As dozens of on-watchers took photos and “selfies” around a prototype of Lockheed Martin’s new Joint Light Tactical Vehicle (JLTV) parked at the steps of the State Capitol, Gov. Asa Hutchinson gave a last-minute pep rally ahead of Tuesday’s special session to consider an $87.1 million bond issue to build the next generation military vehicle in South Arkansas.

“This is a golden opportunity for the state of Arkansas,” Hutchinson told a crowd of more than 100 people gathered at the news conference before lawmakers convened at 3 p.m. for the First Extraordinary Session of the 90th General Assembly.

Gov. Hutchinson was joined at the capitol news event by Republican Sens. John Boozman and Tom Cotton and Rep. Bruce Westerman, R-Hot Springs, to discuss the much-talked about JLTV project the Pentagon will announce in July. Also on the platform with the governor were several Lockheed Martin executives, House Speaker Jeremy Gillam & Senate President Jonathan Dismang, and Mike Preston, the newly hired executive director of the Arkansas Economic Development Commission.

The JLTV will replace the Humvee, which has been used by the military since 1985. Should Lockheed Martin win the contract, the company plans to invest more than $125 million in the East Camden facility. Approximately 600 new full-time positions will be created at the facility and as many as 655 indirect jobs will be created in South Arkansas as a result of this project.

At an average wage of $57,000, the direct jobs will result in an added payroll in the South Arkansas economy of nearly $34.2 million annually, or $855 million over the next 25 years.

During the capitol press conference, Gov. Hutchinson gave an enthusiastic speech in support of the project, acknowledging that the general obligation bonds “would open up windows of new opportunity for the state of Arkansas.”

“I think this is exactly the type of project Arkansas voters had in mind when they approved Amendment 82,” he said. “If East Camden is ultimately chosen as the site for this new facility, South Arkansas will experience a tremendous economic impact for years to come. We need to make this happen, which is why I have chosen to call the General Assembly into special session.”

Despite the governor’s enthusiasm, the bond financing is just the first step in a highly competitive process to help Lockheed Martin build the next-generation of tactical vehicles for the U.S. Army and Marine Corps in Highland Industrial Park in East Camden. The DOD is expected to decide later this summer on the award of the final contract for the $30 billion JLTV project, which will replace the current “Humvee” military version of the all-terrain armored vehicle used by the U.S. Army and Marines.

If Lockheed Martin wins the contract against rivals Oshkosh and AM General, the Maryland-based defense giant will begin the process of its operations in Camden to begin rolling the first of nearly 55,000 off the assembly line by 2018.

Last week, Hutchinson outlined the details of the bond financing package. Nearly $83 million from the bond financing will be handed over to Lockheed Martin for assistance in retaining its current 530-person workforce. Those funds will also be used to assist the company in expanding its current facility, and it will allow the Maryland-based defense giant to double its labor pool to handle the Pentagon’s award that will last through 2040.

The bond financing will also pay for an additional $1.6 million training grant to be used for construction and equipping of training facilities at Southern Arkansas University Tech in Camden. The remaining $2.5 million will pay for expenses related to bond issuance costs, debt service reserves, and other eligible financing costs incurred or paid by the state, officials said.

A legislative study of the $87 million bond proposal shows that the state would easily recover its investment and an additional $16.3 million in added economic benefits. If the project falls through or if Lockheed Martin is not awarded the project, the deal is dead and Arkansas is off the hook for the money, said Hutchinson spokesman J.R. Davis. The payback of bonds for the state, which will be somewhere between 15 and 20 years, is dependent upon market conditions at that time.

Hutchinson also specified on Tuesday that if Lockheed Martin wins the contract, the East Camden manufacturing facility will be the first original equipment manufacturer (OEM) in the state. He also noted that the project would be the first “vehicle manufacturing plant” in Arkansas, a goal of state lawmakers since the state’s losing bid in 2003 for the $800 million Toyota Tundra that went to Texas.

While Hutchinson focused on the economic development benefits to the state, Arkansas’ congressional delegation played up the important role the JLTV would have in modernizing U.S. armed forces. Republican Sen. Tom Cotton noted that as a former Army infantry he actually has driven the aging Humvee, calling it an “old and venerable vehicle.” He said JLTV upgrade was crucial to the “survivability, mobility and reliability” of U.S. troops.

“This project is critical to our next generation of soldiers and Marines,” Cotton said. “I am confident that this program will be awarded on the best vehicle criteria and the best value to taxpayers.”

Cotton also called Lockheed Martin’s industrial site in East Camden “a jewel” for the state’s growing defense contracting sector, adding that he believes this project will be the first of many defense awards the state will land in the future.

Boozman and Westerman echoed Cotton’s comments highlighting the projects importance to the state’s economy and the nation’s military.

“As home to businesses that contribute to our nation’s defense, East Camden would be a perfect fit for this facility,” Boozman said. “The potential for attracting hundreds of highly skilled, quality jobs that will strengthen our national defense and protect our nation’s service members is well deserving of the attention of our state lawmakers.”

After the press conference, Lockheed Martin officials gave additional details on the Pentagon’s JLTV contract. Overall, the program is projected to bring an estimated $3.4 billion to the state’s economy should the nation’s largest defense contract win the high stakes bidding contest.

In addition, Lockheed Martin executives said the company plans to bolster the state’s $87.1 million bond financing with a total investment of more than $125 million for infrastructure improvements in Camden, as well as to reach job-creation and wage milestones set by the state over the next 25 years.

Lockheed officials also said the current estimate of 55,000 vehicles is a conservative estimate. They said that tally could easily increase depending on the needs of the U.S. Army and Marine Corps. Also, several U.S. allies have expressed interest in purchasing a version of the new JLTV vehicle, which would push orders up well above the current purchase order.

A bill that would change the date of Arkansas’ presidential and party primaries, as well as the judicial general election, moved through a state House committee Tuesday (May 26), but companion bill in the Senate didn’t fare so well.

In the first day of an expected three-day special session, the House State Agencies and Governmental Affairs Committee approved House Bill 1006, sponsored by Rep. Andy Davis, R-Little Rock. Under the bill, voters would go to the polls March 1 to determine the Republican and Democratic nominees for President as well as federal, state and county offices around the state. The filing period, under the bill, would be from noon Nov. 2 until noon on Nov. 9.

The bill, which has 29 co-sponsors in the state House and state Senate, would also set a March 22 runoff date for candidates who do not receive the mandatory 50.1% of the vote. Supporters of the plan have said the change – from the customary late May date on the political calendar – puts Arkansas on the national stage in determining who will be in the White House. Opponents note the change would truncate the state’s political calendar, pushing candidates to campaign during the Thanksgiving and Christmas holidays.

Davis told the committee that he has received support for his proposal.

“I have talked with my non-political friends … and they have said they are in favor of it,” Davis said.

Davis also said the change would give voters a say earlier in the process, making the state a key part of the campaign. Rep. Camille Bennett, D-Lonoke, asked Davis about how candidates and the general public would be notified of the change after many years of the primary being in May. Davis said most candidates would already know about the changes, while state and national media would publicize the calendar.

The House bill now goes to the floor.

A similar bill, Senate Bill 8, sponsored by Sen. Gary Stubblefield, R-Branch, was filed Tuesday and sent to the Senate State Agencies and Governmental Affairs Committee. Committee members did not pass the bill out of the Senate panel. It tied 4-4 along party lines, leaving several options with the short timetable of the special session.

It could be reconsidered tomorrow or a majority of Senate members could “pull the bill out of committee” – a rarely used and controversial procedural motion that the Senate allows for. With a supermajority of Republicans in the State Senate, the bill would have a strong chance of passage. Stubblefield tells Talk Business & Politics that he does plan to attempt to have the bill pulled out of committee and onto the Senate floor on Wednesday.

FISCAL SESSION
The House State Agencies committee also approved a bill that would change the date of the state’s fiscal session. The bill, House Bill 1008, was sponsored by Rep. Charlotte Vining Douglas, R-Alma. Under the bill, the 30-day fiscal session would start April 13 in Little Rock.

Lawmakers would be able to pre-file bills for the session starting March 14, while the state’s education adequacy study would have to be done by March 1. Also, officials with the Department of Finance and Administration would have until Feb. 1 to turn in financial numbers to prepare for the 2017 fiscal year.

Currently, the session is set to start Feb. 8.

GOVERNMENT REORGANIZATION
A House and a Senate committee approved bills Tuesday that would seek to consolidate several state agencies into departments.

The House State Agencies and Governmental Affairs Committee approved House Bill 1001, sponsored by Rep. David Branscum, R-Marshall, while the Senate State Agencies and Governmental Affairs Committee approved Senate Bill 1, sponsored by Sen. Jim Hendren, R-Sulphur Springs.

Under both bills, the Arkansas Science and Technology Authority and the Department of Rural Services would be transferred to the Arkansas Economic Development Commission; the Arkansas Building Authority would be transferred to the Department of Finance and Administration; and the Division of Land Surveys of the Arkansas Department of Agriculture would be transferred to the Arkansas Geographic Information Office.

The House bill will head to the House floor, while the Senate bill would move onto the Senate.

OTHER BILLS
The committee voted against a bill that would have kept the presidential and other primaries in May. House Bill 1002, sponsored by Rep. Nate Bell, R-Mena, failed by a voice vote.

The bill would have set a May 3, 2016 primary and a May 24, 2016 runoff date for federal, state and county primaries. Also, the bill would have required the House and Senate State Agencies and Governmental Affairs committees to “study the effects and benefits of holding the preferential primary election and the general primary election in May.”

The bill would have set a May primary date for the state, starting with the 2018 election cycle.

A couple of transportation committees also approved bills Tuesday. The bills – House Bill 1005, sponsored by Rep. Brandt Smith, R-Jonesboro was approved by the House Public Transportation Committee, while Senate Bill 3, sponsored by Sen. John Cooper, R-Jonesboro –was approved by the Senate Transportation, Technology and Legislative Affairs committee.

Both bills would allow agricultural vehicles to travel on U.S. 63 in Craighead and Poinsett counties once the highway is designated I-555.

A leader of Take Back the Fort says the group is delaying its effort to change Fort Smith’s form of city government until the November 2016 election. It’s a move they believe will give city leaders “enough rope to hang themselves.”

Don Paul Bales, a leader of the Take Back the Fort petition drive, said he believes people in Fort Smith are “special electioned out,” and the group has decided to take “a more methodic pace” to getting a change of government vote on the November 2016 general election ballot.

“I don’t even know that we are going to pursue a special election. And that’s the biggest thing you could put out,” Bales told The City Wire.

Bales is a former Fort Smith police officer who was fired and is now suing the department to get his job back. The other group leaders are Jack Swink of Fort Smith, and Little Rock attorney Matt Campbell, according to a filing with the Arkansas Ethics Commission. Campbell is Bales’ attorney in his legal action against the city. The group has not reported donations or expenses.

PETITION BACKGROUND
Take Back the Fort formed in early 2015, provided petition forms to volunteers on Jan. 29, and reported 398 “firm” signatures after the first week of the petition drive in early February. That is the last time the group reported details on signatures. The group’s website still notes that petition signing is being held at Sweet Bay by Creekmore Park in Fort Smith each Friday. However, the group is no longer actively collecting signatures, Bales said.

According to Fort Smith City Clerk Sherri Gard, it requires 2,518 valid signatures to place the form of government vote on the ballot. That number comes from a requirement that a petition for a ballot action needs 15% of the votes in the previous mayoral election. The 2014 election saw 16,788 vote in the mayoral race in which Mayor Sandy Sanders ran unopposed.

Fort Smith’s city administrator form of government has a city administrator who is hired and fired by the seven-member elected Board of Directors. Take Back the Fort wants to change to a form of government where the mayor is responsible for city operations and hires a manager to help with those duties. The new form would also have a city council serving in the normal legislative capacity. Any effort to change the city form of government is possible once every four years, according to the city’s municipal code.

‘THE LONG GAME’
Bales said Tuesday that the group decided on “playing the long game” in what he said is an effort to let actions by the city staff and Fort Smith Board of Directors prove that a form of government change is needed. He said the city is “doing everything that I think people will need to support Take Back the Fort.”

“All their behavior and all their maneuvering is anathema to transparency,” Bales said.

He predicted the city staff and Board will by the end of summer begin talking about “aggressively” raising water rates. That move, coming just a few months after a steep increase in sewer rates, will push more people toward a change in government, Bales said.

And according to Bales, there is no time limit on their petition collection effort.

“We can run this petition for the next year, and if I get the required number of signatures, it would be put on the ballot,” Bales said.

The petition collection effort will continue. Bales said the group is working to “carefully structure” 10 to 20 locations in businesses in Fort Smith as places people may sign petitions in a manner that meets legal requirements.

Bales emphasized that just because they are not as public as they once were and are taking a more low profile approach to getting signatures for 2016, they are still active and using avenues like Facebook to push the discussion.

“Our numbers are growing,” Bales said.

As of May 27, the Take Back the Fort Facebook page had 1,348 likes.

Arkansas was one of 11 states to see a jobless rate rise in April compared to March. However, the rate rise was a function of a bigger gain in the state’s workforce compared to the gain in the number of jobs added between March and April.

The state’s jobless rate rose to 5.7% in April, up from 5.6% in March and better than the 6.3% in April 2014. According to the figures released Wednesday (May 27) by the U.S. Bureau of Labor Statistics, the state’s economy added an estimated 46,719 jobs between April 2014 and April 2015.

The size of the workforce – 1.334 million – was up 3.23% compared to April 2014, and was up 0.3% over the 1.33 million in March. The peak for Arkansas’ labor force was 1.376 million in August 2008.

The number of employed in Arkansas during April was 1.258 million, up 0.2% over March employment of 1.256 million, and up 3.85% compared to April 2014. The number of unemployed was an estimated 76,058 during April, above the 74,579 in March, but below the 80,942 in April 2014.

The closely watched nonfarm payroll number was 1.208 million in April, better than the 1.202 million in March and up over the 1.184 million in April 2014. Nonfarm jobs reached a high in Arkansas of 1,209,800 in March 2008.

The nonfarm number topped the 1.2 million mark in December, the first time since September 2008. The nonfarm category does not include farm workers, private household employees, non-profit employees and “general government” employees. Investopedia estimates that the nonfarm category represents about 80% of the total workforce that contributes to national GDP.

Arkansas’ average jobless rate for 2014 was 6.1%, down 1.3% percentage points from the 7.4% average in 2013. It is the first time the annual average dropped below 7% since 2008.

ARKANSAS SECTOR NUMBERS
In the Trade, Transportation and Utilities sector — Arkansas’ largest job sector — employment during April was an estimated 248,100, above the 246,700 in March and ahead of the 243,700 during April 2014. Employment in the sector hit a high of 251,800 in March 2007.

Manufacturing jobs in Arkansas during April totaled 154,600, above the 154,000 in March and above the 153,500 in April 2014. Employment in the manufacturing sector fell in 2014 to levels not seen since early 1968. Peak employment in the sector was 247,300 in February 1995.

Government job employment during April was 213,500, up from 213,300 in March and above the 213,300 during April 2014.

The state’s Education and Health Services sector during April had 176,300 jobs, up from 174,600 in March and up from 171,800 during April 2014. Employment in the sector is up 21.5% compared to April 2005.

The construction sector employed an estimated 48,600 in April, up from 46,200 in March and above the 45,300 in April 2014. The sector is off the employment high of 57,600 reached in March 2007.

Arkansas’ tourism sector (leisure & hospitality) employed 113,300 during April, down from 114,200 during March, and above the 107,100 during April 2014. The sector hit a record high in February with estimated employment of 114,800.

NATIONAL, REGIONAL DATA
The BLS report also noted that 45 states had unemployment rate decreases from a year earlier, and five states had increases. The national jobless rate during April was 5.4%, down from the 6.2% in April 2014.

Nevada had the highest unemployment rate among the states in April at 7.1%. Nebraska had the lowest jobless rate at 2.5%.

The April jobless rate in Oklahoma was 4.1%, up from 3.9% in March and down from 4.7% in April 2014.

Missouri’s jobless rate during April was 5.7%, up compared to 5.6% in March and down from 6.3% in April 2014.

The Drennen-Scott Historic Site in Van Buren has received a $367,000 grant from the Arkansas Natural and Cultural Resources Council and will begin work on adding a second historic building for tours as well as creating new parking areas, offices and laboratories.

The Drennen-Scott Historical Site received notification the grant had been funded in May. The grant money will be used to start the projects and the group can re-apply annually for additional grants.

Plans include renovating a recently donated historic house, the Leonard Wilhauf house,  as well as adding 35 parking spaces to the property. The city of Van Buren will improve the site more with the addition of sidewalks to and from the two houses as well as providing access for pedestrian traffic from the downtown district.

Tom Wing, assistant professor of history and director of the Drennen-Scott effort, said he is excited about the potential this gives visitors to the site and the impact it will have on the educational value of the Drennen-Scott property.

THE ‘DOWNTOWN FOOTPRINT’
The 1830s structure was donated to the society by John and Zoe Cobb. Wing believes the house, listed on the National Register of Historic Places in 1974, is the second oldest in Van Buren. It originally belonged to Leonard Wilhauf, a German immigrant who was a baker in Van Buren. He was also well known for serving in the Mexican War. Wilhauf built the house on land he purchased from John Drennen.

Jackie Krutsch, executive director of the Van Buren Chamber of Commerce, said the expansion is an exciting addition to the growth and development of downtown Van Buren.

“The addition of the Wilhauf House will allow for extraordinary student opportunities. In addition, the improved property will coincide with the efforts to invigorate the downtown footprint,” she said.

According to a news brief from the University of Arkansas at Fort Smith, the Wilhauf house will be renovated to provide student-created exhibits and student-led programming, similar to the Drennen-Scott House.

Caroline Bercher, a fifth generation descendent of John Drennen, is grateful for the grant and UAFS support of the historic property.

“I'm happy to see that another piece of Van Buren's history is going to be preserved and grateful to the University for seizing the opportunity to expand the Drennen-Scott historic site. These two properties together should provide a unique and amazing insight into the different life experiences of area settlers during the 1800s,” Bercher said.

VAN BUREN SUPPORT
Wing said when plans for adding a second home tour to the property were developing, the group knew there needed to be easy accessibility between the two structures. That is when he contacted Van Buren Mayor Bob Freeman.

“Without hesitation, he was in on the project. The city agreed to build sidewalks to aid in pedestrian access to the site as well as to connect the structures,” said Wing.“He and other community leaders were instrumental in getting this project off the ground. This property is integral to the Van Buren history and we all wanted to do the renovation right.”

Along with the Mayor, Krutsch and Rusty Myers, representing Van Buren Original, were present during a recent meeting to review the project. Mayor Freeman said the city is willing to do whatever is needed to make the expansion successful.

“The Drennen-Scott house and the Wilhauf project are very important to our culture and history,” he said. “We will be providing funding for connecting the property together and making it more accessible.

Sidewalks will also be added from the historic downtown area in Van Buren to the Drennen-Scott properties, making it easier for pedestrians to travel to the site.

BROADER LOOK AT HISTORY
Wing estimated it would be two to three years before all projects were completed and the price tag could reach around $2 million, depending on the amount of rehabilitation it will take to bring the historic home to the codes needed for a public facility.

“Preserving the history of a building while giving it upgrades to match today’s needs is a very tricky process and can be slow-going at times,” he explained.

The first stage of renovation will be adding the additional parking on the northwest corner of the property which will be acquired through the grant funding.

“We have never had enough parking and this is not a place pedestrians can get to easily. Since we are adding another historic house it makes sense to expand the parking first,” he said.

The historic part of the Wilhauf house will be turned into student-led tour rooms and exhibits, while a newer addition on the back of the house will be converted to offices and a lab for the Arkansas Archeological Survey Research Station, now housed in the Echols Building of the main campus at UAFS. Wing said by adding the second home tour, it will give visitors a broader look at lifestyles in the 1800s.

“Wilhauf was a common man. By showcasing his working class home, it will help us contrast the different ways people lived,” he said. “The Drennen-Scott house is a wealthy man’s home. When this home was built, it was grandiose and the people who lived here were very well off. This is a great educational opportunity to contrast the different lifestyles.”

‘RICH HERITAGE’
Wing said numerous artifacts found in the home are now being cataloged by students in the history program at University of Arkansas at Fort Smith, and will be kept in the archives there. When renovations on the Wilhauf home are completed, some of the archives may be used for exhibits. 

The Drennen-Scott Historic Society has two missions, said Wing. One is education through school group tours, lecture series and visiting classrooms offsite. The other is community outreach by providing tours and classes onsite at the Drennen-Scott house.

“Van Buren gains a lot by having this house and history here. It really is an asset to the community and it’s only going to get better with this new expansion,” Wing said.

Mayor Freeman said expansion at the Drennen-Scott house fits in well with other recent developments in the area.

“When you look at how the area is revitalizing their history with the Marshal’s Museum in Fort Smith and now this project, it really reflects how much we value the rich heritage of this area,” he said.

The Arkansas House and Senate easily approved legislation Wednesday that would allow general obligations bonds under Amendment 82 to be set aside for Lockheed Martin’s bid to build the next-generation Joint Light Tactical Vehicle (JLTV) in East Camden’s Highland Industrial Park.

The Arkansas House of Representatives unanimously approved House Bill 1003 by a vote of 96-0 in Wednesday morning’s session, after which the full assembly of lawmakers stood and applauded the passage of the $87 million bond financing package. Four lawmakers were absent during the morning vote.

Not long after, the Arkansas Senate by a vote of 31-3 approved Senate Bill 6, its version of the same legislation. Both chambers will now have to approve each other’s version of the bond financing package this afternoon. The legislation will then go to Gov. Asa Hutchinson for his signature into law by the close of the special session, which is expected tomorrow.

Should Lockheed Martin win the contract, the company plans to invest more than $125 million in the East Camden facility. Approximately 600 new full-time positions will be created at the facility and as many as 655 indirect jobs will be created in South Arkansas as a result of this project.

According to Gov. Hutchinson and the provisions in the 41-page bill, nearly $83 million from the bond financing will be handed over to Lockheed Martin for assistance in retaining its 530-person workforce. Those funds will also be used to assist the company in expanding its facility, and it will allow the Maryland-based defense giant to double its labor pool to handle the Pentagon’s award that will last through 2040.

The bond financing will also pay for an additional $1.6 million training grant to be used for construction and equipping of training facilities at Southern Arkansas University Tech in Camden. The remaining $2.5 million will pay for expenses related to bond issuance costs, debt service reserves, and other eligible financing costs incurred or paid by the state, officials said.

If the project falls through or if Lockheed Martin is not awarded the project, the deal is dead and Arkansas is off the hook for the money, said Hutchinson spokesman J.R. Davis. The payback of bonds for the state, which will be somewhere between 15 and 20 years, is dependent upon market conditions at that time.

Rep. Matthew Shepherd, R-El Dorado, who carried the legislative for Hutchinson, told lawmakers that HB 1003 would help Lockheed Martin retain and add at least 1,000 jobs in South Arkansas.

“This is a tremendous opportunity for South Arkansas and the sole reason we are here at the state Capitol,” Shepherd told lawmakers on the House floor. “Perhaps no other community has suffered such an economic downturn over the last 20 years than Camden.”

Beyond the local economic impact, Shepherd said the bill would help Arkansas gain needed experience in auto vehicle manufacturing, telling a story that Arkansas was not in the running for the planned $500 million Volvo auto plant that went to South Carolina because the state’s labor force did not have the know-how and technical skills.

“This bill will allow Arkansas to bring an auto manufacturing plant to the state …, but not a conventional one,” he said. “But I would say this is better than the Volvos, the GMs, the Fords or any other manufacturer we can talk about because this legislation will allow for the building of tactical vehicles that will support our national security and keep our fighting men and women safe as they defend us around the world.”

Several other legislators also spoke in favor of HB 1003, taking up Shepherd’s economic development and patriotic themes as necessary reasons to support the legislation. A few also addressed claims by a smattering of critics that Gov. Hutchinson and the legislature were supporting “corporate welfare,” and that state government was now getting involved in the selection of losers and winners in the private sector.

Rep. Charlie Collins, R-Fayetteville, said told fellow lawmakers at the House podium that he was supporting HB 1003 after he voted against Amendment 82-sponsored legislative to give the Big River Steel a $125 million package to build a $1.3 billion steel mill in Northeast Arkansas.

“The principle involved in this (bill) is different in my eyes,” Collins told fellow lawmakers. “When I was in the Navy years ago, we use to make fun of the military for paying $400 for hammer or $6,000 for a toilet seat, but the federal government nowadays seems to be pursuing a path to say that we are going to spend $30 billion of your hard-earned federal tax dollars on this vehicle for our troops.”

Collins said the taxpayer-sponsored bond financing for the project will ultimately benefit Arkansas taxpayers over time. “To me, this seems like a very fair deal,” he said.

On Tuesday, the Arkansas chapter of Americans for Prosperity sent out a legislative alert opposing the Lockheed Martin bond financing package.

“Attracting jobs to our state is correctly a high priority for both the Governor and state lawmakers, and bold action should be taken by policymakers to improve the business environment in our state,” AFP said in a statement on its website. “Unfortunately, rather than working to expand opportunities for all Arkansas families and businesses, lawmakers are poised to consider legislation that would put taxpayers on the hook for a multi-million dollar, debt-financed giveaway to a single corporation.”

AFP also noted that each job created by the Lockheed Martin project financed by the bill would cost taxpayers approximately $145,000. At an average wage of $57,000, the direct jobs will result in an added payroll in the South Arkansas economy of nearly $34.2 million annually, or $855 million over the next 25 years, according to an analysis by Talk Business & Politics.

The Environmental Protection Agency issued Wednesday (May 27) what it called a “final” ruling on Clean Water Act regulations and said the new rules will not impact farmers and other private landowners. But several members of Arkansas’ Congressional delegation say they will work to ensure the ruling is not the last word on the subject.

In the 297-page ruling promulgated by the EPA and the civil works division of the U.S. Army, primarily result from U.S. Supreme Court rulings in 2001 and 2006 that limited previous EPA rulemaking and created areas of uncertainty with respect to jurisdiction and interpretation.

“The rule ensures that waters protected under the Clean Water Act are more precisely defined and predictably determined, making permitting less costly, easier, and faster for businesses and industry,” noted a joint statement from the EPA and U.S. Army. “The rule is grounded in law and the latest science, and is shaped by public input. The rule does not create any new permitting requirements for agriculture and maintains all previous exemptions and exclusions.”

The two groups said the rules were drafted with the input from more than 400 meetings with “stakeholders,” and the review of more than 1 million public comments. Key parts of the new ruling highlighted by the EPA and Army include:
• A Clean Water Act permit is only needed if a water is going to be polluted or destroyed;

• The Clean Water Rule only protects the types of waters that have historically been covered under the Clean Water Act. It does not regulate most ditches and does not regulate groundwater, shallow subsurface flows, or tile drains;

• It does not make changes to current policies on irrigation or water transfers or apply to erosion in a field; and

• The Clean Water Rule addresses the pollution and destruction of waterways – not land use or private property rights.

“Today's rule marks the beginning of a new era in the history of the Clean Water Act,” Assistant Secretary for the Army (Civil Works) Jo-Ellen Darcy said in the statement. “This rule responds to the public's demand for greater clarity, consistency, and predictability when making jurisdictional determinations. The result will be better public service nationwide."

The EPA also includes on its website eight “factsheets” about the new rules that cover agriculture, utilities, recreation and other areas.

FARM, PRIVATE LAND USE
The most controversial aspects of the anticipated final ruling were with respect to regulations of farmland and other private property. EPA and Army officials said the new ruling does not infringe upon farmers and does not create new rules for private property use.

“The final rule specifically recognizes the vital role that U.S. agriculture serves in providing food, fuel, and fiber at home and around the world. The rule does not create any new permitting requirements for America’s farmers. Activities like planting, harvesting, and moving livestock have long been exempt from Clean Water Act regulation, and the Clean Water Rule preserves those exemptions,” noted the EPA and Army.

But the American Farm Bureau Federation, Agricultural Council of Arkansas and members of Arkansas’ Congressional delegation beg to differ with assertions that the new rule will not harm private landowners.

“This proposed rule would dramatically expand the reach of extremely costly federal permitting requirements to cover countless land uses, including ordinary farming and ranching activities — even mowing grass in a ditch,” AFBF General Counsel Ellen Steen said in a statement. “Top-level EPA officials have portrayed farmers’ concerns as ‘ludicrous,’ when in fact they are perfectly valid. Farmers and other small business owners and land owners deserve better than misinformation from their government.”

The AFBF created a “Ditch the Rule” website focused entirely on the issue. In October 2014 the AFBF posted a “Trick or Truth” document on the website alleging that the EPA and Army “misstates key information about the proposed rule and its true impacts on farmers and ranchers, builders, local governments, and countless others.”

Farmers under the new rule will be required to seek permits for several activities, according to the AFBF, with such permits being costly and time-consuming.

“The Corps or EPA can take years to issue a permit, or they can decide not to issue one at all. Just the process of applying for a permit can be very burdensome, costing tens of thousands of dollars in consultant and legal fees,” the group noted.

Andrew Grobmyer, executive vice president of the Agricultural Council of Arkansas, said the new rules are an “enforcement and compliance nightmare.”

“This new regulation, if not mitigated by Congress or the courts, will undoubtedly cause new compliance burdens for agriculture, place farmers at risk of lawsuits, and make it more costly to our farmers to produce the food and fiber the world demands.  We hope to work with our Congressional delegation to seek and create sensible government and private sector solutions to enhance water and air quality, soil health, and wildlife habitat,” Grobmyer said in a statement.

U.S. Sen. John Boozman, R-Ark., said he is working in the Senate to overturn the new rule and to pass the Federal Water Quality Protection Act which would “clarify the role of Washington bureaucrats.”

“This EPA overreach threatens farmers, ranchers and private landowners' ability to use their property. This rule will raise costs without providing clean water benefits, takes control away from states and increases uncertainty all while causing project delays as Arkansans try to figure out where this EPA power-grab applies,” Boozman said in a statement. “The agency believes that unless it controls all of our nation’s water, this resource is not protected. This couldn’t be further from the truth.”

When asked for an example of how the law could impact farmers, Boozman’s staff sent the following responses.
• “EPA or the Corps will look at aerial photos or the surrounding area to guess whether a rice pond was constructed in a stream or wetland, even if that construction took place 100 years ago, so they may still regulate rice ponds.”

• “The final rule does not exempt ditches used by agriculture to move irrigation water around.  It only exempts ditches used to drain rainwater runoff. So the channels used to drain rice ponds may be jurisdictional.”

• “Even land that proves to not be jurisdictional will now undergo delays and analysis (for a jurisdictional determination) as landowners seek federal jurisdictional determinations on a much more frequent basis, which increases costs and discourages traditional farming activities.”

• When the “EPA says this will not affect farming, the agency is relying on some creative word-play (to put it generously) to try to back that up. EPA may ultimately realize that it can’t regulate a particular ditch on a farmer’s land, but only after the farmer has jumped through a number of new hoops to get that clearance.”

U.S. Sen. Tom Cotton, R-Ark., said the ruling is a “prime example of government overreach at its very worst.”

“These unprecedented new regulations will have a devastating impact on Arkansas. They further establish the EPA’s ability to regulate farmland, effectively tying farmer’s hands on everything from when to plant, how often they can run a tractor, and regulating mud puddles on their farms,” Cotton said in a statement.

When asked for an example in the new rule that allows the EPA to regulate mud puddles, Cotton’s staff pointed to page 19 of the new rule. That section notes: “The rule continues the current policy of regulating ditches that are constructed in tributaries or are relocated tributaries or, in certain circumstances drain wetlands, or that science clearly demonstrates are functioning as a tributary. These jurisdictional waters affect the chemical, physical, and biological integrity of downstream waters. The rule further reduces existing confusion and inconsistency regarding the regulation of ditches by explicitly excluding certain categories of ditches, such as ditches that flow only after precipitation. Further, the rule explicitly excludes from the definition of “waters of the United States” erosional features, including gullies, rills, and ephemeral features such as ephemeral streams that do not have a bed and banks and ordinary high water mark.”

COMMENTS FROM THE HOUSE
U.S. Rep. Steve Womack, R-Rogers, called on the Senate to vote on a House bill that would recall the ruling.

“The federal government should not be in the business of regulating every creek, stream, and puddle, and I find the sweeping Waters of the U.S. regulations – finalized in spite of significant stakeholder concern – extremely troubling,” Womack said in a statement. “The EPA has shown its cards; the agency will continue to act without regard to the impact on the Natural State and our industries, and Congress must intervene. I applaud the actions already taken by the House to prevent this egregious overreach and urge the Senate to act quickly to ensure these regulations are not implemented.”

U.S. Rep. Bruce Westerman, R-Hot Springs, said the “agency is overreaching and hurting Arkansas farmers, ranchers, and outdoor enthusiasts.” He also support efforts in the House to overturn the ruling.

U.S. Rep. Rick Crawford, R-Jonesboro, said the House has passed a bill to overturn the rule and also called on the Senate to vote on the bill.

“The ambiguous wording of Waters of the United States (WOTUS) rule could subject landowners, farmers, and ranchers to jurisdictional challenges and unprecedented levels of compliance costs. I strongly urge a thorough overhaul of the WOTUS rule that takes into consideration the hundreds of thousands of negative comments filed against it,” Crawford said in a statement. “The bipartisan House-passed Regulatory Integrity Protection Act (H.R. 1732) would send the rule back to the drawing board, and I hope the Senate moves quickly to pass this legislation."

The Senate approved a bill Wednesday night that would change the state’s primary election from May to March in 2016. Senators voted 28-6 to approve Senate Bill 8, sponsored by Sen. Gary Stubblefield, R-Branch, capping a long day at the Capitol.

The bill tied 4-4 in the Senate State Agencies and Governmental Affairs Committee Tuesday on a straight party-line vote. On Wednesday, Stubblefield, along with Senate President Jonathan Dismang, R-Searcy, moved to send the bill to the full Senate which is allowed under Senate rules.

A motion to extract the bill from the committee passed by a 21-10 margin. However, a bill to move Senate Bill 8 to the Senate calendar failed by a 22-10 margin – two votes short of suspending the rules. That vote was expunged about noon Wednesday, allowing the Senate to vote again. The measure was amended to only move the primary season for the 2016 election cycle, which means the debate is likely to occur again before the 2018 cycle.

Stubblefield has said the bill would help the state play a bigger role in deciding who wins the White House. However, Sen. Joyce Elliott, D-Little Rock, said during debate that the calendar vote “poisons the atmosphere and sets a bad precedent” in going to the full Senate.

Both the House and Senate bills would set a March 1, 2016 primary date for federal, state and county offices including President of the United States. If no candidate received 50.1% of the vote, the two top finishers in U.S. House, U.S. Senate, state and county races would advance to a March 22, 2016 runoff election. Candidates would also file from noon Nov. 2 until noon on Nov. 9, under the bill.

The bills were also amended Wednesday night to include protections for independent candidates to file for the 2016 campaign.

“To ensure that independent candidates are provided the maximum number of days allowed by law to circulate petitions to qualify as an independent candidate, the provisions of this act are retroactive to August 1, 2015,” the amended bill noted. “Signatures on a petition to have the name of a person placed upon the ballot as an independent candidate under § 7-7-103 collected between August 11, 2015, and the effective date of this act shall be counted if the signatures are not otherwise collected in violation of Arkansas law; the signatures otherwise comply with applicable Arkansas law; and the petition is lawfully filed.”

“It is found and determined by the General Assembly of the State of Arkansas that independent candidates may circulate petitions for candidacy for ninety (90) days before the deadline for filing as a candidate for office; and that without an emergency clause, the effective date of this act will cause confusion regarding the rights and interests of independent candidates and the time period for circulating petitions for candidacy.”

The amendments were approved by the Senate by voice vote.

HOUSE VOTE ON PRIMARY CHANGE
The House voted 56-32 to approve House Bill 1006, sponsored by Rep. Andy Davis, R-Little Rock. Davis said the change would help the state be at the forefront of the 2016 campaign. Davis told the House about a talk he had with someone Tuesday night at his child’s baseball game.

The man told Davis “he had no idea” when the state’s party primary was.

“I asked him and he said he had no clue,” Davis said of the conversation.

Davis said the change may help educate people about voting and the importance of it.

While saying he supported the concept, Rep. Nate Bell, R-Mena, said he could not support the change.

“It is about the Almighty dollar,” Bell said of the change.

Bell said he opposed the idea for several reasons, including adding to the cost of campaigns, that the bill was not thought out and the toll that a campaign has on families. The bill passed the House while the Emergency Clause – needing a two-thirds vote – failed the first time by a 61-27 vote.

A motion by Rep. Jana Della Rosa, R-Rogers to reconsider the vote passed by a 68-12 margin. However, the second attempt failed 66-13 – one vote short of passage – as Bell asked the House clerk to “sound the vote” or verbally do a roll call vote. The House bill now heads to the Senate.

FISCAL SESSION
With the primary election cycle changed, the House approved a bill to move the state’s fiscal session from February to next spring.

The 69-15 vote on House Bill 1008, sponsored by Rep. Charlotte Vining Douglas, R-Alma, would set an April 13, 2016 start for the session in Little Rock. The 30-day session is currently scheduled to start on Feb. 8.

Under the bill, the state’s education study would be due by March 1 while lawmakers could pre-file bills as early as March 14. Officials with the Arkansas Department of Finance and Administration would have a Feb. 1 deadline to turn in financial numbers to help lawmakers plan for the 2017 fiscal year budget. The House bill now heads to the Senate.

Both the House and Senate bills include an amendment that the April move will be only for 2016. The Senate also voted 33-0 Wednesday night to approve a similar bill, Senate Bill 5, sponsored by Sen. Jon Woods, R-Springdale.

GOVERNMENT REORGANIZATION
The House and Senate also approved a pair of bills that will attempt to transfer several state agencies into larger departments. The House voted 95-0 to approve House Bill 1001, while the Senate voted 33-0 to approve Senate Bill 1.

Both bills – sponsored by Rep. David Branscum, R-Marshall in the House and Sen. Jim Hendren, R-Sulphur Springs – would transfer the Arkansas Science and Technology Authority and the Department of Rural Services to the Arkansas Economic Development Commission.

The bills would also move the Arkansas Building Authority to the Department of Finance and Administration and the Division of Land Surveys in the Department of Agriculture to the Arkansas Geographic Information Office.

The House bill heads to the Senate, while the Senate bill moves to the House.

DWI
The Senate voted 25-6 Wednesday to approve a DWI-related bill.

The bill, Senate Bill 4, was sponsored by Sen. David Johnson, D-Little Rock. Johnson told the Senate that the bill would restore the strict liability standard to DWI and other alcohol-related offenses in the state.

Sen. Jeremy Hutchinson, R-Little Rock, also told the Senate that the bill was needed due to a recent ruling by the Arkansas Supreme Court.

Justices ruled that state law requires criminal intent for a DWI conviction. The state also faces a potential loss of about $50 million in federal highway funding if the law is not updated, officials have said.

Packed into The Video Wire this week is a note on “tattoo-worthy” quotes from a leader of Take Back the Fort, Fort Smith Mayor Sandy Sanders swinging his big veto stick and another screw up by Dawson Meadows.

The Video Wire also includes a brief lesson on the behavior of polite cowboys and the first rule of the Fort Smith Boxing Club.

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

Although Lockheed Martin has now pocketed an $87 million financing package from the state of Arkansas, a Washington, D.C.-based defense budget expert said there is no reason to believe that the Bethesda, Md.-based defense contractor has an advantage over rivals in the high-stakes Joint Light Tactical Vehicle acquisition for 55,000 new tactical ground vehicles for the nation’s military.

“I really don’t have a good sense of who’s the leader,” said Ryan Crotty, deputy director for defense budget analysis at the Center for Strategic and International Studies. “It is definitely high profile, but the (JLTV) program directors have kept it on lockdown as to who’s the favorite, and there are three pretty strong candidates.”

Crotty, whose bipartisan Washington, D.C.-based think tank offers research on a wide range of U.S. policy issues at the nation’s capital, said he still believes the Pentagon will make an announcement concerning the JLTV project in July, although some defense and ground vehicle contracts have been cut, put on hold or are on the chopping block because of automatic spending cuts that are part of the 2013 sequestration.

However, the JLTV project is seen as high priority among Pentagon and congressional officials because it offers a limited window to upgrade and modernize the military’s ground vehicle capacity, he said.

ARKANSAS BOND FINANCING PACKAGE ‘HIGHLY UNUSUAL’
Crotty also called the Arkansas financing package “highly unusual” in defense contracting circles, saying it will be interesting to watch and see if it sets a pattern of local and state governments offering taxpayer-backed incentives for a taxpayer-funded government project.

“I have not heard anything from the other two competitors (Oshkosh and AM General) doing anything similar, but I don’t know if it gives Lockheed an advantage because they already have a demonstrated history with the federal government for this kind of contract,” he said. “I certainly don’t know if it will help (Lockheed), but it can’t hurt.”

Crotty said all of the companies are supported by local and state officials in the communities where they operate, but “this particular incentive (program) in Arkansas is not something that I have seen a lot of, and it remains to be seen if it sets some kind of precedent.”

Besides Lockheed Martin, publicly-traded Oshkosh Corp. in Wisconsin and privately held AM General LLC in South Bend, Ind., are the other two finalists to build the next-generation tactical, armored vehicle in a contract worth more than $30 billion through 2040.

In 2012, the U.S. Army and Marine Corps selected all three to build JLTV prototypes to replace the aging Humvee, which is noted for its off-road capabilities but is vulnerable to the road-side bombings that targeted U.S. troops during conflicts in Iraq and Afghanistan. Based on their recent applications, each company received a split of a $185 million award and started from scratch to develop their own version of the JLTV tactical vehicle.

In February, each company submitted final applications to the Army and Marine Corps that met the Pentagon draft requirements for a tactical vehicle that had the off-road capabilities of the Humvee, but also was capable of withstanding anti-vehicle explosive devices that would serve as an Internet-ready, technology command center on the battlefield.

FINALISTS OFFER ADVANTAGES
Today, each company has dedicated websites for the JLTV vehicle, offering photos, videos and talking points on their version of the JLTV tactical vehicle. All of the prototypes have a similar look and body type, but each company offered Talk Business & Politics their own reasons why they best meet the Pentagon requirements for “a lightweight, highly-mobile, net-ready vehicle” with unprecedented levels of protection for U.S. troops on the modern battlefield.

Oshkosh spokeswoman Jennifer Christiansen said the reason why the Wisconsin defense contractor and truck builder should be selected to build the JLTV is very simple.

“Experience,” she told Talk Business & Politics. “Oshkosh Defense has decades of experience designing, manufacturing and sustaining the U.S. military’s heavy, medium and mine-resistant ambush protected all-terrain vehicle (M-ATV) fleets. ... In developing our JLTV solution, we applied in-theater experience to develop the next generation light vehicle with unprecedented protection and off-road mobility for our troops.”

Christiansen, who is vice president of business development operations for Oshkosh, said the company’s workforce is highly trained and is already building vehicles for the U.S. military.

“This is an important consideration because transitioning a new vehicle like JLTV from the development phase into production can be very challenging for a company lacking vehicle production experience,” she said, not specifically naming Lockheed Martin. “This is where Oshkosh is truly unique because no other company has successfully transitioned more new military vehicle programs into production for the U.S. Department of Defense.”

And although the state of Wisconsin has partnered and invested in military vehicle technology, manufacturing and infrastructure for years, “Oshkosh is not dependent on economic incentives or taxpayer funded bonds to build brand new capabilities to compete for JLTV,” Christensen said.

“At Oshkosh, our team with support from our suppliers, stands ready to add JLTV to our current production lines today,” Christensen said.

According to Oshkosh’s application submitted on Feb. 10 in response to the request for proposal (RFP) for the JLTV, the Wisconsin company said it is “fully prepared” to begin production of the all-terrain vehicles immediately. According to sources, the company’s bid was the lowest of the three finalists.

“Our troops deserve the best vehicle and technology our government can provide, and no other company serves this mission more effectively than Oshkosh,” said U.S. Army Major General (Retired) John Urias, executive vice president of Oshkosh Corp. and president of Oshkosh Defense. “Our JLTV proposal reflects Oshkosh’s heritage of building high performance tactical vehicles, and an unparalleled commitment to providing our troops with the most capable and reliable JLTV at an affordable price.”

HUMVEE MAKER AM GENERAL TOUTS EXPERIENCE
AM General’s version of the JLTV, called the Blast Resistant Vehicle-Off-road (BRV-O) tactical vehicle, was also submitted to the Pentagon on Feb. 10. Company officials said that the BRV-O provides the most operational and protection capability to address current and future needs of the U.S. Army and Marine Corps.

“The BRV-O is a combat system designed and built with a total focus on Warfighter needs, by a team whose sole calling is fielding the world’s best light tactical vehicles. The BRV-O JLTV proposal reflects AM General’s dedication to excellence and our steadfast determination to be the most reliable, trusted partner for the United States government,” said AM General President and CEO Charlie Hall. “AM General has the experience, focus, innovation and investment to give soldiers and Marines the advantage in a dangerous and constantly changing world.”

AM General spokesman Jeff Adams told Talk Business & Politics that the Indiana defense contractor “is the leading ‘light tactical vehicle’ manufacturer in the world, supported by an expert workforce and our state-of-the-art, fully-tooled, production-ready facility.”

“Our Blast Resistant Vehicle-Offroad (BRV-O) is a transformative vehicle, with an agile and hardened system that will equip and support the Army and Marine Corps with tactical mobility, proven C4ISR and unsurpassed protection,” said Adams, executive director for the global communications and marketing at AM General.

C4ISR is the military acronym for command, control, communications, computers, intelligence, surveillance and reconnaissance.

One dynamic that some JLTV watchers believe works for and against AM General’s is the fact that the Indiana company is also the original designer and manufacturer of the HMMWV, or Humvee vehicles. Designed for garrison duty during the Cold War, it was not originally designed to be an armored vehicle to protect troops from mines and roadside bombs in recent Middle East conflicts.

Although the company has not received any specific incentive package for the JLTV project, Adams said the company is a trusted partner for the U.S military and “we are proud of our longstanding, productive partnership with the State of Indiana.”

THE CASE FOR LOCKHEED MARTIN
For Lockheed Martin, also a publicly traded company, JLTV observers say its key advantage is its position as the nation’s largest defense contractor and familiarity with the Pentagon contracting process. The defense contracting giant has also teamed with Boeing Co. to bid on a contract to build a new long-range bomber for the Air Force worth over $80 billion. Northrop Grumman Corp. is also competing for that contract, which is also expected to be announced later this summer.

At the Arkansas Capitol on Tuesday, Lockheed Martin officials offered a rare glimpse at their version of the JLTV prototype that has been kept under close wraps.

Lockheed Martin executives said the company plans to bolster the state’s $87.1 million bond financing with a total investment of more than $125 million for infrastructure improvements in Camden, as well as reach job-creation and wage milestones set by the state over the next 25 years.

Lockheed officials also said the current estimate of 55,000 vehicles is a conservative estimate. They said that tally could easily increase depending on the needs of the U.S. Army and Marine Corps. Also, several U.S. allies have expressed interest in purchasing a version of the new JLTV vehicle, which would push orders well above the current purchase order.

The incentive package for Lockheed Martin is not without precedent. In fact, Camden is not even the first “Camden” to get multi-year, tax financing to land a Lockheed Martin project.

According to a story from November in The New Jersey Star Ledger, that state’s Economic Development Authority (EDA) approved a 10-year, $107 million tax break to Lockheed Martin as an incentive to move 250 employees from elsewhere in the state to a pair of new facilities to be established in Camden, N.J.

Under the incentive agreement approved by the EDA on Monday, Lockheed Martin must keep a minimum of 4,464 jobs in New Jersey in order to receive the full $107 million award over 10 years.

The Arkansas bond financing package passed by the Arkansas House and Senate on Wednesday would hand over nearly $83 million to Lockheed Martin for assistance in retaining its current 530-person workforce. Those funds will also be used to assist the company in expanding its current facility, and it will allow the Maryland-based defense giant to double its labor pool to handle the Pentagon’s award that will last through 2040.

The bond financing will also pay for an additional $1.6 million training grant to be used for construction and the equipping of training facilities at Southern Arkansas University Tech in Camden. The remaining $2.5 million will pay for expenses related to bond issuance costs, debt service reserves, and other eligible financing costs incurred or paid by the state, officials said.

If the project falls through or if Lockheed Martin is not awarded the project, the deal is dead and Arkansas is off the hook for the money, said Gov. Asa Hutchinson spokesman J.R. Davis. The payback of bonds for the state, which will be somewhere between 15 and 20 years, is dependent upon market conditions at that time.

An $11,000 check presentation and energy efficient demonstrations were part of the open house event held Wednesday (May 27) for the University of Arkansas at Fort Smith’s Sustainable Conservation House, an event showcasing the university’s newest learning facility.

The open house included interactive booths by local companies. An Alternative Fuel Vehicle Ride-and-Drive was also held during the event, where attendees could test drive an alternative fuel vehicle, as well as demonstrations of energy efficiency. The ride-and-drive was sponsored by UAFS, Falcon CNG and the Arkansas Clean Cities Coalition.

The open house also showcased a learning facility unique to the state and region. The house is part classroom and part laboratory, with students able to apply concepts learned in the former to the latter. The house is designed to provide training in energy efficient concepts and energy auditing, areas which are in dire need of workers. According to a study by the U.S. Green Building Council, green construction supports more than two million jobs and generates more than $100 billion in gross domestic product in wages. 

Dr. Paul Beran, UAFS chancellor, cited the study during his remarks at a private donor event before the open house to prove the increasing demand the house will address.
 
“There is a need for people trained in energy audits and who can make recommendations for energy savings,” Beran said. “The house will serve as a working laboratory for our students to get the hands-on training that they need to be successful. Here, they will learn about the latest green technology as they are being prepared for careers in the energy auditing field.”
 
Wendy Swenson of West Fork provided a student’s perspective on the house. Swenson was interested in energy efficiency and learned about the house through a story broadcast on KUAF, the public radio arm of the University of Arkansas at Fayetteville. She enrolled in the energy auditing program at UAFS and is now continuing her training with Knierim Enterprises. She has also received an offer to become an independent contractor with the Arkansas Valley Electric Cooperative.
 
“Because of this program, because of the university’s Sustainable Conservation House, I’m experiencing great success in the field that I’ve chosen,” Swenson said.
 
Oklahoma Gas & Electric also presented the UAFS Foundation an $11,000 check at the event to help fund the house’s heating, ventilation and air conditioning, a gift which earned the praise of Dr. Mary Lackie, vice chancellor for university advancement and executive director of the UAFS Foundation.
 
“We are so appreciative of this gift for the Sustainable Conservation House. Without support from OG&E and our other generous donors, this hands-on laboratory would not be available for our students,” Lackie said. “It’s an exciting project that provides the ideal space to train energy auditors, and it represents another successful partnership between UAFS and our community.”
 
The idea for the Sustainable Conservation House originated in 2013, when John Martini, assistant professor of electronics technology, met Doug Knierim, president and owner of Knierim Enterprises, while teaching energy auditing courses at the university.
 
“We would take our classes out on energy audits, and Mr. Knierim’s group was in charge of the audits,” Martini said. “We started talking about how it would be nice to have a local testing facility for audits like that.”
 
With the closest facilities for such training in Oklahoma City and Little Rock, Martini and Knierim partnered to try to bring such a facility to the UAFS campus. The university acquired the property in 2014 and began renovating it that fall through the donation of materials and labor from local companies.
 
“We completely gutted the house down to nothing and built it back up,” Martini said. “The people who helped on this project had to work around their other jobs. They did it as part of their regular workload.”
 
Local businesses that contributed to the Sustainable Conservation House were: All American Building Materials, Arkansas Oklahoma Gas Corporation (AOG), Arkansas Lighting, Arkansas Valley Electric Cooperative, Blaylock Heating & Air, Blaylock Plumbing Services, Boyd Metals, Cherokee Building Materials, D & D Flooring, Energy Efficiency Design and Development, Fort Smith Winsupply Co., Harry G. Barr Company, Hickory Springs, J & B Supply Company, Knierim Enterprises, Larry Gordon Construction, Chuck Liggett, Lumber One, Mack Thompson & Son Signs, Oklahoma Gas & Electric (OG&E), Ozark Solar, Rheem Air Conditioning Division, Rick Rosenthal, Sanders Supply, Sealant Tech, Service Master, Sherwin-Williams, Superior Siding & Window, Water Furnace, Wholesale Electric Sales, and Lowe’s of Van Buren.

Wal-Mart’s age-old weekly circular tab insert in newspapers is being revamped into a digital catalog format that will have less focus on price and product and more on the retailer’s commitment to helping its customers “live better, everyday,” according to Steve Bratspies, executive vice president of food at Walmart U.S. 

Bratspies recently told Wal-Mart suppliers that the technology facilitating digital and physical integrations will be a big part of how Wal-Mart markets products. That starts the weekly circular, and it may not be a change the newspaper industry will appreciate.

“The normal tab we send out every weekend, we are changing how we do that. For one thing we will be doing it less frequently,” Bratspies said.

The new version, which Bratspies said has been relabeled “EDLP Catalog,” is more focused on delivering the retailer’s core promise of saving money and living better.

“It is going to be integrated in the technological world. Everything is going to be connected with digital partnerships and digital content so that you make the connection
of product to the online world and back and forth much more seamlessly than you have been able to do in the past,” he said.

Continuing, he told the suppliers: “That is what the customer is asking for, that’s what they are demanding actually. We can’t just live in a physical world or a digital world, the two have to work together. When you get at the intersection of the two, that’s where one plus one equals four. We are spending a lot of time figuring out what is the best way for us to do this.”

Wal-Mart used the Memorial Day Holiday to launch the digital revamp which is available online with live links. The mobile version is available as a tab inside the Walmart Stores app but the there live links are not active in the mobile application.

The expanded digital version of the circular has 24 pages laid out in a magazine style with a focus on lifestyle imagery and lighter exposure on produces and prices. The retailer hits the main theme on the first page of the digital magazine. The theme continues in the photos and text content within the 24-page piece.

Page two features avocados, limes and Tostitos with a recipe for guacamole front and center. Wal-Mart said incorporation for the featured recipes which were gleaned from Pinterest and are there to engage digital integration for pre-and post-shopping behaviors. There is also a link that plays a video from an avocado farmer that shows the best way to select avocados for peak ripeness as well as the best way to cut into the fruit.

The circular also places roughly half the number of products per page in previous tabs which averaged 10 to 15 items. Wal-Mart also shows packaged food in its final prepared form such as Oscar Meyer wieners which are identified on “Rollback” at $1.50 per pack. Wal-Mart includes the pre-Rollback price at $2.50 so the customer understands the savings.

Also visible in the new format is more skin with a model wearing a two-piece Catalina swimwear bikini. In this section the retailer provides tips for choosing and applying sunscreen as well help for those consumers looking for summer beauty tips.

The new format also features a “Projects” page for do-it-yourself enthusiasts. Gardeners get planting guidelines for a lush garden and tips for the best curb appeal. Other design tips, which can be accessed online, include space planning for backyards and patios.

Analysts who reviewed document said the page is another take on value-added content integration. It provides shoppers with a problem-solution approach relevant to the theme and products. They said it’s important for Wal-Mart to sell itself to consumers as a solution provider and providing content with products in a digital format is a step forward. The related online content is one way Wal-Mart can help drive customers to their brand.

Wal-Mart uses the final page of the circular to profile one of the veterans it has hired as part of is commitment made two years ago. They also highlighted patriotic items such as  flags and other decorations using the space to reinforce their mission to hire veterans.

A three-day special session wrapped up Thursday afternoon (May 28) after lawmakers approved a change to the state’s primary election date as well as a plan to bring up to 600 new jobs to South Arkansas.

The session ended about 3 p.m. Thursday after debate earlier in the day on two primary-related bills – Senate Bill 8, sponsored by Sen. Gary Stubblefield, R-Branch, and House Bill 1006, sponsored by Rep. Andy Davis, R-Little Rock. The Senate approved Stubblefield’s bill by a 28-6 margin Wednesday night, sending it to the House State Agencies and Governmental Affairs Committee.

The bill from Stubblefield would set a March 1, 2016 primary for federal, state, county and judicial elections as well as a March 22, 2016 runoff. The filing period would run from Nov. 2 to Nov. 9, with protections added Wednesday night in the amended Senate bill to help with independent candidates filing for office.

The change would only be in effect for the 2016 elections.

The committee met Thursday morning to hear the bill. However, two lawmakers – Reps. Nate Bell, R-Mena and Camille Bennett, D-Lonoke – expressed concerns about the Senate bill. In the past several days, Bell has stated his opposition to the bill citing both costs of the primary and that the idea was not thought out.

“We are taking and making a significant change. This is not the way to do the people’s business,” Bell said.

However, two lawmakers who serve on the committee said Thursday afternoon they supported making the change. Rep. Jack Ladyman, R-Jonesboro, said while he understood the concerns of candidates on moving up the date, the change would give voters an added say on picking a nominee for President. Rep. Dwight Tosh, R-Jonesboro, echoed the comments from Ladyman.

“It is an opportunity to try it and see if the voters like it,” Tosh said. “I like it and it gives voters an opportunity to allow their vote to mean something.”

Bennett objected to the bill, due to a lack of a fiscal impact study from the Bureau of Legislative Research on the amended bill. The original bills did have a fiscal impact statement, noting there would be no cost to the state’s treasury or taxpayers for changing the primary date, records noted. The House voted Thursday morning by a 65-20 margin to waive the fiscal impact statement requirement on bills introduced during the special session.

The committee voted Thursday afternoon to approve Senate Bill 8, sending it to the House. The House voted 67-22 late Thursday to approve the bill, sending it to the governor. Davis’ bill was approved in the Senate by a 26-6 margin.

LOCKHEED MARTIN SUPERPROJECT
Lawmakers overwhelmingly approved two bills to provide up to $87 million in general obligation bonds to help with an economic development project in Camden. The House voted 90-0 to approve Senate Bill 6, sponsored by Sen. Bobby Pierce, D-Sheridan, while the Senate voted 30-2 to approve House Bill 1003, sponsored by Rep. Matthew Shepherd, R-El Dorado.

The bills cleared both chambers earlier in the week.

Defense contractor Lockheed Martin, with a facility in Camden, is in the running with two other companies – Oshkosh and AM General - to land a Defense Department contract for the Joint Light Tactical Vehicle. Company officials have said they are planning to invest more than $125 million for the facility, Talk Business and Politics reported Wednesday.

Of the $87 million, nearly $83 million would go toward Lockheed Martin retain the 530 jobs currently in Camden, $1.6 million would go toward construction and equipping a training facility at Southern Arkansas University Tech in Camden with the rest going toward debt service on the bonds, Brown reported.

State officials have also said the spending for the bonds are contingent on Lockheed Martin receiving the federal contract. In a statement late Thursday, Gov. Asa Hutchinson said the project gives the state a key economic opportunity.

“This is an important next step in our attempt to help Lockheed Martin secure a federal Defense project and create hundreds of new jobs in South Arkansas. The state of Arkansas is doing its part by overwhelmingly passing the Amendment 82 legislation,” Hutchinson said. “We are on board with bipartisan support. I’ve called this a golden opportunity for Arkansas, and it is – not just for us to expand our economy but to contribute to our nation’s defense.”

Hutchinson will sign the bill into law during an 11:30 a.m. Friday news conference in the Governor’s Conference Room at the Capitol.

OTHER ACTION
The House and Senate also approved several other bills Thursday. The House voted 73-11 to approve Senate Bill 5, sponsored by Sen. Jon Woods, R-Springdale; while the Senate approve House Bill 1008, sponsored by Rep. Charlotte Vining Douglas, R-Alma. Both bills would set an April 13, 2016 date for the state’s fiscal session in Little Rock. Lawmakers will be able to pre-file bills starting March 14, 2016, under the bill.

The House voted 80-2 to approve a DWI-related bill. The bill, Senate Bill 4, sponsored by Sen. David Johnson, D-Little Rock, would restore the strict liability standard for alcohol-related offenses in Arkansas. The bill was approved Wednesday in the Senate on a 25-6 vote.

Lawmakers approved two similar bills dealing with agricultural vehicle traffic on U.S. 63 in Northeast Arkansas.

The bills – House Bill 1005, sponsored by Rep. Brandt Smith, R-Jonesboro, and Senate Bill 3, sponsored by Sen. John Cooper, R-Jonesboro – would make sure state law matches up with federal law on the issue. The issue involves the changing of U.S. 63 to Interstate 555 from Lake David to Jonesboro. The four-lane highway’s change to an interstate has been a key issue with residents in Northeast Arkansas. Cooper said the change would have a “big impact” for people in the region.

The change is also contingent on work being done as part of the federal highway bill. Rep. Rick Crawford, R-Jonesboro, has said he plans to introduce an amendment to the bill to seek a waiver that would allow certain agricultural traffic to travel on the St. Francis Floodway Bridge near Payneway.

Under federal law, agricultural vehicles cannot travel on interstate highways. There has been a plan to build an access road bridge across the floodway. However, it could cost as much as $50 million to build, officials have said.

The legislature also approved two government reorganization bills Thursday. The House voted 85-0 to approve Senate Bill 1, sponsored by Sen. Jim Hendren, R-Sulphur Springs, while the Senate approved House Bill 1001, sponsored by Rep. David Branscum, R-Marshall, by a 32-0 margin.

The bills would move the Arkansas Science and Technology Authority and the Department of Rural Services to the Arkansas Economic Development Commission; the Arkansas Building Authority to the Department of Finance and Administration; and the Division of Land Surveys in the Arkansas Department of Agriculture to the Arkansas Geographic Information Office.

Hutchinson applauded the actions of lawmakers on the government reorganization bills.

“I’m very pleased with the broad-based, bipartisan support for our efficiencies measures. It signals to the taxpayers of Arkansas that the executive and legislative branches of government are of one mind when it comes to finding smarter, more efficient ways to deliver services. It makes sense. If we can do a better job for the taxpayers at less cost, we should,” Hutchinson said.

Union Pacific plans to invest $98 million in 2015 to improve Arkansas’ transportation infrastructure, the company announced Thursday, with some of that to be spent on rail lines and road crossings in the Van Buren area.

The railroad giant’s multi-million dollar private investment will enhance employee, community and customer safety and increase rail operating efficiency, the company said in news release on its website.

“We constantly evaluate our customers’ needs to make targeted investments that enhance our efficiency and deliver the goods American businesses and families use daily,” said Brenda Mainwaring, Union Pacific vice president of public affairs, Southern Region. “Continuing to aggressively invest in our infrastructure is an important element in Union Pacific’s unwavering safety commitment.”

Union Pacific’s planned investment in Arkansas covers a range of initiatives, including $81 million to maintain railroad track, $8 million to enhance signal systems and $8 million to maintain or replace bridges in the state. Key projects planned this year include:
• $23 million investment in the rail line between Gould and the border with Louisiana to replace 44 miles of rail and repair the surfaces at 65 road crossings;

• $9.7 million investment in the rail line between Knoxville and Van Buren to replace 65,251 railroad ties and install 28,107 tons of rock ballast. In addition, crews will repair the surfaces at 62 road crossings; and

• $7.1 million investment in the rail line between Hope and Texarkana to replace 50,383 railroad ties and install 21,910 tons of rock ballast. In addition, crews will repair the surfaces at 40 road crossings.

This year’s planned $98 million capital expenditure in Arkansas is part of an ongoing investment strategy. From 2010 to 2014 Union Pacific invested more than $663 million strengthening Arkansas’s transportation infrastructure.

Union Pacific plans to spend $4.2 billion across its network this year, following investments totaling more than $31 billion from 2005-2014. These investments contributed to a 38% decrease in derailments over the last 10 years.

Earlier Thursday, the nation’s largest railroad operator announced plans to invest $27 million to improve transportation infrastructure in Oklahoma, and another $72 million to upgrade its railway and transportation systems in Louisiana.

The infrastructure upgrades were announced by Union Pacific even though the Omaha, Nebraska-based railroad has furloughed about 900 railroad workers because shipping demand has been weaker than expected.

Last month, Union Pacific began reducing rail crews and storing some locomotives because shipping volume had been weaker than expected this year.

In Arkansas, Union Pacific operates more than 1,325 miles of track across the state and has nearly 3,000 employees with an annual payroll exceeding $246 million 2014. As Arkansas’ largest railroad, Union Pacific serves the food processing, forest products and poultry industries. Major commodities hauled by the railroad giant include soybeans, cotton, rice, bauxite, manganese and glass. In addition, the railroad is a vital link for western coal used by local electrical generating plants.

Union Pacific’s operational hub in Arkansas is located in North Little Rock, where the railroad operates the Downing B. Jenks locomotive repair shop — the largest and most modern on the system. North Little Rock is also home to Union Pacific’s second-largest freight car classification yard.

Beyond North Little Rock, Union Pacific operates a $70 million state-of-the-art, 600-acre intermodal facility at Marion (10 miles west of Memphis) and a classification yard at Pine Bluff. Amtrak operates passenger train service over Union Pacific’s main line through Arkansas, connecting St. Louis and Texas.

According to company officials, Union Pacific invested more than $663 million in Arkansas transportation infrastructure from 2010 to 2014. Nationwide, Union Pacific has nearly 49,000 employees and is the largest railroad transportation company in North America, covering 23 states in the western two-thirds of the United States.

In the first quarter, Union Pacific reported net income of $1.2 billion, or $1.30 per diluted share, compared to $1.1 billion, or $1.19 per diluted share, in the first three months of 2014. Operating revenue for the quarter was of $5.6 billion, same as a year ago.

Under the direction of Dr. Carol Reeves, University of Arkansas graduate students Kenny Bierman and Phillip Turner received top honors in the Donald W. Reynolds Tri-State Collegiate Business Plan competition held recently in Las Vegas.

The team’s venture, Kordate Solutions, focuses on developing a therapeutic Alzheimer’s drug using the peptoid JPT1 to treat Alzheimer’s disease from early on-set to severe dementia.

Kordate Solution’s effort to find effective treatments for Alzheimer’s disease is timely as another person in the U.S. develops the disease every 67 seconds, according to the Alzheimer’s Association. This disease of the brain is the sixth leading cause of death in the U.S. and the only disease without medicines or other therapies that prevent, cure or slow progression.

The business plan competition requires the teams to make oral presentations for the proposed ventures which are evaluated on their potential to become a viable company.

Reeves told The City Wire Friday (May 28) that the competition allows scientists like Bierman to team up with business students. She said this year's competition was heavily weighted with biomedical teams and Kordate stood out among the crowd. She said the students form their own teams in the summer before the fall class and work together on the venture throughout the year.

“This year’s teams presented sophisticated and forward-thinking business plans that have the potential to become very successful companies,” said Rush Deacon, acting CEO for Arkansas Capital, the sponsoring arm of the annual contest. “It’s exactly the type of innovation we were looking for when we started this competition. This competition is an example of broad efforts Arkansas Capital has spearheaded to support entrepreneurship in Arkansas, and we are very proud of our student competitors.”

The competition is an invitation only event for the first and second place winners of the Donald W. Reynolds Governor’s Cup in Arkansas, Nevada and Oklahoma who compete for $118,000 in cash awards each year. As a first place winner Kordate Solutions received $30,000, while Reeves, acting as advisor earned $3,500. Awards of $20,000 went to second place winners.

Kordate Solutions is the not the first biomedical team from the UA to win this competition. In 2009, Robin Goforth and her friend Misty Stevens entered the competition as a requirement of Reeves’ entrepreneurship classes taught at the UA.

Goforth’s BiologicsMD venture sought to produce a drug that battles osteoporosis. Her team garnered more than $630,000 in business plan competitions and in 2012 was awarded $2.3 million from the Department of Defense to continue their work. Last year BiologicsMD received their first patent.

As entrepreneurial provost at the UA, Reeves has advised dozens of teams in recent years that have become viable businesses. DataRank, cycleWood and Skosay which are examples of Fayetteville startups growing today that received early guidance from Reeves. She said there are many more teams she advised that are up and running as a business.

"My teams have earned more than $40 million in price money and grants over the years to further their startup visions," she said.

In Reeves’ 25 years in Arkansas, she has never been so excited about the state of entrepreneurship in Arkansas.

“I feel like all the pieces are starting to come together, and we’ve got a critical mass of entrepreneurship going on,” Reeves said.

The UA was not the only Arkansas institution to garner a win in the Donald Reynolds competition. Joshua Baker, representing Agricultural Innovations from Arkansas State University in Jonesboro, beat five other teams to win the graduate division of the Tri-State Elevator Pitch competition and a $2,000 cash award.

In just 90 seconds Baker sold the judges on how his team’s business model offers a more efficient approach to farm irrigation with WellsVision, a sensor-driven automated irrigation system.

The first four reporting months of sales tax collections in Fort Smith have the city on a track that could top record collections posted in 2008. Collections of the 1% sales tax in the April report was up 8.81%, and the city’s portion of the countywide 1% tax was up 7.38%.

The city has in the first four reporting months of 2015 collected $7.089 million on its 1% street tax program and the same amount on a 1% tax divided between bonds, Fire Department and the city’s Parks Department. The amount is up 6.14% compared to the same reporting period in 2014, and is 6.98% above the budget estimate.

“This is great news. (W)ould be great if this trend continues through 2015. Will be interesting to see the Steel Horse Rally effect on May numbers,” City Director Mike Lorenz noted in an e-mail response to City Administrator Ray Gosack who sent the numbers out Friday (May 29) morning.

The Steel Horse Rally, held May 1-2 in downtown Fort Smith, attracted between 8,000 and 10,000 motorcycles to the area, with attendance estimated around 30,000.

The city’s 1% street tax program collected $1.852 million in the April report, up 8.81% compared to April 2014, and up more than 12% compared to April 2013. The amount was up 9.64% over the budget estimate. (Because the state of Arkansas has a two-month delay in reporting collections back to the cities, the city of Fort Smith — for budgeting purposes — has historically reflected the collections on a one-month delay. Which is to say, the tax collections remitted to cities in May are from taxes collected in March and transferred by merchants to the state in April.)

Collections during 2014 of the Fort Smith’s 1% sales tax for the street program topped $20 million for the first time since 2008. The 1% tax generated $20.099 million for the January-December reporting period, up 3.24% over 2013, and was above the budget estimate by 0.78%. However, collections for the past five years have been inconsistent. Revenue from the city’s street tax was down 0.87% in 2010, up 3.9% in 2011, up 1.36% in 2012, and down 0.69% in 2013.

BETTER CITY FINANCES
Gosack told The City Wire that broad improvements in the regional economy has helped boost tax collections.

“I believe that increased business activity, capital investment by the private sector, and jobs gains are stimulating retail sales in the Fort Smith area. There’s approximately 3,000 more jobs in our area economy this year compared to last year, commercial building permit activity is 60% higher than it was last year, airport enplanements continue to increase, and our local sales tax revenue is 4.5% - 6.0% higher than last year. All of these positive trends bolster consumer confidence, which typically translates into more retail spending,” Gosack noted.

Indeed, the number of jobs in the Fort Smith metro area was an estimated 113,464 in March, up 3,111 jobs compared to March 2014. The number of employed in the metro area is down 9.5% compared to the revised high of 125,426 in June 2006 – or 11,962 fewer jobs than the peak metro employment.

Gosack also said the positive trend in revenue for the first four months of the year obviously improves the city’s budget outlook.
 
“The additional revenue will help the city government achieve the financial goals set by the board of directors. Some of our budgeted contingencies haven’t been as high as we’d like; the increased sales tax revenue will help us build those contingencies and strengthen our financial position,” he said.

The city’s portion of the countywide 1% sales tax generated $1.419 million in the April 2015 report, up 7.38% compared to April 2014, and up 7.67% over the budget estimate. For the first four reporting months of the year, the city’s portion of the countywide tax revenue is $5.433 million, up 4.51% compared to the same period in 2014. The revenue for the first four months is also 4.82% above the budget estimate.

Countywide tax collections are critical because they fund a majority of essential services within the city’s general fund budget.

CONSUMER SPENDING FACTORS
Many economists have said lower gasoline costs are putting more money into consumer pockets which should translate into higher consumer spending – the lifeblood of the U.S. economy. U.S. pump prices have fallen for a year or longer. And, in spite of recent increases to a U.S. average of $2.70, consumers are still paying a dollar less than a year ago, according to the U.S. Department of Energy.

The average U.S. household will spend about $700 less on gasoline in 2015 compared with 2014 as annual motor fuel expenditures are on track to fall to their lowest level in 11 years, the U.S. Energy Information Administration (EIA) said in its most recent short-term forecast.

The EIA said average household spending in 2015 is estimated to be $1,817, down from $2,513 in 2014. The federal agency estimates the 2016 spending will increase to $2,058.

A recent Bankrate.com survey suggested that consumers are spending 40% of savings from lower gasoline prices on necessities such as groceries and rent. The survey found that 23% of Americans saved (19%) or invested (4%) the extra savings. Just 14% of respondents in the Bankrate survey reported spending their gas savings on dining out or a vacation.

PREVIOUS ANNUAL COLLECTION INFO
Fort Smith 2% sales tax collection (1% for streets; 1% for water/sewer bonds)
2014: $40.198 million
2013: $38.938 million
2012: $39.210 million
2011: $38.683 million
2010: $37.229 million
2009: $37.554 million
2008: $41.226 million
2007: $37.858 million
2006: $36.840 million

Fort Smith portion of 1% countywide sales tax
2014: $15.625 million
2013: $15.353 million
2012: $15.279 million
2011: $15.15 million
2010: $14.89 million
2009: $15.04 million
2008: $16.61 million
2007: $15.15 million
2006: $14.71 million

As of Friday morning (May 29), six of the 13 locks on the Arkansas portion of the Arkansas River system were closed. Locks were closed early Friday at Little Rock near the airport and below Pine Bluff. Earlier, locks had been closed at the James Trimble Lock & Dam near Fort Smith, and locks near Conway, Morrilton and Pine Bluff, according to Jay Townsend with the U.S. Army Corps of Engineers. 

Barges at the Port of Little Rock are parked in the slack water harbor, as 340,000 cubic feet of water are expected to rush past Little Rock today or tomorrow  – more than twice the limit for navigation.

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. 

Locks are closed when the equipment is submerged. Traffic can travel between the locks but not through them.

Bryan Day, Little Rock Port Authority executive director, said barges are not in danger because all of them are being stored in the slack water harbor off the river with no chance of flooding. The port averages unloading a couple of barges each day.

ECONOMIC IMPACT
Day said he expects traffic to resume within a week. In the meantime, operations are continuing with products being shipped through other means. 

“From a port standpoint, the economic impact will be minimal,” he said. “I think from an industrywide riverwide standpoint, the economic impact is probably going to be significant.”

Townsend said 600,000 to 700,000 tons of commodities normally would be shipped from Oklahoma’s Port of Catoosa to the Mississippi River, but locks also had to be closed May 13-15 when the river crested at 20.28 feet in Little Rock. Late today or early tomorrow, it should reach 23.3 feet, Townsend said. 

At that height, 340,000 cubic feet per second will be flowing through Little Rock. Under normal summertime conditions, that number is 30,000 to 50,000 cubic feet per second. 

Gene Higginbotham, executive director of the Arkansas Waterways Commission, said the largest tugboat operator had said it would be almost July before it could return to operations. That’s because the reservoirs in Oklahoma that feed the river are at more than 100% flood stage and must be gradually lowered.

The McClellan-Kerr Arkansas River Navigation System has a $1.1 billion annual impact on Arkansas, Higginbotham said. Goods normally shipped on the system are now being shipped via another waterway, truck or rail. 

TONNAGE IMPACT
Marty Shell, owner of Van Buren-based Five Rivers Distribution which operates the port facilities in Van Buren and Fort Smith, said in mid May that the rains to that point would likely reduce river activity in the second quarter. He said at the time that continued rains could slow activity into the third quarter. Unfortunately for the river economy, the rains continued.

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.

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.

SYSTEM INFRASTRUCTURE
Higginbotham praised the Army Corps of Engineers for managing the system and preventing more damage. He noted that in 2011, the volume of water carried by the Mississippi River exceeded the flood of 1927, when large sections of Arkansas were submerged.

“We’re not seeing flooding like we used to because of basically the infrastructure that the Corps has in place, the navigation,” he said.

Not an immediate concern is the confluence of the White, Arkansas and Mississippi Rivers. A major flood in that area could cause the White and Arkansas to join into a swamp, ending navigation for up to a year. Hickingbotham said there has not been enough rain to cause the White River, usually higher in elevation, to rise excessively. In fact, two weeks ago the Arkansas River rose in elevation and flowed into it. He believes that will happen again this weekend. 

“More than likely there will be some damage (to the infrastructure). ... I don’t think it will be a catastrophic failure,” he said.

Walmart U.S. is in the process of a major organizational realignment under the supervision of Judith McKenna, chief operating officer for the retailer’s U.S. business unit.

McKenna outlined the organizational changes in an email to workers on Friday (May 29). The City Wire obtained a copy of that email that details divisional and regional realignment as well as additional leadership moves.

Earlier this month Walmart U.S. announced it was streamlining its operations under the leadership of Mike Moore, executive vice president of supercenters, and Julie Murphy, executive vice president of the neighborhood market formats.

McKenna noted in the email that management aims to bring more leadership to its stores and a more focused approach in some metro areas with the U.S. realignment.

“We are increasing the number of operating regions from 41 to 50 regions. These roles will be based in the markets in which they operate,” she wrote. “We’re streamlining our business and will now have six supercenter divisions and two neighborhood market divisions, both based in the home office.”

She said there are no significant changes to store- or market-level operations in the restructuring plan.

“As we continue to focus on the customer and retail fundamentals, we have created eight new supercenter regions and one new neighborhood market region. This will drive operational simplicity and consistency in execution and will help us bring the right talent closer to our stores,” she noted.

Following are the new regions.
Region 3 – Jacksonville, Fla.
Region 8 – San Antonio, Texas
Region 15 – New Haven, Conn.
Region 21 – Columbus, Ohio
Region 26 – Raleigh, N.C.
Region 40 – Kansas City, Mo.
Region 54 – Las Vegas, Nev.
Region 58 – San Diego, Calif.

McKenna said one additional region is planned in the Carolinas for neighborhood markets.

McKenna said the additions bring the total to 44 “operational regions” within supercenters and six within the neighborhood market segment. She said leaders for the new regions will soon be named.

Within the growing neighborhood market unit, McKenna said the divisional alignment has been simplified to two divisions. The East division will be led by Glenda Fleming Willis and David Norman will lead the West division.

She said the organizational realignment for supercenters creates six divisions.
• Northeast – led by Jerry Spencer
• Mid-Atlantic – led by David Redfield
• North Central – led by Karisa Sprague
• South Central – led by Carol Johnston
• Southeast – led by Martin Mundo
• West – led by Dacona Smith

Walmart U.S. CEO Greg Foran recently told analysts in the May 19 earnings call that he and McKenna are making a point to visit as many stores as possible in their effort to improve store traffic and comparable sales. He said simplified operational management will shorten the chain of command which he said is crucial to his agenda
 
“We are making progress and beginning to see the benefits of simplifying how we operate. More importantly, our customers are telling us they’re noticing, too,” McKenna noted in the internal email.

Other executives on the move with this latest realignment include Ben Hassing, senior vice president of the pacific southwest division, who is taking a short-term assignment reporting to McKenna before he assumes a senior leadership role in Walmart International.

“In his short-term role, he will focus on refining and aligning our financial planning process. His expertise of several business areas will be a great asset in this important work. Further details on his International appointment will be announced in the future,” McKenna wrote.

Mitch Slape, senior vice president of the Great Lakes division, is moving to Walmart International. She said Mitch joined Walmart U.S. in 2013 from Bharti Retail Ltd., where he served as chief operating officer.

While the Lockheed Martin superproject was well in the works before he was ever considered for the job as director of the Arkansas Economic Development Commission, Mike Preston knows that there are many people to credit in the “team sport” of economic development.

Appearing on this week’s edition of Talk Business & Politics, Preston said his role in the $87 million bond financing package for the Lockheed Martin JLTV superproject in Camden was to “bring it in for a landing.”

He joked, “Two months on the job and now they say, ‘what are you going to do next month?’”

Under the state’s superproject amendment, Amendment 82, the legislature overwhelmingly approved the bond package to shore up the incentive package for Lockheed’s bid for a $30 billion Joint Light Tactical Vehicle (JLTV) project.

What happens next? Preston said Lockheed Martin will put the bond financing agreement into their final official proposal and then the waiting begins.

“The Department of Defense procurement process will start evaluating the contracts,” Preston said of the next phase. “We would anticipate sometime in late July, maybe early August, sometimes they get drawn out a little bit further. There will probably be a protest period by the two companies who don’t win. That could drag it out a little bit longer.”

Preston said the state participation was needed to help bring the cost down to manufacture at a minimum 55,000 JLTVs for the American military. The production number could climb higher eventually as the transportation vehicles are sold to allies of the U.S.

“I think the Department of Defense is pleased with the overall per unit cost that Lockheed Martin is able to do on these JLTV vehicles,” Preston said.

He said while Arkansas’ state involvement in the deal is now known, it doesn’t mean that competitive states – Indiana and Wisconsin – won’t offer incentives to land the contract.

“There could be some incentives offered behind the scenes that just haven’t been made public yet,” he said.

SILICON VALLEY TO PARIS
As if a superproject special session wasn’t enough in his first two months on the job, Preston has been racking up the frequent flyer miles. The new AEDC director was in Silicon Valley two weeks ago with Gov. Asa Hutchinson, former Acxiom CEO Charles Morgan, and others visiting with 10 high-tech firms on the West Coast. Some of those stops included Facebook, Intel, Intuit, and HP.

Preston said the trip was “a foot in the door” to lay out the new computer coding initiative Gov. Hutchinson passed in the recent regular session. Arkansas economic officials want to sell the advantages of the Natural State for future business expansions.

“We’re gong to have a whole generation coming out of the high schools now who have this ability, who have the computer science and are able to do coding,” Preston said.

Combined with Arkansas’ quality of life, lower cost of doing business, and tax structure, Preston said the state wanted to sell its positives.

“We’re way ahead of California where they are when they’re offering a 13% state income tax on top of everything else,” he cited as an example.

Preston also said the controversial Religious Freedom Restoration Act (RFRA) never entered the conversation on the high-tech trip to Silicon Valley despite several company CEOs from the region issuing high-profile statements during the debate calling on Arkansas to reject the law.

“It never came up,” Preston said. “This was really planting the seeds with these CEOs and letting them know we’re here and this is what we have to offer.”

He said the connections made in California will need to be nurtured in the future. Preston anticipates follow up trips as well as invitations to come to Arkansas to see the computer coding initiative and business advantages first-hand.

Preston will also be in Paris in mid-June for the Paris Air Show, one of the largest aerospace trade shows in the world. With aerospace manufacturing being one of Arkansas’ largest exports, Preston said having a booth presence at the event should be helpful in landing more business in state.

The countdown has begun again on what is arguably one of the region’s biggest events each year: The Wal-Mart shareholders meeting. More than 5,000 Wal-Mart workers from around the globe began flying into Northwest Arkansas Regional Airport on Sunday (May 31). 

Workers participate in a week of events that culminates Friday morning in a business meeting that has morphed over the years into a pep rally, concert, international festival and fancy power point presentation of financial highlights.

This year’s annual shareholder meeting will be webcast for the public to see. The festivities begin about 7 a.m. on Friday (June 5.) The meeting webcast can be viewed live at this link.

HOUSING THOUSANDS OF EMPLOYEES
Lodging at the University of Arkansas was ready when guests began signing in on Sunday. Each year the UA works with Wal-Mart during shareholders week providing room, board and meeting spaces for the week-long event. Last year Wal-Mart paid the UA approximately $1.5 million, including nearly $1 million for the use of facilities in connection with annual shareholders’ meeting and the week-long events, according to disclosures in the retailer’s recent Proxy filing with the Securities and Exchange Commission.

Steve Voorhies, manager of university media, told The City Wire that Wal-Mart reserved 5,051 beds for the visiting workers who eat and sleep on campus. The room rate is $28 per night. The bed count is up from about 4,800 last year. Housing and dining costs each approximate $500,000.

He said the UA housing and hospitality staff has spent the last three months preparing for this week. The dining services department will provide three meals a day or about 72,000 for the week. They also provide snacks and special food to the celebrity guests and entertainers for Friday’s meeting, according to Voorhies.

With dining and housing Voorhies said the cost is a little more this year given the higher head count. Added security is needed for the week which costs Wal-Mart about $130,000, most of which is paid to the UA police. The college also makes about $78,000 in parking fees with another $5,200 earned in facilities fees. He said there is no charge for the use of Bud Walton Arena but Wal-Mart does pay for the event set-up. 

CONCERTS AND EVENTS
Kayla Whaling, media spokeswoman for Wal-Mart, said it’s a full week of activities for those attending on behalf of their stores. Each worker delegate who attends is chosen by their peers in their store. She said workers living within 10-hours of Bentonville are bused into for the week. That’s about 30 bus loads. The others are flown into XNA. 

“When they get to town they tour the home office and the Wal-Mart Museum so they can get a real sense of the company’s origins. They will attend the associates meetings on Wednesday in at the UA and they also take part in the associates’ expo which is being held at the Washington County Fair Grounds in Fayetteville,” Whaling said.

The retailer also organizes two concerts for its employees which will take place on Tuesday and Wednesday evenings (June 2-3) at Bud Walton Area. This year Whaling said Train and Lighthouse will perform on Tuesday (June 2) while Lynyrd Skynyrd will perform on Wednesday night (June 3).

‘We’re expecting more than 14,000 to attend the actual shareholder meeting on Friday (June 5). It’s anybody’s guess who will take the stage that day,” Whaling said. 

In past years guest hosts have included: Harry Connick Jr., Hugh Jackman and Justin Timberlake. While guest entertainers have ranged from Pharrell Williams to Taylor Swift. Superstars like Mariah Carey, John Legend, Celine Dion and Josh Groban have also appeared in recent years.

ACTIVE PROTESTS
Shareholders week also typically includes protestors from organizations like OUR Walmart which is backed by the Commercial Food Workers Union. This vocal group continues to petition the retail giant to pay a living wage of $15 per hour. The group began their demonstrations last week.

On Thursday (May 28) in Los Angeles, two dozen Wal-Mart workers began a 24-hour fast. The demonstration march culminated in a protest and community sit-in action outside the Walmart Chinatown store where workers wore masking tape over their mouths to protest the company’s silencing of those who speak up for change, said Marc Goumbri, media spokesman for the group.

The group said it will be in Bentonville this week.

Wal-Mart CEO Doug McMillon and the company committed $1 billion to pay raises and training this year with the starting pay raise to $9 per hour, with most earning at least $10 per hour before year-end.

OUR Walmart has thanked the retailer for acknowledging the need for high worker wages, but said the company stopped short of the $15 per hour they say is needed.