Shipping on the Arkansas River continues to slow in 2015, with the U.S. Corps of Engineers reporting a 9% dip during the first four months of the year. Recent heavy rains in Arkansas, Kansas and northern Oklahoma may slow traffic more in future months.

The U.S. Corps of Engineers reports that 3.718 million tons floated up and down the Arkansas River between January and April, down 9% compared to the same period in 2014. Inbound tonnage was up 7% during the first four months, while outbound tonnage was down 30%. Shipments between ports on the river were down 2%.

April saw 907,240 tons shipped, down 11.16% compared to the 1.021 million tons shipped in April 2014.

The Arkansas River system (The McClellan-Kerr Arkansas River Navigation System) is 445 miles long and stretches from the confluence of the Mississippi River to the Port of Catoosa near Tulsa, Okla. The controlled waterway has 18 locks and dams, with 13 in Arkansas and five in Oklahoma. The river also has five ports: Pine Bluff, Little Rock, Fort Smith, Muskogee, Okla., and the Tulsa Port of Catoosa in Oklahoma. 

Without gains in the remainder of the year, the river could see two consecutive years of shipping declines. Tonnage totaled 11.719 million tons in 2014, down from the 12.139 million in 2013 but better than the 11.687 million in 2012 and the 10.6 million in 2011.

Marty Shell, owner of Van Buren-based Five Rivers Distribution which operates the port facilities in Van Buren and Fort Smith, said he was expecting Arkansas River tonnage to increase in the second quarter based on shipping trends at ports in Houston and New Orleans. However, the recent and expected April rains have him minimizing his expectation of gains and pushing those to the third quarter.

“A couple of the locks have shut down ... and a lot of tow boats have tied up,” Shell said during a Monday (May 11) interview. “I will probably not be doing anything for about two weeks except for cutting grass and painting and cleaning up. ... You will definitely see a decrease (in river tonnage) in May and it could go into June.”

There is a double whammy for river operators, according to Shell. Once river levels return to near normal flows, the the Corps releases excess rainwater from Oklahoma lakes along the system.

“And we then get hit again. ... It will effect us for about two weeks or so,” Shell said, adding that it will be more than two weeks if more rain falls in the north Oklahoma and Kansas areas that drain into the Arkansas River watershed.

Because the ports in Fort Smith and Van Buren provide raw materials for everything from manufacturers in Fort Smith to the construction industry in Northwest Arkansas, high river levels for an extended period could become an issue. However, Shell said most of his customers carry about a month of supplies, and is confident river traffic will be moving within a month.

As to why tonnage is down year-to-date, Shell said that is a mystery to him.

“I cannot give you a reason why. We have been busy this year. Now we will slow down because of the water, but that’s the only thing that has slowed us down,” Shells said.

Shipments of sand, gravel and rock – typically the biggest category based on tonnage moved – totaled 891,841 tons during the first four months of 2015, down 11%. The category is a reflection of private and public sector construction. Iron/steel shipments totaled 562,525 tons during the first four months, unchanged compared to 2014. Such shipments reflect manufacturing activity near the shipping corridor.

The McClellan-Kerr Arkansas River Navigation System recently was upgraded from “Connector” to “Corridor” status under the U.S. Department of Transportation’s America’s Marine Highway Program

This is the third piece of good news for the MKARNS in recent months. Earlier this year, the U.S. Army Corps of Engineers changed the system’s designation from a moderate-use to a high-use system, the same classification given to the Mississippi and Ohio Rivers. Previously, the Corps had announced that its budget included a $3 million study of the “Three Rivers” area, which is the confluence of the Arkansas, Mississippi and White Rivers. A major flooding event in that area could shut down the system for up to a year. Half of the $3 million is funded by the federal government. State legislators agreed to fund the other half during this year’s legislative session.

A vote Tuesday in a northwest Arkansas town to maintain an anti-discrimination ordinance may create a further battle in the courts, a person opposed to the ordinance said Wednesday.

Voters in Eureka Springs voted Tuesday (May 12) 579-231 in favor of keeping the ordinance approved by the Eureka Springs City Council in February.

The ordinance “seeks to protect and safeguard the right and opportunity of all persons to be free from unfair discrimination based on real or perceived race, ethnicity, national origin, age, gender, gender identity, gender expression, familial status, marital status, socioeconomic background, religion, sexual orientation, disability and veteran status,” content partner the City Wire reported Tuesday night.

There has been discussion in the past year or so, with similar ordinances being supported in other Arkansas cities. The Fayetteville City Council approved a similar ordinance last year. However, voters there overturned the council vote during a special election earlier this year.

The cities of Little Rock and Hot Springs have approved ordinances banning discrimination among city employees and contractors.

Meanwhile, legislators approved Senate Bill 202 by wide margins during the session. The bill, which would ban local governments from creating anti-discrimination ordinances, was approved by a 24-8 vote in the Senate Feb. 9 and 58-21 in the House Feb. 13. The bill became law without the signature of Gov. Asa Hutchinson, which is allowed under state law.

“Senate Bill 202 passed with significant margins in the General Assembly, and I have a high regard for the discussion in the Legislature and respect for the legislative process. As Governor, I recognize the desire to prevent burdensome regulations on businesses across the state. However, I am concerned about the loss of local control. For that reason, I am allowing the bill to become law without my signature,” Hutchinson said at the time.

However, the law did not have an emergency clause on it and will not go into effect until 90 days after legislators officially ended the session ("sine die"), which occurred on April 22.

‘DIRECT CONFLICT’ WITH SB 220
Jerry Cox, an official with the Arkansas Family Council, said the vote Tuesday was expected but said the city’s ordinance is “egregious and far reaching.”

“First of all, anyone who believes the Eureka Springs vote is how the rest of the state feels, they are severely mistaken,” Cox said. “It could not have passed anywhere but Eureka Springs.”

Cox said the town’s liberal orthodoxy led to voters approving the ordinance. He also said he believes the ordinance is in “direct conflict” with SB 202, and believes the Eureka Springs ordinance is unenforceable because of SB 202.

As for the issue, Cox said he believes it will likely be decided in the courts.

“Now that Eureka Springs has passed (the ordinance), the question I would ask is who is being discriminated against now,” Cox said.

Cox compared the issue to a see-saw, with religious freedom on one side and personal freedom on the other. He noted when one side rises, the other side drops. Cox said the ordinance could have an impact on religious freedom on other issues including whether a Muslim who owns a restaurant would be forced to serve pork, as well as small businesses complying with the ordinance.

“There has been no cases in any of these cities. I am not aware of any discrimination in any ordinance (in Little Rock or Hot Springs, two other cities that have passed anti-discrimination ordinances). If it is not a problem, why go to great lengths,” Cox said. “It is social activists using it to make a social statement.”

Cox said his group is considering its legal options on the Eureka Springs, Hot Springs and Little Rock ordinances.

“We will possibly get involved but it is too early to know,” Cox said.

The office of Arkansas Attorney General Leslie Rutledge declined to comment on the possible legal implications of the Eureka Springs vote.

ORDINANCE PROVIDES ‘CLARITY’
Supporters of the Eureka Springs ordinance applauded the vote Tuesday. Kendra Johnson, Arkansas state director for the Human Rights Campaign, said the Eureka Springs ordinance provided clarity.

"Arkansas cities are leading the way and we hope that Governor Asa Hutchinson is taking notice. Where leadership has failed Arkansans on the state level, local municipalities like Eureka Springs have taken the initiative to ensure that all their residents are rightfully protected from all forms of discrimination, Johnson said in a statement.

In the statement, another supporter, Lamont Richie said people in the town worked to build support for the idea.

"As a small group of committed citizens of Eureka Springs, we are very happy that we have received such good advice, counsel and support from so many organizations and people including the Human Rights Campaign Arkansas. While 2223 was a totally local ordinance, created by local community members, having the advice and support of so many has been instrumental,” said Richie, who wrote the ordinance and chaired a committee on the issue.

Johnson said the group would continue to work on the issue.

“HRC Arkansas is working to advance equality for LGBT Arkansans who have no statewide protections in housing, workplace, or public accommodations; and legal state recognition for their relationships and families,” Johnson said.

Retail giant Wal-Mart Stores confirmed that it has partnered with Alibaba’s financial arm, Ant Financial, to offer mobile pay in China. It’s an interesting deal given the two parties are competitors on some levels.

“We launched Alipay Wallet in 25 Shenzhen stores, including Sam's Club, with plans to expand to other stores in the future,” said Marilee McInnis, spokeswoman for Walmart International corporate affairs.

The primary reason Wal-Mart said it made the deal is because Alipay will help better serve customers. McInnis told The City Wire that allowing mobile payment in seconds, is increasingly what Walmart customers want because of the convenience and the ability to shop however, whenever and wherever they want.
 
This somewhat unlikely partnership on the surface makes sense on many levels, according to economic and retail experts.

Dr. Raja Kali, professor of economics at the University of Arkansas, said Chinese consumers are encouraged by their government to spend more money as China works to tilt more toward a consumer-driven economy and away from the export-driven model it has been for decades. He’s not surprised to see Walmart China reach out to Alibaba’s financial unit given that Alibaba is a trusted brand among the Chinese. Another interesting factor at work in China is the lack of credit and debit cards in use as the country is still a cash society.  

“We know that the Chinese consumers are sophisticated users of mobile phones and a large adopter of smart phone technology. It’s logical for Wal-Mart to take this initiative in this area because it gives their customers one additional way to pay for their purchases,” Kali said.

He has no doubt that the lack of credit and debit card usage across China is driving mobile pay faster there than in the United States.

“Retailers offering mobile pay in China are creating a leapfrog effect over credit and debit cards.” Kali said. “The fact Wal-Mart is testing this first in Shenzen, where they are headquartered is the equivalent of them testing something in Bentonville like they often do.” 

Alipay spokeswoman Miranda Shek told China Daily that the Walmart China partnership is a significant move as the mobile pay service is gaining popularity. Alipay reported it has more than 800 million registered users and 190 million active users for its mobile pay system. The company also claims to process 45 million transactions daily because the payment option is already accepted at 40,000 locations, including at Wal-Mart competitors Carrefour and government-owned grocers.

Retail expert Carol Spieckerman, CEO of newmarketbuilders, frequently lauds Wal-Mart’s efforts to test the waters, stretch its boundaries and look for solutions that best service its 220 million global customers each week. Spieckerman has characterized mobile pay here in the U.S. like days in the Wild West with various payment platforms jockeying for position amid skittish consumer sentiment from recent data breaches.

Mobile pay in China is further along which gives Wal-Mart an opportunity to use 
its global presence to test the payment form before it become more mainstream in the U.S. 

China is an important market for Walmart International and Walmart.com who controls an Alibaba competitor — Yihoadian. Kali said the benefits of working with Alibaba’s financial mobile pay option are important for Wal-Mart who does compete with Alibaba in some areas.  

“Think of if this way: Wal-Mart also competes with Google and Apple in some areas, but they also offer those products because it’s important to do so,” Kali said.

After pulling back on expansion within China in recent years, Wal-Mart Stores CEO Doug McMillon announced April 29 plans to open 115 new stores inside China by 2017. This expansion will expand the retail giant’s footprint by nearly one-third.

"Our aim is to become an integral part of China's economy," McMillon said in Beijing last month. "China is a top priority."

Shanghai, Shenzhen and Wuhan are three cities tagged for new store openings over the next two years. This expansion will create more than 30,000 jobs The retailer also said it will invest $60 million remodeling more than 50 other stores in China this year.
Doing business in China has not been easy for Walmart in what is a highly competitive environment. Walmart International CEO David Cheesewright said in February net sales in China declined 0.7% and comp sales were down 2.3% for the fourth quarter ending Jan. 31.

In its recent annual report Wal-Mart said it operated 411 stores in China as of Jan. 31.

Wearing his safety helmet, The Video Wire Anchor Dawson Meadows rants about a low voter turnout, a sewer savior and people who rant.

Meadows also discovers a link between “A Wonderful Life” and strategic demolition of Whirlpool’s shuttered manufacturing plant in Fort Smith. Judge Parker’s Rope War and Western Heritage Month are also part of this week’s report.

The Video Wire is a collaboration between The City Wire and Things To Do In Fort Smith.

Wal-Mart Stores has been known to surprise Wall Street on occasion but when the retail giant reports its fiscal 2016 first quarter earnings on Tuesday (May 19) consensus is there won’t be much to celebrate.

The average earnings per share estimate is $1.04, which would be 5.4% shy of last year’s earnings, according to 26 analysts who follow the retailer’s financial performance.

Veteran analyst Water Loeb, of Loeb Associates, expects disappointing results from Wal-Mart Stores. He said the retailer is not the store of choice for too many. He expects a 1% to 2% increase in Wal-Mart’s sales citing ongoing difficulties in gaining momentum this year, despite new management and investments in e-commerce.

Wal-Mart recently guided downward with its first quarter earnings per share forecast which is between 95 cents and $1.10. The retailer noted in the previous earnings statement that its decision to invest $1 billion annually in pay raises and for its U.S. store employees and additional investments in e-commerce would trim earnings by as much 26 cents to 29 cents per share.

Loeb is not alone in his assessment as much of the retail sector has been sluggish in the quarter (February through April) as reported retail sales across the board have been weaker than expected despite lower gasoline prices.

"There is no denying that the lack of evidence of a pick-up in consumption growth is disappointing given the boost to purchasing power from lower energy prices," Capital Economics' Paul Ashworth said. "But even though we haven't seen it feeding through yet, we do still expect to see that acceleration soon.”

Walmart U.S. CEO Greg Foran also previously forecast bottom line pressures this year, noting that it’s going to take time to improve overall performance. His agenda to boost financials includes improved customer service, store experience, fresh quality and improved values in private label products.

Wal-Mart forecast U.S. comparable sales growth between 1% and 2% in the first quarter. The same was predicted for Sam’s Club.

Stephens Inc. analyst John Lawrence expects comp sales at the low end of that guidance at 1% for Walmart U.S. and Sam’s. Lawrence does see some upside in the stock giving it a target price of $97. He also predicts first quarter earnings per share of $1.03 at the lower end of the guidance, but believes the retailer may gain some momentum in future quarters.

Raymond James & Associates analyst Budd Bugatch predicts earnings per share of $1.03. He recently downgraded his prediction from $1.11 following cautious sentiment from management during the earnings call in mid-February. He also cites the $10 billion drag Wal-Mart anticipates this year from currency exchange rates against a stronger U.S. dollar as an impact to earnings.

Wall Street expects Wal-Mart’s total consolidated revenue to top $116.32 billion, up 1.2% from the year-ago period.

Stacey Widlitz, founder of SW Retail Advisors, and CNBC retail contributor, expects a weakened cycle for the retail sector citing tough comps from Macy’s and Costco, which had been the stars in recent quarters. She said among retailers who do muster decent comp sales like J.C. Penney, there is evidence of shrinking margins and pressures on top and bottom lines.

Widlitz said margins and internal costs will be something to watch among retailer earnings. She also said the overall retail pie is not growing so there are more efforts to steal market share which lends to promotional pricing and even more pressure on margins.

Investors have also steered clear of Wal-Mart shares (NYSE: WMt) in recent weeks as the retail stock price is down 8.89% year to date. At Wednesday’s closing price of $78.16, shares were down 9.07% in the past three months. The share price is up 1.73% from a year ago. 

Against the composite Dow Jones Industrial Average Wal-Mart shares have been the lagger. The Dow Jones Industrial Index is up 1.33% year-to-date. Over the last three months the composite index is up 0.07%. Compared to a year-ago the composite value rose 9.81%.

News that Walmart.com would begin testing a $50 subscription that provides unlimited deliveries to online shoppers within three days, did not come as a surprise to some. Market watchers say it is not enough to threaten Amazon with its Prime program.

The retail giant confirmed Wednesday (May 13) that it planned to test a subscription plan this summer by invitation only. The plan will cover about 1 million items of general merchandise and does not include video upstreaming or other features offered by Amazon Prime, which costs consumers $99 a year.

Annibal Sodero, supply chain expert at the University of Arkansas, said he has waited two years for a surprise from Wal-Mart, but the subscription test looks like the retail giant is playing a game of catch-up. While he’s seen some interesting applications like Scan and Go that address consumer issues, Sodero said too often Wal-Mart is the second mover.

He also questioned why Wal-Mart decided to test a subscription-based service which is a loyalty program at its core. Sodero said Amazon aligns everything around loyalty with Prime users who often see the $99 as a value play given the benefits of streaming video, Box, Dash and price check apps that provide for convenience and savings in time and money.

“You have to ask what is Wal-Mart’s goal with this subscription test? Will it promote loyalty in its limited scope and what might be the consequences to its other businesses like Sam’s Club,” Sodero noted.

He said Amazon Dash goes directly after Costco customers and wonders if folks who sign up for Walmart’s subscription might forego a Sam’s Club membership in exchange. An avid Amazon user himself, Sodero was recently in New York City on business when he discovered he left his voice recorder at home.

“As an Amazon Prime member, I quickly downloaded the Amazon Prime Now app, found the recorder and batteries I needed, ordered, and it was delivered to my hotel room in two hours for free,” Sodero said.

He doesn’t think Wal-Mart beats Amazon by mimicking their programs, but said Wal-Mart does have an opportunity to innovate solutions that use its massive infrastructure to its advantage. He applauds the use of in-store pickup.

Max Goldberg, retail expert and president of Max Goldberg & Associates, noted in a recent RetailWire blog: “Walmart once again finds itself playing catch-up in the digital world and resorts to a time-tested technique, cutting prices .... This time it won’t work.”

He said while the new Walmart offer will spur some signups, it will not threaten Amazon’s digital dominance.

Mohamed Amer, vice president with SAP Global Retail, said it makes sense for Walmart.com to test the waters to better understand the trade-off consumers make between delivery window and program fees. But he cautioned that Amazon Prime is a hard act to follow.

Carol Spieckerman, CEO of newmarketbuilders, said Wal-Mart’s subscription-based foray is clearly in beta stage so it would be premature to make any judgments about how, or if, it will roll out. That said, Spieckerman believes the potential is tremendous. She said the media often judges Walmart based on outdated assumptions, including pinning the Walmart shopper as being behind the digital shopping curve, which is not the case today. 

“Clearly, Walmart shoppers are ordering products online and utilizing all of Walmart’s current delivery and pick-up options. The real opportunity and scale will kick in when and if Walmart ties its third-party online marketplace sellers into the program. Then and only then will Walmart have true ‘Amazonian’ potential from a product standpoint,” Spieckerman said

The subscription service and other non-traditional retail moves by Wal-Mart have caused Sodero to wonder about the future role of the supercenter. Kantar Retail analyst Leon Nicholas said two years ago that Wal-Mart’s supercenters remain the cash cows, and while Neighborhood Market store growth has improved, it’s still the supercenter generating the bulk of the retailer’s revenue.

Sodero said if Wal-Mart really wanted to compete head-to-head with Amazon they would need to flip their focus to San Bruno and perhaps turn their massive store network into fulfillment centers. But no one expects that to ever happen, given the success of the supercenter profit structure.

The dangers he sees in Walmart.com testing a loyalty subscription plan is that it will need to exceed shopper expectations which raises the bar for everyone along the supply chain.

“If there are any weaknesses in the supply chain they will become exposed. There are also higher costs associated with last mile delivery which has to be funded by someone, if not the retailer, then it will be suppliers,” Sodero said.

He said if the subscription test is successful for Walmart.com, it would be good for business in a sense that subscription plans lock users into a relationship with the retailer. But if the retailer under delivers in any way there is little chance they will get that customer back.

Memorial Day weekend will be a working weekend for the signage company hired by Muskogee, Okla.-based Armstrong Bank. The weekend will see Armstrong signs replace Benefit Bank signs in the Fort Smith area and Northwest Arkansas as part of a deal that could see Armstrong Bank rise to the top five in Fort Smith metro deposit market share.

Ironhorse Financial Group, a privately held bank holding company and parent company of Armstrong Bank, announced Dec. 29 it would acquire Fort Smith-based Benefit Bank.  Terms of the deal have not been disclosed. Armstrong Bank was established in 1910, and has 17 banking locations in northern and eastern Oklahoma along the Interstate 40 corridor. Benefit Bank, organized in 1999, has four full-service branches in the Fort Smith area and a loan production office in Springdale.

Gary Andrews, Armstrong’s regional president over Fort Smith and Northwest Arkansas, said the conversion process is underway between the two banks and new signage will be installed over the Memorial Day weekend. A signage unveiling ceremony is set for 10 a.m., May 26, at the bank location on Massard Avenue (and near Phoenix Avenue).

“We’re excited about coming to Fort smith and to our Springdale office there in Northwest Arkansas.  ... It’s a great team that was assembled there by him (former Benefit Bank President Joe Edwards) and we’re looking forward to working with them,” Andrews said.

The company has also worked to coordinate with Benefit Bank customers. Part of that includes a guidebook designed to help Benefit Bank customers transition to Armstrong.

MARKET SHARE GROWTH
Customers who do stick with Armstrong will be part of a larger bank company. Armstrong Bank reported first quarter net income of $3.693 million, down from $4.411 million during the first quarter of 2014. The bank ended 2014 with net income of $16.332 million, better than the $13.98 million in 2013 and up 37% over the $11.914 million in 2012.

Armstrong ended the first quarter with $689.453 million in assets, and total deposits of $588.73 million. Ironhorse Financial, which also owns Norman, Okla.-based Republic Bank, has combined assets with the Benefit Bank acquisition of more than $1.3 billion.

Benefit Bank had $194.68 million in assets at the end of the first quarter. Benefit Bank net income in 2014 was $1.436 million, up from $1.076 million in 2013, and well ahead of the $871,000 in 2012.

Armstrong now has 22 locations in eastern Oklahoma and western Arkansas. Andrews, a 30-year veteran with Armstrong, joined the bank out of college when it had just two offices. The bank will employ around 300 people post-acquisition, Andrews said.

That growth includes growth in deposit market share. As of June 30 2014, the most recent FDIC market share report, Armstrong Bank had four bank locations inside the Fort Smith metro market and a market share of 4.09%. By comparison, First National Bank of Fort Smith had the most metro market share at 21.35%, with Arvest Bank at 16.51% and BancorpSouth rounding out the top three at 11.23%.

Benefit Bank had five locations in the metro market with 3.61% of market share. 

If Armstrong is able to retain deposits through the acquisition, it would move the bank into the top five for metro market share. Citizens Bank & Trust in Van Buren – owned by the parent company of First National Bank of Fort Smith – had a market share of 7.71% and Regions Bank rounded out the top five at 4.95%.

LOOKING AT NORTHWEST ARKANSAS
Andrews said Armstrong Bank also will “investigate” new opportunities in the “highly, highly competitive” Northwest Arkansas banking sector. Prior to the acquisition, Benefit Bank obtained state approval to convert its Springdale loan production office into a full-service branch bank. Armstrong was able to retain that approval.

“We’re going to go up there (Northwest Arkansas) and try to carve out a niche and compete and do the best we can,” Andrews said.

How competitive is Northwest Arkansas? The region has 39 bank institutions active in a market with $8.552 billion in deposits, compared to a central Arkansas market with $14.778 billion in deposits among 35 active banks.

And Ironhorse Financial with more than $1.3 billion in assets could attract the attention of larger regional and national banks. Consolidation through mergers and acquisition has been the banking industry story in recent years. For example, the number of banks in Arkansas at the end of 2014 was 109, down from 120 at the end of 2013. It’s a similar story in Oklahoma, with 221 banks at the end of 2014 compared to 229 at the end of 2013.

Andrews said Armstrong “ownership (is) still in an acquiring mode and to my knowledge there is no design on selling.”

Total manufacturing technology orders for the South Central region of the U.S. fell 51.9% in March compared to a year ago, according to a monthly report by the Association for Manufacturing Technology (AMT).

The South Central region, which includes Arkansas, Louisiana, Texas, Oklahoma and New Mexico, saw orders of only $84.91 million in the manufacturing technology sector, down from $176.56 million in March of 2014.

Obviously, a slowdown in manufacturing is not what Arkansas needs. Manufacturing employment in the state was an estimated 154,400 in March, up from 153,200 in March 2014, but almost 24% below 10 years ago when March 2005 manufacturing employment in Arkansas totaled 202,500. The March employment is 92,900 fewer jobs than peak manufacturing employment of 247,300 in February 1995.

The monthly AMT report tracks manufacturing technology orders on a regional basis for six geographic breakdowns of the United States. Manufacturing technology provides the tools that enable production of all manufactured goods, AMT officials said.

Nationwide, U.S. manufacturing technology orders totaled $399.83 million, up 30.3% from February’s $306.96 million, but down 18.7% when compared to $491.73 million reported for March 2014.

The biggest gainers for the month were the North Central-West and Northeast regions, which rose 23.9 and 11.8%, respectively, year over year. Like the South Central region, the North Central-East, Southeast and West regions all lost ground in March compared to a year ago, although most regions are seeing improved orders from the previous month.

Altogether, year-to-date orders as reported by companies participating in the manufacturing technology benchmark are now at $1.05 billion for fiscal 2015, down 12.7% when compared with 2014.

“There are many indications that our end-user customers are making significant investments in their manufacturing facilities to increase capacity, including GM’s announcement that it will invest billions in its U.S. plants,” said AMT President Douglas Woods. “Overall we expect the industry to hold steady with a push-pull between strong domestic investment(s) in manufacturing but a drag on foreign trade due to the dollar’s strength.”

The numbers and data in the AMT report is based on the totals actually reported by companies participating in the United States Manufacturing Technology Orders (USMTO) program. The information is compiled by the trade association that represents the production and distribution of manufacturing technology, and provides regional and national U.S. orders data of domestic and imported machine tools and related equipment.

The Association for Manufacturing Technology represents and promotes U.S.-based manufacturing technology and its members — those who design, build, sell and service evolving technology in the manufacturing sector.

Analysis of manufacturing technology orders provides a reliable leading economic indicator as manufacturing industries invest in capital metalworking equipment to increase capacity and improve productivity, AMT said.

It’s one of those classic “good news, bad news” situations at Rheem’s Fort Smith plant. Two productions lines will end at the plant by the end of summer, reducing employment by as much as 150. But the company says the plant will be the “primary production site” for large commercial air conditioning units.

Changes expected this summer are part of a companywide three-year production plan set in motion in June 2011 that have resulted in several rounds of employment changes at the company’s Fort Smith manufacturing plant.

Several sources recently told The City Wire that two lines were being moved out of the plant, with job losses estimated between 100 and 150. The sources also said the changes would push salaried and hourly employment at the plant below 1,000, and possibly below 800. In June 2011 the plant had around 300 salaried and 1,100 hourly jobs.

Lindsey Ford, a senior public relations specialist with Rheem, said Thursday in an e-mail note that business at “Rheem’s Fort Smith plant, and throughout Rheem, is going well.” She said production in Fort Smith is shifting to commercial HVAC (heating, ventilation, air conditioning) equipment.

“Most importantly, the Fort Smith plant is strategically positioned within Rheem to serve as our primary production site for commercial HVAC equipment. With its central location, Fort Smith provides convenient access to prime commercial markets. We are presently making capital investments at the facility to prepare for future commercial product launches. We are very excited about the great work taking place at this plant and we remain committed to growing in Fort Smith,” Ford noted.

Focusing on commercial HVAC means a residential production line “temporarily” transferred to Fort Smith in August 2014 will close at the end of July. Also, gas furnace production in Fort Smith is being moved to a Rheem plant in Nuevo Laredo, Mexico.

“We have been progressively phasing out gas furnace production in Fort Smith over the last four years. We expect to complete this transition by late summer,” Ford wrote. “We anticipate some staffing adjustments after we fully retire these products. However, we have not determined the total impact at this time.”

The manufacturing sector in 2014 ended eight consecutive years of declines in annual average employment in the Fort Smith metro. Annual average jobs in the region were 27,900 in 2005, falling to 17,500 in 2013 before rising to an average 18,100 in 2014.

Fort Smith metro manufacturing jobs were an estimated 18,100 in March, better than the 17,900 in March 2014, but down almost 35% compared to 10 years ago when March 2005 sector employment stood at 27,700. Based on recent revisions by the U.S. Bureau of Labor Statistics, manufacturing employment in the Fort Smith metro peaked at 31,200 in June 1999.

Rep. Joe Jett, chairman of the House Revenue & Tax Committee, says he will propose to a working group a study of using 25% of surplus funds for potential future highway funding.

Jett, who appeared on this week’s edition of Talk Business & Politics, said if the state had dedicated 25% of surplus funds during the past decade for road purposes, it would have accumulated a nearly $500 million revenue stream. The 25% of surplus money to be allocated for highways would only come after all areas of the Revenue Stabilization Act (RSA) are funded, under Jett’s concept.

“This is not a fix, but it’s a start. Basically, what it is, is showing my colleagues that we don’t have to just go out and arbitrarily raise taxes to find money to help the highway program,” Jett said.

A year-over-year look at what 25% of the state’s surplus would provide ranges from $0 in 2009 and 2010 to as much as $102.3 million in 2007. In 2013, 25% of the surplus would have equated to $74.9 million while in 2014 it would have accumulated $19.7 million. All told, the equation would have brought in $478.4 million during the past decade.

State highway officials have delayed or cancelled hundreds of millions of dollars of road projects in Arkansas this year due to federal funding uncertainty. Also, flat gasoline tax revenues have led to declining regular funds for highway construction and repairs for years. Voters did approve a major highway construction program, but those funds are specified for key projects.

Jett said his plan is simply an idea for the conversation, and he said he will ask the recently announced Governor’s Working Group on Highway Funding to add his proposal to the mix for consideration.

When asked if future tax cuts or General Improvement Funds spending might have to be curtailed in order to build a reservoir of potential highway revenue, Jett said, “The alternative is going to be a tax increase (to pay for roads).”

The twin issues of foreign policy and national security were on the agenda this past week as Arkansas’ Congressional lawmakers were in the middle of the debate on several issues.

Also, the House approved a defense spending bill that drew a bipartisan vote and discussed the impending deadline for a highway funding bill.

COTTON: PATRIOT ACT, FISAKEEPS US SAFE
In a column Friday on FoxNews.com, Sen. Tom Cotton, R-Ark., said Congress should work to reauthorize the Patriot Act before a May 31 deadline. Cotton, who joined with Rep. Mike Pompeo, R-KS in writing the column, said the United States faces a dangerous world.

“The system was blinking red … it could not get any worse.” That’s how then-CIA Director George Tenet described the threats against the United States during the summer of 2001. But it did get worse: Al Qaeda struck on 9/11, killing almost 3,000 Americans. Today, the terrorist threats are more dangerous than ever, as Director of National Intelligence James Clapper recently testified to Congress,” Cotton and Pompeo wrote.

“Across Africa and the Middle East, Al Qaeda affiliates have metastasized following America’s retreat. Iran continues its unrelenting support for terrorism. And of course there’s the Islamic State. Far from “the JV team” as President Obama called them, the Islamic State is rampaging across Iraq and Syria, while inspiring attacks and plots in the U.S. and Western Europe. These groups are now larger and more sophisticated—for example, developing new non-metallic bombs to evade detection, recruiting westerners to conduct homegrown attacks, and attracting adherents through social media. Just last week, the Islamic State inspired the attack in Garland, Texas, and our military bases had to go on heightened alert.”

The column also noted that strong surveillance has helped capture suspected terrorists.

“As members of the House and Senate Intelligence Committees, we have carefully studied this program and are convinced that it’s an integral tool in our fight against terrorism.”

The House voted 338-88 Thursday to approve the bill, which now goes to the Senate.
All four members of the House delegation – Reps. Rick Crawford, R-Jonesboro, French Hill, R-Little Rock, Steve Womack, R-Rogers, and Bruce Westerman, R-Hot Springs – voted yes on the bill.

Hill said the reauthorization was needed.

“The safety and well-being of the American people are paramount, and so are the constitutional rights of private citizens. This bill ensures the effective tracking of terrorists while ending bulk data collection by our intelligence agencies. It also increases transparency of the Foreign Intelligence Surveillance Court to create a healthy balance between our critical national security interests and an essential confidence in individual privacy rights. I am proud to support the bill and will continue to work to promote our national security interests while ensuring constitutional protections,” Hill said.

DEFENSE BILL APPROVED BY HOUSE
The House voted Friday by a 269-151 margin to approve the National Defense Authorization Act of 2015.

Womack and Westerman said the bill will meet needs and provide a strong defense.

“Regardless of the gridlock in Washington and our countless disagreements, there is one commitment that both sides of the aisle must come together to uphold – our commitment to our men and women in uniform,” Womack said. “That is why, on the passage of the fifty-fourth consecutive National Defense Authorization Act, I applaud Chairman Thornberry for his leadership and join my colleagues in sending the Senate a bill that provides for our military in a way that is both fiscally responsible and mindful of the growing threats across the globe. From ISIL to Boko Haram, our enemies are becoming bolder and more numerous, but defending our nation and defeating terrorist threats is one place where politics should not – and cannot – interfere.”

“My vote today for the National Defense Authorization Act was a vote to protect America from those who may seek to harm this great nation. It was also a vote in support of our veterans, streamlining medical treatment from their time in service to our nation to their life outside of the military. For far too long, veterans have had to pay out of pocket for prescriptions subscribed during their time in the military since the V.A. did not always cover the same medications. Passage of this bill eliminates the discrepancies in care for those in the military and veterans of the service while continuing to secure the nation,” Westerman said.

The House also approved an amendment from Hill involving a plan to do a business case analysis of an Air Force decision to keep 10 C-130J aircraft at Keesler Air Force Base in Mississippi.

“The Little Rock Air Force Base is one of the most technologically advanced and well-run military installations in the entire country and, in my view, is clearly a center of excellence for our global airlift operations. Prior to their decision to maintain the aircraft at Keesler, Air Force officials highlighted the importance of LRAFB and the cost savings and efficiencies that would be realized by relocating the ten C-130J aircraft to Little Rock. Our military is facing severe budget limitations, and Congress must ensure that we are effectively utilizing hardworking taxpayer dollars for our national defense priorities. In conducting this business case analysis, the Department of Defense will be assuring the American people that it is committed to its national defense goals of having the most efficient and effective military in the world,” Hill said.

HIGHWAY FUNDING DEADLINE APPROACHES
With about two weeks before a deadline to approve a highway funding bill, officials are working to provide a short-term fix for funding issues. Westerman and Crawford spoke this week about the bill, which funds highway transportation projects around the country.

“Mr. Speaker, with this being National Infrastructure Week, I want to call attention to the crisis facing the Federal Highway Trust Fund. In my home state of Arkansas, the Highway and Transportation Department canceled several projects due to the depletion of the trust fund. It is vital that we find a solution to this crisis that finances the Trust Fund for the long term and keeps our roads and highways safe for travel and commerce,” Westerman said. “That is why next week, I plan to file legislation to plug the $15 billion deficit in the trust fund without raising taxes. It will be common sense legislation that Members on both sides of the aisle should get behind in order to fund our critical infrastructure construction and maintenance and to avoid these crisis deadlines in the future.”

Crawford, who serves on the House Transportation and Infrastructure Committee, said Thursday that lawmakers are working on the issue.

“As of now, a long term reauthorization before the deadline is not likely, so the most probable option is a short term patch that’s going to allow (House) Ways and Means additional time to secure funding for a full authorization later this year,” Crawford said.

BROADBAND DEBATE CONTINUES
The discussion over affordable broadband in rural America will likely be decided by “football season”, the chairman of the Federal Communications Commission told a Senate subcommittee this week.

U.S. Sen. John Boozman, R-Ark., who chairs the Financial Services and General Government Appropriations Subcommittee, questioned Federal Communications Commission (FCC) Chairman Tom Wheeler about the status of the agency’s year-end timeline to provide affordable broadband to rural America.

“Connectivity such as broadband is the vital infrastructure for the modern age. Citizens living in rural Arkansas deserve access to reasonably priced broadband. This is an important economic tool and that’s why the FCC needs to update its rules that fail to keep this service at an affordable cost,” Boozman said.

Boozman said this week that the data on broadband, especially in Arkansas, shows the need for work.

“High speed Internet is a luxury for most Arkansans. According to the FCC, 84 percent of rural Arkansas lacks access to broadband, which is more than 30 percentage points higher than the national average. TechNet’s 2012 State Broadband Index ranked Arkansas 50th for broadband utilization.”

Wheeler told Boozman that reforms would be implemented to the Universal Service Fund “by football season.”

It’s never been more difficult to get items on retail shelves in brick and mortar stores like Wal-Mart. Part of that is a function of e-commerce competition which pushes traffic and associated sales out of the stores.

Bill May, a former Wal-Mart buyer and merchandise manager for three decades, said there are several changes at work in the retail sector that make it challenging to get new products to physical retail shelves. May, co-founder of New Horizon Enterprises in Rogers, spoke recently at Selling to the Masses CGP School in Bentonville where he shared with prospective suppliers his insight on what it takes to get and stay on Wal-Mart shelves.

First, it’s not for the faint of the heart according to May. He said Wal-Mart buyers are not interested in “me too” items. He said retail consolidation, chain closures and the explosion of e-commerce options have buyers constantly seeking innovative products. But when they add one product it often comes at the expense of another.

If an item doesn’t sell, the price is marked down and suppliers are charged for losses according to the buyer/supplier terms. Unless sales improve that product won’t be renewed once the contract expires.

Experts across the supplier consulting segment have told The City Wire that there is often a misconception that if they get into the store the product will sell itself. That’s a bad assumption, according to long-time supplier Jan Long, CEO of Mr. Canary. 

CONSTANT LEARNING
Long’s bird feeders have been in Wal-Mart stores since 1998. At one point her “Mr. Canary” was on the shelf in 1,700 stores, but within three years she was down to roughly 480 stores. Long said she made a trip to Bentonville and met with a consultant who walked through a local supercenter with her.

The consultant, a retired Wal-Mart executive, told her to look at all the competition and how they had improved their product and packaging over the years. He then asked her if she knew anything about birding in Norway.

Long said she quickly replied, “No, do you ?” To which he nonchalantly answered, “It’s not my business,” she shared.

“That hit me like a ton of bricks. Here I was pouting about my loss of stores and doing nothing to improve my product. It was a major wake-up call for me that forced me to totally revamp the packaging and cut the shelf space in half. That was huge because it has opened lots of new possibilities,” Long told The City Wire in 2013. That same year Long’s Mr. Canary bird feeders were accepted into more than 2,700 stores Wal-Mart Stores across the country.
www.thecitywire.com/node/26479

Long said doing business with Wal-Mart has been hard and demanding at times, but she’s become a better business owner because of it. She the learnings have transpired into improved business with other retailers as well.

Last week Long told The City Wire that her store count will be 2,900 this fall, up from 2,700 last year after what she calls a “great year” but not without its challenges. Long said she has a new buyer with whom she’s excited to work, but a recent attempt to try a Mother’s Day promotion in 1,200 stores went awry. Orders were shipped in mid-April for feeders that would be displayed in hanging end caps, which are not her usual shelf space. She said in some stores the products were late getting to the floor in part because they were not going to the normal shelf location. The products didn’t make it to the end caps until the week of Mother’s Day, which was disappointing.

On the bright side Long said she made the Mother’s Day Tag on the product removable so that the feeders could remain in the end caps after the holiday, but there is labor involved in removing the tags.

“Doing business with Wal-Mart is always an adventure, but everyone on my team continues to help me and the business is growing. My buyer team is now working with me to add another product after sharing my concerns about being on the top shelf which is nearly unreachable for smaller ladies – a big user of my bird feeders. The buyer told me the top shelves were being lowered this next year and my products will be lowered on the display modular. That’s just one example of how willing Wal-Mart has been to work with me,” Long said.

Long said people are always asking her how she got the bird feeders in Wal-Mart. She said it took a lot of due diligence but no more so than staying on the shelf.

MINIMUM PREREQUISITES

May said there are minimum prerequisites that must be met before a potential supplier can get a purchase order from a Wal-Mart buyer. He said everyone who sells product to Wal-Mart Stores must be registered with Dun & Bradstreet. The registration itself is free, but ancillary costs on an annual basis can range between $500 and $1,000. If a credit history file needs to be built around a new company, the cost for fast-tracking can range from $1,000 to $12,000 depending on the levels of services selected, according a customer service representative for Dun & Bradstreet contacted by The City Wire.

Product suppliers also must carry product liability insurance ranging from $2 million to $10 million in policy coverages depending on levels of potential product liability. For instance most food falls in category I with a $2 million to $4 million coverage requirement. Baby food and toys falls in category II requiring $5 million in coverage. The $10 million level at category III includes items like chainsaws, medicines and propane.

May said a factory identification number also must be affixed to every item making its way into a retailer, so the item’s origin can be traced if need be. He said those suppliers with products consisting any of one of a long list of chemicals must also pass through another compliance regulatory hoop of WERC — Warehousing Education and Research Council.

May said all items in retail stores like Wal-Mart or Sam’s Club must also go through a syncing process performed by third party providers like Data Sync or 1 Sync that ensure there is consistency in the items and that the UPC case codes correctly link traceability back to the manufacturer.

There is also Retail Link, a data base to which suppliers are given access that details the sales of their items down to the store level. It also allows them to track inventory. Using Retail Link is a requirement to do business with Wal-Mart.

May said new suppliers often have to get training on how to use Retail Link because it’s essential to see how a product is doing on the shelf. Those services are provided by third party firms such as VendorMasters and 8th & Walton both located in Bentonville.
Lastly, May said packaging and pricing are two other big components that potential suppliers must fully understand before they sit down with a buyer.

HIGHER STANDARDS
May said standards have been raised across the retail sector in recent years and are much higher than when he began in the business three decades ago.

“Product quality, competitiveness of an item, accurate pricing, proof that it is already selling are all things a buyer is looking for today at the first meeting with a potential supplier,” he said.

May said buyers are not willing to take much risk with products given the costs associated with adding them to the shelf. He said the higher standards are a good thing for consumers, because products have to be safe.

“The last thing a retailer can afford to do is kill a customer,” May said.

There should be little doubt Arkansas’ travel and tourism industry is doing well. Sector employment set a new record high in February and collections of the state’s 2% tourism tax set new collection records in January and February.

The Arkansas Tourism Ticker shows that the three key measurements of Arkansas’ leisure and hospitality sector during January and February posted healthy gains over the same period in 2014. The ticker is managed by The City Wire, and uses the following three measurements to review the health of the state’s tourism industry. The Arkansas Tourism Ticker will be produced every two months, or six times a year.
• Hospitality tax collections – prepared food tax and lodging tax – of 17 Arkansas cities (cities listed below and in included image);
• Tourism sector employment numbers as reported by the U.S. Bureau of Labor Statistics; and
• Collections of Arkansas’ 2% statewide tourism tax.

Results for the January-February ticker report are:
• +8.67%
Gain in combined January-February hospitality tax collections in 17 Arkansas cities compared to the same period in 2014

• +7.48%
January-February gain in Arkansas’ 2% tourism tax compared to the same period in 2014

• +6.67%
Increase in average Arkansas’ tourism industry jobs during January and February compared to January-February 2014

The January-February report follows the inaugural Ticker report in which 2014 hospitality tax collections in the cities was up 3.7% over 2013; Arkansas’ 2% tourism tax revenue in 2014 was up 7.48% compared to 2013; and jobs in the state’s travel and tourism sector were up 6.5% in 2014 compared to 2013.

HOSPITALITY TAXES
The combined hospitality tax collections in the 17 cities totaled $6.378 million in January-February, up 8.67% compared to January-February 2014. Collections in the 17 cities were up more than 30% compared to the same period in 2010.

Restaurant (prepared food tax) tax collections among the 17 cities totaled $4.979 million in January and February, up 8.78% compared to the $4.577 million in January-February 2014.

Hotel tax collections among the 17 cities totaled $1.399 million in January and February, up 8.27% compared to the $1.292 million during the same period of 2014.

During the January-February period, only three cities – El Dorado, Texarkana and Van Buren – saw hospitality tax collection declines.

STATEWIDE TOURISM TAX
Collections of Arkansas’ 2% tourism tax in January and February totaled $1.775 million, up 7.48% compared to the $1.651 million in January-February of 2014. The January collection of $833,448 and the February collection of $941,979 were new records for each month.

The 2% tourism tax in 2014 totaled $13.677 million, up 7.48% compared to the $12.716 million collected in 2013. The 2014 tally sets a new record for the tax. Following are the past five years of 2% tax collections.
2014: $13.677 million
2013: $12.716 million
2012: $12.404 million
2011: $12.025 million
2010: $11.492 million

TOURISM JOB NUMBERS
Jobs in the travel and tourism sector during January and February were up 6.67% compared to the same period in 2014.

The travel and tourism sector employed 112,100 in January and 114,800 in February for an average of 113,450. That’s well ahead of the 106,200 and 106,500 in January and February 2014, respectively, for an average of 106,350.

If it stands, the 114,800 employed in Arkansas’ travel and tourism industry during February is a new record high for the sector.

Job growth in the sector has been impressive during the past 10 years. February employment of 114,800 is up almost 23% compared to February 2005 employment of 93,600.

Of the eight metro areas in or connected to Arkansas, the Bureau of Labor Statistics provides tourism employment data on five. The Fort Smith and Memphis-West Memphis areas were the only metro areas to see travel and tourism sector employment declines in the January-February period. Following are comparisons of the employment averages in the January-February period.
Northwest Arkansas
Jan.-Feb. 2015: 21,100
Jan.-Feb. 2014: 20,650
Jan.-Feb. 2010: 16,900

Fort Smith
Jan.-Feb. 2015: 8,650
Jan.-Feb. 2014: 8,750
Jan.-Feb. 2010: 8,200

Central Arkansas (Little Rock-North Little Rock-Conway)
Jan.-Feb. 2015: 31,850
Jan.-Feb. 2014: 30,550
Jan.-Feb. 2010: 28,000

Memphis-West Memphis
Jan.-Feb. 2015: 61,900
Jan.-Feb. 2014: 62,500
Jan.-Feb. 2010: 62,650

Texarkana (Arkansas-Texas)
Jan.-Feb. 2015: 6,200
Jan.-Feb. 2014: 5,850
Jan.-Feb. 2010: 5,450

WHY THE TICKER?
Arkansas’ tourism industry is an important economic engine for the state, and is often cited as Arkansas’ second largest industry – behind agriculture.

There are many reports and economic indices to measure several areas of the the state’s economy. The City Wire issues a monthly housing report (The Arkansas Home Sales Report). The University of Arkansas issues a quarterly report on economic activity, and has published reports on the economic impact of the Fayetteville Shale Play. There are reports to measure public opinion on various social issues.

But there has not been an independent report looking at the health of the state’s tourism sector. Therefore, The City Wire decided to work with officials in the state’s travel and tourism sector to capture some indication of the relative health of the industry.

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It’s not every day or even every year that the Fort Smith metro area records two home sales valued in excess of $1 million, but that’s what happened in April. The former Sicard home on South O sold for $1.5 million and another large estate sold on Free Ferry at $1.2 million, according to Kevin King, broker with Weichert King Realtors in Fort Smith.

He said those two deals along with higher-end homes selling in Barling and Fianna Hills helped boost the average sales price higher for the month. At $165,655, the average home sales price rose 40% because of the large home activity. 

MountData.com reports that agents sold 114 homes in Sebastian County last month. King said 76 of them were located in Fort Smith. The total volume for Sebastian County home sales totaled $18.884 million, up 36% from the $13.874 million value reported a year ago. 

King said looking at the first four months of 2015, April held its own after what has been solid upward momentum over last year.

MountData reports 423 homes have sold in Sebastian County through April 2015, up 12% from the 377 homes sold during the same period last year. Total volume has appreciated faster given the April big home sales. The accumulated volume for the homes sold through April was $60.919 million, up 25% from the year-ago period.

King said median square foot prices are up a little in some areas of Fort Smith, but sellers on the most part are still having to be fairly aggressive on pricing even in established neighborhoods like Fianna Hills. He said there were eight homes sold last month in Fianna Hills Subdivision, and five of them sold for more than $200,000 but it took a while to close the transactions. King said on the short end of the time scale a deal was closed in 47 days and 150 days, but there were two sellers whose homes were on the market in excess of one year.

“The Fort Smith inventory is pretty flat, maybe down a little from a year ago, but it’s trending toward a more balanced level to the number of buyers in the market,” King said.

He said the number of showings have been up this spring and buyer confidence is as strong as its been in several years which has him bullish on the prospects for another solid year. 

“I expect sales will continue to trend higher at a slow pace throughout the summer to the end of the year. We are looking for growth in 2015 over last year because in part of lower interest rates, threat of rising rates and prices in the future,” King added.

CRAWFORD COUNTY
Activity was better than in recent months in neighboring Crawford County where agents sold 53 homes, a few more than 46 sales in April 2014. Accumulated sales volume rose 34% to $6.153 million compared to $4.847 million a year ago, according to MountData.com.

A fairly active new home market is part of the reason sales in the Van Buren area are growing, according to local agents. The new home market pushed the median-square-foot price up to $73.30 this year, compared to $61.30 a year ago. Median square-foot prices are higher than in neighboring Sebastian County at $65.80 and much lower than in Washington County’s $91.40, MountData.com reports.

Limited inventory in Crawford County has helped the market maintain the shortest time on market among its neighboring counties. Homes in Crawford County took an average 79 days to obtain a contract this year. In Washington County, it took sellers 94 days to get a contract and in Sebastian County the time was 122 days. Even in an active Benton County it took sellers 102 days so far through the year to obtain a contract.

Year-to-date home sales have been pretty flat in Crawford County. MountData.com reports agents have sold 174 homes in Crawford County this year with a value of $19.833 million. This compares to 179 homes worth $19.361 million reported a year ago. While the unit sales have been flat, prices have been anything but. The median home price has risen 15% to $107,500 from a year ago’s $93,700 median home price.

Agents said Van Buren’s smaller market than Fort Smith also holds some value potential since it has been able to keep its Rural Development finance eligibility. That RD status also provides ammo for homebuilders like Ronald Ragon Homes to offer 0% downpayments on new home construction and keep the new building market active.

HOME SALES DATA (January through April)
Crawford County
Unit Sales
2015: 174
2014: 179
-2.79%

Sales Volume
2015: $19.833 million
2014: $19.361 million
2.43%

Median Sales Price
2015: $107,500
2014: $93,400
15%

Sebastian County
Unit Sales
2015: 423 
2014: 377
12.2%

Sales Volume
2015: $60.919 million
2014: $48.726 million
25%

Median Sales Price
2015: $117,250
2014: $116,000
1.07%

Rising pump prices apparently won’t deter Arkansas travelers and other vacationers across the national from hitting the busy roads heading into the upcoming Memorial Day weekend on May 25, the official kick off of the summer driver season.

In its annual Memorial Day travel forecast, the AAA predicts that automotive travel this Memorial Day holiday will be up 5.3 % to 37.2 million travelers compared to last year’s holiday weekend, which would be the highest volume in 10 years.

Traditionally, although Memorial Day is held on the last Monday in May, U.S. vacationers commemorate the day for men and women who have died in military service by taking a four-day weekend vacation, hitting the road to visit family, holding a picnic or attending a summer sporting event. The Memorial Day holiday travel period is defined as Thursday, May 21 to Monday, May 25.

“Following a harsh winter, many Americans are trading in their snow boots for flip flops and making plans to start the season with a vacation getaway,” said AAA President Marshall Doney. “AAA is expecting more Memorial Day travelers this year than any time in the past 10 years as confident consumers come out of hibernation ready to explore national parks, beach destinations and America’s great cities.”

Doney cited a number of economic factors contributing to the large increase in holiday travelers this year.

“A strong employment market and low gas prices have driven consumer optimism to new highs and boosted Americans’ disposable income. This is welcome news for the travel industry,” said the AAA executive.

AAA’s forecast is encouraging for the nation’s economy, despite the fact that the average U.S. price of gas has increased for 28 of the previous 29 days to $2.70 per gallon, according to the U.S. Energy Information Administration (EIA). As of today, driver are seeing the highest average pump price of the year, yet still paying a dollar less than a year ago heading into the national holiday.

AAA also predicts gas prices may not change much by the holiday weekend, which would result in the cheapest Memorial Day gas prices in at least five years.

WEST COAST PUMP PRICES TO RISE
However, regional refinery issues on the West Coast continue to push prices higher in a handful of states, with the majority of the most expensive markets located in that region, the EIA said.

The refinery problems on the West Coast even caused GasBuddy.com to send out a news alert last week warning that average price for California’s reformulated regular unleaded gasoline could hit $4 per gallon as stations began passing along higher prices to consumers because of refinery outages.

GasBuddy said the expected West Coast price shock will be centered in Los Angeles, while other Northern California markets may escape another round of price spikes as supply in Los Angeles remains much tighter than other regional markets.

“Motorists are urged only to buy what gasoline they immediately need to avoid further straining an already extremely tight supply chain,” GasBuddy said in a press release.

According to the EIA’s latest figures, California ($3.81) is the nation’s most expensive retail gasoline market, and is joined by four other states posting averages of $3 or more per gallon: Hawaii ($3.25), Nevada ($3.30), Alaska ($3.21) and Oregon ($3.02).

The price at the pump is above $2.50 per gallon in 36 states and Washington, D.C. On the other end of the spectrum, motorists in South Carolina ($2.38), Mississippi ($2.42) Missouri and Arkansas ($2.44) are the paying the lowest averages at the pump, although they too have seen prices inch upward since last week’s report.

ARKANSAS PUMP PRICES
Will Speer, GasBuddy’s senior petroleum analyst for the Southwest market, said motorists traveling in and through Arkansas and neighboring states shouldn’t worry about the West Coast run-up affecting prices across the region.

Speer said consumers who are frustrated by rising pump prices over the past few weeks should remember prices a year ago that were nearing $4 a gallon before Memorial Day.

“Consumers can be a little short-sighted when they see price rising,” he said. “Year over year, things are looking pretty good in Little Rock and other areas across the state.”
Speer also advised Arkansas travelers who are taking trips out of town to plan before hitting the roads.

Statewide, motorists are paying an average of $2.44 per gallon to fill up their tank across the state, according to AAA’s daily fuel gauge. Pump prices in the state’s metropolitan areas range from a low of $2.35 per gallon in the Fayetteville-Springdale-Rogers area to a high of $2.49 for drivers at the stateline in Texarkana.

Motorists in the Little Rock metropolitan area are seeing prices at an average of $2.43 per gallon, and travelers and residents to the Fort Smith area are paying about $2.44 per gallon on average. Residents in the Little Rock-North Little Rock area are paying an average of $2.46 a gallon to fill up their tanks.

For Arkansas motorist traveling to tourist destinations across the state, the Arkansas State Highway and Transportation Department has a map of major state interstate routes and highways with construction and lane closures.

MODES OF TRAVEL
AAA says the 4.7% in the number of Memorial Day travelers compared to 2014 is the highest forecast growth rate for any of the holidays tracked by AAA since Independence Day 2012.

More than 88% of travelers (33 million) will travel by automobile, an increase of 5.3% over last Memorial Day. Holiday air travel is expected to increase 2.5% to 2.6 million leisure travelers. Travel by other modes of transportation including cruises, trains and buses, is expected to decrease 3.6% this Memorial Day, to 1.64 million.

Travelers who plan to find a hotel during their holiday vacation will likely encounter higher lodging costs this year. According to AAA’s Leisure Travel Index, the average nightly stay in a “two diamond” hotel is 16% higher this year at $144, while “three diamond” hotels will cost 7% more, averaging $182.

Yet those choosing to take a plane to grandma’s house will find that airfares are down slightly compared to Memorial Day 2014. Average airfares for the top 40 domestic flight routes are 2% cheaper this year, falling to about $222, AAA said.

A ruling by the World Trade Organization against a U.S. product labeling regulation is more proof that the U.S. law needs to be repealed, members of the state’s congressional delegation said Monday.

The WTO ruled against the United States “Country of Origin Labeling,” or COOL, policy during a meeting Monday. The final ruling launches a WTO process to determine the level of retaliatory tariffs Canada and Mexico can impose on the U.S.

According to a 2013 Congressional Research Service report, the rules were created during the 2002 Farm Bill and amended during the 2008 Farm Bill.

The policy requires “most retail food stores to inform consumers about the country of origin of fresh fruits and vegetables, fish, shellfish, peanuts, pecans, macadamia nuts, ginseng and ground and muscle cuts of beef, pork, lamb, chicken and goat,” the report noted.

The rules took effect in March 2009, but received immediate opposition from Canada and Mexico.

Springdale-based Tyson Foods, one of the world’s largest meat production and distribution companies, deferred comment to the North American Meat Institute. Officials with NAMI said the WTO ruling is a clear sign the COOL labeling should be repealed.

"The WTO has spoken not once, not twice, not three times, but four times in panel and appellate body decisions. All four rulings found against the U.S.," NAMI President and CEO Barry Carpenter said in a statement. "Now, after years of grappling with this costly and onerous rule - a rule that USDA's own economic analysis says is a burden on livestock producers, meat packers and processors with no consumer benefit – it is clear that repealing the statute is the best step forward.”

Sens. John Boozman, R-Ark., and Tom Cotton, R-Ark., as well as Rep. Rick Crawford, R-Jonesboro, agreed that the COOL labeling rules negatively impact Arkansas’ farmers and consumers.

“I’ve long opposed the COOL mandate because it alienates our trading partners, increases compliance costs, and offers few benefits. Unless Congress acts, American businesses will be subject to billions of dollars in undeserved tariffs and these costs will be passed on to consumers. I’m committed to working with my colleagues in Congress to find a workable solution,” Boozman said.

“The World Trade Organization (WTO) ruled against the United States’ Country of Origin Labeling (COOL) rule earlier today, a decision that was expected. U.S. meat labels, mandated since 2009, list where the animals are born, raised, and slaughtered. Both Canada and Mexico have argued that the labeling requirements unfairly target their cows and pigs by increasing the compliance cost for meatpackers with little payoff for consumers. This is the 4th time the WTO has ruled against the United States,” Crawford, who serves on the House Agriculture Committee, said.

“Country of Origin Labeling not only drives up compliance costs for our domestic producers, but the WTO’s ruling against the rule will now allow for billions of dollars in retaliatory tariffs against U.S. exports. In order to prevent the further harm this costly rule will inflict on the U.S. economy, today I am introducing legislation – along with a bipartisan group of colleagues – that repeals COOL requirements for meat once and for all,” Crawford said.

Cotton said the ruling will increase tariffs and impact Arkansans.

“Today the World Trade Organization once again validated the concerns of agricultural producers across Arkansas and the country with current Country of Origin Labeling (COOL) regulations. Unless these regulations are reversed, Arkansas exports will soon face a 100 percent retaliatory tariff that will directly impact profit margins and devastate our state economy. President Obama should change course and support the efforts underway in Congress to repeal these misguided regulations immediately. Rest assured, I am working with my colleagues in Congress as well as with partners at the Canadian and Mexican embassies to modify COOL regulations and protect Arkansans from losing access to these important markets,” Cotton said.

Improved comp store sales and a 17% increase in global e-commerce sales were just about the only highlights of the first quarter earnings report from Wal-Mart Stores. First fiscal quarter net income and total revenue were down was down 6.7% and 0.1%, respectively, from the same quarter of 2014.

Earnings per share for the fiscal first quarter ended April 30 was $1.03, down from $1.11 in the first quarter of 2014 and one cent below the consensus $1.04 per share among the 26 analysts who follow the retailer’s financial performance. The company said currency exchange rate issues reduced earnings by 3 cents per share.

Total revenue in the quarter was $114.826 billion, down from $114.96 billion in the 2014 first quarter and below the consensus estimate of $116.32 billion.

Prior to the earnings report, Wal-Mart revised downward its first quarter earnings per share forecast to between 95 cents and $1.10. The retailer noted in the previous earnings statement that its decision to invest $1 billion annually in pay raises and for its U.S. store employees and additional investments in e-commerce would trim earnings by as much 26 cents to 29 cents per share.

In the earnings report issued early Tuesday (May 19), Wal-Mart said an operating income decline of 8.3% was primarily the result of currency issues and “investments in associate wages & training and e-commerce.”

EARLY ANALYST REACTIONS
Retail analyst Stacey Widlitz, president of SW Retail Advisors, said Wal-Mart has made it pretty clear this year they don’t expect any real sales growth or earnings gains because they are “spending, spending, spending on e-commerce where they have fallen a little behind. And you can’t forget about their wage increases this year.”

She applauded their e-commerce spending saying Wal-Mart has to get out there and ramp up their penetration which is a good bit behind other retailers. But this spending comes at the cost of shorter term earnings. She cautions that if sales don’t roll in for Wal-Mart this year there will be increased pressures on the bottom line profits.

Raymond James & Associates analyst Budd Bugatch sees some upside potential in the retailer. He said without the currency fluctuations and Wal-Mart investments in e-commerce and wages the retailer would have met top line and bottom line expectations. On a positive note he said same-store sales growth of 1% and positive traffic are indications that some of the improvements underway are taking root.

He said ongoing challenges in the international business and a disappointment by Sam’s Club add to the complexity of Wal-Mart’s business going forward.

Walmart U.S. same-store, or “comp,” sales were up 1.1% in the quarter compared to a 0.1% decline in the first quarter of 2014. Wal-Mart had forecast U.S. comparable sales growth between 1% and 2% in the first quarter. The same was predicted for Sam’s Club. Comp sales for Sam’s Club in the first quarter were up 0.4% compared to a 0.5% decline in the first quarter of 2014.

WALL STREET REACTION
Wal-Mart Stores CEO Doug McMillon said the first quarter report reflects “solid” gains in improving the business.

“We had a solid first quarter. We took some important strategic steps to strengthen the foundation of our business for the future. We need to continue to get better at consistently running great stores, clubs and e-commerce everywhere we operate ... and we are,” McMillon said in a statement.

Wall Street did not agree with McMillon’s “solid” statement overall as investors turned negative on the big box retailer. Shares traded down more than 4% following Tuesday’s earnings release. Wal-mart shares (NYSE: WMT) were selling at $76.39, down $3.53 in very heavy volume in the morning session. Wal-Mart shares have traded lower in recent weeks. During the past 52 weeks the share price has ranged from a $90.97 high to a $72.61 low.

Charles Holley, chief financial officer for Wal-Mart Stores Inc., estimated that currency issues and the increases in wages and training will cost the company 8 cents per share in the second quarter.

"Based on our views of the global macro-economic environment, and assuming currency exchange rates remain at current levels, we expect second quarter fiscal 2016 earnings per share to range between $1.06 and $1.18. Our second quarter guidance includes the impact of approximately $0.04 per share from our previously announced investments in both U.S. associate wages and training, as well as $0.04 per share from currency," Holley said.

The first quarter report follows a modest full-year report. Total revenue for the fiscal year ended Jan. 31 was $485.651 billion, up 2% compared to the previous year. Earnings per share for the year was $5.07, which beat the consensus estimate of $4.99 per share. Comparable store sales, a closely watched metric with Wal-Mart, also improved. Comp sales in all U.S. stores – including Sam’s Club – were up 0.5% in the fiscal year, better than the 0.4% decline in the previous fiscal year.

GROCERY GAINS
Walmart U.S. returned net sales of $70.245 billion in the quarter, up 3.5% from a year ago. While sales grew, so did expenses which negatively impacted the segment’s operating income. In the quarter, operating income fell 6.8% to $4.639 billion, which also included merchandise losses, most of which were in the fresh food business.

“We were pleased by the operational improvement we saw in fresh. As we mentioned in April, this is a key area of focus, and getting fresh right is critical to the customer experience. We’re taking the right steps towards reducing the time to bring fresh product to our customers, and training associates to ensure the best offering is on the shelf. We still have a lot more to do in this area, but we’re steadily improving,” Walmart U.S. CEO Greg Foran noted in the earnings call.

He said the “urgent agenda items” he laid out last year are still being addressed. Those items range from assortment discipline to pricing and in-stock goals as well as inventory controls.

Leading the way for Walmart U.S. is the Neighborhood Market grocery format which returned positive comps of 7.9% in the quarter.

While general merchandise comps were similar to last quarter, Foran said areas that performed the best were home — indoor and outdoor — led in part by lower opening price points which helped to drive momentum.

He said the health and wellness categories also performed to expectations while the media and electronics categories did not. Foran said in-stock positions for televisions suffered because of the port congestion on the west coast, which he believes is now behind them.

For the second quarter, Foran expects traffic to remain strong supported by sustained low gas prices and the retailer’s efforts to improve customer service in our stores. 

He did caution that a continued decline in food inflation will weigh a little heavier on sales in the current quarter. For the 13-week period ending July 31, the company  expects a comp sales increase of around 1%. Last year, comp sales for the period were flat.

DISAPPOINTMENT AT SAM’S
Rosalind Brewer, CEO of Sam’s Club, didn’t sugar coat her comments regarding the dismal report. 

“Our first quarter results were disappointing, as comp sales missed guidance, and we delivered softer net sales and profit than last year,” Brewer said in her opening remarks on Tuesday.

With fuel, operating income declined 10.9% to $427 million in the quarter. Brewer said the fuel business has experienced significant pricing volatility within the quarter, and as a result, Sam’s fuel business lost $9 million in the quarter.

She said net sales, without fuel, grew 1.2% to $12.4 billion. Comp sales were 0.4%, driven by slightly higher ticket increases offset by lighter traffic. The club’s Plus Cash Rewards Program nipped at the Sam’s gross profit rate which declined 0.15 % compared to last year. On a positive note, membership income rose 7.4%, but overall operating income declined 8.6% to $436 million as the retailer continues to invest in digital capabilities.

“The integration of digital and physical is a key enabler for our growth. E-commerce delivered a double-digit comp this quarter, contributing 0.40% to the segment comp. Growth in traffic, ticket, and conversion was driven by strong double-digit Club Pickup comps,” Brewer said.

CHALLENGES ABROAD
Walmart International is not without its challenges and risks. There is currency exchange volatility to deflationary pressures in the United Kingdom and Japan, and inflation runs higher in China and Brazil.

Walmart International CEO Dave Cheesewright said in the first quarter, net sales grew 3.4% on a constant currency basis, but factoring in currency exchange rates that was not the case.

“The U.S. dollar has remained at historically high levels, leading to a considerable currency impact of $3.3 billion, which led to a 6.6% sales decline on a reported basis. Net sales totaled $30.278 billion in the quarter,” Cheesewright noted in the release.

He said comp sales were favorable across four of five top markets, with the U.K., driven by continued deflation in food and aggressive competition, being the exception. 

“We also had negative comps in Japan, lapping last year’s benefit of accelerated consumer spending ahead of the April 2014 consumption tax hike. We grew comp sales in our remaining markets,” Cheesewright said.

On a positive note, Canada and Mexico performed better and Cheesewright said the new growth strategy in China is off to good start. 

“Part of this growth will come from the planned opening of 33 stores and clubs this year, with expansion focused in the southern regions where we have strong market presence. Additionally, we aim to provide better services and widen our customer reach through greater expansion of our omni-channel platforms, including online and mobile,” Cheesewright said.

Walmart China is focused on improved efficiency, cost reductions and strengthening the overall portfolio of stores. Operating income grew 23.5% in the quarter, due to expense leverage and gross margin improvement from higher sales with the Chinese New Year. 

“We leveraged expenses this quarter in our core business through ‘We Operate for Less’ and ‘We Buy for Less’ initiatives and will continue to pass those savings onto customers,” he added.

FCPACOSTS
Now its fourth year of investigation, Wal-Mart continues to spend money on the Foreign Corruption Protection Act violations the retailer has been accused of in Mexico, China and Brazil and India.

FCPA and compliance-related costs were approximately $33 million in the quarter. This is comprised of $25 million for the ongoing inquiries and investigations, and $8 million for Wal-Mart’s internal global compliance program and organizational enhancements. Last year, FCPA and compliance-related costs were $53 million in the first quarter. 

Since the retailer self-reported the alleged violations it has spent $645 million in legal fees and compliance restructuring costs. While there is no way to tell how long this investigation will continue it’s important to note that if violations are proven there could also be substantial fines to pay as well as criminal prosecution for anyone involved.

When regional transmission organization (RTO) Midcontinent Independent System Operator literally turns on the power switch to its state-of-the-art command center in West Little Rock on June 1, Arkansas will be at the epicenter of the nation’s ongoing and often raucous debate on the safety and reliability of the nation’s energy grid system.

Along with Southwest Power Pool’s $62 million relatively new campus with its own real-time data and operations center about 3.4 miles from the MISO headquarters, both nonprofit grid operators now staff a specially-trained group of engineers that oversee the smooth flow of nearly one-third of the nation’s power generation across all or parts of at least 23 states and Canada.

Once fully operational, MISO’s 50,000-square-foot Little Rock campus will control the organization’s (RTO) South region, which includes 18,000 miles of transmission, 50,000 megawatts (MW) of general capacity, and 30,000 MW of load into the MISO southern footprint across parts of Arkansas, Louisiana, Mississippi, Texas and the city of New Orleans.

The company’s initial 42 employees are primarily experts in engineering and technology, adding to the growing number of science, technology, engineering and mathematics (STEM) jobs at high-tech companies throughout Arkansas.

“We hope to use our presence here not only as a resource to the greater Little Rock community, but as a magnet for other energy-sector firms,” MISO President & CEO John Bear said at the grid operator’s grand opening on March 24.

As one of the largest RTOs overseeing power grid operations across North America, MISO manages a 15-state region stretching from the Gulf of Mexico to Manitoba, Canada. MISO’s $22 million Little Rock operations center will also work in tandem with a similar facility in Carmel, Ind., MISO’s corporate headquarters outside of Indianapolis, and a third facility in Eagan, Minn., near Minneapolis. Employees at all three MISO locations work together in real-time operations, market operations, customer services, government and regulatory affairs, information technology and administrative support, officials said.

FORMIDABLE FACILITIES
During a recent tour of MISO’s space-age looking command center, Todd Hillman, MISO’s vice president of South Region Operations, proudly chaperoned visitors through the grid operator’s facility located just off Kanis and Bowman Roads in West Little Rock. On this particular day, engineers were testing computers and other hardware connected to a giant “live map” covering one large wall, displaying every power plant and distribution line where MISO operates.

Notwithstanding the impressive engineering epicenter, the other facilities and operations at MISO’s Little Rock location are just as notable. They include a train-sized backup power generator, a solar-paneled outdoor car garage, open-space workstations with “Jetsons”-like computers and phone systems, National Security Agency-level security and sports-inspired meeting rooms named after the Arkansas Razorbacks and other SEC schools.

Among his many hats as ambassador for MISO’s South Region, Hillman said his main job is consistent with the grid operator’s mission of providing safe low-cost and reliable energy to consumers across MISO’s massive geographical territory. And although there have been many questions about the reliability of the system in the news, Hillman said during the tour of the command center that utilities, regulators and grid operators are always working to improve the efficiency of the nation’s energy system, often through innovation, upgrades and “smart grid” technology developed after major events like Hurricane Sandy or Midwestern tornadoes that temporarily take thousands of electric consumers offline.

“The grid has always been reliable,” Hillman said quietly when questioned about Hurricane Sandy in 2012 and the Northeast blackout of 2011.

He argues with ready available statistics that, although problems will occasionally occur in the nation’s grid that are caused by weather or human error, the U.S. still has the most expensive, sophisticated and reliable system in the world when compared to other countries.

PREDICTING CONGESTION

In addition, Hillman said technology that now allows MISO and other grid operators to see the energy grid in real time also allows engineers to now immediately correct energy overload and congestions problems they see each day. The command center in Little Rock and other MISO locations also allow the grid operator to run scenarios to help predict and alleviate congestion and other issues that may cause future blackouts and power surges.

“The thing MISO brings to the table is tools that have far-reaching [capabilities],” he said. “We can see the over-arching picture from a reliability standpoint. At MISO, we are able to run 9,000 contingencies every 90 seconds – it just blows your mind the amount of analysis.”

He added: “There are actual facts that show that MISO being in the South in one year has made the [grid] system more reliable.”

Hillman, like other grid operators and industry watchers, describes grid operators as the “air-traffic controllers” of the nation’s complex and often-maligned energy grid, ensuring the delivery of reliable least-cost energy to wholesale energy customers.

In his office after a tour of the still-new-smelling MISO headquarters, Hillman talked passionately about the Little Rock center that was literally hewn out of the famous rock that gave the city its name. Outside his office window sits one of those impressive car-size boulders that Hillman said will help keep him grounded about the mission of grid operators in Arkansas and the other states he oversees.

‘FRIENDLY’ RIVALRY
But MISO’s decision to move to Little Rock is largely related to its current rivalry with SPP that both grid operators call “friendly.” After first exiting its system agreement in 2005, Entergy Arkansas evaluated a number of alternatives before considering whether to continue its independent arrangement with SPP or deciding to join another RTO like MISO, which had no Southern roots at the time.

During that period, SPP made the argument before the Arkansas Public Service Commission (PSC) that it was in a better position to serve Entergy Arkansas and its Arkansas ratepayers.

“If Entergy joins SPP as a full member, two large adjacent power grids will be consolidated, Entergy will have a voice in SPP’s decision-making process, it will continue contributing to our regional energy reserves, and the APSC will have real and meaningful influence through SPP’s Regional State Committee,” SPP President and CEO Nick Brown said during that process.

Finally in November 2011, after months of often contentious public discussion, cost-analysis studies and regulatory hearings, Entergy Arkansas officially filed a “change of control” request to join MISO.

“Our proposal for Entergy Arkansas to join MISO is monumental for our customers,” Hugh McDonald, president and CEO of Entergy Arkansas, said at the time. “It provides the answer to a commitment we made to customers in 2005 to terminate Entergy Arkansas’ participation in a contract that simply created too much uncertainty and litigation risk for our customers and company.”

As part of the decision to allow Entergy Arkansas to join with the Midwest grid operator, the PSC issued a 112-page order that dictated specific steps Entergy Arkansas had to take before the deal was complete. Those mandates included giving special recognition to other electric companies in Arkansas, such as SWEPCO and the Arkansas Electric Cooperatives Corp.

The PSC edict also required Entergy Arkansas to maintain operational independence from its parent company, Entergy Corp., and sister operating companies in Louisiana, Mississippi and Texas.

In late 2013, Entergy Corp. completed the integration of its transmission system into MISO following more than two years of planning and preparation with the New Orleans-based parent of Entergy Arkansas and numerous other stakeholders.

‘VERY GOOD TRANSITION’
Today, both Entergy Arkansas’ McDonald and MISO’s Bear say the integration process went smoothly, and the initial projections of more than $1 billion in savings to Entergy utility customers over the next decade is ahead of schedule.

“It has been a great decision,” McDonald said in a recent interview. “The estimates of customer savings that we had over the entire Entergy [system] was like $1.4 billion over the first 10 years, and our [Entergy Arkansas’] share of that was about $263 million for that same period. And after being with MISO for a year now – we are on track.”

In looking back on the entire process that took years to complete, McDonald termed the cooperative deal with MISO a rousing success. “We joined at 11 p.m., Dec. 18, 2013,” McDonald said. “Things went very smoothly without a hitch, and it’s been a very good transition. The MISO team has done a great job in helping us, and our customers are benefitting from that in the form of lower energy and fuel costs.”

MISO’s Indiana-based chief executive said much the same before the grand opening of the grid operator’s Little Rock operations. “Everything went as well as it could have gone,” Bear said. “The best news for me is that I have met with every [stakeholder] and every person has said they have met or exceeded the benefits that they projected.”

LOOKING TO THE FUTURE
Despite the long and often contentious bid with MISO for the right to oversee Entergy’s vast energy portfolio, Southwest Power Pool has rebounded nicely from the disappointing news with the state’s largest utility that would have expanded the Arkansas grid operator’s Southern footprint substantially.

Still, the board of the Little Rock-based RTO approved more than $1.7 billion in new projects in early 2012 that will span over the period of 10 years. Part of the plan included about $251 million in new transmission projects over five years and another $1.5 billion in targeted transmission upgrades over 10 years.

SPP also successfully implemented its Integrated Marketplace process in March 2014, becoming the first RTO to design, build and deliver a FERC-mandated marketplace program that will improve grid reliability and improve the regional balancing of energy supply and demand.

“The Integrated Marketplace program is the latest and most complex incremental step in SPP’s evolutionary approach to improving our service to members and the region,” SPP President & CEO Nick Brown said a year ago.

Founded in 1941, SPP’s footprint includes 48,930 miles of transmission lines and 370,000 square miles of service territory. The Little Rock grid operator has 76 members in Arkansas, Kansas, Louisiana, Mississippi, Missouri, Nebraska, New Mexico, Oklahoma and Texas that serve more than 15 million energy customers.

And despite their obvious differences, including a FERC-refereed disagreement over how compensation and energy flow issues in areas where the two grid operators’ Southern boundaries cross, MISO and SPP representatives often run in the same local circles, appear at the same events and support the same causes.

In fact, both RTOs have recently released white paper and public reports saying that President Obama’s Clean Power Plan could cost its members billions of dollars to comply with the EPA’s proposed rules to shutter most of the nation’s coal-fired energy generation plants.

The two nonprofit grid operators also speak the same acronym-laced language that often leaves journalist and industry outsiders trying to interpret the meaning of commonly used alphabetic phrases like RTO, EPA, SPP, MISO, FERC, PSC and ADEQ.

Likewise, both grid operators are leaders in bringing attention to the need for adding STEM-related jobs to the Arkansas economy, boasting annual salaries for their respective employees that are well above $80,000 a year.

“Little Rock can become a major center for science, engineering and technology jobs which will mean a bright future for the city and enhance Little Rock’s reputation as an energy capital,” MISO’s Bear said at the grid operator’s Little Rock grand opening.

And as the RTO with Arkansas roots going back more than 65 years, SPP’s 575-person workforce at its nearly new 200,000-square-foot headquarters in West Little Rock is already one of the most tech-savvy workplaces in Arkansas. There, at its four-story office headquarters with a 36,000-square-foot operations data center, the nonprofit RTO monitors the power grid for such utility giants and energy powerhouses as Conoco Phillips, Kansas City Power & Light and the Tennessee Valley Authority.

COMMUNITY RELATIONS
Both grid operators are also strong corporate denizens, actively supporting their employees’ involvement in nonprofit and charitable activities in Central Arkansas. For example, when an F-4 tornado nearly destroyed the suburban communities of Mayflower and Vilonia in late April 2014 and left 16 people dead, SPP employees donated time and money to each other and their neighbors who were affected by the disaster, company spokesman Tom Kleckner said.

“Our staff volunteers with – or contributes to – more than 70 nonprofits and charities,” Kleckner said. “They participate in blood drives, charity runs, cook-offs, and as mentors to area students.”

The SPP spokesman noted that the grid operator also “once again” led the Little Rock area’s Summer Cereal Drive, contributing more than 28,000 boxes of cereal to the Arkansas Foodbank and accounting for 13% of the drive’s total. The Little Rock RTO’s charity golf tournament also raised $13,000 for CareLink, which reaches more than 18,000 people a year in Central Arkansas through Meals on Wheels, home care, senior fitness and wellness programs, and helping family caregivers, he said.

Although MISO is still not yet fully staffed, Hillman and Bear said during a tour of the facility that the grid operator began establishing community and charitable roots in Little Rock starting in 2013 when the decision was first made to establish a Southern presence in the city.

Hillman, an Indiana native, said the regional grid operator has already contributed to the community in ways beyond the operation of the electric grid and salaries to employees. For example, MISO’s employee base is already actively involved with the Make-A-Wish Mid-South Arkansas office, and Hillman serves on the board of directors of Make-A-Wish Mid-South, which serves Arkansas, West Tennessee and North Mississippi.

During the tour of the facility at the grand opening, company officials proudly showed artwork featured in the main entrance of the facility that was created by a local artist with the assistance of Make-A-Wish children.

In addition, Katherine Prewitt, MISO’s senior director of South Region Operations, serves on various boards like the Women’s Foundation of Arkansas, the Arkansas STEM Coalition and the Arkansas School for Mathematics, Sciences and the Arts.

Hillman said MISO is also developing relationships with the University of Arkansas engineering departments and other similar programs across the state to collaborate on future industry research projects and to potentially recruit new employees in the future.

Members of a newly formed non-profit group are confident they will reach their goal to revitalize the downtown and historic area of Van Buren with the help of community support, funding and awareness.

Van Buren Original, named after the original platte used to form the historic districts, is comprised of eight community leaders focused on nurturing and sustaining the heritage and history of the Van Buren area.

Revitalizing the downtown district, and surrounding ones including Fairview Cemetery, Drennan-Scott House, the Riverfront, Broadway Street, and East Main Street, is important for the health of the overall community, said Rusty Myers, former assistant executive director of the Western Arkansas Planning and Development District and a VBO organizer.

“The downtown area is integral to the history of our community. We are underutilizing the potential and now have an opportunity to create and restore a part of our history and culture,” said Myers.

The group’s five-year focus is to promote and develop strategic commercial and residential activity, and cultivate dynamic events and entertainment scenes that provide engaging experiences for visitors, shoppers and area residents. The focus was determined by Myers and the other VBO organizers: Fred Williams, Jackie Krutsch, Lisa Huckelbury, Mayor Bob Freeman, Maryl Koeth, Debbie Foliart and Jim Williamson.

‘UNIQUE SETTING’
Myers said the Van Buren area is ripe for revitalizing, given its unique architecture, history and location.

“Our city is located near an interstate. We have less vehicle traffic on our Main Street than most cities making it ideal for pedestrian traffic, and we have the train service that brings people into our city,” he said.

The train service is operated by Arkansas & Missouri Train and runs two routes three days a week: one to and from Springdale and the other to Winslow and back. The Springdale route deposits tourists to the downtown area each morning then returns for riders once the Winslow run is complete.

“Our downtown district is a very unique setting with more than 70 historic buildings located within a six block area, and most of those are still in good shape. Very few towns have these assets, and we need to take advantage and showcase them,” he said.

Koeth, executive director of Van Buren Advertising and Promotion Commission, said she expects the Van Buren downtown revitalization to be a slow, long-term process but she fully believes it will happen.

“It will take a lot of hard work to revitalize the downtown district area,” she said. “It will not be quick. The revitalization will need to be constantly evolving to stay current with the needs of current generations. But, it is an exciting time. I know we can do it.”

BUSINESS INPUT
According to Krutsch, executive director of Van Buren Chamber of Commerce, the group is working on a strategic plan, based on short-term and long-term goals.

“We will be asking some of our larger businesses and organizations such as our hospital what is important to them in the downtown footprint. We know from preliminary conversations with some of these businesses that they want inviting restaurants and shops to help them attract talent to their companies,” she said.

By recruiting unique shops, events and restaurants and restoring the historic value, the group members said Van Buren will attract more visitors to the downtown area and offer a better experience for those who ride the train from Springdale to Van Buren. Myers said more needs to be done to entertain riders who depart the train in Van Buren and are in the downtown district for several hours each day while waiting for their return trip. He calls that ‘captive audience’ an untapped resource for gaining ‘word-of-mouth’ publicity for Van Buren.

“Having a more vibrant downtown area can help recruit residents, work force and businesses,” said Koeth. “More and more communities are recognizing the need to rebuild downtown areas and make them a cornerstone for activities, tourism and shopping.”

DOWNTOWN DECLINE
The decline of downtowns across the country is centered around the change in economic development, said Myers. Downtown areas had a totally different look 30 to 40 years ago. Mass retailers were not as common so small businesses were relied upon for services and goods. As more mass chains moved in and other shopping options became available, many downtowns have steadily declined.

That is true for Van Buren as well. Further decline followed when the recession hit in the early 2000’s. Tourism declined, leaving fewer visitors to the historic areas of Van Buren. As a result, the downtown area continued to decline at a greater rate and has steadily done so since.

“The downtown belongs to the community and reflects upon the community. We want it to be a source of pride. It just needs a little polish right now.”

BENTONVILLEEXAMPLE
When forming plans for Van Buren Original, Myers and other members toured the Northwest Arkansas area. Of particular interest was the Bentonville downtown revitalization. Developers of that renewal effort explained the catalyst for the project was when corporations in the area stepped in because they were having trouble obtaining highly skilled workers who wanted to move to the area. A revitalized downtown with shops, restaurants and activities is a huge draw for potential employees.

“Quality of place is what people and businesses need and want,” said Myers.

He explained that quality of place determines if a person wants to live or visit a particular area, based on what is offered by the community. By improving quality of place, the area is automatically a stronger attraction for more skilled workforces and a wider variety of events and businesses.

Myers was told at one point in the past, seven out of 10 potential employees of major corporations in the Northwest Arkansas area turned down jobs because of the lack of desire to live in an area with no cultural activities or revitalized areas. Revitalizing downtowns and other areas had positive results for residents, small businesses and major corporations. The success of the Northwest Arkansas projects leads VBO members to believe the same can happen in Van Buren.

The VBO group customized their plan to meet the needs of the community and downtown district, including preserving and marketing the area’s history, creating outdoor recreation and events, and recruiting unique businesses. Future plans of the Van Buren Original are to visit community groups to raise awareness and gather ideas. They also will reach out to community stakeholders, investors and business leaders who have an interest in contributing ideas and aid for the cause.

“After awareness, some of the next steps will be developing our strategic goals, defining the area we are calling the downtown footprint, developing a budget and hiring staff,” said Krutsch. “It’s an honor to serve with such a talented and strong board. I am looking forward to all that we can accomplish.”

The group hopes when their goals are accomplished, the image of the historic district and the community will be elevated, making it a more attractive place to visit and live.

The pop song was almost right. Based on recent news, the next few months and years could be all about that Bass Reeves. Fox News and the Discovery Channel plan separate documentaries this summer about the legendary U.S. Deputy Marshal. And now comes news that HBO has green lighted a mini-series based on the life of the former slave who would become a Marshal for U.S. Judge Isaac Parker.

Art Burton, author of “Black Gun, Silver Star: The Life and Legend of Frontier Marshal Bass Reeves,” and “Black, Red and Deadly: Black and Indian Gunfighters,” confirmed with The City Wire that award-winning actor Morgan Freeman and television actor James Pickens Jr., have convinced HBO to produce a mini-series on Reeves.

Deadline Hollywood and other entertainment media outlets first broke the news.

“The story of one of the least known heroes of the Old West, Deputy Marshal Bass Reeves, is finally headed to the screen. HBO has put in development an untitled event miniseries project, from Morgan Freeman and Lori McCreary’s Revelations Entertainment and Grey’s Anatomy co-star James Pickens, Jr.,” Deadline Hollywood noted in this May 18 report.

REEVES HISTORY
According to most reports, Reeves was the most feared Marshal of his time under U.S. Federal Judge Isaac C. Parker. Reeves was born a slave in Texas in 1838 and died in Muskogee, Okla., on Jan. 12, 1910.

Even though Reeves was an African-American and illiterate, he brought in more outlaws than anyone else, according to Burton’s, “Black Gun, Silver Star” book. He was able to memorize the warrants for every law breaker he was to arrest and bring to trial.

Reeves was an expert tracker and detective, both respected and hated, but mostly feared. Reeves was not the first African-American appointed to serve Judge Isaac C. Parker's federal court as a deputy U.S. Marshal, but he was the most famous Marshal in his day. He was the first African-American inducted into the Great Westerners Hall of the National Cowboy Hall of Fame in Oklahoma City in 1992.

Burton said Tuesday that Hollywood first took an interest in the Reeves story in 1991 following the release of his “Black, Red and Deadly” book. Lou Gossett, Don Johnson, Freeman, Sinbad, and Maury Povich were just a few of the celebrities interested in the story.

“I was contacted by numerous agents, but they wouldn’t tell me who they were working for,” Burton said with a laugh during a phone interview from his home base in Chicago.

‘HERO FOR EVERYBODY’
Pickens contacted Burton shortly before the Bass Reeves statue was placed in downtown Fort Smith. He said Pickens partnered with Freeman in the effort to interest HBO in Reeves’ life story. Through Fox News, Bill O’Reilly will feature Reeves in a one-hour segment of the “Legends and Lies” series, Burton said. He also said the Discovery Network has planned a one-hour special on Reeves.

“It is kind of surreal. Even when they put the statue up, it was surreal, because when I started researching Bass, no one knew about him. I didn’t even know a lot about him,” Burton said. “He’s an American hero. This guy is a hero for everybody. This is someone, a story, we can all put our arms around.”

The recent buzz about Reeves – which Burton says reignited with the 2013 release of the Lone Ranger movie– has momentum behind it, Burton said, adding that he senses a broader level of interest in the slave turned lawman.

“This is like a rodeo, and we are in the chute. Once we kick that door and that chute opens, I think that Bass Reeves is going to take off. He’s going to be bigger or as big as anybody in western lore,” Burton told The City Wire. “I think Fort Smith needs to get ready for that. I don’t think I realized how big that this would get. ... If you think about it, there is no lawman that you can compare to Bass.”

Burton estimated it could take two years or more before the series is aired. Burton said he helped with some of the screenwriting, and is open to being a production consultant if asked. As to Reeves’ portrayal, Burton has a simple request.

“The only thing I ask, is that they keep the man’s integrity intact. But I don’t think there will ever be a documentary, mini-series, or film that will capture who Bass Reeves really was. It was like that movie about Ali ... it was a great movie, but you’re not going to get all of who Ali was in a movie,” Burton said.

MINI-SERIES ADVANTAGE
Baridi Nkokheli, director of the Fort Smith Department of Sanitation and who is known for his portrayal of Reeves, said the attention on Reeves “has been a long time coming.” He noted that when the Reeves statue in downtown Fort Smith was unveiled in 2013, an agent for Pickens was at the event.

In April 2010 Nkokheli visited briefly with Freeman in Little Rock. Nkokheli, dressed as Reeves, used the time to update Freeman on the plans to build a Reeves statue and on how the Bass Reeves Legacy Initiative works with area schools and other groups to raise awareness about the Marshal. (See video below of that meeting.)

Nkokheli also has a hope for how Reeves is treated in the HBO series.

“I would hope that they would concentrate more on his accomplishments coming from the fact that he was born enslaved  ... and how he adapted and overcame all those handicaps because the country was still practicing slavery,” Nkokheli said. “I would hope they would emphasize that the human spirit can triumph.”

He is somewhat concerned that the HBO focus will be that Reeves was forced to arrest his own son, and may miss the point that an overwhelming majority of those he arrested were white, “and that it was rare in those days for a black man to be empowered to arrest white men.” However, Nkokheli said a mini-series could be better than a movie, “because it may give an audience more time to delve into the background of Bass Reeves.”

Burton is confident HBO will get it right.

“HBO is a premiere group. ... He should get good treatment with HBO,” Burton said.

Burton also is not ruling out a movie.

“I actually think that will happen, that there will be a Bass Reeves movie for the theaters.”

MARSHALS MUSEUM TIMING
Depending on the progress of fundraising, opening of the U.S. Marshals Museum in downtown Fort Smith could coincide with the HBO series.

In January 2007, the U.S. Marshals Service selected Fort Smith as the site for the estimated 20,000-square-foot national museum. The museum is to be built on 15.9 acres along the Arkansas River that is being donated by the Robbie Westphal family.

The planned $53 million museum's construction is a three-phase project, starting first with site work before moving to building construction and finally design and installation of exhibits to be housed at the museum celebrating the United States' oldest law enforcement agency. A ceremonial groundbreaking was held in September 2014, and museum officials hope to have the facility open by late 2017.

Latest reports indicate that around $20 million in cash and in-kind has been raised to build and operate the museum.