Could the fight over the donation of leave time in Crawford County be coming to an end? It appears so, according to Justice of the Peace Stanley Clark, who has met with attorney Chuck Baker, legal counsel to the Crawford County Quorum Court, to prepare a proposed ordinance to vote on at the Court's Sept. 16 meeting.

Clark said the previous ordinance, which he said could have passed the court, was pulled in order to improve the language to avoid putting the county in any sort of legal bind.

"They were just little things that Chuck feels have to be in this policy to protect the county," he said, later adding that it was Baker's comments on the previously proposed ordinance, as well as other members of the Court, that caused him to pull it on July 15.

At the time, Justice Mary Jan Blount said the tabling of Clark's ordinance was due to one issue – the definition of catastrophic illness.

"Basically, it was just tabled to go back to the personnel committee to further define catastrophic illness," she said. "Rather than approve it last night, it was sent back to re-address the whole ordinance and come back with a better-worded ordinance. That was the main thing."

Justice James Lane, who chairs the Court's personnel committee, said Baker found "gaping holes in what was presented."

Reached by e-mail, Baker referred all questions to Clark, including questions about changes to appear in the updated ordinance, saying, "I've met with Justice Clark and I am in the process of writing a proposal for the Quorum Court at his direction. It will be presented to them when completed, prior to the September meeting. …You will need to speak with Justice Clark for that information. This is his Ordinance."

Clark said two main issues will be addressed in the new ordinance – the process for requesting time from a leave bank and requiring that employees not donate every hour of vacation time available to them to the bank. The latter point was important to Clark, who said employees should have some banked time themselves should an unforeseen situation arise.

"We wanted to make sure they don't give away time they don't have," he said. "This makes sure they have to have 40 hours on the books after they donated (to the leave bank). That's one of the changes we put in there. That's to say let's say a guy only had eight hours of vacation on the books. You wouldn't want him to give that away and not have anything left."

Clark said the proposed ordinance would require employees seeking to use the leave time bank, established at the personnel committee's Aug. 1 meeting, to go through their immediate supervisor before the personnel committee would determine whether to grant up to 240 hours of leave time to an employee in need of the hours due to catastrophic illness affecting either themselves or a close family member, such as a child or spouse.

"Before, I had it set up with going to straight to the committee instead of to their boss," Clark said. "We changed it to start with the department head."

As part of the process, the ordinance is likely to address the concern of private medical information being released as a part of the process, Clark said. Typically, as recently demonstrated when the city of Fort Smith Board of Directors granted City Administrator Ray Gosack a 2.5% pay raise, meetings that deal with individual employees' performance or other private personnel matters can be held in executive session, protecting private information from public consumption.

Another portion of the ordinance Clark said is likely to be addressed in the upcoming proposal is allowing employees to only take a small number of hours, as needed, versus taking an entire 240 hours, Clark said.

"I think I put something in there that if 240 hours was the maximum someone could apply for at a given time, but if the doctors are saying you just need two weeks, they (the committee) can lower that number. They don't have to give that person the total number of hours," he said. "They can re-apply (at a later time) if the doctor says they need it."

And while this new proposed ordinance addresses many of the concerns from employees and the Quorum Court, Clark knows this is not the end of the changes that could happen to the proposed leave time donation bank.

"(The donated hours) would carry over from year to year. If people were to keep donating, (the bank could grow to thousands of hours). This is something else we talked about, if down the road something needs to be tweaked, or do they want to put a cap of 800 hours."

As of now, no cap will be included in the proposed ordinance, which Clark says will not come back for consideration should it fail to garner enough votes to pass at the September meeting of the Court.

"I believe that it will pass. I think the only controversy there will be is that some will probably want to include sick time instead of vacation time. But once that's hashed out and agreed to, I believe it will pass. If it doesn't pass, that will probably be it. I won't pursue it after that."

Downtown Fort Smith, an area once described as rundown with gutted buildings and others in disrepair, has recently been experiencing a re-birth, of sorts, but the revitalization is not only limited to commercial space.

According to developer Rick Griffin of Griffin Properties, residential real estate in downtown Fort Smith is not only stable, but a growing sector in an area once struggling to recover from the devastating affects of suburban sprawl to the east following the development of Central Mall and a 1996 tornado that caused millions of dollars in damage to western gateway of the city.

"Malls around the country changed downtowns. In the 1950s, when (Fort) Chaffee was alive and well, people would go downtown and walk the sidewalks. That was typical entertainment," he said. "The malls gutted local businesses. Downtown fell into disrepair. But our family and others started to buy those properties and figuring out what do with them. We've been working down there for about 35 years."

Griffin said part of his family's approach to downtown development has been to accomplish three things – offer commercial buildings that are modernized, get people living downtown and offer services to support residential and commercial development.

APARTMENT ACCEPTANCE
While the modernization of commercial buildings has been underway for many years, luxury apartment development has lagged for some time, with the Griffins not introducing their first units to the market until about 10 years ago.

"People in the late 80s and 90s put apartments in, they were just ok. But over the last 10 years, we've started to put (luxury) apartments in the top floors of buildings – 23 feet wide and 90 feet deep, about 2,000 square feet per floor."

Developments to call downtown home in the last decade include not only Griffin's 307 Garrison Avenue and 14 North 3rd Street, but also the West End Lofts, apartments at 706 1/2 Garrison Avenue, 501 1/2 Garrison Avenue, West End Lofts and the Ivory House Lofts, located above the Sake Sushi and Martini Bar at 823 Garrison Avenue.

Property Manager Amanda Mondier said the 14 lofts above Sake, purchased in 2008 by the Meadows family and first rented in 2010 through management company Southwest Resources, are nearly always at capacity. Much of the residents have chosen to be close to work.

"I think that just the downtown lifestyle, and just feeling like they live in the city, is a draw," she said. "And quite a few of the people that live down here work downtown, also."

DOWNTOWN JOBS
There may be more people working downtown by next summer.

The historic and white tiled Friedman-Mincer building – also known as the OTASCO building – at the intersection of Garrison Avenue and Towson Avenue in the eastern end of downtown Fort Smith was built in 1911, and Steve Clark plans to give it a serious makeover more than 102 years later.

Clark, founder and president of Propak, plans to convert the three-story, 24,000-square-foot building into offices for the about 40 employees of Propak. The company provides logistics, transportation and supply-chain management services.

Griffin said while the apartments he builds in mixed-use developments are typically  always full, as well, but it has not been without cost.

"Renovating the buildings is expensive. Cash flow isn't great. But there are tax credits available, but it handcuffs you to what you can do to the outside of the building. I wanted to do it all as apartments, but tax credit people want businesses that face Garrison. We had to do commercial space on the Garrison frontage."

And while some of the commercial space may not be leased regularly, Griffin said what he does know is "when we build decent apartments, we rent them. With commercial, we may have vacancies, but the apartments stay full."

POSSIBLE MARSHALS STIMULUS
As for what the future holds for downtown residential development, with conservative estimates of about 100 units in the market, Griffin said he thinks it looks bright.

"Remember that when the U.S. Marshal's Museum is constructed, it will be a game changer for this area and for downtown Fort Smith. It will bring a lot of people to downtown."

Griffin is already planning for that period, developing a $3 million mixed use residential development along the 400 block of Garrison Avenue to add to his downtown residential portfolio.

But to continue the growth Griffin expects in the downtown neighborhood, Mondier said residents will start to demand more amenities.

"If you look at people that move in from out of town from bigger cities, they're always surprised that there's not stuff downtown. ... A grocery store (would be a good addition), because there's not one down there. There needs to be more things that could be easily accessed or more convenient to down there."

Griffin said with his commercial properties, he is working to make sure unique retailers come to downtown in order to meet the needs of residents and visitors alike.

"We're trying to not rent to just anyone. I'd like to have a meat market downtown. if there was a small specialty grocery store, a small market down there would probably thrive. I was concerned about having a liquor store downtown, but we have that solved. People need to focus on not duplicating, but you need it to be diverse. But does (the downtown residential market) have a good future? I think it has a great future."

Investors of Tyson Foods got cold feet on Monday (Aug. 26) amid concerns of steep production increases that will most certainly pressure poultry margins in the coming quarters.

Shares of Tyson Foods tumbled more than 7% following a downgrade by Bank of America/Merrill Lynch analysts who took the stock from a “buy” to a “hold” recommendation on a one-year target price of $32.

The stock was trading Monday afternoon (Aug. 26) at $29.17, down $2.31 per share following the downgrade.

Tyson Foods had been flying high of late hoisted by better operating margins linked to lower commodity grain costs and higher chicken prices. But analysts heeded caution on Monday, following steep increases in poultry production reported across the industry.

The Merrill Lynch team of Ryan Oksenhendler and Bryan Spillane said recent industry data indicates a steep increase in production that will likely squeeze operating margins sooner than expected – by the spring of 2014.

U.S. Department of Agriculture recently reported broiler egg sets rose 3% from a year ago, but pullet placements among breeders jumped 8% in July. At the same time cold storage levels rose 4% from June, and processors had 5% more chicken in the freezer at the end of July than they did a year ago. These stats forecast excess poultry supplies in the coming two quarters or so, and also threaten to cut short the rally in wholesale prices enjoyed by processors for most of this year.

Georgia Dock chicken prices for boneless, skinless breast were $2.08 cents per pound last week, up from $1.77 a year ago. Leg quarters, typically an export item, were bringing 53 cents per pound last week, up one cent from a year ago.

While Tyson is a diversified meat company, chicken has been one of the brighter spots in its portfolio this year. Beef and pork margins have been constrained from demand issues relevant to supplies of live cattle and hogs. Tyson Foods continues to invest its chicken and prepared foods segments in part because it will help drive the company’s value-added sales, a mission CEO Donnie Smith announced late last year.

Smith said in the company’s recent earnings call that Tyson’s move toward growing value-added sales 6% to 8% this year is on track with 5% gains made through three quarters of 2013. Last year roughly 45% of Tyson Foods’ sales came from value-added products. That was $15 billion of the $33.3 billion the meat giant posted in total revenue, according to analysts with Fitch Rating Service.


Using that data, half of Tyson’s total sales are now perceived as valued-added. These products command a larger profit margin than commodity whole or chicken parts. They also provide some insulation against this perceived threat of declining industry margins.


Earlier this month, Tyson executives said they expected U.S. chicken production to increase 2% to 3% in fiscal 2014. Smith said Tyson’s chicken segment should be operating at or above its normalized range through next year.


Tyson was not the only company impacted from the Bank of America downgrade. Its chief competitor, Pilgrim’s Pride, also lost 7.75% of its share value on Monday. Shares of Pilgrim’s closed at $15.47, down $1.30 on the day.

Both companies recently reported strong results in chicken. Tyson’s chicken sales rose 10.6% over the past year to $3.16 billion, largely on the heels of higher demand. S&P Capital IQ analyst Tom Graves expects chicken to provide the largest amount of profit for Tyson this year and next, helped by a likely reduction in grain costs thanks to lower corn and soybean prices.

Pilgrim’s reported chicken sales of $2.18 billion in the recent quarter. Sales rose 10.5% from a year ago. Pilgrim’s CEO Bill Lovette, told investors on July 31 that he believed the “industry remains disciplined to the supply and demand fundamentals necessary for profitability.” He said the higher egg sets also met with lower hatchery rates compared to a year ago. Lovette said when looking at cumulative chick placements, the industry is still at one of its lowest levels since around 2007.

The one thing analysts and poultry executives do agree on is that cost-conscious consumers continue to purchase more chicken than beef, given the lower prices per pound.

University of Arkansas officials on Monday defended the sudden decision to end the employment of Associate Vice Chancellor of University Relations John Diamond, with UA Chancellor G. David Gearhart saying Diamond had been “insubordinate.”

UA Vice Chancellor for Advancement Chris Wyrick announced Friday (Aug. 23) that Diamond was “terminated from employment,” with his last day to be Sept. 22. Diamond, who earns $173,000 a year, is to work from home, with his work assignments received by e-mail or phone.

Wyrick alleges that Diamond responded inappropriately during an Aug. 22 meeting in which Diamond was informed that UA “senior leadership had lost faith” in him. It was during that meeting that Wyrick informed Diamond he was being reassigned to associate vice chancellor of communication for the campaign.

“During the course of our meeting, however, you became irate and confrontational. Rather than demonstrating any willingness to maintain a professional and positive working relationship during the reassignment period, you made statements that my leadership style is ‘laughable’, and frankly escalated the discussion to the point that I had to end the conversation,” Wyrick noted in his Aug. 23 letter to Diamond.

Link here for a PDF of the letters from Wyrick.

Gearhart supported Wyrick’s action in a statement sent to the University of Arkansas System Board of Trustees and System President Donald Bobbitt.

“Mr. Diamond has been argumentative, inflexible, insubordinate and aloof with his direct report. He consistently refused to take direction from Chris or many of the senior leaders of my team on a variety of issues,” Gearhart wrote.

Gearhart said Diamond maintained too close of a relationship with Brad Choate, the former head of the UA advancement division. The advancement division has been under review for a $3.3 million deficit. In December 2012, Choate resigned as vice chancellor of the division and Joy Sharp resigned as budget director.

On Feb. 7, Gearhart asked auditors for the Arkansas General Assembly and the University of Arkansas System to perform independent audits of spending within the university’s advancement division. Following the Feb. 7 announcement, Gearhart named Chris Wyrick the new vice chancellor for university advancement. At the time, Wyrick was serving as executive director of the Razorback Foundation. In mid-July, Wyrick announced several staff changes within the division.

DIAMOND BACKGROUND
Diamond was hired by Choate and university in September 2010. Prior to arriving in Northwest Arkansas, Diamond managed public relations and lobbying for the University of Maine system. Diamond, who earned a bachelor’s degree in journalism and a master’s degree in speech communications from the University of Maine, was elected in 1980 to the Maine House of Representatives. At age 30 was elected by his peers to be the House Majority Leader, and was at the time the youngest majority leader in the country.

While at the UA, Diamond worked with Jeff Long, UA vice chancellor and director of athletics, as the university responded to the Bobby Petrino scandal in early 2012. The UA earned top honors for “Best Crisis Management” in the PR Daily’s 2013 Nonprofit PR Awards because of how the university dealt with the investigation of the Petrino’s activities and his eventual dismissal. Kevin Trainor, associate athletic director for public relations, was also cited by the UA for his work with Long during the events.

DIAMOND RESPONSE
The UA on Monday also included a four-page letter from Diamond, in which he lays out a completely different perspective on the issue.

Much of the letter focuses on Diamond’s belief that the UA was creating “unjustifiable delays” in responding to Freedom of Information Act requests from the Arkansas Democrat Gazette.

Following are some of the key points Diamond included in the letter.

• “As directed, I forward, via e-mail, the document to the Democrat Gazette as the totality of responsive documents in the university’s possession which, based on the e-mail exchanges, documents, and video that had been circulated on campus and within the division, was not accurate. By directing me to provide that single page as the sole responsive documents, you put me in a position that jeopardized the university’s credibility, a position I objected to on Thursday morning when we met. I believe the action you took on Friday morning to terminate me in 30 days was in retaliation for pointing out that concern.”

• Diamond noted that Wyrick’s action in firing him as “a continuation of a five-month pattern that I and other members of the Advancement division’s leadership team had advised you against – that is, imposing serious, disruptive, and secretive changes in personnel appointments with little regard to the stress it places on affected individuals, their colleagues, and Division operations.”

• “As I and others have tried to tell you during your five months as Vice Chancellor, good leaders must maintain trust and credibility of their leadership team and staff. The way you dealt with me on Thursday and Friday has contributed further to the toxic environment that currently exists within the Division and which has permeated other parts of the campus.”

• “Even more damaging, your disregard fro the University’s obligations under FOIA continues to jeopardize the U of A’s relationship with its internal and external constituencies. To be sure, complying with the Freedom of Information Act may at times be disruptive and time-consuming. However, that’s a reasonable burden for the University to bear in exchange for the taxpayer and tuition-payer dollars it receives. The University’s students, employees, alumni, donors, and friends – as well as the public – deserve the University’s cooperation.”

Link here for a PDF of the letter from Diamond to Wyrick.

GEARHART RESPONSE
Following is the complete text of the letter UA Chancellor G. David Gearhart sent to the University of Arkansas System Board of Trustees and to System President Donald Bobbitt.

Members of the Board of Trustees and President Bobbitt:

Over the past several days I have been in close contact with several members of my senior staff as well as Dr. Bobbitt over the personnel issue surrounding Mr. John Diamond. Any time we deal with issues of termination the accounts of the actions taken are paramount. I wanted to send you this email to insure that you too are in the loop on what already has become a public issue. The purpose of this email is to give you some important background information in advance of any further media articles.

For many months Chris has attempted to build a relationship with Mr. Diamond as his new supervisor. Diamond was hired by Choate three years ago and has found it difficult to accept our new advancement leadership team. It has been a particular concern to me for many months. Mr. Diamond has been argumentative, inflexible, insubordinate and aloof with his direct report. He consistently refused to take direction from Chris or many of the senior leaders of my team on a variety of issues.

As you may know, since Brad Choate's dismissal, Mr. Diamond has been interviewed for at least three positions at other institutions in the last several months and has been unable to land a job to date.

Diamond has been very defensive of his former boss, Brad Choate, who hired him, and continued to maintain a very close and inappropriate relationship with Choate during a time he was serving as our chief spokesperson, a clear conflict of interest.

Over the last several months the relationship with Diamond and Chris, and my senior leadership, has deteriorated to the point of irreparable damage.

Thursday, Chris met with Diamond and told him he felt a change was necessary and that his relationship with him was beyond repair. Chris told Diamond that the senior leadership had lost faith in him for a variety of reasons, including his inflexible attitude and his inattentiveness to his daily duties, including his refusal to answer e-mails and phone messages from myself, Vice Chancellors and Vice Provosts.

Chris told Diamond that he wanted to give him more time to find a job, but he should expect to conclude his position by the end of the calendar year. He made it very clear to Diamond that he did not want to harm his reputation or embarrass him.

Diamond became very agitated, hostile and exhibited aggressive behavior bordering on rage. In what appeared to be a premeditated, emotional rant, Diamond accused Chris of racism, harboring ill will toward Diamond's religion and told him his management style was "laughable".

This was all witnessed by one of Dr. Pederson's staff members, Ms. Denise Reynolds, who sat in on the meeting. Ms. Reynolds personally felt threatened by Diamond.

Diamond stormed out of Chris's office and within minutes an ADG reporter called Chris with knowledge of the meeting.

Chris attempted to call, text and email Diamond throughout the day in hopes he had cooled down, but Diamond refused to take the calls or respond in any way. On Friday, Chris gave Diamond an opportunity to resign but only received a combative text in return.

After discussions with me and senior officers, Chris terminated Diamond with 30 days notice. He also asked him to leave his office and finish his 30 days from home so as not to continue his creation of a hostile and threatening work environment.

Diamond contacted several members of the media and has yet to respond to his supervisor.

Diamond is claiming to the media that he was fired because he had a different philosophy of transparency with the public. In reality, Diamond has always insisted that all communication with the media come through him and that my senior team should not answer any media inquiries directly. Any lack of transparency with the media or the public can only be attributed to Diamond's own failings as that was his primary responsibility. Diamond also refused to allow the university to release the termination letter which describes the reasons for his termination.

My apologies for the length of this message but you needed to have these facts.

Please call me or Chris should you have questions.
Thank you.

The U.S. Corps of Engineers says some infrastructure on the navigable Arkansas River is becoming critically old, with a waterway official suggesting a modernization investment could run as much as $120 million.

A recent assertion by U.S. Rep. Markwayne Mullin, R-Westville (Okla.), that the locks along the Arkansas River navigational channel have a "50/50 chance of failing at any given day" may have come as a shock to some. But as numerous sources across the region have indicated, Mullins was correct about the need to get funding in place to keep commerce flowing along the Arkansas River from Catoosa, Okla., to the Mississippi River in eastern Arkansas.

Martie Cenkci, chief of public affairs of the U.S. Army Corps of Engineers, said discussions were held as recently as last week in Fort Smith to discuss the future of the navigational system and what efforts could be taken to make the system a continually reliable source of water transportation.

"The locks are, in fact, approaching the end of their design life; it will require future investment by all parties to sustain and improve them," she said.

The House Committee on Transportation and Infrastructure is already planning hearings in September on the Water Resources Reform and Development Act (WRRDA) to deal with funding of projects deemed vital by the U.S. Army Corps of Engineers and move projects from being studied to actually being implemented, if proven necessary.

“We are literally studying infrastructure projects to death. While it once took the Corps of Engineers three to five years to complete a study, it has now become the norm for this process to take 10 to 15 years,” said U.S. Rep. Bob Gibbs, R-Ohio, who chairs the committee. “The unwieldy review process remains tied up in red tape, costing us time and money and preventing action. Congress must change the way the Corps of Engineers does business.”

Gene Higginbotham, executive director of the Arkansas Waterways Commission, said he has been in constant contact with the Arkansas Congressional delegation and the Oklahoma Department of Transportation as the groups seek to find a solution to the maintenance issues Mullin revealed last week.

According to Higginbotham, the situation highlighted along the Arkansas River is a priority for not only both states and their Congressional delegations, but also for the Corps, as he says the river's navigational system is in need of between $100 million and $120 million in upgrades and maintenance.

"I'm working with my counterpart in the Oklahoma Department of Transportation to make sure our system is working. Of course, Oklahoma has only one river and we have five. But we're addressing the operations and maintenance backlog. When (Mullin) was talking about 50% failure, (the Corps) have a critical maintenance backlog and it's basically areas that they've identified that have at least a 50% failure over the next five years. Those have priority. So we make sure we keep our delegations educated so we can make sure we have a system that's reliable."

Higginbotham, who will testify before the General Assembly Joint Transportation Committee on Sept. 10 about the situation along the navigational system, said a failure of the lock system at any point along the river would not only matter to Arkansas and Oklahoma businesses and governments, but would matter to entities in neighboring states, as well.

"One of the things we've talked about is that (the Port of Catoosa) has a huge reach. They bring products in from Texas, Nebraska and Missouri," he said. "So we're reaching out to (members of Congress and Senators in those areas) to let them know that they use this system and their constituents use this system, as well. We're making that effort to broaden the impact and show how this system as a regional economic impact on the nation."

Working with the Corps, Higgenbotham said a three-year maintenance plan has been proposed which would work with the shipping industry to adjust barge movements so needed maintenance could take place with minimal disruption to the flow of goods up and down river. But that plan only works if a bill is passed that takes care of not only funding but also the red tape mentioned by Gibbs.

"With this schedule, they can focus that budget, even if it's declining, they can focus on the most needed projects. I have to talk to the (State Joint) Transportation Committee on this. With the declining budget, there is a gap in what the federal government can do and what we need. There are some things that are in the WRRDA that is on the House side. I get to brief the legislators on that on Sept. 10. We just have to figure out a way and it may come from private funding. It's just figuring out the difference between what the federal government can provide and we we need."

Even though the Arkansas Ethics Commission has admitted to being "spread pretty thin," senators on both sides of the aisle say the best approach to ethics reform would be to wait until the 2015 regular legislative session instead of calling a special session or attempting to pass legislation during the fiscal session.

The admission from the AEC came to light during an investigation by The City Wire content partner Talk Business, which looked at how the commission holds lawmakers accountable for filing proper campaign fundraising and expenditure reports, among other items. The report revealed that the commission "relies heavily on citizen complaints before investigating whether filed reports are in compliance. … Such a system relies in part on watchdogs in the media, but even more heavily on groups that have an interest in exposing candidates who are in violation of the law. Of course, the main source of this type of complaint stems from political opponents and the opposing political party of a candidate."

Sen. Jake Files, R-Fort Smith, said he was aware of the problems before the Talk Business report shed light on the issue.

"I knew that was the case because of prior campaigns where opponents have not reported correctly and when I called the Ethics Commission about it, (they said) someone would have to file a complaint before they'd do anything," he said.

Files said addressing ethics reform would be necessary, especially in light of the resignation of Sen. Paul Bookout, D-Jonesboro, following his reprimand and $8,000 fine from the AEC for improper spending of nearly $50,000 from his campaign account last year, a race he won with no opposition.

"It's a tough situation because I want there to be a lot of transparency, but I also think that because one guy is doing something, not everyone is doing it."

Sen. Uvalde Lindsey, D-Fayetteville, said he's certain changes will be made in the next regular legislative session, even though it will be well more than a year after Bookout's resignation.

"I don't think there's any doubt that this is going to be a front burner. Ethics reform has been out there for a while and obviously in the last month or so, it's taken front and center stage. I don't think it's going away," he said. "I think there will be very thoughtful work between now and the 2015 session about what needs to be done."

Lindsey specifically mentioned HJR 1009, which was proposed as a constitutional amendment by Rep. Warwick Sabin, D-Little Rock, as a step in the right direction, though he'd like to see something with more teeth. Sabin's proposed amendment, which will be on the ballot in the November 2014 general election, would ban gifts to all legislators, ban corporate and union donations to candidates and extend the current one year ban on legislators becoming lobbyists to a two year ban.

"I think (Rep. Sabin's) bill is a step in the right direction, but it's watered down to where it doesn't do much. I think there will be a discussion to try to find something that makes sense. Obviously, being complaint-driven is not working."

Files said he just does not want to throw money at a problem, such as hiring a lot of enforcement officials at the AEC, if that is not the best solution to fix the problem.

"There's not a lot of enforcement power (in the AEC). Had no one brought up the complaint, there was no way it would have been known. But I think there's a balance between a full out investigative team and what they're doing now."

Simply having issues such as Bookout's come to the forefront will aid the AEC, Files said, because more people will be going through the reports with "a fine-toothed comb."

Before any legislation is proposed whether as a part of an appropriations bill in the fiscal session or during the regular 2015 session, Lindsey said it would be imperative to see what other states do in order to see what works and what does not.

"I would be curious (to see) what other states do in how campaign finance is reported and what kind of oversight (there is) or sanctions for errors or willingly violating the law," he said.

Lindsey added that he does not think Arkansas' public officials have an inherent ethics problem, even with the recent case of Bookout, the arrest and resignation of State Treasurer Martha Shoffner for accepting bribes and steering state contracts to a particular investment company and the recent ruling that Secretary of State Mark Martin's office violated the law by hiring outside counsel instead of using staff attorneys or the attorney general's office for legal services.

"I don't think Arkansas has an ethics problem unique in and of itself. I think our system may be out of whack (compared) to other states."

Files acknowledged that ethics reform is now being taken more seriously than ever by the members of the General Assembly, but any reforms should be well thought out and should not completely change a system that he asserts has worked, even in light of Bookout's resignation and the appointment of a special prosecutor to investigate possible criminal wrongdoing.

"People should be adequately punished for what they do, but to completely change the system that has been in place and seemingly worked well, I don't know that that's ever been the case of good policy. I'm also not saying I would not be for something before the 2015 session, but there's been no cry to do something tomorrow and have everybody look at it."

Members of the Fort Smith Board of Directors discussed city finances at today's noon study session, where they learned that the city's 2014 budget would likely stay at levels similar to the current budget.

The budget is unlikely to rise noticeably in the next fiscal year, according to City Administrator Ray Gosack, due to the drop in sales tax revenues this year.

In response, Director Pam Weber questioned whether any cuts need to be made to this year's city budget following the across the board 4% cuts that went into affect earlier this year.

"The sales tax revenue is still meeting those revised revenue estimates, so at this time there's not any spending adjustments to the general fund. But if those revenue trends continue into 2014, then that level of spending we made for the rest of 2013 would need to continue into the rest of 2014," Gosack said.

He said even with the decline, repayment of bonds are in good shape since the bonds were drawn out over multiple years and included "cushion" should a drop in revenues, such as what happened this year, were to occur again or continue.

Gosack added that the city has budgeted 7.5% for contingencies, a number he said cannot go any lower without affecting cash flows.

"Given what's gone on the last eight to ten months revenue, that's the most prudent route to take at this time."

Each of the city’s 1% sales taxes (1% for streets and 1% for water and sewer projects) collected $1.614 million in the July report, down 3.49% from the same period in 2012, and 6.34% below budget estimates.

For the first seven reporting months of 2013, each of the 1% sales taxes generated $11.494 million, down 1.63% compared to the same period of 2012, and 4.49% below the budget estimate.

For the first seven reporting months of 2013, the city’s portion of the countywide tax has generated $8.958 million, down 1.75% compared to 2012 and down 4.15% compared to budget forecasts.

The countywide tax collection is critical because the revenue is a little more than 40% of the city’s general budget of roughly $42 million. A majority of the general fund budget general supports fire, police and other critical city functions.

Despite the decline in sales tax revenues, Gosack said there were reasons to be optimistic about the future of Fort Smith.

"There are other positive signs in our economy. It will probably take sales tax or retail sales some time to catch up with those other positive trends," he said.

Among the positives, Gosack highlighted the recent announcements of new jobs coming to the Fort Smith area and the positive signs in the commercial construction market.

"So although people focus on the employment rate, one of the things I look at is the actual number of people with jobs working in our MSA and that number continues to go up. So that tells me there are more people with jobs, working and that provides more income to be spent on retail sales in the economy."

Gosack also highlighted positive signs in the residential real estate market as an indicator that the sales tax revenue decline will eventually turn around, though likely not until fiscal year 2015.

One of the few areas the city administrator said would need additional funds in the 2014 budget would be in healthcare, where premiums have continued to rise.

"Even though the revenue will be flat, the one significant expense that I know will rise in 2014 is healthcare," he said, with Board members speculating it could rise as much as 7% or 8%.

The nation’s largest private employer — Wal-Mart Stores Inc. — expanded the parameters of its company benefit package to include spouses of full-time employees and domestic partners.

A postcard was sent out to employees this week detailing several changes to the company’s health plan for 2014, according to Wal-Mart spokesman Randy Hargrove.

He said Wal-Mart did expand coverage eligibility for any spouse or domestic partner of a full-time employee which includes, medical, dental, a new vision option, critical illness and accident plans. Hargrove told The City Wire that domestic partners would be eligible beginning in 2014, during the enrollment period starting Oct. 12.

Wal-Mart joins a long list of Fortune 500 companies including Costco, Ford, Home Depot and Best Buy to offer health care benefits to same-sex partners. The civil rights group, Human Rights Campaign, estimates 62% of Fortune 500 companies have already done so. HRC said inclusion efforts have increased from 34% in 2002.

Often a target of criticism by labor groups, the retail giant was praised today by HCR for “adding gender identity and expression to its employment non-discrimination policy.” 

“What matters in the workplace is how you do your job, not your gender identity or sexual orientation,” said HRC President Joe Solmonese. “As the nation’s largest private employer, Walmart shows that doing the right thing is also good for business. We urge them to continue to move forward by ensuring all of their LGBT employees receive equal benefits.”

The Supreme Court’s ruling in June to recognize same-sex marriage will undoubtedly mean more employers tweak their benefit packages to comply with federal law, especially since 13 states and the District of Columbia have legalized same-sex marriages.

Hargrove said benefits for domestic partners is one part of the company’s ongoing effort to provide affordable, comprehensive medical coverage for its employees. He said this is also the first year Wal-Mart has offered a vision plan in its benefit package. In addition, a program known as Expanded Centers of Excellence will provide participants 100% coverage for hip and knee joint replacements as well as certain heart and spine surgeries.

Wal-Mart also is providing participants the opportunity to comparison shop for certain health care procedures with a new online tool – Castlight – that searches for doctors and medical services based on cost and quality reviews.

Hargrove said health insurance premium increases would be 3% and 10% depending on the coverage plan chosen, and are the lowest increases in several years.

Wal-Mart employs roughly 1.3 million in the U.S. and more than half of its workers participate in the company’s health care plans

A plan that has been under consideration by the Sebastian County Election Commission continued its crawl toward possible adoption on Tuesday (Aug. 27), but not without questions about the cost by County Judge David Hudson.

The plan, proposed on July 18, would reduce the number of polling sites across the county and consolidate them with "polling centers," which would allow voters to vote at any of the centers versus voting at a designated precinct, which is how elections are currently structured across the county. Cities that were initially considered for polling centers included Fort Smith, Greenwood and Lavaca.

The Commission estimated cost savings of $17,645 should the polling centers in Fort Smith and Greenwood be open in time for the May 20, 2014, primary election and $18,550 for the Nov. 5, 2014, general election. Total, the Commission estimated savings from both elections at $36,195.

In the same meeting, the commission had also proposed opening early voting sites at off-site locations. The sites floated during the July meeting included the Ben Geren Park Tornado Shelter and the Dallas Street branch of the Fort Smith Public Library.

The proposal would have the sites open to voters who did not want to journey to either the Fort Smith or Greenwood County Courthouses in order to vote early.

The total estimated costs presented at today's meeting for the early voting at the Dallas Library for the primary election next year would total $8,207, according to the Commission's estimates, while the general election would run about $4,760 for a total between both elections of $12,967.

The costs associated with opening an additional early voting site, which would require hiring additional temporary help in the county clerk's office, caused Hudson to have concern, though he said he was not against having the sites open.

"Once again, our two top revenue sources - property taxes are relatively flat; sales taxes are, they're not increasing. I don't know exactly what will happen with the rest of the year. Those are number one and two revenue sources for the county in the budget and we have to take care of our existing county employees as best as we can, so any expansions in personnel need to be thoroughly scrutinized and that's kind of where I'm coming from."

According to Hudson, the only additional employees the county had planned to hire include 11 jailers, which would be paid for through the renewal of the county's one cent sales tax earlier this year. The jailers were necessary due to findings from the U.S. Department of Justice that the county jail was understaffed. Hudson said the county had been dealing with the DOJ since 2005, adding that the hiring of the additional jailers was one way of addressing some of the federal government's concerns with the jail.

On top of hiring additional jailers for the county's detention center in downtown Fort Smith, Hudson said any financial appropriations have to take into consideration the recruitment and training of a new election coordinator to replace current Election Coordinator Jerry Huff, who has notified Hudson of his intent to retire prior to the 2014 general election.

Huff confirmed to The City Wire that he would stay on staff as long as Hudson and the Commission needed him to train his replacement.

"I'll stay as long as they need me," he said, adding that a firm date for his retirement has not been set.

In addition to extra costs that could be incurred through setting up an additional early voting location, establishing the polling centers across Fort Smith, Greenwood and Lavaca could come with one-time costs of up to $100,000 for new electronic poll books, County Clerk Sharon Brooks said.

All of the costs for Brooks' electronic poll books and the funds needed to establish off-site early voting come out of the county's general fund, Hudson said, adding again that he does was not against the items, but he wanted to be cautious with spending money that other departments may need.

"I'm not opposed to the Dallas early voting site. I'm not opposed to polling centers. I'm not opposed to polling books. I'm not opposed to any of that. My role is to make sure we are all working, we are all communicating with one another and that the Coordinator is effectively working with all of us."

The next step toward adopting any proposed off-site early voting centers, polling centers and/or polling books will be for the Election Commission to work with County Comptroller Kathy Lawrence and Hudson's office to develop a proposed budget for the next year. A meeting to present the proposed budget to the entire Commission has not yet been scheduled, though Election Commission Chairman Lee Webb indicated a meeting could be just a few weeks away.

The Fort Smith metro area was one of two in the state to see a jobless rate decline in July compared to June and to July 2013. Unfortunately, the rate improvements do not reflect sizeable employment gains in the region.

The jobless rate in the metro area during July was 7.6%, down from 7.7% in June and well below the 8.4% in July 2012, according to figures released Wednesday (Aug. 28) by the U.S. Bureau of Labor Statistics.

Metro employment of 123,147 was 0.24% more than July 2012, but was 1.72 below employment in June.

Five of the eight metro areas in or connected to Arkansas had jobless rate increases in July compared to June, and six areas had jobless rate decreases compared to July 2012. Only the Fort Smith and Texarkana metro areas saw jobless rate declines compared to June and July 2012.

During July, the lowest metro jobless rate in the state was in Northwest Arkansas with 5.9% and the highest rate was 10.3% in the Pine Bluff area.

UNEMPLOYMENT FALLOUT
July was the 55th consecutive month the Fort Smith metro jobless rate has been at or above 7%. July food distribution by the River Valley Regional Food Bank is a side-effect of the persistent higher unemployment rate in the region.

The food bank set an all-time record of distribution in July 2013 by placing 975,091 pounds with its 217 member agencies during the month.

“The jump in tonnage represents a 55% increase over July 2012 and a 26% increase over the previous record set in July of last year. With a daily average of 31,450 pounds, the food bank easily distributed a truckload of food a day, which amounted to 795,000 meal equivalents in July,” noted a food bank statement.

There were 144 hunger-relief agencies receiving food for the Arkansas service area counties of Crawford, Franklin, Johnson, Logan, Polk, Scott, Sebastian and Yell.

"All I know is that this is the biggest amount we have ever distributed and I've been here for 11 years,” said Ted Clemons, executive director of the food bank.

Wal-Mart Stores is the largest provider of food. The Walmart stores in the Fort Smith region and the Walmart Clarksville Distribution Center are responsible for one-third of the food bank's donations, according to the food bank. Other top contributors in the month of July included Sam's Club, Kellogg's, Pepsico, Little Debbie, Harp's Food Stores and Tyson Foods. As part of the food bank's retail recovery program, Red Lobster, Longhorn Steakhouse, Pizza Hut, Olive Garden and Bob Evans Restaurant donated 4,300 pounds. 

FORT SMITH METRO NUMBERS
The size of the Fort Smith regional workforce during July was 133,224, down from the 135,812 during June, and below the 134,039 during July 2012. The labor force reached a revised high of 140,253 in June 2007.

Unemployed persons in the region totaled an estimated 10,077 during July, down from the 10,502 during June, and below the 11,195 during July 2012.

The Fort Smith area manufacturing sector employed an estimated 18,600 in July, up from the 18,500 in June, and below the 19,400 during July 2012. Employment in the sector is down more than 34% from a decade ago when July 2003 manufacturing employment in the metro area stood at 28,100. Also, the annual average monthly employment in manufacturing has fallen from 28,900 in 2005 to 19,200 in 2012 – the first year the average has dropped below 20,000 since surpassing that level.

Jobs in the Trade, Transportation and Utilities sector — the region’s largest job sector —  totaled 25,600 in July, down from a revised 25,800 in June, and above the 24,100 during July 2012. The revised June employment marks a new employment high in the sector. The previous high was 25,700 posted in December 2007.

Employment in the region’s tourism industry was 9,500 during July, down from 9,600 in June and above the 9,100 in July 2012. The sector reached an employment high of 9,800 in August 2008.

In Education & Health Services, employment was 17,800 during July, down from 17,900 in June and above the 16,900 during July 2012. The June employment level was a record for sector employment in the Fort Smith area. The annual average monthly employment in the sector has steadily grown since 2005 when it reached 14,000. In 2012 the average was 17,100.

In the Government sector, employment was 16,700 during July, down from 18,900 in June and above the 16,600 in July 2012.

NATIONAL NUMBERS
Unemployment rates were lower in July than a year earlier in 320 of the 372 metropolitan areas, higher in 38 areas, and unchanged in 14 areas, noted the broad BLS report.

The U.S. unemployment rate in July was 7.4%, down from 8.2% from a year earlier. Arkansas’ jobless rate was 7.4% in July, up from 7.3% in June and unchanged compared to in July 2012.

Oklahoma’s jobless rate during July was 5.3%, up from 5.2% in June, and unchanged compared to July 2012. The Missouri jobless rate during July was 7.1%, compared to 6.9% in June and unchanged compared to July 2012.

ARKANSAS METRO AREAS
Fayetteville-Springdale-Rogers
July 2013: 5.9%
June 2013: 5.7%
July 2012: 6.2%

Fort Smith
July 2013: 7.6%
June 2013: 7.7%
July 2012: 8.4%

Hot Springs
July 2013: 7.8%
June 2013: 7.7%
July 2012: 8%

Jonesboro
July 2013: 7.3%
June 2013: 7.1%
July 2012: 7.6%

Little Rock-North Little Rock-Conway
July 2013: 6.8%
June 2013: 6.7%
July 2012: 7%

Memphis-West Memphis
July 2013: 9.5%
June 2013: 10%
July 2012: 9.5%

Pine Bluff
July 2013: 10.3%
June 2013: 10.1%
July 2012: 10%

Texarkana
July 2013: 7.1%
June 2013: 7.4%
July 2012: 7.3%

FORT SMITH METRO AREA HISTORY
Past annual average unemployment rates
2012: 7.7%
2011: 8.6%
2010: 8.2%
2009: 7.9%
2008: 4.8%
2007: 5.3%
2006: 4.9%
2005: 4.5%
2004: 5.2%
2003: 5.5%
2002: 5%
2001: 4.2%
2000: 3.7%

Not only is the management of product and people related to supply and demand part of the curriculum at the University of Arkansas’ Walton College, it’s also a real issue with which Walton College leaders are struggling.

However, it’s a struggle they welcome.

The Executive MBA program at Walton College has grown from about 20 students in 1999 to 68 accepted students for the 2013-2014 class and around 40 students on a waiting list.

“It has been growing steadily over the past few years,” Dr. Vikas Anand, associate professor and director of the MBA program at Walton College, said in what could be labeled an understatement.

Students in the newest class work in a wide variety of backgrounds. Sectors represented are retail, technology, consumer packaged goods vendors, engineering, marketing, manufacturing, computer hardware and software, higher education, logistics/transportation, law, banking, military and medical.

Anand also said the class diversity has changed, with 38 women in the 2013-2014 class – a record class number for the program.

The two-year, 38-hour program consists of online and at-home study, with students attending class one Saturday per month for two years. Classes in the program include “Managing Ideas, Products and Services,” “Economics of Management and Strategy,” “Retail Strategy and Processes,” and “Supply Chain Management.”

It’s the growing supply of individuals seeking matriculation through the program that Anand and others at Walton College are now tasked to manage.

Anand says the program is “not an overnight success.” He emphasizes that interest is the result of many factors, including the university’s willingness to think beyond traditional academia and merge the needs of the private sector with the advantages of technology.

GROWTH FACTORS
A factor leading to increased interest has been a move to make the course more accessible to those with jobs and who do not live in Northwest Arkansas. Part of that was a willingness to waive the GMAT (graduate management admission test) requirement by “giving weight to work experience,” Anand said.

“When you think about it, why should someone who is 40 or 45 years old and have run a business for several years” not be given credit for the experience, Anand asked.

The 2013-2014 class has 38 students with between 10 and 25 years of work experience, and only 28 with less than five years of work experience.

“I found that they are probably the most motivated students that we have,” Anand, who has been with the program since inception, said of those with extensive work experience. “When you think about it, someone who is coming in, who is coming back, at that age is motivated.”

Anand said the older graduates also are “some of our strongest supporters after they have graduated. ... Their word of mouth about us is fantastic.”

Yet another factor, according to Anand, is that the university has actively pitched the program in large regional cities only a few hours drive from Northwest Arkansas. Dallas, Kansas City and Little Rock are home to some of the students in the newest class. Anand also said the class has become a “recruiting tool” for some of the retail-sector vendor companies in Northwest Arkansas.

“A large number of people who come to Northwest Arkansas are here just a few years to work for a vendor. ... What we find is that they use that time to complete (the executive MBA). I know at least two or three companies who use that as a recruiting tool to get them to come here,” Anand said.

Somewhat of a surprise in recent years to Anand is the number of physicians and pharmacists who enter the program. Several doctors from the Little Rock area have completed or are in the program because they see how changes from the federal healthcare law may require them to “learn more about the finances of their business,” Anand said.

TUITION COMPARISON
Possibly the most important factor is tuition. Tuition for the Executive MBA program is about $35,000, although it could rise closer to $40,000 for the 2014-2015 class. Even with the higher tuition, the program is less expensive than other large university programs. Following are tuition levels for similar programs around the country:
• University of Texas: $89,250
• University of Texas-Dallas: $82,000
• University of Pennsylvania (Wharton College): $171,360
• University of Oklahoma: $77,400
• Arizona State University: $79,600
• Auburn University: $55,480
• Texas Christian University: $89,500

Anand admitted that it “is tempting to push it (tuition) higher when there is so much demand,” but said Walton College officials are mindful of what the cost means to companies and individuals. He said about 40% of students receive tuition reimbursement from their employer, with the reimbursement ranging from 25% to 100% of all costs.

TECHNOLOGY, CLASS EXPANSION
With expectations for continued demand, Anand said, Walton College officials are planning to expand the program to two sections in 2014-2015. Technology, which has helped foster program growth, will help Walton College administer a second section without stressing the system and jeopardizing quality, Anand said.

“Technology to me is a huge enabler,” he said.

The technology is “centered around the delivery of education,” Anand said, with Walton College faculty developing over the years several options for that delivery. One option allows outside experts to interact with the class from a remote location. All class lectures are recorded, which allows students to merely listen to a lecture and then watch it again to take notes – or vice versa.

Another option is access to a video lecture in which students watch the lecture before attending class.

“This allows students to interact more when they come together,” Anand said. “We’ve already gone to that format, so it’s really about, ‘How do we go beyond that? How do we enhance that impact?’”

Going beyond to enhance an impact may be a journey without books.

“In a few years, we won’t be looking at textbooks,” Anand said of moving to a more digital classroom. “I see this as a huge opportunity.”

But technology, Anand stressed at the end of his praise for its benefits, is not a substitute for human interaction.

He said a key value of the MBA program is that “it builds networks through an interactive format for learning” in which faculty and students gather in or out of the classroom and “engage in these accidental conversations” that foster a level of learning outside even the best-planned curriculum.

The struggle continues to be the balance between quality education, convenience and the ever-changing needs of the private sector.

“We have to continue to increase the flexibility for our students without compromising the quality of the education,” Anand said.

A recent report from the Bureau of Labor Statistics shows a rise in the percentage of foreign-born workers in the American labor force and it's a trend that has also been observed in the Natural State.

According to the "Spotlight on Statistics" report by the bureau, from 1996 to 2012, "the total labor force increased by about 21 million and more than half (about 11 million) of the increase was among the foreign born."

A recent study commissioned by the Winthrop Rockefeller Foundation entitled "A Profile of Immigrants in Arkansas" shows the state lags behind the national immigrant labor force of 15.7%, as reported by the BLS, with immigrants accounting for only about 7% of the Arkansas workforce in 2010, while only representing 5% of the state's overall population which the U.S. Census Bureau estimated in 2011 was 128,809 people.

According to Michael Pakko, chief economist and state economic forecaster at the Institute for Economic Advancement at the University of Arkansas at Little Rock, those numbers could continue to increase in the near future if trends continue.

"We are one of the fastest-growing states in immigration population," he said.

But in order to understand the growth, Pakko said one must understand that part of the growth is due to Arkansas starting "from a low base."

According to the Immigration Policy Center, that low base he referred to showed immigrants only accounted for 1.1% of the Arkansas population in 1990, 2.8% in 2000 and 4.4% in 2011, meaning that any growth could appear large in comparison.

The economic impact of the growing immigrant labor force appears to be having a positive impact, according to Pakko and the Rockefeller study.

In 2010 alone, immigrants contributed $524 million in income, sales, property, small business and other taxes to the Arkansas government, the report said.

"This total includes taxes paid directly by immigrants, as well as indirect taxes paid by natives and by businesses were generated by immigrants' economic activity," the report read.

Even though the state reported over half a billion dollars paid in taxes to the Arkansas government by immigrants, the report by the Rockefeller Foundation also reported that expenditures by the state on immigrant households totaled $555 million on items such as education, health care and corrections, resulting in net expenditures of $31 million, or $127 per immigrant.

The report did draw a distinction between the total paid in taxes versus the total expenditures (the fiscal impact) and the total statewide economic impact, which it said totaled $3.9 billion in combined consumer expenditures and tax contributions, resulting in a net economic benefit to the state of $3.4 billion in 2010.

Pakko said when evaluating the fiscal and economic impacts, it is important to look at the complete picture of what the expenditures pay for.

"Some of the costs we're looking at is the cost of educating children," he said. "We never look at educating non-immigrant children as a drain on the future. It's a benefit to the future. I think there's some interpretation issues in how you assess economic cost and benefits to having immigrants in the state."

The Rockefeller study did address the education cost.

"On a per capita basis, immigrants' contributions ($16,300) exceeded the fiscal cost of essential services ($2,300) by $13,900," the report reads. "That is, immigrants generated $7 in business revenue and tax contributions for every $1 the state spent on services to immigrant households - K-12 education, health-care, and corrections - in 2010."

According to the report, the largest expenditure was on education for immigrants' children, "a large majority of whom are U.S.-born citizens."

Attempts to contact groups and elected leaders to speak on the economic and fiscal impacts of immigration in Arkansas were unsuccessful. Secure Arkansas founder Jeannie Burlsworth, whose organization has voiced support for tightening immigration laws in Arkansas, did not return calls seeking comment for this story.

Pakko said the changes seen over the last several years will only accelerate in the near term.

"I think with the baby boomers approaching retirement, with so many people dropping out of the labor force, we're going to have to find a younger workforce to fill in the gaps and immigration is one way of approaching that issue."

PANEL DISCUSSION
On Wednesday (Aug. 28), a panel of four state leaders discussed immigration reform as part of a Clinton School of Public Service program.

Jeffrey Hall, Arkansas Farm Bureau Associate Director for National Affairs; Dr. Zulma Toro, Provost and Executive Vice Chancellor for Academic Affairs at UALR; Dr. Sherece West-Scantlebury, Winthrop Rockefeller Foundation President; and Randy Zook, Arkansas State Chamber of Commerce/AIA CEO participated.

Hall said that in the agricultural field – which includes row crop farming as well as fruit, poultry and rice production – Arkansas has needs that are different than other states.

"Our needs are different than places like California. We need a new agricultural visa program that would allow some employers and employees some flexibility," he said. "There needs to be a way to apply for 'legal status' for those who are here illegally, particularly in the agricultural business."

Hall clarified that "legal status" did not mean citizenship, but that his group supports a means to making illegal immigrants reach a legal immigrant status for purposes of work.

Toro said that there is a misconception that illegal immigrants are taking all available U.S. jobs and contributing to unemployment rates. She said that while there are low-paying jobs that American workers have tended to avoid, there are also specialized skills sets that foreigners possess that contribute positively to the U.S. economy.

"There is a need for certain skills and knowledge-based jobs that immigrants have that aren't available for current U.S. citizens," she said.

Zook agreed.

"We need a fresh infusion of immigrant laborers not just on the low end, but on the high end," he said. "We need to staple a green card on every diploma of an immigrant college graduate who is a visa holder."

Zook also said that he talks to state business leaders, particularly in manufacturing, who would like to see immigration rules changed in order to recruit more workers to Arkansas.

"There are several thousand potential jobs that are just not coming to fruition because of the lack of available able-bodied people for those jobs," Zook said, adding that it is "completely bogus" that poultry plants are full of illegal immigrants.

Congress has stalled on its immigration reform debate as the Senate has passed a comprehensive measure and the House is looking at a piecemeal approach with different bills to address border security, knowledge-based workers, and citizenship rules.

An audience members asked the panel if removing the "pathway to citizenship" portion of the debate could unlock the gridlock on immigration in Washington.

West, whose Rockefeller Foundation group spearheaded the recent study, said, "If the pathway to citizenship were taken off the table, would immigration reform pass? Border is such a huge challenge. There are other parts of that bill that require much debate. It's a major factor, but it's not the only factor."

Zook said he thought the issue may stall until after the 2014 elections.

"The House is determined to self-destruct," he said. "I think after the '14 elections, this will likely get more support from Republican House members because the mix will be different."

Lt. Gov. Mark Darr (R) says he will no longer be a candidate for the U.S. Congress, District 4 seat. The announcement comes less than a month after Darr’s Aug. 12 formal entry in the race.

In a statement released to Talk Business Arkansas this morning, Darr said:
“After careful thought and deliberation, I will not be seeking the Fourth District position in the United States Congress.

I feel that my priority needs to be focused on my family and sometimes trying to achieve titles gets in the way of that.

I look forward to serving out my current term as Lt. Governor and helping my friends get elected or re-elected should they desire my assistance.

I have made many friends across this state.. . young and old. .. Democrats and Republicans and for their unwavering support I am humbled.”

Darr’s campaign was consumed last week after Matt Campbell with the Blue Hog Report blog reported on discrepancies and expenses in Darr’s campaign finance reports related to campaign debt from his Lt. Governor’s race.

Darr wound up self-reporting items to the Arkansas Ethics Commission and is in the process of amending his campaign expenditure records.

Darr’s exit from the Fourth Congressional District race leaves House Majority Leader Rep. Bruce Westerman, R-Hot Springs, and businessman Tommy Moll as the only two GOP candidates in the field. Democrat Janis Percefull has also announced for the seat.

UPDATED INFO BELOW
Rep. Westerman issued a statement this morning:
“I thank Lt. Governor Darr and his family for their continued service to the people of Arkansas. I salute him for being an important part of the historic 2010 election that started our state down the path of common-sense conservative government–a path we must continue to move forward upon in order to create a brighter future for our state.

“I will continue my campaign to fight the unfair, top-down government of President Obama and change it into one that treats us fairly, doesn’t pick winners and losers, no longer ties the hands of state government, lives within its means, and creates an environment where we can grow good-paying jobs for Arkansas workers.”

In a one-on-one Talk Business Arkansas interview, Darr said he is out of the Fourth Congressional District race, but he’s not ready to endorse any candidate and he’s not certain yet if he will be on the ballot in 2014 in some capacity, including Lt. Governor.

“I’m not running for Congress, I’m not running for Governor,” Darr said on Thursday morning. “I think what I need to do is get this cleared up at the Ethics Commission first before I even worry about that.”

Darr is referring to discrepancies and errors in his candidate filing reports related to debt retirement that were first reported by the Blue Hog Report blog. Darr is self-reporting a number of errors and says he’s hired Morrilton attorney Paul Dumas to represent him before Ethics Commission.

“No one wants to make a mistake in filling out reports obviously, I’m not throwing other people under the bus. I signed the reports, so it’s my campaign, my responsibility. But there were some errors on there,” he admitted. Darr also said that he expects he may owe his campaign money as he took more than the debt he was owed.

“I think I will. It’s not a whole lot of money but it’s still an error in calculation and reporting,” Darr said. He was not ready to disclose the total repayment as he wanted Dumas to review his amended reports, but he said the amount was “not exorbitant.”

DROPPING OUT OF CONGRESSIONAL RACE
Darr said he thought the problems with his ethics reports would not have prevented him from being competitive or winning the Fourth District Congressional GOP nomination.

“It didn’t affect my ability to raise money,” he said claiming that he had numerous commitments that he did not call in during his first days of the race. He doesn’t think he’ll have to file a report with FEC due to the small amount of money he actually collected.

But the ordeal with the ethics reports was an indicator of how brutal the political campaign in the competitive race was going to be, and Darr said last week he figured he would have to drop his Congressional bid because of the questions that were raised.

“Last Friday, I knew what my decision was. No one likes their character being questioned,” he said, acknowledging that it was very difficult for him and his family.

“When somebody talks bad about me, I can get over that and it doesn’t bug me. Or when people spread rumors or accusations or comparisons, I guess you could say, that doesn’t bug me. But it bugs my wife. If I look at that on the flip side, I’d be overprotective of her,” said Darr.

“I’m really relieved to be honest with you,” said Darr of his decision to exit. “Now I can quit being so reserved, I can be outspoken. I don’t have to worry about how will this statement or how will this position affect me in the primary.”

He’s not willing to throw his endorsement to any candidate yet, which could include announced Republican candidates Rep. Bruce Westerman, R-Hot Springs, or newcomer Tommy Moll. Darr said he had spoken with Moll and the two said they wanted to make introductions.

Darr also said that he has spoken with former Fourth District candidate Beth Ann Rankin, whom Darr considers a “great friend of mine.” Darr confirms what she has said publicly in that she is still considering a run.

“I think it’s a Republican seat regardless. I don’t mean that disrespectfully to the other side, but I just think it is,” he said.

Rumors are flying that Darr could eye a term-limited state legislative seat or a county elective post, or even remain in the Lt. Governor’s race despite the fact that Rep. Charlie Collins, R-Fayetteville, and Rep. Andy Mayberry, R-Hensley, have already thrown their hats in the ring. He could avoid running for any position and simply help candidates who want his assistance.

“Ultimately, I’m going to do what’s right for my family. If it means running, then it means running. If it means not running, then it means not running,” Darr said.

STATE OF POLITICS
Darr’s recent experience has had an impact on his political perspective.

He’s all right with the revelation of his campaign finance problems and how it unfolded, despite it tripping up his campaign.

“I’m quite all right with the things that have been brought out and I’m going to address it,” he said. “The Mark in me wants to fight, every time somebody says something about me, I want to take them down, but I am a happier person when I’m not angry at people.”

Darr said he knows Republicans and Democrats who take great pleasure in other people’s downfalls and its problematic for the state and country.

“When you see somebody make a mistake, there’s a difference between bringing it to the public’s attention and hopefully getting it fixed, regardless of who that person is, or rejoicing in a person’s misery. I actually feel sorry for those people,” he said. “Maybe I was supposed to run to realize just how important family and friends are.”

“I think the more things like this that happen that drive normal people away from politics, the closer Little Rock is going to get to Washington, D.C.,” Darr added. “I’m not a cutthroat person, I’m not a vengeful person. I get angry, but I’m not going to walk around on a fact-finding tour and for the next 15 months have my staff pull everybody’s financial filings and we’re going to go through them with a fine-toothed comb and report who’s doing them right and who’s doing it wrong.”

“I think I’m a normal person. I’m an ordinary person that ran for office. Regardless if I continue or not, I want to be a normal person. I think that’s the question I have to answer for myself: can I continue and still be myself? As soon as I get that answer, I think I’ll know if I’m done with politics.”

Representatives from Arkansas, Louisiana and Missouri gathered in Barling on Thursday (Aug. 29) to discuss the status of the Interstate 49 project that will eventually link the Gulf Coast with Winnipeg, Manitoba, in Canada.

The meeting, held at the new Arkansas Highway and Transportation Department (AHTD) District 4 Headquarters adjacent to the section of I-49 under construction at Chaffee Crossing, focused heavily on where the project stands and ways to fund the remaining portions of the project. The largest unfinished section, a 170-mile stretch from south of Fort Smith to Texarkana, Ark., is estimated to cost $2.5 billion.

Dan Salisbury, the assistant director of the southwest district of the Missouri Department of Transportation (MoDoT), spoke about the progress made by his state, which recently opened a large stretch of I-49 from Kansas City to just six miles north of the Arkansas state line in Pineville, Mo.

Salisbury said his state had made progress to take the interstate as far as they had, though funding to complete the state's I-49 corridor in a section known as the Bella Vista Bypass was not currently in place.

"And today, we have the plans done. They've been done for many years. We would have to go in and refresh those plans, but that would be a relatively minor task. We purchased the land but we have one challenge," he said. "Considering all the work we did north of there, we no longer have enough money to complete that. So at this time, we can't commit to a schedule in Missouri to do that."

The shortfall in funding amounts to about $25 million, though he said Missouri transportation officials were working to find a funding source to complete the state's portion of the project.

TOLL ROAD STUDY
AHTD Public Information Officer Randy Ort said while Missouri was struggling to secure the funding necessary to finish its portion of the Bella Vista Bypass, Arkansas had secured enough to install two of the highway's planned four lanes. To complete the other four lanes, AHTD would have to figure out a way to raise an additional $50 million.

One way to possibly pay for the Arkansas portion of not only the Bella Vista Bypass, but other sections of the interstate, would be the creation of Arkansas' first ever toll road, which Ort said was being studied for feasibility.

"It's a candidate to be a toll road, but we need to get the results of this study," he said. "Another reason the results of this study are so important, no only will that show us whether or not it's feasible as a toll road, it will provide us a great amount of data and information as to what it will take to complete the final two lanes to make it the ultimate four lanes that both states want. So by getting the results of the toll study, we think there is a possibility, and a realistic possibility, whether it's a toll road or not a toll road that we will be able to complete this as a four lane facility in the time frame that we committed to only committed to build the two lanes."

The construction of the Bella Vista Bypass, Ort said, is definitely funded for the two lanes as part of nearly $600 million to be spent on transportation infrastructure upgrades in Benton and Washington Counties in the next several years using funds from a half cent sales tax on diesel fuel passed by voters in November 2012. In Northwest Arkansas, those funds will be used not only to build the two lanes of the Bella Vista Bypass but also to add additional lanes along the I-540 corridor, which will eventually be part of I-49 should the project ever be completed.

MOBILITY AUTHORITIES
Attorney Jack Williams of the Williams and Anderson Law Firm was also present to discuss the use of Regional Mobility Authorities as avenues local city and county governments could use to funnel money to completing the projects in their respective areas.

By forming local mobility authorities, Williams, an expert in mobility authorities, said it would help the state secure federal grants and other funding mechanisms.

"A project like this is likely to require federal funding and when you apply for federal funding, the state transportation department can also have some kind of partnership or support. Local government, it very much helps move you up the latter of qualifying for some of this grant funds. Grant funds aren't always there, but sometimes they are and as always, there's a lot of candidates for it."

One such authority is already in existence along the I-49 route – the Northwest Arkansas Regional Mobility Authority.

On the Authority's website, it makes clear that it does not replace federal or state funding, but instead supplements funding. The website also states that all projects, by state law, "must be approved by voters."

FEDERAL FUNDING OPTIONS
As part of the conference, the I-49 International Coalition also presented a webinar that focused on innovative federal finance options.

One of the options mentioned was GARVEE Bonds (Grant Anticipation Revenue Vehicles), which allows a state to finance a highway project for a term "for a debt instrument that has a pledge of future Title 23 Federal-aid funding," according to the Federal Highway Administration's website.

"GARVEEs enable a state to accelerate construction timelines and spread the cost of a transportation facility over its useful life rather than just the construction period. The use of GARVEEs expands access to capital markets as an alternative or in addition to potential general obligation or revenue bonding capabilities. The upfront monetization benefit of these techniques needs to be weighed against consuming a portion of future years' receivables to pay debt service. This approach is appropriate for large, long-lived, non-revenue generating assets."

Other ideas included the implementation of Tax Increment Finance Districts (TIFs), which would collect taxes in a designated area to be used for a specific project, such as highway funding, and possibly creating a public-private partnership to share in the cost of construction and upkeep of a given highway.

‘ACCELERATED RATE’
Following the meeting, Arkansas House Transportation Committee member David Whitaker, D-Fayetteville, said it was important to find alternative methods, such as those presented today, in order to ensure not only easier transportation between north and south Arkansas, but also to create economic development across the region and nation.

"What we're talking about is from an economic development standpoint – combined with the east-west traffic we have on Interstate 40, plus having New Orleans to Winnipeg north to south coming straight down our corridor. Just think of the number of people that would be passing through there, even if only stopping once to get gas, staying a night in a hotel."

Gard Wayt, the Shreveport, La.-based executive director of the I-49 International Coalition, said having officials like Whitaker and others from the city and county level on up to the federal level participate in today's meeting was designed to get all sides thinking and working together to figure out how to finish I-49 at an accelerated rate, a rate at which the interstate could be done in less than a decade.

"If I were going to be safe, I'd say (the Arkansas portion would be complete in) 10 years," Wayt said. "But what we're trying to do is cut that in half."

A partial approval of contract terms that may push forward by several weeks ratification of a five-year labor agreement was likely not the report officials at Fort Smith-based Arkansas Best Corp. wanted to hear.

The contract, once ratified, will cover about 7,500 employees of ABF Freight System who are members of the union. Most of those workers are drivers. ABF is the largest subsidiary of Arkansas Best, a transportation holding company. The contract includes an immediate 7% wage reduction that is recovered by the fifth year of the contract. The company was also able to negotiate for flexibility in work schedules and work across job classifications. Most of those workers are drivers.

The five-year contract between Arkansas Best and the International Brotherhood of Teamsters was approved June 27, but some supplemental provisions were rejected. Officials with both sides negotiated the rejected provisions, and the seven “local/area supplements” were again placed on the local ballots for approval.

But Arkansas Best reported Thursday (Aug. 29) that only five of the seven supplements were approved. Neither the company nor Teamsters officials provided comment on how the remaining two supplements would be handled. Supplements not approved are from the Central Region Local Cartage and the Western States Office Employees—Part V.

“The national master portion of the ABF National Master Freight Agreement has previously been approved, but will not take effect until the status of the two remaining supplements is resolved,” noted a statement from the Teamsters.

“The five-year agreement is an important step to return ABF to its historic profitability, while preserving the best-paying jobs and benefits in the freight industry,” the company noted Thursday in a filing with the U.S. Securities and Exchange Commission.

Further delay in contract approval will prove costly for Arkansas Best. Brad Delco, a transportation industry analyst with Little Rock-based Stephens Inc., said Friday it could be another six to eight weeks – “in a best-case scenario – before a contract is ratified.

Delco outlined in a previous note to investors what the contract means financially to Arkansas Best. He initially said benefits from the new contract would result in 2013 net earnings of 60 cents per share, or near $16.25 million. However, because the benefits of the new contract are not likely to begin until later in the third quarter, Delco in early August lowered the estimate to 30 cents per share.

For the same reason, Wells Fargo lowered its 2013 per share estimate for Arkansas Best to 43 cents from 67 cents.

It’s no small shift. For example, Delco’s lowered estimate shaves more than $8 million from the Arkansas Best bottom line. The lowered estimate by Wells Fargo reflects a reduction of almost $6.5 million from 2013 net income for Arkansas Best.

The newest delay may mean the savings don’t begin until the fourth quarter – not the timeline for which company officials were expecting earlier in the year. A 2013 in positive territory will avoid two consecutive years of losses for the company. In 2012, the company posted a $7.7 million loss, a wide swing from the $6.159 million gain in 2011.

Also, ending on a positive note means the company will have to perform well in the back half of the year. For the first six months of 2013, the company has a loss of $8.517 million.

Delco, however, is optimistic that company and union officials will hammer out an agreement.

“I feel pretty confident that we’ll see something that will be ratified and Arkansas Best will be on the path to profitability,” he said, adding that “both parties are interested in getting to a point where this is behind them.”

The contract delay could put downward pressure on third-quarter financials for Arkansas Best. The consensus of analyst estimates has the company earning 40 cents per share in the third quarter. Delco said “some may argue a slight deterioration” in earnings compared to the second quarter.

Second quarter net income hit $4.878 million, down 58.8% compared to the $11.8 million earned in the second quarter of 2012. However, the second quarter 2012 net income included an $8 million tax benefit. Revenue during the quarter was $576.899 million, well ahead of the $510.543 million during the second quarter of 2012.

Shares of Arkansas Best (NASDAQ: ABFS) closed Thursday at $26.59, up 11 cents. During the past 52 weeks the share price has ranged from a $27.48 high to a $6.43 low.

The path to victory for a statewide candidate in a Republican primary is said to go through Northwest Arkansas, specifically Benton County, and for good reason if you look at the numbers. But with the state turning increasingly red over the last few elections, some GOP strategists believe a new path is beginning to emerge.

“A lot of people like to classify the Republican party in Arkansas as just the Northwest Arkansas party,” said Clint Reed, a partner at Impact Management Group in Little Rock. “We’re certainly not that anymore.”

According to the numbers Reed provided, from 2004 to 2006, Northwest Arkansas – consisting of Benton, Washington, Sebastian and Crawford counties – represented nearly 40 percent of all Republican primary voters in the Natural State with Benton County leading the way each time. From 2008 to 2012, Northwest Arkansas, on average, represented about 32 percent of total primary votes.

“Obviously the dynamics are changing,” said Keith Emis, a partner at Diamond State Consulting in Little Rock. “In 2006, there were 50,000 voters total in the Republican primary that year, and I think you’ll see upwards of that in just the Fourth District alone next year in the congressional primary.”

Of those 50,000 votes in 2006, Northwest Arkansas represented a whopping 45%. But in the 2008 presidential primary, those numbers began to change. Of the roughly 185,000 Arkansas Republican primary votes cast in 2008, Northwest Arkansas accounted for 27%, a nearly 20% drop from 2006. Pulaski County topped Benton County, too, that year, with 25,000 votes to Benton County’s 21,000.

“I think that Arkansas, having become a majority Republican state, you are going to see an increase in Republican primary participation,” added Emis.

CROWDED PRIMARIES
Crowded and competitive Republican primaries have always been a given in Northwest Arkansas, which hasn’t been the case across the rest of the state until recently.

“If you look at what’s happening in places like Lonoke County, Faulkner County, Saline County, Garland County – these places are hotbeds for conservatism,” said Reed. “There’s a central Arkansas base developing in the statewide primary that will one day rival northwest Arkansas,” said Emis. “It’s not quite there yet, but it will rival it.”

In 2004, Lonoke, Faulkner, Saline, and Garland counties represented about 13% of the GOP vote. In 2012, the four counties accounted for 20% of the total.

“The argument can be made, and has been made and I generally support it, that someone outside of Northwest Arkansas can win a primary statewide because the party has grown,” said Reed, who points to the continued increase in GOP voter turnout as key. “If you have more candidates on the ballot in primaries, and even down to the county level, it breeds turnout, which in turn, gives those statewide candidates the opportunity to pick up votes that they ordinarily wouldn’t have.”

From 2004 to 2006, voter turnout in statewide Republican primaries averaged 51,782. From 2008 to 2012, the average more than tripled to 157,180. And with the unprecedented success Arkansas Republicans have had as of late, it’s hard to believe those numbers will fall back below pre-2008 levels any time soon.

“To win Northwest Arkansas is still incredibly important in a primary,” said Emis. “It’s just not the only thing that matters like was true six years ago, eight years ago.”

GOP Statewide Candidates And Where They Reside:
Governor
Asa Hutchinson (Benton County)
Debra Hobbs (Benton County)
Curtis Coleman (Pulaski County)

Lt. Governor
Andy Mayberry (Grant County)
Charlie Collins (Washington County)

Attorney General
David Sterling (Pulaski County)
Leslie Rutledge (Pulaski County)

Secretary of State
Mark Martin (Washington County)

Treasurer
Duncan Baird (Benton County)
Dennis Milligan (Saline County)

Auditor
Andrea Lea (Pope County)
Ken Yang (Saline County)

Commissioner of State Lands
John Thurston (Pulaski County)

ABF Freight System has again seen a $750 million lawsuit against the International Brotherhood of Teamsters and YRC rejected by a federal court.

ABF, the largest subsidiary of Fort Smith-based Arkansas Best Corp., announced Aug. 30 through a filing with the U.S. Securities and Exchange Commission that the United States Court of Appeals for the Eighth Circuit affirmed a lower court ruling to dismiss the case.

Officers with ABF have claimed that YRC, a trucking company, and the Teamsters violated the National Master Freight Agreement when the Teamsters provided YRC wage concessions that other trucking companies under the agreement were not provided. The NMFA, implemented April 1, 2008, was designed to create equal labor costs and other benefit payments among trucking companies with drivers represented by the Teamsters.

The lawsuit, first filed in November 2010, was dismissed a second time by U.S. District Court Judge Susan Webber Wright (Eastern District of Arkansas). ABF officials are deciding whether to take a third shot at the case.

“ABF is disappointed in the court’s ruling and the fact that YRC received three rounds of concessions from the IBT that ABF did not also receive. ABF is assessing the opinion and determining whether to pursue additional options,” noted the ABF response.

Arkansas Best officials have said the Teamster wage concessions gave YRC a competitive advantage, and resulted in higher operating costs for ABF. In the past four years, the company has posted a loss.

For the first six months of 2013, the company posted a loss of $8.517 million, more than the loss of $6.321 million during the same period in 2012. In 2012, the company posted a $7.7 million loss, a wide swing from the $6.159 million gain in 2011. The 2011 income company was a big improvement from the $32.693 million loss during 2010. The 2011 financials marked the end of two consecutive years of income losses.

Company and Teamster officials are close to finalizing a new five-year labor agreement. The existing labor contract technically expired March 31, but has been extended to Sept. 30 to allow for supplemental provisions of the contract to be renegotiated or taken back to certain union offices for another vote. The core of the contract was approved by Teamsters on June 27.

Key terms of the contract include an immediate 7% wage reduction that is recovered by the fifth year of the contract. The company was also able to negotiate for flexibility in work schedules and work across job classifications. Most of the about 7,500 workers covered under the agreement are drivers, but the union membership also includes dockworkers, mechanics and office staff. Arkansas Best employs more than 10,000.

Being ready for Day One is the No. 1 priority for Arkansas’ newest publicly traded company, Murphy USA.

The spin-off of the El Dorado-based oil and gas parent company, Murphy Oil Corp., Murphy USA opened for trading on Tuesday (Sept. 3) on the New York Stock Exchange under the trading symbol “MUSA” with the stock beginning at $37.30 per share. (Shares traded higher during the day, and were up more than 50 cents in early afternoon trading.)

Murphy Oil shareholders received one share of MUSA common stock for every four shares of Murphy Oil common stock held at the close of business on the record date of Aug. 21, 2013.

The company already has its management team and board of directors in place, so it was ready for business on its first day as a standalone firm.

“Being prepared for Day One is key,” Murphy USA CEO Andrew Clyde tells Talk Business Arkansas. With Murphy USA operating in many ways as an independent division within Murphy Oil, Clyde expects few, if any, glitches. Because the spin-off date was initially fluid, he said his team hit a July 1 deadline to have all of the accounting, finance, IT and human resources components in place. Contracts have been altered to segregate the two companies at the right time.

He’s been hitting the road to meet with investors, analysts and potential shareholders in the third quarter of 2013. His presentation is made easier by the fact that he’s selling an existing enterprise that has been the baby of the family business.

“Not only has the earnings been tangled up and hidden inside Murphy Oil Corp, but the story has been a little lost as well,” he said. “It just doesn’t get the attention on the earnings call and at the analysts’ meeting, and rightly so, it’s a smaller portion of the business. As a standalone business, it is the story.”

BY THE NUMBERS
The new company, which will keep its headquarters in Murphy Oil’s El Dorado corporate complex, already has a major U.S. footprint.

As of June 30, 2013, there were 1,179 retail outlets in 23 states with plans to top 1,200 by year’s end. The business also owns midstream assets, including product distribution terminals and pipeline positions.

Murphy USA accounts for roughly 47% of Murphy Oil’s current revenues, which topped $28.6 billion in 2012. Projections for 2013 indicate that Murphy USA will easily clear $19 billion in sales of fuel, merchandise and other transactions.

The new public company, with more than 7,600 employees, handles more than 1.6 million transactions daily and cleared $83.5 million in net income last year.

About 77% of the company’s retail locations are 208 square foot kiosks that handle 1.6 million transactions daily. Murphy USA is experimenting with larger 1,200 square foot formats, but its strength is in the smaller size, many of which can be found on Wal-Mart properties across the south and midwest.

That “strategic and complimentary” relationship with Wal-Mart is one of five major pillars that Clyde is counting on to come out of the gates fast with the new publicly traded company. Murphy USA has embarked on a 200-store expansion with Wal-Mart over the next three years.

“When you’re sitting in front of the world’s largest retailer, you’re drawing a lot of traffic,” Clyde says. “It’s great real estate and it’s a great consumer base because they are looking for low price and great values everyday.”

Low-cost gasoline and low-cost overhead are two more crucial components to driving shareholder value for Clyde. He notes that price-conscious shoppers – like the ones visiting Wal-Mart – are Murphy USA’s target customers.

Price is the overwhelming number one reason a customer chooses a gas station, Murphy USA’s research shows. In presentations to analysts, Clyde highlights a slide that shows price and promotion account for 81% of the decision-making driving fuel purchases. Convenience is also an important factor.

Murphy USA’s efficiency in building sites – $1.5 million to $2 million per location – and the associated labor that comes with such an efficient operation is another crucial piece to its profitability puzzle. In its smaller 208 square foot formats, payroll may only include five employees.

“We think everyday about if we are doing something to add complexity to our business because we know if we add complexity, we’re going to add costs,” Clyde said.

He also asserts that the company’s safety, security and environmental record is “sterling” and its maturity in the fuel supply chain, thanks to Murphy Oil’s history, gives the new spin-off advantages to maintain low costs that will translate into lower prices for consumers.

“I think the story for investors is pretty straightforward,” Clyde says. “We have some distinctive strength and strategies. We have a strong earnings base, we have growth ahead of us, and we have a conservative capital structure. Those things make a really compelling story.”

The commute along Van Buren's north side will likely be a little smoother in coming weeks due to upcoming milestones associated with two different road projects.

The longest-running of the two projects is the Rena Road widening, which started on June 20, 2012. According to Jason Hughey, district construction engineer with the Arkansas Highway and Transportation Department, the $4.4 million project has narrowed the commute that serves several neighborhoods and an elementary school just north of Interstate 40 between exits 3 (Lee Creek Road) and exit 5 (Fayetteville Road/Arkansas Highway 59) from two lanes to one.

While traffic has been narrowed to one direction for several months now, Hughey expects the road to open to two-way traffic again this week.

"We have it down to one lane right now, but at the end of (next) week we'll have it back to two-way traffic again," he said, adding that the re-opening date for the second lane will likely to be Sept. 5 or 6.

The Rena Road project, which will eventually add a middle turn lane along much of the route from west of Fayetteville Road toward Lee Creek, was slowed by several weather delays during the summer, keeping the route one-way for longer than planned and causing tension for motorists driving the route, including parents taking students to Rena Elementary.

"As far as the rain delays, we've had 23 days where rain has impacted our work," Hughey said. "Like I said, we planned to be back to two lanes before school started."

Another delay in the project was the lack of useable materials at the construction site, which he said was unforeseen.

"We took the old road out and widened the existing material. Some of it had to removed and replaced with more suitable materials."

And while it may feel like progress has been made with the upcoming opening of the second lane of traffic, Hughey said residents will have to endure a few more months of construction before an expected completion date of Thanksgiving opens all three lanes of traffic.

Another project impacting a busy east-west route near a school is taking place south of I-40, at the intersection of 16th Street and Pointer Trail East.

The $624,951.01 project, approved by the Van Buren city council in June, resurfaced Pointer Trail all the way to 24th Street to the east and 16th Street up to the section of 16th maintained by the county. The overlay itself cost $200,000.

City Engineer Brad Baldwin said the construction also included re-routing traffic exiting the city's tennis courts facility and Heritage United Methodist Church to new exits, maintaining traffic flow at the resurfaced intersection.

The reason for the re-routed exits, Baldwin said, is the new traffic signal that will be installed at 16th and Pointer Trail, which accounts for the more than $400,000 in remaining funds associated with the project.

Much of the resurfacing work is complete, though he said the traffic signal is unlikely to be installed until at least October.

"The traffic signal installation will probably be in October just because of the lead time it takes for traffic signal components," Baldwin said. "We're estimating the middle to end of October before the traffic signal is actually up and running."

Even without the signal installed, Baldwin said the redesigned intersection, with the re-located exits at the tennis courts and Heritage, has already relieved congestion near Van Buren High School, which sits just east of the city's tennis court complex.

Following the completion of the signal install, he said area residents and commuters should expect future construction, though he said it should not conflict with traffic.

"There will be a future project that wraps up at the west end of the tennis courts to provide more parking on that end and exit up by the softball fields that exits out onto 16th Street. I'm not sure when that will happen, but I imagine in the next couple of years."

It’s crunch time for nine entrepreneurial teams taking part in this year’s ARK Challenge as they get ready for the high stakes program finale — Demo Day — set for Thursday (Sept. 5) at Crystal Bridges Museum of America Art in Bentonville.


This field of nine was chosen from 92 applications for the rigorous 14-week boot camp. Each team earned $20,000 in seed money in exchange for a 6% interest. They also were provided access to a mentoring network to help them get their startup business going and ready to pitch to other angel investor groups on Sept. 5.

“This year’s class is a very competitive international group chosen from 15 different states and 15 countries. They are further along with their ventures than last year’s contenders as some of them already have customers and are generating revenue,” said Jeannette Balleza Collins, program director for the ARK Challenge.


Collins said the selected companies have each put in three months of intense, hard work to get their business ventures ready for an 8-minute investment presentation in hopes of winning one of two coveted $100,000 investment prizes given by the ARK Challenge sponsors: Fund for Arkansas’ Future, Gravity Ventures, Winrock International, New Road Ventures and Arkansas Development Finance Authority.

The contest criteria includes that the companies have some application in retail, transportation and logistics, food industries or consumer technology.

One lucky winner will also be chosen as a new board member for the University of Arkansas RFID Research Center.

“That is another opportunity for one of entrepreneurs presenting in Thursday’s Demo Day,” Collins said.

The business ventures that will be pitched to a room of investors on Sept. 5 include services for consumers that will help track luggage and make flying more convenient, provide a tool to order home-cooked meals that are delivered hot to the front door and help keep the country’s highways safer by forewarning of accidents. There are also ventures to help newspapers and crafters among this group of contenders.

Collins said the this year’s teams are in their final lap preparing for the Demo Day showdown.

“We have had more inbound interest from outside investor groups who plan to attend this year’s Demo Day. Last year there were three winners chosen by the ARK Challenge judges, but three other teams also secured funding as a result of that day from outside investors. This cohort is more mature, and that should bode well for their attracting more investors,” Collins said.

THE NINE TEAMS
Langhar : a web/mobile app to access a trusted community marketplace where students, young professionals and businesses can book delicious, home cooked meals for pickup, delivery or dine-in experience at the chef’s home. Founders: Karanpreet “Karan” Singh, Pankaj Sharma, Pawan Saini and Sunil Kumar from Delhi, India

Passenger Baggage Xpress:
 Your luggage passport, PBX is the travel baggage tracking/recovery network, complete with website, mobile app and unique PBX ID system, that makes flying with luggage secure and easy. Founders: Michael Eason and Brandon Eason of Little Rock

WeGreek: A group management tool, built exclusively for fraternities and sororities, to help chapters manage all activities in a single place. Founders: Mary Dunlap, Luke Pittman, Lukas Deem and Jonathan Ulrich of Conway and Little Rock


PressBaby: 
Multimedia digital content creation and distribution engine for newspaper and magazine publishers. Founders: Jody Shackelford and Emily Reeves of Hardy and Little Rock

Visualogistic Technologies: 
Distributed, low-cost, networked forewarning Automated Detection & Alert System (ADAS) to prevent highway collisions and to promote safety awareness. Founders: Brett Schaefer, Eric Specking, Andrew Dodson and Dr. Scott Smith of Fayetteville.


Overwatch: Mobile app, hardware and branded guns and gear that combine core game features and technologies from combat video games for enhanced live-action airsoft, paintball and laser tag matches. Founders: Josh Moody, Joe Saumweber and Michael Paladino of North Little Rock and Bentonville

Info Assembly: An intelligent enterprise search and analytics platform that accelerates investment research and empowers faster reporting and business decision making.
Founders: Aditya “Adi” Goel and Karthik “Kar” Vaidyanath of Delhi, India

Gamerius: Focused on delivering a seamless experience for the entire lifecycle of a game, the only community-curated marketplace where gamers can choose, fund and purchase games. Founders: Juan Videla and Agustín Juárez of Buenos Aires, Argentina and Montevideo, Uruguay

Craftistas: A monetization platform that not only helps bloggers and content creators turn their creative content into a personal shopping experience, but also changes the way people discover and buy craft materials. Founders: Camille Malkiewicz and Ashleigh Pinkerton of Syracuse, New York, and Fayetteville.