A water park project over budget, a ‘pipeline’ for females to be elected governor, and the continued fight over Obamacare are part of the Fort Smith area Friday Wire for Nov. 15.

NOTES & ANALYSIS
• The worried consumer
Wal-Mart Stores on Thursday reported quarterly income of $3.738 billion, up 2.8% overall, but same store comps in the U.S. were down 0.3%.

Wal-Mart President and CEO Mike Duke said consumers remain wary about the economic outlook and concerned about their job. Wal-Mart results are typically seen a barometer for the overall national economy given the retailer’s size and geographic reach across the U.S.

Duke’s not an economist, but it’s not unreasonable to think he has as good a grasp on economic conditions a a gathering of Federal Reserve governors. If he says consumers are worried, they are.

• Service center uncertainty
The relatively new Board of Directors of Health Management Associates – the parent company of Sparks and Summit – announced Nov. 13 that it supports the $7.6 billion acquisition offer from Community Health Systems. Barring any regulatory checks, the deal is expected to close in the first quarter of 2014.

The deal, like it or not, does inject some measure of uncertainty into the future of a newly opened HMA regional service center in Fort Smith. HMA officials announced in April that the center would be housed in what was once a portion of Phoenix Village Mall. HMA said at least 500 will be employed at the center, and estimated the annual payroll at $21.5 million, with the center at full employment within 12 months. The facility began operations in mid September.

• Water money
Construction of a long discussed, voter-approved water park in Sebastian County is now uncertain.

Concerns raised earlier this year by members of the Sebastian County Quorum Court that the planned Ben Geren Aquatics Center could come in over budget have been realized after County Judge David Hudson revealed during a Nov. 12 Quorum Court meeting that designers have estimated the water park to cost almost $11 million should all features requested in public meetings be in included in the design.

The county and city of Fort Smith were to share costs on the project. It will be interesting to watch elected officials with both governments wrestle with this dilemma. Stay tuned.

ICYMI
Following are a few stories posted this week on The City Wire that we hope you didn’t miss. But in case you missed it ...

• 'Pipeline' needed for female Arkansas Governor
Having a female name on the door of the Arkansas Governor’s office in the State Capitol is just a matter of finding the right candidate, says Gov. Mike Beebe. But two women who watch Arkansas politics say women face culture obstacles and a “pipeline problem” with respect to being elected to the state’s top office.

• Changing retail trends
Retail’s landscape over the next five years, powered by such trends as smart phones, sweeping demographic shifts, and radically transformed consumer expectation, could be Kryptonite for brick-and-mortar stores, creating more painful change than in the last century.

• Here we go again
The fight over the Affordable Care Act is not over. At least according to U.S. Rep. Tom Cotton, R-Dardanelle.

NUMBERS ON THE WIRE
$11 million: The estimated cost of building Ben Geren Aquatics Center up to conceptual designs previously shown to the public.

$162,000: Amount approved by the Fort Smith Board of Directors for funding of outside agencies.

20,000+: Number of veterans hired by Wal-Mart Stores following a Memorial Day announcement that the company would hire at least 100,000 veterans in the next five years.

564: Number of homes in Arkansas in a foreclosure process during October. The number was up 4.5% compared to October 2012.

OUTSIDE THE WIRE
• Small Business and ObamaCare
One of President Obama's proudest boasts about the Affordable Care Act is that it helps small business. The White House website says the health law "makes it easier for businesses to find better coverage options" and "stops insurance companies from taking advantage of you, giving the consumer and business owner more control and making health-care coverage more affordable." Small businesses aren't buying it.

• The Wal-Mart fight in Kenya
In Africa, foreign investors beware: business is often a family affair. Just ask Wal-Mart, the world's largest retailer. When it sought a foothold in east Africa, it sparked a family feud in one of its acquisition targets, Kenya's Naivas supermarket chain.

• Good growth in Arkansas?
Meredith Whitney, the Wall Street analyst who forecast a flood of U.S. municipal-bond defaults in 2010 that hasn’t materialized, predicts that growth in states such as Arkansas and South Dakota will be twice the national average, according to the presentation. Those states have one-third less consumer leverage, lower taxes, right-to-work laws and high commodity exposure, the presentation shows.

WORD ON THE WIRE
"It's typically a longer term process. It's a frustrating process. I can tell you I do these for sites all across the state and it typically takes a significant among of time to get to this point to select an ultimate remedy. Because what you want to do is when you select your ultimate remedy, you want to know that you have all the information."
– Ryan Benefield, deputy director of the Arkansas Department of Environmental Quality, responding to a question about why it has taken so long for the agency to clean up TCE pollution caused by a chemical spill at the former Whirlpool manufacturing facility in south Fort Smith.

“The best we’ve been able to determine looking at this program and similar programs across the country, somewhere between 25% and 30% of the value of the tax credits make it to the end-project company. That means 70% of the value of the tax credit is going someplace else. Where? I’m not sure anyone is completely sure."
– Grant Tennille, executive director of the Arkansas Economic Development Commission, addressing concerns about the New Markets Tax Credits passed by the Arkansas General Assembly during the 2013 legislative session

“Arkansas has never elected a female to hold a Constitutional office that the office is not considered a traditional female role, such as Attorney General or Lieutenant Governor. Such an office could vault them into the office of Governor during a non-incumbent year. Such was the case in Texas, Oklahoma and Louisiana.”
– Megan Tollett, executive director of the Republican Party of Arkansas, when asked why Arkansas has not yet had a woman elected governor

“I received a note from a fifth-grade student from Fort Smith, (Ark.), named Stephanie, who wrote after her visit to the Museum, ‘Before, I looked at art as just something someone painted on a canvas. But now I look at it as something someone put their feelings into and made it from their heart,’ I want everyone to see contemporary art through the eyes of the artists. That’s why we’re doing this.” 
– Alice Walton, about a new exhibit planned for the Crystal Bridges Museum of American Art

Notes of success at Crystal Bridges Museum, a ‘pipeline’ for females to be elected governor, and a retail fight in Kenya are part of the Northwest Arkansas Friday Wire for Nov. 15.

NOTES & ANALYSIS
• The worried consumer
Wal-Mart Stores on Thursday reported quarterly income of $3.738 billion, up 2.8% overall, but same store comps in the U.S. were down 0.3%.

Wal-Mart President and CEO Mike Duke said consumers remain wary about the economic outlook and concerned about their job. Wal-Mart results are typically seen a barometer for the overall national economy given the retailer’s size and geographic reach across the U.S.

Duke’s not an economist, but it’s not unreasonable to think he has as good a grasp on economic conditions a a gathering of Federal Reserve governors. If he says consumers are worried, they are.

• Crystal clear
More than one million visits have been logged at Crystal Bridges Museum of American Art in Bentonville, and the complex has had a remarkable string of successes and accomplishments in its first two years.

The museum, opened on Nov. 11, 2011 (11-11-11), had 560,165 visits in 2012 for an average of 1,530 a day. Between Jan. 1, 2013 and Nov. 4, the museum had 443,665 visits for an average of 1,440.

To mark the second anniversary of the museum, Crystal Bridges President Don Bacigalupi announced a “State of the Art” initiative that will debut at the museum on Sept. 13, 2014, and be on display until Jan. 5, 2015.

One doesn’t need a crystal ball to know that Crystal Bridges will continue to be a unique, educational and economically valuable asset to all of Arkansas. Kudos to all those who make the place work.

ICYMI
Following are a few stories posted this week on The City Wire that we hope you didn’t miss. But in case you missed it ...

• 'Pipeline' needed for female Arkansas Governor
Having a female name on the door of the Arkansas Governor’s office in the State Capitol is just a matter of finding the right candidate, says Gov. Mike Beebe. But two women who watch Arkansas politics say women face culture obstacles and a “pipeline problem” with respect to being elected to the state’s top office.

• Changing retail trends
Retail’s landscape over the next five years, powered by such trends as smart phones, sweeping demographic shifts, and radically transformed consumer expectation, could be Kryptonite for brick-and-mortar stores, creating more painful change than in the last century.

• Here we go again
The fight over the Affordable Care Act is not over. At least according to U.S. Rep. Tom Cotton, R-Dardanelle.

NUMBERS ON THE WIRE
20,000+: Number of veterans hired by Wal-Mart Stores following a Memorial Day announcement that the company would hire at least 100,000 veterans in the next five years.

564: Number of homes in Arkansas in a foreclosure process during October. The number was up 4.5% compared to October 2012.

8%: Estimated amount of total e-commerce retail sales in the U.S.

121,000: Number of visitors to the Norman Rockwell exhibit at Crystal Bridges Museum of American Art.

OUTSIDE THE WIRE
• Small Business and ObamaCare
One of President Obama's proudest boasts about the Affordable Care Act is that it helps small business. The White House website says the health law "makes it easier for businesses to find better coverage options" and "stops insurance companies from taking advantage of you, giving the consumer and business owner more control and making health-care coverage more affordable." Small businesses aren't buying it.

• The Wal-Mart fight in Kenya
In Africa, foreign investors beware: business is often a family affair. Just ask Wal-Mart, the world's largest retailer. When it sought a foothold in east Africa, it sparked a family feud in one of its acquisition targets, Kenya's Naivas supermarket chain.

• Good growth in Arkansas?
Meredith Whitney, the Wall Street analyst who forecast a flood of U.S. municipal-bond defaults in 2010 that hasn’t materialized, predicts that growth in states such as Arkansas and South Dakota will be twice the national average, according to the presentation. Those states have one-third less consumer leverage, lower taxes, right-to-work laws and high commodity exposure, the presentation shows.

WORD ON THE WIRE
“The best we’ve been able to determine looking at this program and similar programs across the country, somewhere between 25% and 30% of the value of the tax credits make it to the end-project company. That means 70% of the value of the tax credit is going someplace else. Where? I’m not sure anyone is completely sure."
– Grant Tennille, executive director of the Arkansas Economic Development Commission, addressing concerns about the New Markets Tax Credits passed by the Arkansas General Assembly during the 2013 legislative session

“Arkansas has never elected a female to hold a Constitutional office that the office is not considered a traditional female role, such as Attorney General or Lieutenant Governor. Such an office could vault them into the office of Governor during a non-incumbent year. Such was the case in Texas, Oklahoma and Louisiana.”
– Megan Tollett, executive director of the Republican Party of Arkansas, when asked why Arkansas has not yet had a woman elected governor

“I received a note from a fifth-grade student from Fort Smith, (Ark.), named Stephanie, who wrote after her visit to the Museum, ‘Before, I looked at art as just something someone painted on a canvas. But now I look at it as something someone put their feelings into and made it from their heart,’ I want everyone to see contemporary art through the eyes of the artists. That’s why we’re doing this.” 
– Alice Walton, about a new exhibit planned for the Crystal Bridges Museum of American Art

Sam’s Club has operated in the shadow of big brother Wal-Mart Stores for 30 years, but some analysts and a former Sam’s Club exec say that perhaps the warehouse club and its big box relative would be better served independently.

Wal-Mart Stores has recorded $465.9 billion in sales through three quarters of this year. And while Sam’s Club comprises 12% or $42.48 billion of the total sales, it only contributes 7% to the company’s bottom line profits.

Meanwhile, Wal-Mart continues to report sluggish traffic patterns and weak comparable sales overall, with forecasts into next year much the same. Other competitors like Costco have fared much better with recent comp sales of 6%.

Brian Sozzi, CEO of Belus Capital Advisors offers this prescription: “Get rid of Sam’s Club. ... It doesn’t belong in the company especially when the focus in clearly on investing online and winning internationally.”

Sozzi made these remarks in May during an interview with Jeff Mackle at Yahoo! Finance Breakout. He said under the umbrella of Wal-Mart, Sam’s Club, arguably the 8th largest retailer in the U.S., can easily get lost in the shuffle.

THE RUMOR CYCLE
Carol Spieckerman, CEO of New Market Builders in Bentonville, said rumors of a Sam’s Club spin off have sparked over the years only to die down and then spark up again.

“It is interesting that the buzz has increased recently given that Sam’s and Wal-Mart have never had a more synergistic relationship. I can see how a spin-off would be more likely, and potentially beneficial, these days if only because WalmartLabs is an empowered entity that both banners can draw from,” Spieckerman said. “Pulling from Wal-Mart’s buying power and supplier relationships is one thing, but harnessing the digital-forward strategies coming out of WalmartLabs while developing a separate identity is another. It could be more compelling in the end.”

Sozzi told Breakout that a spinoff is something the next CEO of Wal-Mart should strongly consider, because as the two remain hitched there is brand confusion and there is no way Sam’s can fulfill its potential of becoming Costco’s biggest nightmare.

REQUEST TO MOVE SAM’S HQ
Robb Voss, a retired executive and one of the original team members to found Sam’s Club, told The City Wire he begged Wal-Mart co-founder Sam Walton several times between 1983 and 1990 to move Sam’s headquarters out of Bentonville. He said around 1995 he called a meeting at Sam’s Club and told the corporate buyers that Wal-Mart was spinning off the division, just to get a feel for how the internal staff would react.

“They were shocked until I told them I was only kidding, but this was needed to help us regroup and consciously work on Sam’s Club’s own identity, not just a cousin or brother to Wal-Mart,” Voss said.

The secret to running a successful warehouse club is and always has been stellar merchandising, finding unique products that aren’t also sold at Wal-Mart, according to Voss. He said being located in Bentonville, aka Wal-Mart supplier central, comes with pressure to take certain items.

SUPPLIER ISSUES
The close supplier relationships between Wal-Mart and Sam’s Club are sometimes seen as advantageous, but Voss doesn’t believe that is universally true.

“I always felt Sam’s Club merchants should go after the one-of-kind products and higher-end merchandise that consumers want whether that is potato chips or polo shirts,” Voss said.

He said Costco has always been run by a merchant, and though they have had a few setbacks through the years, they are winning in comp sales, higher tickets and increased traffic.

“You don’t find Frito-Lay or Coca Cola in a Costco, because those products are available everywhere else,” Voss added.

Voss said he dearly love’s Sam’s Club, but he is captivated by the merchandise he can find only at Costco.

Sozzi classified Sam’s Club as akin to a low-end Wal-Mart with an annual membership fee, but it were to act alone it could aspire to be much more.

MARKET, BRAND OVERLAPS
Jason Long, CEO of Shift Marketing Group, agreed that Sam’s Club’s full potential is held back as long as it tethered to Wal-Mart. Reaching the growth and cachet of a Costco is doubtful, he said, especially with the higher income demographic that frequents club stores.

“Spinning Sam’s Club away from Wal-Mart would provide them the opportunity to better-position their brand and to focus their energies on growing their business instead of fighting for internal resources,” Long said.

Other shared resources like logistics, data processing and satellite feeds are beneficial to Sam’s Club as long as its hitched to Wal-Mart.

But at the same time, Wal-Mart continues to go after Sam’s Club market with events like the recent “Stock-up and Save” campaign, where the suppliers parked large trailers in Wal-Mart supercenter parking lots to sell bulk packages of consumer goods.

And then there is the constant threat of cannibalization, which is always an issue for multi-banner and multi-format retailers like Wal-Mart, according to Spieckerman. She said Wal-Mart is managing the dilution, but a bigger issue is price transparency, as shoppers do the math between the two retailers.

“Sam’s Club members expect more than nominal value in exchange for membership fees. I don’t see how a spin-off would solve for this concern since the two brands are closely identified,” Spieckerman said.

GOOD ENOUGH
Long said Sam’s Club is “good” and will likely remain so as long it operates under Wal-Mart. 

“But if the retailers aspire to be best-in-class and delight the consumer they should give serious consideration to separating Sam’s Club from Wal-Mart,” Long said.

He said at the very least, the retailers need to look for ways to better carve out a unique brand identity and story for Sam’s Club.

“They could look to other companies including Aldi,” which has successfully differentiated its Aldi and Trader Joe’s formats, he said.

Voss also doesn’t expect Wal-Mart to cut the ties, but said Sam’s can still follow the essential rules for warehouse clubs — be a merchandiser first, find unique products that consumers want and can’t buy anywhere else, then offer them at a value proposition.

The company that took a financial gamble on what has proven to be a successful makeover of the former Phoenix Village Mall property may soon invest at least $7 million in the acquisition and renovation of the Fianna Hills Country Club in Fort Smith.

Lance Beaty, a partner with Dr. Stephen Nelson in Fort Smith-based FSM Redevelopment Partners, has confirmed he is working with club owners David Mille and Jim Shields on buying the club and 18-hole golf course. Both sides are in the due diligence phase, with a goal to close on a deal before the end of the year.

Professional service firms working with Beaty during due diligence include Van Buren-based Burrough Brasuell Corp., Rogers-based HP Engineering Inc., and Fort Smith-based The Hill Firm Inc.

In January 2009, FSM Redevelopment Partners purchased the 35-acre former Phoenix Village Mall in west Fort Smith. When purchased, it was a poorly-maintained site that contained more than 10 acres of structures on about 35 acres.

Since that time, FSM Redevelopment Partners invested more than $10.5 million in improvements, including a successful expo center that was open for about three years before closing to make room for a regional service center operated by Health Management Associates. The service center is expected to employ at least 500. Including the HMA jobs, the Phoenix area is now home to more than 1,100 jobs. FSM Redevelopment still owns the mall site and continues to make improvements there.

Shields told The City Wire on Tuesday (Nov. 19) that he and Mille, head of Van Buren-based Mid-South Steamboiler & Engineering Co., are working with Beaty on the possible transaction. Shields, who recently turned 70 years-old, and Mille have owned the more than 40-year-old club and course since 2003. Shields said it’s time to hand the club over to a new owner with a new vision.

“It’s like raising a kid, because there comes a time when you and the kid need to separate,” Shields said.

MAJOR RENOVATIONS NEEDED
Shields said there have been several renovations made to the club in recent years, including a major overhaul of the golf course, but he said it needs much more.

“This place is due for a major renovation,” he said.

And that’s what Beaty and Nelson have in mind if the deal goes through.

Beaty would not go on the record with specific plans, but said the club will be “extensively” gutted and modernized. The investment may include a renovation of the pool area and “significant” expansion of meeting, dining and other spaces.

If the deal closes by the end of the year, Beaty estimates a design and facility plan will be complete by April 2014, with bids going out in May. New construction and renovation of existing facilities could begin in early summer, with the work completed by Fall 2015.

Shields said Beaty will “bring a new perspective” that most of the about 345 club members will like.

“People who know Lance know that he’s not coming here just to sit on his hands,” Shields said. “Yes, we will have a few naysayers, but I don’t expect many. I think in general it will be received very positively.”

CLUB STRUGGLES
Beaty will need a positive reception.

The club has struggled in recent years with membership and revenue. According to an IRS report for the club’s fiscal year ended June 30, 2011, the club posted revenue of $1.9 million, down from the $2.046 million in the previous fiscal year. The revenue in the year ended June 30, 2012, fell to $1.693 million.

Also, membership revenue in the 2012 fiscal year was $858,484, down from the $1.035 million in the 2011 fiscal year.

The trend nationwide has not been positive for the golf industry and associated clubs. The National Golf Foundation has reported that the number of people who play golf has dropped from 30 million to 26 million since 2000.

But Beaty does not believe the industry trends are a deal breaker. His model, similar to that he pursued with the Phoenix Mall property, is to “reposition” the club in a manner that expands the demographic reach and revenue sources.

“That’s the key to this, to reach a different, a younger audience and demographic. And just like we found out with the expo center, there will not be another venue in this market that will provide the range of amenities, event and social activities that we will have here,” Beaty said.

Also, Beaty noted, the supply of such facilities on geography that overlooks a large portion of Fort Smith is limited.

“This is hard and expensive property to replicate. And it has got good bones,” he said.

Citizens this week got their first chance to see what the future of Fort Smith would look like if the city continues on its current path. But instead of just looking at the future, citizens who took part in Future Fort Smith's second set of community forums were able to influence what the future may look like.

As part of the meetings held Monday (Nov. 18) and Tuesday (Nov. 19) as part of an update to the city's comprehensive plan, citizens were also able to compare the city's growth patterns with what is now the adopted five-page vision statement and see how to more closely align the city's current trajectory and the vision statement.

"We are discussing if we continue on the trend we are on now without giving consideration to the vision, what the desire of the community is for the next 20 years, this is what we will be like in 20 years," Development Services Director Wally Bailey said.

The vision statement adopted by the Comprehensive Plan Steering Committee focuses on unifying local government, citizens, businesses, institutions and civic groups by advancing progress on four different areas:
• Retaining and enhancing community character and quality of life;
• Promoting sound growth and development;
• Growing and diversifying the economy; and
• Uniting people, institutions and government.

According to Planner Brian Traylor of Wallace, Roberts and Todd, the consulting firm paid $340,000 by the city to update the city's comprehensive plan, community members were able to take part in "chip games" and visualize an array of future development choices.

"Chip games help the community visualize the impacts of current development trends and future population projections," Traylor's presentation read. "They encourage discussion about the tradeoffs of different land use types. Also, they can be used to explore new development as well as plan for redevelopment, transportation, and open space."

Development Services Director Wally Bailey said the input received will be taken and directly used in future planning as the city attempts to align planning and policies with the results of the updated comprehensive plan.

"Part of the discussion we had with the citizens last night and what we'll have today with the citizens is putting pieces on a map – where do you think housing needs to be? For example, if we do increase based on the vision of keeping our young people and creating the jobs, we'll have a population increase of about 19,000 people. Where will the housing be and what kind of housing will it be? And the citizens that are hear participating will have the opportunity to put the chips on the map and tell us where they think the housing should be."

Bailey said the process could guide the city to develop further east or take a new direction, focusing on redevelopment and in-fill.

And even as the city's planning department works with the consultants of Wallace, Roberts and Todd to take the public's wishes and incorporate them into a roadmap for the future, Bailey said his staff was well aware of the budget constraints that are likely to be placed on them through the next several years due to declining revenues and talk of deficits. But he said the key to achieving the goals set out in what will ultimately be the adopted comprehensive plan update come down to the Board of Directors prioritizing goals.

"This process doesn't get down into the nitty gritty details of how we can increase our revenue for the city. There might be some discussion about that, but it's really not about that. It's more about visioning and what needs to be done and what can you do," he said. "…When you get down and start developing the policies and developing an implementation plan of how we put the vision policies and goals, developing ordinances if necessary - how we arrive at those, that's going to be at the back of everybody's mind. How are you going to pay for it?"

Bailey said he sees the Board taking the comprehensive plan and using it each year during its annual retreat to re-focus energies, priorities and resources on what the public needs and wants.

"As we start that discussion (of priorities), the first thing we should do it open up the comprehensive plan. We should look at it and say, 'What have we accomplished? What have we not accomplished? What part of the plan do we want to accomplish this year? Or in three years? Or in five years?' It allows us to do some forecasting, perhaps even setting some money aside."

The next Comprehensive Plan Steering Committee meeting has not yet been scheduled, but is likely to take place early in the new year after all input from this week's forums have been analyzed and documented, according to Silvia Vargas, a senior associate and planner with WRT.

Downtown Fort Smith is one step closer to realizing a dream first proposed in 2010 following a presentation at Tuesday's (Nov. 19) Central Business Improvement District meeting of a splash pad with a firm budget estimate.

The splash pad, to be installed on a plot of land west of the Park at West End, would be about 2,500 square feet in size and feature several different spray and splash components that would be activated only when a person touches a designated button, resulting in a water flow that would last for anywhere between eight and 15 minutes.

The design is distinctive, using long steel pipes bent in different patterns to spray and drop water from above during the summer months and also provide what many could consider a display of public art during the cooler months of the year when the splash pad is not in use. Also included in the design is a rubberized surface to prevent children and adults from slipping and injuring themselves.

The splash pad is being designed by Water Odyssey, the same company that designed the choreographed water shows at the Bellagio Hotel and Casino in Las Vegas.

The estimated cost of the splash pad presented at Tuesday's meeting is $326,000, according to former Parks Commission Chairman Bobby Aldridge. The total, he said, was slightly above the $300,000 total originally allocated for the project.

"I feel confident that we can take care of that in the site work installation and some modifications to the filtration system on the $145,000 (initial estimate for a filtration system," he told the CBID. "I didn't want to come in here and show you something that I knew the cost was in excess of $300,000. I wanted to be upfront and honest and show you that we're just slightly over budget but we're working to get to that $300,000 limit."

The funds for the project include $150,000 in private donations solicited by CBID members and an additional $150,000 in funding from the eighth cent sales tax to fund parks projects passed by voters in 2012.

Estimates for the project first presented in 2010 were $200,000, while an updated estimate in May 2013 placed the estimate around $250,000.

Aldridge said the biggest drain on funding the project was the filtration system, which would include in-ground storage tanks and filtration to collect water once it has drained from the splash pad, filter it and allow it to be re-used versus using fresh water from the city's public utility and all runoff flowing into the city's sewer system and eventually into the Arkansas River.

According to Aldridge, not recycling water would result in an annual water bill to the Parks and Recreation Department of about $30,000. At that rate, five years of water bills would nearly equal the cost of the filtration system.

The water bill would not be charged to the CBID, but instead could be charged to the Parks Department, according to Fort Smith Parks and Recreation Director Mike Alsup. He added that the Parks and Recreation Department had reached an agreement with the Fort Smith Utility Department to provide water free of charge to the splash pad at Martin Luther King Jr. Park, something which he said was also a likely situation for the proposed splash pad downtown.

Even though the project is over the $300,000 set aside for the project, at least one member of the CBID is hoping to see the project fully funded.

"It seems to me that we're getting pretty close money-wise. I suspect there's enough talent in this room to go out and do what he's shown and maybe a little more," CBID Chairman Richard Griffin said.

Even though there is a push from Griffin to raise the needed funds, Aldridge said he was looking to still bring the project in at $300,000 as agreed upon by the CBID and the Parks Department.

"I really hope we can take that $146,000 number and decrease it significantly," he said. "And one option to almost do away with it in its entirety is if we are indeed going to use a phase two option, build a building in the future - build a restroom facility or pavilion or something like that - is if we can get a defined phasing plan that within five years we're going to have this facility, then the utility department would be much more (open) to having a temporary waste system."

The Commission voted to move forward with the project. The next phase will be taking the project to the Parks Commission for approval of designs and quickly moving to accept bids and start construction early next year.

According to Aldridge, should the plan be approved, construction would likely take 90 to 120 days. Griffin said he hoped for a July 4 opening date at the latest.

Investors made a U-turn away from America’s Car-Mart Inc. on Wednesday (Nov. 20) as the buy here, pay here, auto dealer missed Wall Street expectations on the top and bottom lines.

Shares fell more than 7% in active trading when the market opened Wednesday. Car-Mart shares traded as low as $38.52, down almost $4 on seven times the normal daily volume. Following the earnings call with Car-Mart execs, the shares rebounded a bit to $40.11, down $2.64.

America’s Car-Mart has been rolling out new dealerships at a robust 10% rate this year and last; but in the recent quarter ending Oct. 31,  the car dealer faced competitive headwinds that curtailed its net profits.

The Bentonville-based company posted net profits of $5.8 million for the recent quarter, down 20.2% from the $7.268 million pocketed in the year-ago period.

On a per-share basis earnings totaled 61 cents, down from 76 cents, a year ago. Car-Mart missed Wall Street’s consensus expectations of 80 cents per share.

Car-Mart also missed top line revenue expectations of $126.8 million, instead reporting $121 million, a solid increase of 10% from the same period in 2012.

A key metric in the industry is same-store sales, rising 3.8% in the quarter, which was aided by a slight uptick in the average retail sales price and steady traffic patterns.

"We are pleased with our top line growth in this presently challenging competitive environment ... We are highly focused on increasing customer success and tightening expenses while ensuring that our infrastructure remains solid to support the business," said CEO Hank Henderson.

He said many companies are competing for Car-Mart customers on the funding side, but they are not focused on earning repeat business that has always been Car-Mart’s goal.

“This is a reality that is having a negative effect on our business especially on the provision for credit loss line. We remain committed to the belief that the only way to run this business for the long-term is to do everything possible to help customers successfully complete the terms of their contracts. By focusing on customer success, we will continue to fulfill our vision of being the most respected buy-here-pay-here organization in the country," Henderson said.

Because Car-Mart provides in-house financing for its 60,000 customers, maintaining steady loan portfolio performance is important to the company’s net profit.

The company reported net charge-offs as a percent of its finance receivables of 6.9% in the quarter, up from 6.5% in the prior year. Likewise, the provision for credit losses also ticked higher to 26.3% of sales versus 24.1% in the prior year.

In the recent quarter Car-Mart sold 10,608 automobiles, an average of 27.6 units per dealership per month. While total unit sales were up 8.1% from a year ago, the monthly average sales per dealership slipped from 28.2 units.

The company opened three new dealerships in the quarter, ending the period with 129 lots, which was 12 more than they had a year ago.

“We have several new openings planned for the next few months and we continue to expect to open a total of 12 for the fiscal year," Henderson said.

Chief Financial Officer Jeff Williams said the provision of credit losses are higher than they would like, but the company’s balance sheet and cash-on-cash returns are still very  attractive.

"As we have said in the past, we believe it is prudent to maintain a very conservative balance sheet, especially in the current operating environment. Our debt to equity ratio was 47% and our debt to finance receivables ratio was 26.1% at the end of the quarter,” Williams said.

Henderson said the company’s mature lots, those over 10 years old, were a little heavy on higher-end vehicles in the quarter as they continue to see more consumers wanting to buy lower priced cars.

“We continually battle that cost-to-quality curve as it moves up and down. Perhaps we lost a few sales because some of the mature lots did not have enough lower priced cars, but we have made the necessary inventory adjustments, this is nothing new to us,” Henderson said.

He said the firm has a bright future and will continue to expand its footprint with more stores, but in the meantime Car-Mart is reigning in corporate expenses. For example, he said the total headcount at the corporate offices has been slightly reduced, as some workers have been moved out to the lots as positions open up.

“I woke up one morning as a ‘who’s who.’ I went to bed that same night a ‘who’s he?’ It happened just about that quickly.”

At 25-years-old, Steve Clark held the position of assistant dean at the University of Arkansas School of Law. At 29, he was chief of staff to Gov. David Pryor. That same year, a Little Rock newspaper featured Clark in an article titled, “Second Most Powerful Man in State Government,” to which Clark reminds me, jokingly, “I only have a hundred copies of that paper left if you’d like to have one.”

The man sitting on the couch across from me, though older, has the same political twinkle in his eye – the same quip and smile he had back when his career was just starting out.

“I come from a family where your career choices are farming, teaching, preaching or politics,” says Clark with a familiar grin, adding, “My analysis of my skills and my preferences was that I wanted to do politics, so from a very young age, I was fairly interested in serving in public service, and I was very interested in being governor.”

He was on his way.

In 1979, at age 31, Clark became the nation’s youngest attorney general. He argued eight cases in front of the United States Supreme Court, more than any other attorneys general in Arkansas history. In fact, only a few attorneys general in the entire country had ever accomplished that feat. He was a state treasurer, featured in The New York Times, on the “Today Show” and “Good Morning America.”

During his tenure as state’s attorney general, Clark was a staunch advocate for nursing home reform, missing and exploited children, and victims’ rights. In 1989, after more than a decade in the A.G.’s office, he was poised to challenge then Gov. Bill Clinton’s reelection bid in a Democratic primary for Arkansas governor, in which some polls showed the two in a dead heat.

“I was going to make it a competitive race, there was no doubt,” remembers Clark. “I might not have won, but it would’ve been close,” he says.

He had it all.

Clark announced for governor in January of 1990.

“Having been in the attorney general’s office for 12 years and having had some success, which I was very proud of, you get to reading your own stuff,” said Clark. “You get to thinking, you know, ‘wow, look at what I’ve done,’ and it’s never about what I’ve done, it’s about what are you doing today. You’ve got to contribute everyday, and I lost sight of that.”

Shortly after announcing his bid for governor, Clark was accused of using a state-issued credit card for personal use, racking up more than $28,000 over a three-year period.

“I woke up one morning and that investigation was there, and all that went forward, and yes, it changed,” recalls Clark. “It changed overnight.”

The past president of the National Association of Attorneys General was charged July 10 with one count of felony theft of property by deception, carrying a maximum penalty of up to 20 years in prison and $15,000 in fines.

“I was flying pretty high when I announced for governor and within 17 days I’m out of the governor’s race,” Clark said.

A New York Times article at the time detailed some of Clark’s alleged spending habits:
A state audit has shown that Mr. Clark spent $28,564 in state money on nonbusiness or personal expenses from 1986 to 1989. An affidavit filed by the Pulaski County Prosecutor and State Police in Pulaski County Circuit Court here showed 56 incidents in which Mr. Clark used his state Visa card for purposes other than reported on his expense account. One $761 charge in August 1988 included $500 for champagne, the affidavit stated. State laws prohibit the use of state money on alcohol.

In January, The Arkansas Gazette reported discrepancies in Mr. Clark’s expense accounts dating to May 1986 in which Mr. Clark said he dined with guests at hundreds of dinners to discuss state business. Many of the guests Mr. Clark listed in the expense accounts, including a Federal appeals court judge and a United States Representative, said they had never eaten with him. Some guests said the meals were social; others said they picked up the tab.

“At the time, in the context of how this was done, they were basically given to all of the constitutional officers and they said use them as you think is appropriate,” Clark explains. “You get to where your whole life is public life. You say you’re on 24/7/365, and you are to a degree. You always have to remember that you can stop. You can always stop.”

In October of 1990, after about eight days at trial, Clark says a jury found him guilty of using more than $200 but no more than $2,500 of the government’s money for personal use with no legitimate state purpose over a five-year period – the amount of which ended up being far less than the alleged amount. However, the damage was done.

According to Clark, he was ordered to pay a fine of $10,000 and court costs totaling roughly $6,500. Though he managed to avoid jail time, the punishment took a devastating toll on the once rising political star.

“My dream of being governor expired when I made those really bad choices,“ Clark admits.

He resigned his post as attorney general a few days later.

“It’s the lost opportunity,” Clark recalls, reflecting on the moment as he gazes out a window. “You had this opportunity to be in a place where you could make a difference. You’re no longer in that place. So, the question is why, and the answer is me.”

According to Clark, the days following his conviction only seemed to emphasize the true weight and reality of the situation.

“Where you would get invitations to give 500 speeches a year and 500 events, your phone didn’t ring,” recalls Clark. “Where you were having people walk across the street to say to you, ‘when you’re my governor, I’m going to be so proud’ – now they see you coming, so they walk to the other side of the street.”

“That’s when it got real in that sense.”

After his resignation in November of 1990, Clark spent the next two years in Jonesboro appealing his conviction, though he never succeeded.

ROCK BOTTOM
If ever there were such a thing as rock bottom, Clark found his in the early ‘90s. After his efforts to overturn his conviction failed, Clark moved to Florida.

“I’d gotten a job with a large home health company,” he recalls. “They primarily hired me because of the people I knew. I did a lot of external relations.”

But the job was short lived.

“I’m not thriving,” Clark remembers thinking. So, with “some money in the bank,” as he described it, he left the company to start over, again.

“You try everything you worked for in the past,” Clark says, pressing his hands together. “You try to work harder. You try to work smarter. You try to be more engaging. You try to be more thoughtful and reflective. You try to be more creative. You try to be more tenacious.”

“None of those things worked for me.”

Toward the end of 1993, still jobless and with only $46.10 in his bank account, Clark was in trouble.

“I was literally on the floor of my apartment, weeping,” Clark recounts. “I owed everybody and their brother.”

“I thought, ‘I’ve got about two-and-a-half weeks left on this damn rent. I don’t know what the hell I’m going to do.’”

That’s when Clark received what he’s dubbed the “magic phone call.”

“Then a friend of mine called me and said, ‘I want you to come home (home being Memphis), and let’s go into business together’,” explains Clark, who despite having lots of questions, agreed to his friend’s gracious offer. Though he recalls one rather large problem.

“I can’t afford to get home,” Clark told his friend over the phone.

“He said, ‘I will overnight you a check so you can pay what you need to get home’,” Clark recalls. “That’s exactly what he did. FedEx came at 10 o’clock the next morning.”

JOHN BARLEYCORN

A thankful and humble Clark arrived in Memphis at the end of 1993. Shortly thereafter, in 1994, Clark, his friend and another gentleman went into business together, establishing a very successful health care company.

“I worked my tail off,” Clark recalls.

The company’s success landed the once heralded Arkansan in Austin, Texas.

It was a new place, but more importantly, it was a new start.

“I wanted to be a different man,” says Clark. “I had been doing everything I was taught would get me where I was before, but it wasn’t working. Then I asked myself, ‘What is the only thing you never tried to change?’”

“John Barleycorn,” Clark answered. “Alcohol.”

“I stopped drinking on October 10, 1994,” Clark proudly declares – 19 years sober. “I put the plug in the jug, and I do that a day at a time, and, you know, by the grace of God, I’ve been sober since I got up this morning, so it’s been a good day.”

It was the difference maker, according to Clark.

STARTING OVER AGAIN
1998 was a mixed year for Clark.

It was the year he met and married his current wife, Suzanne, whom he credits with where he is today.

“There’s no one, and there’s no issue or thing that I love more than my wife,” Clark says. “I wouldn’t be where I am without her.”

That same year, the company Clark helped start, sold. He was starting over again, the third time in eight years. And to Clark’s surprise, this time was no easier than the first.

“I applied for about 40 jobs,” Clark recalls, joking, “I have a pretty good resume, until you get to that part that says alcoholic and felon.”

Of those 40 applications, he received just two interviews – neither of which ended with employment.

“I even applied to be a chauffeur,” Clark said, smiling. “I said, ‘I used to ride in the back, so I know what the guy in the front is supposed to do’. They wouldn’t even give me an interview.”

Clark eventually landed a job at a bookstore for a humble $6.50 an hour, but the pay didn’t matter to the former politician.

“There’s a dignity to having a job,” Clark says with a sincere tone, taking a moment to glance around his current office.

Clark received a raise 90 days into the job, bumping his pay to $7 an hour. He continued working at the bookstore until his wife suggested something different – yet familiar.

ON THE WAY BACK
“Why don’t you be a lawyer again?” Clark’s wife asked him.

“’They won’t let me do that. You don’t understand’, I told her,” Clark recalls. “’Why don’t we go ask’, she said.”

“I hated when she did that,” Clark jokes. “So, I go ask.”

To Clark’s surprise, the state of Texas allowed him to take the bar, explaining they practiced rehabilitation and believed he had “had enough.”

“I was thrilled,” recalls Clark. “It was going to cost $275. I couldn’t wait to write that check before they changed their minds.”

Clark graduated law school in 1971. It was now 1999. The law had evolved, and it reflected in Clark’s score.
“I failed by about 27 points,” says Clark, who studied even harder. “I signed up, took it again, and failed by about 17 points.”

For a dejected Clark, the third time was literally the charm.

“I passed,” said Clark. “I was thrilled. They wrote me a letter – I still have it, June 1, 2000 – that says, You are a lawyer. Go and do good.”

REDEMPTION
Back in 1996, Clark decided to apply for a pardon with then Gov. Mike Huckabee.

“I wrote Governor Huckabee a letter and said, ‘you should know I will be submitting, in a week or two, an application for a pardon,’” remembers Clark. “He actually called me and said he was going to give me a pardon if the board recommends me. They did, unanimously, but he didn’t.”

“I never knew why, but he didn’t.”

A couple of years later, Clark applied again, and again, the board unanimously recommended him.

“The governor sent me a letter,” recalls Clark. “It said, ‘I’ve decided not to decide.’”

Although he wondered why, Clark never questioned Huckabee’s decisions.

“I have a deep, abiding respect for the offices,” Clark says. “He was the governor. It would be presumptuous on my part to think that he needs to answer my question of ‘why.’”

Finally, in 2004, while in his Austin law firm, Clark received a phone call from Gov. Huckabee letting him know he had decided to grant the state’s former attorney general a pardon.

“I told him I wanted to find the most appropriate response but ‘right now, the best I’ve got is thank you. I’m humbled. Thank you.’”

To this day, Clark and Huckabee have never talked about the pardon or why the former governor refused to grant Clark’s previous requests.

HOMECOMING
From 2005 to 2007, Clark served as a professor of law at St. Thomas School of Law in Miami.

In 2007, Clark and his wife moved back to Fayetteville to be with family, and in 2008, Clark announced his bid for mayor. He was back in politics and back in the Natural State after a 17-year hiatus.

“I’ve still got a little bit of that left in me,” Clark recalls telling his family. “I still loved that public service thing, and I always said the best government is the one closest to the people.”

Clark ran and lost, finishing third out of six.

“I was eating lunch with my wife two days after the election trying to figure out what I wanted to do – what I wanted to be when I grew up,” jokes Clark.

This time, though, starting over would land Clark what he would later call his “new dream job.”

“I never even thought about the chamber job,” Clark recalls. “They were looking for a new chamber director, and I had interviewed for the job, but that was it.”

The Fayetteville Chamber chose Clark and offered him the job. The one-time self-described “radioactive” politician, quickly accepted. The journey home was complete.

“I landed at the right place,” Clark points out from the couch in his office at the Fayetteville Chamber of Commerce. “I love this job. I honestly have the best job in Arkansas. There are people who make more money, but they don’t have a better job.”

REFLECTION
Roughly 25 years ago, Steve Clark made a series of decisions. They were bad decisions with devastating consequences. But Clark will be the first to tell you that those consequences were appropriate and justified.

“I’m a very firm believer in it’s never right to do wrong, and it’s never wrong to do right,” says Clark. “When you do wrong, you have to be held accountable for the choices you make.”

We all make mistakes, but sometimes it’s more about how we deal with those mistakes that truly speaks to our character.

Steve Clark went from ‘who’s who’ to ‘who’s he’ in the span of 17 days. For 14 years, he was labeled a felon. He battled alcohol, he struggled with employment and, at one time, flirted with homelessness.

“Although it was a very painful episode in my life and a very difficult time for me personally, and for my family, it should have been all of those things,” reflects Clark. “In some ways, it was the very best thing that ever happened to me.”

He could have broken. Perhaps he should have. But he didn’t.

“If my life stands for anything, it’s do not quit,” Clark said.

As for a political future… Asked if he would ever run for anything else, Clark, paused briefly and responded with that same familiar grin: “I can’t imagine I would.”

The nation’s largest private employer, Wal-Mart Stores Inc., has become synonymous with ongoing labor disputes largely fueled by union-funded groups over allegations of low wages and efforts to keep workers from protesting and staging strikes.


Earlier this week, the National Labor Relations Board detailed its investigation relating to Wal-Mart’s retaliation against workers who went on strike and staged protests at stores sites during Thanksgiving Day 2012.

The NLRB, which is tasked to protect the rights of workers who organize for better working conditions, said Wal-Mart illegally threatened "reprisal" against workers who protested on Nov. 22, 2012. The federal agency said it’s ready to file a case against Wal-Mart if a settlement is not reached in the next two weeks. Any settlement would have to either give the fired workers their jobs back, or compensate workers who have been disciplined.

The Office of the General Counsel found merit to alleged violations of the National Labor Relations Act against Wal-Mart, as follows:

• During two national television news broadcasts and in statements to employees at Walmart stores in California and Texas, Wal-Mart unlawfully threatened employees with reprisal if they engaged in strikes and protests on Nov. 22, 2012.


• Wal-Mart stores in California, Colorado, Florida, Illinois, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, North Carolina, Ohio, Texas and Washington unlawfully threatened, disciplined, and/or terminated employees for having engaged in legally protected strikes and protests.


• Wal-Mart stores in California, Florida, Missouri and Texas unlawfully threatened, surveilled, disciplined, and/or terminated employees in anticipation of or in response to employees’ other protected concerted activities.


Wal-Mart spokeswoman Brooke Buchanan said the company is looking into its next steps and will take a decision very soon.

"We take this very seriously. We believe our actions were legal and justified," she said.

About 117 workers were either fired or disciplined for participating in the last year’s strike on Thanksgiving Day.

Also in the same report, the NLRB said the General Counsel found no merit in the following alleged violations by Wal-Mart.
• Wal-Mart stores in Illinois and Texas did not interfere with their employees’ right to strike by telling large groups of non-employee protestors to move from Wal-Mart’s property to public property, pursuant to a lawful Solicitation and Distribution policy, where the groups contained only a small number of employees who either did not seek to stay on Wal-Mart’s property or were permitted to remain without non-employee protesters.

• Wal-Mart stores in California and Washington did not unlawfully change work schedules, disparately apply their policies, or otherwise coerce employees in retaliation for their exercise of statutory rights.

In the past year, Wal-Mart has come out aggressively allowing its workers to speak directly to the media on several occasions as the retailer seeks to tell it’s own story about employment opportunities. This is an about face from the story being told by union-backed groups like OUR Walmart.

On Monday (Nov. 18), Wal-Mart broadcast a multi-city town hall meeting that featured 350 employee promotions.

Wal-Mart said it is on track to promote 160,000 employees across the country this year, including more than 25,000 promotions between November and the end of January.

It may not be obvious to the naked eye, but Fort Smith will be a bit more crowded through the upcoming weekend as players, coaches, support staff and fans stream into the city for the Heartland Conference regular-season volleyball tournament taking place this weekend at the University of Arkansas at Fort Smith's Stubblefield Center.

According to Dr. Dustin Smith, UAFS director of athletics, the tournament will feature UAFS and three other teams.

"(In our conference), the team who wins the regular season (games) hosts the tournament," he said.

With the UAFS Lady Lions boasting a 21-8 record going into the tournament, no other school was even in contention to host the tournament. It's the second such volleyball tournament the school has hosted. The school also hosted a Heartland Conference basketball tournament last year and a golf tournament about two years ago, according to Smith.

And while it is important for any school hosting a tournament to have home court advantage, Smith also spoke about the financial side of hosting a tournament.

"We get the benefit of not having to pay any of (the travel expenses), plus you have your home court advantage," he said. "Now if you compare it to what the Razorbacks do, we don't get (paid any money by the conference). But they do pay for the officials and lodging for the officials."

To give an idea of how much money the athletic department is saving by hosting the tournament in Fort Smith, all you have to do is look at what expenses the three schools participating in the tournament (Dallas Baptist, St. Edward's and St. Mary's) must front for their student athletes.

"You're looking at probably $35 to $40 per kid in meals. You're looking at roughly $100 per room, with seven to 10 rooms per team. And then your entertainment, depending on what they do and how many times they have to do it, you figure about $25 per kid."

For a team of 25 spending three days out of town, a college could be looking at nearly $7,900 using the figures provided by Smith.

Factoring in fans and support staff that travel with the team would put the number even higher.

According to Claude Legris, director of the Fort Smith Convention and Visitors Bureau, the tournament to be hosted this weekend will pump more than $175,000 into the local economy.

"The bottom line is we're looking at $176,072 which would have gone somewhere else, which is a good thing," he said. "If the university had not done as well as they did in the outcome, they would not have been the host. By them doing as well as they did, they brought this town $176,000 that would not have come here otherwise, which means Fort Smith being the hotbed of volleyball is a good thing."

And if the Lady Lions can add a few more wins to their already impressive 21-8 record, Smith said it is possible the school could host another tournament in the near future which could have an even larger economic impact in Fort Smith.

"The top eight teams make the regional tournament. If you rank high in the regional, you can host. So there could be eight teams and that expands that amount of money and the impact it could have in the community. So it would double that money for sure."

And while UAFS focuses on hosting the tournament this weekend, there is already talk about what the future holds for Fort Smith and sports tournaments, Legris said.

"It is our intention in 2015 to start pursuing that sports market once again because of the infrastructure we'll have in the city with the additional fields (at the River Valley Sports Complex and Ben Geren Regional Park)," he said.

But UAFS' Director of Sports Information Jonathan Gipson said his focus would be solely on this weekend and said if nothing else, the impending tournament will be a good thing for locals.

"Our conference is so geographically spread out, it's difficult for our home fans to make games," he said. "It's a reward for our fans who've been loyal to us to see them play in the conference (tournament) right in Fort Smith. And it gives us a good home field advantage."

The tournament begins Friday (Nov. 22) at 5 p.m. and runs through Saturday's final match at 1 p.m.

A dominant landmark for the tens of thousands of residents and city visitors who travel along Rogers Avenue in Fort Smith is the almost 100-foot tall, nine-floor structure.

The building was constructed by Superior Federal Bank more than 30 years ago, and was acquired in Arvest’s $211 million purchase of Superior Federal Bank in late 2003.

The building has several tenants other than the bank, with a little more than 200 people work in the building, according to Craig Rivaldo, Arvest Bank President and CEO of the Fort Smith/River Valley region.

Work to renovate the outside of the structure began several weeks ago, and is expected to be finished in late December or early 2014. Other than to note that it was “major renovation,” Rivaldo declined to provide an estimate of the renovation costs.

Renovation work includes:
• Resurfacing the parking lot and making parking more customer friendly in front of the building;
• A second enter/exit lane for Rogers Avenue will be added;
• Improved exterior lighting;
• Fencing along the northwest side for improved security;
• Installation of canopies over entrances and awnings over windows;
• Cosmetic improvements will include larger “ARVEST” letters on top of the building and the addition of accent colors to the building; and
• New landscaping will be added to improve the building’s presentation toward the busy Rogers Avenue.

“The Arvest Tower building is more than 30 years old and needs an extensive update and renovation, Rivaldo said in a statement. “I have been amazed at the number of people that have asked me about the project. With all the questions I have received, it completely supports the notion that the Arvest Tower, located in the center of Fort Smith, is a highly visible icon for this city. When we are done with construction, I believe the citizens of Fort Smith will be proud of the renovations.”

Construction is staged in phases to avoid where possible interruptions during normal business hours. The building is open during the renovation work.

Based in Bentonville, Arvest Bank operates more than 260 bank branches in Arkansas, Kansas, Missouri and Oklahoma through a network of 16 locally managed banks, each with its own board and management team.

Getting a product on the shelf at Wal-Mart can be one of biggest highlights of a career. It’s been compared to finding the Holy Grail because the mass retailer can literally change the fortune of a small company with a simple three-letter word – “Yes.”

But new suppliers will be the first to say that getting on the shelf is just the beginning, because staying there can be like drinking rocket fuel by the gallon.

The City Wire recently asked a few small suppliers, service providers and former Wal-Mart employees to weigh in on the top five concerns or lessons new suppliers must learn as they do business with one of the largest companies on the planet.

In no particular order the cohort came up with the five biggest lessons new suppliers face when they sign a contract with Wal-Mart.

• Harness Retail Link 
Small suppliers spend thousands of dollars getting the necessary training in Retail Link, a comprehensive data base Wal-Mart requires its suppliers to use.

Matt Walters, a senior director of Client Development for Atlas Technology Group, said Retail Link can be daunting for someone completely new, even more so for someone new to point-of-sale (POS) data. At its most granular level retail link data is by item, by store, by day. This data is available for analysis, every day. He spent 15 years with Wal-Mart before joining Atlas Technology.

Rhonda Pieracci, president of Hi Octane Corp., told The City Wire last week, after some private training in Retail Link, she now runs her reports every morning and looks forward to going over the sales results for her Arrow Signs which are sold in Wal-Mart Stores  throughout the California market. Like many small suppliers, Hi Octane is a lean group with just a handful of employees, so someone has to learn the ropes of Retail Link.

Walters recommends getting the initial training from a qualified provider and then joining a Retail Link User Group (RLUG).

“As a new supplier starts doing business at Wal-Mart, one of the key questions for them to ask the buyer is what level of reporting the buyer needs from them and how often. Each buyer at Wal-Mart works differently and knowing your buyers expectations is key,” Walters said.

Mike Graen, the newly named director for the Crossmark Collaboration Center, also agreed new suppliers should reach out to RLUG groups for the help they need to grasp Retail Link functions. Graen, a former Wal-Mart marketing exec, said the No. 1 lesson he thinks new suppliers should learn is “The Customer is No. 1.”

• Asking Questions
Suppliers said the last thing they want is for Wal-Mart to perceive they are lost or clueless about a certain situation. Jason Long, CEO of Shift Marketing Group, said suppliers should be bold with their questions, but not needy.


“Wal-Mart merchants have plenty of headaches already, so as a new supplier it’s important that you choose your moments. It’s all in the approach. Think through what you’re going to say before you say it. Ask yourself, 'What is the goal of this discussion?' Be concise, smart and focused and you’ll earn the respect of your merchant over time,” Long said.

Walters said most buyers in his experience have been receptive to direct questions.

“Don’t ‘beat around the bush’ with your buyer. They appreciate short, direct, questions that can have quick answers,” he said.

When an issue becomes more complex, he said most new suppliers turn to local resources in Bentonville who specialize in certain areas. An entire cottage industry has developed around helping suppliers do business with Wal-Mart. He said there are specific firms for headquarter buying assistance, retail link data analysis, replenishment consulting, and various other aspects of working with the world's largest retailer.

Walters also encourages new suppliers to learn the Wal-Mart history and the corporate organizational structure, which are helpful once they began working directly with the retail giant.

• Ensure Supply Chain Reliability
One of the common challenges new suppliers have with Wal-Mart is estimating volumes and forecasting future demand. This is a luxury existing suppliers already have because they know category performance averages and modular distribution, Walter said.

In the beginning suppliers don’t know how many stores will carry new items or at what rate of sale they can expect. He said new suppliers need to be diligent and follow POS data trends versus forecasted volume. 

Retail Link helps give suppliers some visibility, but knowing when to adjust forecasts and or supply chain settings on products is critical. Walters said it is not uncommon for Wal-Mart to represent 20% to 30% or more of a company’s total U.S. sales. This means missing a forecast at Wal-Mart can leave a small company with no inventory or excessive inventory in a hurry. 

It is up to the supplier to watch their own inventory at all times to spot possible shortages because Wal-Mart has too many products and too few people to do that job for the suppliers.

Long said one of the biggest mistakes new suppliers make is the focus on sell-in versus sell-through.

“Merchants usually have a good feel for how a product is going to sell after only a few weeks. Time is short. If a new supplier isn’t driving sales velocity they can get into trouble quickly,” he said.

Long warns that in an effort to understand, new suppliers may cede brand and business decisions to the merchants, leaping at any suggestions for new business. He said new suppliers should guard against giving merchants that much control in the event it could hurt the longer-term relationship with the merchant if the product doesn’t sell.

“Retail is detail and there is a lot to understand, from supply chain flow, item set-up, modulars, in stock, it’s all important,” Graen said.

• Grasping Replenishment
Suppliers are responsible for keeping a close eye on their replenishment goals, which in a perfect world would be an easy feat given the automation of Wal-Mart’s reordering system.

One local supplier training group said the biggest complaint they hear from clients over replenishment is that they don’t know how to get through to their replenishment manager at Wal-Mart. The average replenishment manager has 75 suppliers and 700 items. So if those 700 items were in 3,500 stores, that is 2.5 million store/item combos for which they are responsible.

That said, suppliers must be diligent in reaching out to the replenishment manager when they see a change in sales patterns that can impact the availability of their product.

Walters said communication with Wal-Mart has always got to be part of the process. He said internal communication within Wal-Mart is not without its challenges as the sales team may not always want to hear about forecast updates or changes. Pushing updates internally can sometimes be the biggest hurdle.

• Always Take the Blame
New suppliers are quick to realize they need to take the blame for lots of things that go wrong early on in the relationship.

Pieracci said there is so much learn in short fashion and not knowing what you don’t know can add to the confusion at times.

Walters agreed.

“As a new supplier to Wal-Mart you are responsible for what you don’t know. Sounds tricky, right? Buyers have more daily emails then you will ever care to experience, so the need to understand the process and work flow are critical to saving everyone time," he said.

He said Wal-Mart expects its supplier to use the resources available to learn its systems.

“If you know something regarding your Wal-Mart business is inaccurate, go to your buyer upfront with a short exact description regarding the concern. Expect Wal-Mart to hold you accountable for your business with them. It is part of the culture of doing business in Bentonville,” Walters added.

Retail analysts lined up Monday morning (Nov. 25) to assess what might be behind Wal-Mart’s decision to appoint Doug McMillon as its CEO and discuss their thoughts on what to expect next at the retail giant.

There had been two candidates – Walmart International CEO Doug McMillon and Walmart U.S. CEO Bill Simon – in the running, according to public opinion. The Walton family and the rest of Wal-Mart’s board chose culture and merchant tenure as the two trump cards in McMillon’s hand.

Carol Spieckerman, CEO of New Market Builders, said McMillon’s international experience should be a plus in his role as CEO. She gave two reasons for her assertion.

“First of all, Walmart is perhaps the only international retailer poised to fulfill the promise of “global e-commerce” from an omni-channel perspective. Most if its U.S.-based competitors are still trying to figure out how to integrate bricks and clicks – Walmart is doing so on a global level and accelerating its efforts through strategic acquisitions such as Yihaodian in China. Secondly, Walmart’s international business is a terrific learning lab for its multi-format and localization efforts, both of which are critical to its omni-channel strategy, as these stores serve as distribution hubs for the thousands of unique items that Walmart offers online,” Spieckerman explained.

However, Spieckerman said McMillon’s challenges are significant.

“The term ‘merchant’ still gets thrown around in retail these days but the implications and expectations have to expand,” she said. “That is perhaps Mr. McMillon’s biggest challenge and opportunity as retailers evolve from their store-centric past and into harnessing digital-first strategies.”

SIMON’S FATE
Leon Nicolas, retail insight exec with Kantar Retail, wonders what the implications will be for the U.S. business, with McMillon's move to the top.

"For instance, will Bill Simon remain at the helm of Walmart US? If not, does Duncan Mac Naughton assume the helm of US operations? There could be a domino effect there," Nicholas said.

He said word in the industry for sometime has been that Simon could have political aspirations in his future, given his previous public service work in Florida.

Courtney Reagan, a retail analyst with CNBC, also said lots of eyes are now on Simon’s  fate wondering if he will also make an exit.

Brian Sozzi, CEO of Belus Capital Advisors, believes Simon will stay on as CEO of Wal-Mart U.S. because he is connected to the brand, but said at some point he could get pushed out. Sozzi, through Twitter, also said of McMillon: “New Wal-Mart CEO has been groomed for this spot, has touched all parts of organization”

Sozzi also said the decision to go with McMillon suggests the company has concerns about the future of its U.S business and that international growth in the near term may slow.

THE NATURAL
Others said the naming of McMillon has been in the works for some time as he as been prepped for the role and is the perfect candidate to lead Wal-Mart through these challenging and evolutionary times for retailers.

"We're encouraged by this," said Joe Feldman, a senior retail analyst at Telsey Advisory Group. "I would bet that very little would be different and think that's part of why the stock's barely moving at this point. It's going to be a seamless transition."

Wal-Mart shares (NYSE: WMT) rose slightly on the news trading at $80.42 up 61 cents in normal volume in the morning session. The shares have traded between $67.37 and $80.57 during the past 52-week period.

David Schick, retail analyst with Stifel Nicolaus, said the new is merely confirmation of what many thought would happen.

“Perhaps it will be an extra happy holiday for the McMillon family at home,” he said.

Schick said the decision doesn’t necessarily indicate more focus on U.S. and less on international, but it does underscore what has already been happening at the company as the retailer works on increasing its small store development in the U.S. and matching that intensity with the omni-channel strategy.

“I don't know that it's a deemphasis of international but there's new talking points and directions for the domestic business as part of their emerging story,” Schick said.

Budd Bugatch, senior analyst with Raymond James & Associates, agreed that McMillon was the heir apparent. He said the decision is “vintage Wal-Mart and an example of the retailer in a very rational way going about their business.”

FCPA WOES
One issue that won’t change even with a CEO transition is the ongoing investigation into alleged violations by Wal-Mart officials of the Foreign Corrupt Practices Act, according to Jeffrey Sonnenfeld, an expert in corporate succession and Dean of Executive Programs at Yale University. 

On CNBC Monday he reminded the public that Duke and former CEO Lee Scott have been implicated as having knowledge of alleged FCPA violations. They could face some legal action when the investigation is finished. He said the board seats of Duke and Scott could be in jeopardy pending the findings of the FCPA investigation.

Sonnenfeld said McMillon is a clean image and calm influence for the company going forward and he is already a board member, a position that Simon does not have.

No one knows exactly what will happen to the city of Fort Smith's general fund budget once the Board of Directors meets for a third budget meeting on Tuesday (Nov. 26). But what is nearly certain is the expectation of at least some fireworks between the administration and the Board.

At issue is Director Keith Lau's request of City Administrator Ray Gosack to cut about $2.2 million from the city's budget. The amount is the difference between expenditures of $47.919 million and revenues of $45.716 million for the city, which Lau has said shows the city taking part in deficit spending.

Gosack has contended that the city is simply rolling over end of year balances into the following year's budget, meaning the city is not deficit spending.

Lau has held the position that the city must cut spending and have a higher end of year balance (now set at 7.5%, though Lau has said he would like it to be higher) in order to prevent a coming collision of lower revenues and spending levels in FY15 that appear to be at current rates or higher, resulting in more than $10 million in projected deficit spending.

He requested multiple scenarios for cutting expenses at the Nov. 18 budget study session. Gosack was able to only prepare one scenario to present to the Board given a week to develop the scenarios.

The proposed cuts were made public Friday (Nov. 22), which included increases in fees coupled with cuts to all city departments resulting in the proposed cut of 14 full-time staff positions from the general fund and furloughs in the building safety department.

In response to Gosack's presentation of the proposed cuts on Friday, Lau accused Gosack of using the media to advocate against the cuts.

"Gosh dang it, if you're not playing it out in the media, then what the hell are you doing? I can't express how frustrating this stuff is to me. This isn't how this works in the business world. We don't get emotionally involved and we take actions that are the best decision at the time."

‘PRETTY SEVERE’
Gosack would not respond directly to Lau's accusation Monday (Nov. 25), though he said the information made public should not have been a surprise to the Board.

"No to your first question," he wrote in an e-mail. "The information was made available to the board, media and public at the same time – when the meeting packet was posted on the (city's) web site."

Lau again reiterated his position by e-mail Monday after having a chance to review all of the proposed cuts, again saying he was not pleased with the scenario presented by Gosack. When asked where he would propose making cuts, Lau simply responded, "That's Ray's job."

"I want a general fund budget that reduces or eliminates the $2.2 (million) deficit between revenues and expenses and maintains a stable end of the year fund balance preferably the 15% mandated as good fiscal policy by the (Board)."

Director George Catsavis did not hold back on his view of the proposed budget cuts.

"I saw what (Gosack) proposed. I thought it was pretty severe," he said.

PARKS CUTS
Director Pam Weber also found the cuts to not be "very palatable." In order to move forward on the budget, she said it will take the Board making a series of decisions at the Tuesday study session.

"We are facing three options - stay at 7.5% (end of year balance), make necessary cuts to get to 15%, we can try Ray's cuts or do like we did a few years ago when we cut $750,000 from the budget and went line by line," she said. "I think first we've got to decide if we go (with) 7.5% or 15% or some point in between and how do we get there?"

Regardless of which decision is made, it appears that big changes could be in store for the budget though no one can articulate a clear vision of where the cuts would come from specifically. Catsavis pointed to various parks projects as over-extending the city's general fund.

"As Pam Weber (has previously) said, we're not going to be able to afford the projects we're building," he said. "It's going to catch up with us."

It is a point Weber made again Monday.

"I want to look at the Parks Department funding because I do think possibly that we are going to, by adding all of these new projects, we are going to put future pressure on the Parks Department budgets with maintenance issues and that type of thing."

"I do not want to see parks cut," said Director Philip Merry, though he conceded that Weber had a valid point which was worth exploring.

PUBLIC SAFETY CONCERN
Weber made clear that she wanted to do all she could to protect public safety funding for the police and fire departments, the two departments to experience the largest chunk of cuts in Gosack's Friday proposal.

"I think my thing is there are certain areas I'm uncomfortable with and I want to revisit those areas. I'm uncomfortable with the Police Department funding (cuts of over $600,000)."

Merry said he found Gosack's list of proposed cuts "unacceptable" and asked that he go back and find other areas for cuts. Should Gosack not present a set of budget cuts that he and other Board members finds acceptable, Merry said he was prepared to start the budget process from scratch.

"This is in my mind, but I'm not ready to make it my recommendation yet - (take) existing expense loads and priorities as it is right now and take the original budget as it is submitted and put it in a holding pattern and dig deep between now and February. And maybe we do need to have a (budget) year where we built it from scratch. Whenever you do a budget, you can have everyone tell you what they need and whether you agree with it."

BUDGET DEADLINE DEBATE
Weber said she was ready to look at the budget line by line to see where cuts were necessary, though protecting police and fire funding would be a challenge as the two combined with the Parks Department make up 70% of the general fund budget. But she said she'd be willing to go beyond Gosack's deadline of adopting a budget by Dec. 3.

"Technically we don't have to pass a budget until Feb. 1," she said.

Even though Weber is openly flirting with the idea of extending the budgeting process, Gosack said Friday (Nov. 22) it was imperative to get a budget passed as soon as possible.

"Well, I'm hopeful the Board will direct us to proceed with adoption of the budget in the Dec. 3 meeting. It sends a strong message when a governmental organization can adopt its budget in advance of the start of the fiscal year. It sends a strong message that we've got our financial plan in order, we know what we're going to do and we can adopt it before the fiscal year begins. And we've always adopted our budget the first meeting in December. I can't recall a year when we didn't adopt it in early December."

Weber said she would like to see Ray's desire for an adopted budget come to pass, but it will not be easy.

"The city's going to pass a budget. Is it more difficult this year? Yes, it's more difficult. But I hope we can pass a budget by Dec. 3 or in the month of December. I'm willing to do whatever the Board deems necessary to pass a budget in the month of December."

Merry was less certain of December adoption and had a message for Gosack.

"We can…go through each line item with a ruler in every department. If the law says we really don't have to have it until February, then go through it and remove every single speck of dust. Please, Ray, go back and make some recommended cuts and get back to us."

The Board will meet at noon Tuesday (Nov. 26) in the Fort Smith Public Library Community Room.

There will be no beer sales in the near future at Ben Geren Regional Park’s golf course.

The Sebastian County Quorum Court decided Monday (Nov. 25) to nix the idea that was first raised as a new source of revenue for the financially-troubled public course.

At issue for the court were two different issues – whether to abolish the Parks Advisory Board and whether to pursue annexation into the city of Fort Smith in order to legally be able to sell alcohol (Fort Smith, considered the northern half of the county, is wet while the remainder of Sebastian County is dry).

In discussing the purpose of the Parks Advisory Board, Justice of the Peace Danny Aldridge said the board of seven provided good information that the Quorum Court could take under consideration.

"They present a lot of good ideas, exchange a lot of information and I think it's to (Sebastian County Judge David Hudson's) interest and the parks superintendent's best interest to hear what these people say that are getting the pulse of the users of the park on a daily basis and have to deal with the soccer league and the softball league and the miniature golf," he said. "I think it would be a real shame to abolish this advisory board that does have some good input."

The Parks Advisory Board, which had no voting power, did not always present the best ideas but they were worth hearing out, according to Aldridge.

"At least they're putting ideas out there and trying to find a way to solve problems. And certainly seven heads or five heads is better than one in trying to get this resolved."

The problem the Parks Advisory Board was trying to resolve was a projected budget shortfall for the golf course, which The City Wire reported in September was on track to lose $150,000, the third straight year the golf course would not turn a profit for the county.

Justice of the Peace Bob Schwartz said he thought the board was not an assistance to the Quorum Court in any way.

"Danny, I know where you're coming from on that. But really, I've been on this Quorum Court for about 16 years and we've had advisory boards and look at how we're going down hill. I don't see where they're helping. Actually, they can't vote on nothing. We have to vote for it. So they're hanging out there on a wing and having their meetings - taking up time and expense and all that - I personally don't think we need it because it hasn't provided anything."

Even if the board has ideas, such as alcohol sales, the ideas have not been brought before the court by a member of the board.

"They never come to vote on them. They don't vote either. We have to approve them. So I've never seen someone on the Board come up here and talk to us about it. The judge hasn't let us know. ... It's just something we need to get rid of and it's something we can take care of through the Quorum Court."

Justice of the Peace Shawn Looper, who first brought up the issue of alcohol sales before the court after reading of the Park Advisory Board's suggestions in local media, suggested the Quorum Court direct Hudson to create a Parks Committee of three justices of the peace.

"As we continue to lose more and more money there, we need to get more and more involved. The judge is in control of that, he's administrator and all of that. But we need to be more and more involved in what's going on at the golf course. …Sometime we have to take responsibility and say, 'OK. This is what we've got to do.'"

While the Quorum Court did vote to abolish the Parks Advisory Board and abandon any plans to seek annexation for the golf course into the city of Fort Smith, essentially killing the plan to introduce alcohol sales as a revenue source, no action was taken by the court or Hudson on appointing a committee of three court members to serve on a parks committee.

In other business, the Quorum Court voted to approve several budgetary items which will allow the court to vote on a budget ordinance at its December meeting.

Among the items to be approved was a $75,918 reduction in expenditures at the golf course which will eliminate four full-time positions and create five seasonal part-time positions that do not carry benefit packages.

Additionally, the court approved 2% pay raises for elected department heads, such as the county judge, sheriff, treasurer and other executive-level elected officials. The 2% pay raises were also extended to all county workers, regardless of position. The only people to not receive a 2% pay raise next year will be the Quorum Court, which voted to eliminate funding for the raise. The only member of the court to vote for a pay raise was Justice of the Peace Tony Crockett.

The court also voted to approve appropriating $115,961 from the Treasurer's Commission fund in support of the county's Information Technology department.

That traditional Thanksgiving dinner will cost a little less year thanks to lower turkey and milk prices, according to the Arkansas Farm Bureau. But before the feast can be digested, retailers promise to deliver a huge helping of pre-Black Friday bargains.

The 28th Annual Farm Bureau survey indicates $42.63 will feed a family of 10 this year,  which is a 5.5% savings from a year ago.

The statewide average is based on responses volunteers who surveyed food prices at 11 grocery stores and supermarkets across the state. They were asked to report the “best in-store price” of 12 items included in the meal. They are allowed to take advantage of advertised specials, excluding discount coupons and purchase requirements.

“The fact the cost of the traditional Thanksgiving dinner is more than $2 lower than last year remains a testament to the efficiencies of our food production system,” said Randy Veach, Arkansas Farm Bureau President.

LOWER PRICES
He said the savings are somewhat remarkable given the drought many farmers have endured the past several years. Food prices in the Natural State came in 13% cheaper than the $49.04 average reported in the national survey.

“Lower prices on turkey and sweet potatoes account for much of the price difference from a year ago. Turkey supplies have increased this year due to lower feed prices, while sweet potatoes benefited from this year’s milder growing conditions. Both of these items were negatively impacted by the heat and drought in 2012,” said Travis Justice, chief economist for Arkansas Farm Bureau.

After rising sharply two years ago, the average price of a 16-pound young tom turkey this year fell $2.26 to $15.59 (98 cents per pound). Turkey prices are higher nationwide. The American Farm Bureau reported an average of $1.36 per pound.

Milk, sweet potatoes and cranberries each cost less this year saving consumers nearly $1 on their traditional Thanksgiving meal. Other items included in the meal that saw modest price declines were a package of brown and serve rolls, frozen green peas, a pound of carrots, and half pint of whipping cream. These price decreases were mitigated by higher costs for stuffing mix, canned pumpkin, celery and frozen pie shells.

The $42.63 state average cost this year, is the best value consumers have seen since 2010, reversing a two-year higher trend.

PRE-BLACK FRIDAY
Retailers like Wal-Mart, Best Buy, J.C. Penney, Target, Toys R Us and Macy’s have announced they are open Thanksgiving evening and pulling overnight sales marathons through Friday night.

Despite a few protests regarding the Turkey Day deals, Wal-Mart said it will kick off its Black Friday specials at 6 p.m. Thanksgiving Day – this is a two-hour advance versus last year. Meanwhile, Kmart is set to open at 6 a.m., and will stay open for a full 41 hours straight.

Wal-Mart has sweetened the deal for its employees who work this Thanksgiving, providing them with dinner at work and a 25% discount. Duncan Mac Naughton, Walmart’s U.S. chief merchandising and marketing officer most employees are “really excited” to work the holiday.

“We appreciate each of our associates and the time that they dedicate,” he said.

Wall Street analysts said this year is expected to brutal for retailers who are each vying for more of the consumer wallet.

Wal-Mart has aggressively marketed toward consumers this year with price matching guarantees backed by an broad advertising campaign, said CNBC Courtney Reagan.

“I won’t be surprised if Wal-Mart picks up market share this year, because cash strapped consumers need and want those great deals Wal-Mart is offering online and in stores.” Reagan said.

REMAIN CLOSED
That said, other retailers like Costco, Sam’s Club, Dillard’s, Apple, Cabela’s and Home Depot has stood firm on their decision to remain closed Thanksgiving Day.

Paul Latham, Costco’s vice president for membership and marketing, told the Huffington Post that the warehouse club wants to give its employees time with their families, as they work especially hard throughout the holiday season and they deserve the day off.

Charles Redfield, vice president of merchandise for Sam’s Club, said the Wal-Mart subsidiary will close the clubs on Thanksgiving Day, but the Sam’s Club Black Friday Savings Event will begin at 7 a.m. on Friday, Nov. 29.

Dillard's also will close all 299 stores on Thanksgiving Day "to honor our associates with their family time," said spokeswoman Julie Johnson Bull.

HIGH STAKES

Between Black Friday and Christmas retailers will make between 30% to 40% of their total annual sales and with six less shopping days this year retailers across the board have already started giving Black Friday deals.


An estimated 33 million people, or 23% of those surveyed by the retail federation, said Thanksgiving will find them in stores at some point. Nearly 70% or an estimated 97 million consumers plan to be out shopping on Black Friday.

"It is evident that Americans are in the holiday spirit, despite their cautious approach to spending," said Pam Goodfellow, director of Consumer Insights at Prosper Insights & Analytics, the firm that polled more than 6,000 consumers for the National Retail Federation Survey.

Shoppers venturing out on the evening of Thanksgiving (Nov. 28) and Black Friday (Nov. 29) may want to avoid the intersection of Rogers Avenue and Interstate 540 in Fort Smith.

The reason, as it has been since January, is the ongoing construction on the interstate, according to District 4 Engineer Chad Adams of the Arkansas State Highway and Transportation Department. The construction has created bottlenecks and slowed traffic during slow times. Traffic could come to a halt on sections of the road that lead to the more popular shopping locations in Fort Smith.

Adams said his department was unable to change traffic flows or patterns either on I-540 or on Rogers Avenue due to the construction project.

"There's no method in place to deal with it," he said of the potential traffic snarls. "The configuration is the same - two lanes in either direction on Rogers Avenue."

And while there are two lanes open in either direction on I-540, traffic backups have already started with some motorists having to sit through several traffic light rotations before being able to move down the avenue.

Asked whether the Fort Smith Police Department was planning any special preparation for the increase in holiday shopping traffic along the city's major retail corridor, Sgt. Daniel Grubbs said the Super Bowl of shopping would not be different than any other day.

"We treat it as a normal holiday," he said. "We've kind of seen a slide in some of those major issues we have to face. But it's a part of life. We understand it will be an issue. (We asked people to) just slow down, be a defensive driver and take basic safety tips. As far as anything particular or specific, special assignments, we have nothing planned at this point."

Sgt. Randall Dias of the Arkansas State Police Troop H Headquarters in Fort Smith said his department was also not making any special preparations in anticipation Black Friday.

"There are limited things we can do except prepare to handle the inevitable crashes that will occur."

He said while there is some increase in the number of incidents that occur on Black Friday, it has not typically been a major issue. But that was before I-540 was reduced to one lane in both directions earlier this year.

"Everybody's got to go to Best Buy and get their laptops at 4 a.m. So we know there will be traffic to deal with," Dias said. "If you get one crash, what is going to be different this year is the construction. If you get one crash, it'll bottleneck everything up for a while."

Dias added that multi-car accidents were more likely to occur in the construction zone.

"Of course, we're talking about rear end collisions," he said. "Sometimes it's the second or third car back that pushes them into each other. Also, what happens is if there is one crash like that maybe a half-mile back, there could be another crash because of the resulting backup."

Grubbs urged the public to not worry about any problems that could arise.

"To pay an officer to sit at the Rogers and I-540 interchange to deal with traffic control – at this point we don't have anything planned. But we are problem solvers. We'll deal with (problems) as we need to."

Asked what drivers should do in preparation to deal with the Black Friday traffic, Adams said he was at a loss.

"It's going to be your normal Black Friday traffic, but it may be down some. You've got no school, no work. So traffic may be a little bit down compared to your normal rush hour everyday traffic. But I don't really know what to recommend on that one."

It’s been a good year for home builders across Northwest Arkansas, but the residential construction pace in the region’s four largest cities continues to taper with a 15% reduction in the number of new home starts in October compared to a year ago.

The cities of Fayetteville, Springdale, Rogers and Bentonville issued permits for 122 new homes during October with a value of $29.788 million. This compared to 145 permits worth $34.747 million in the year-ago period.

Springdale was the only city of the four to report a busier October. While the number of permits increased slightly to 18, the value rose some 38%, according to city records.

RESIDENTIAL PERMIT VALUES (October)
Bentonville $11.240 million, down 26%
Fayetteville $8.412 million, down 4.4%
Springdale $5.488 million, up 38%
Rogers $4.649 million, down 26%

Several builders interviewed by The City Wire in recent months said the residential construction pace is steady and sustainable at this time, after making up some ground in shorter suppliers earlier this year. Local home builders expect to close 10% to 15% more transactions this year which would make 2013 the best business climate they have witnessed since the market recovery began in 2009.

MountData.com reports new homes are selling well throughout the region, with 69 pending transactions during October. The data firm reports that agents and builders sold just over 200 new homes during past 90 days, with an ending new home inventory of 366 properties, a 5.4-month’s supply.

PRICES, DEMAND
Across the region, the average selling price for new homes in October was $106 per square foot, according to MountData.com. Prices are up slightly from this last year and are expected to rise more in later 2014.

Among the four cities noted in this report, the largest overhang of new unsold homes listed for sale are located in Bentonville (110) and Rogers (84). Given the ongoing demand in these two markets, Paul Bynum analysts with MountData estimates about a 5.5-month supply.

Fayetteville shows the tightest supply with 44 new home listings last month, and 17 sales left a 2.6-month supply of new homes on the market, according to MountData.com

Springdale has the slowest moving market for new home sales averaging three transactions last month, at the lowest average price of $98 per square foot.

Bentonville had the highest price per square foot at $110, while Rogers and Fayetteville came in at $105 and $106, respectively.

COMMERCIAL UPTICK
Much of the construction activity in the region this year has been residential, but this fall a number of restaurants and other retail outlets have begun to pop up.

In October, nearly half of the total $58.107 million in new permits issued by the four cities were for new commercial projects. Commercial permit values totaled $28.319 million, up 348% from the same month in 2012. The October permits were boosted by one large project, the new Walmart Supercenter in Springdale. The new supercenter under construction at Elm Springs Road and I-540 in Springdale was valued at $15.442 million when the permit was issued by the city last month. It was one of two new permits totaling $18.724 million issued by the city in October.

Rogers issued a couple of large permits totaling $5.187 million in value. The largest – $4.337 million – being a new addition to the Preformed Line Products facility located at 2740 S. First St. The other permit valued at $850,000 is for the new Longhorn Steakhouse under construction at 2206 S. Promenade Blvd.

In Fayetteville there were a handful of new projects valued at $3.88 million, up from $139,000 reported a year ago. Casey’s General Store is under construction at 2720 W. Wedington Drive in Fayetteville. The value of this convenience store and gas station is $2.125 million.

Also in the works is a 15,000 square-foot mixed-use space at 525 W. Willoughby Road under construction by Joe Terminella as well as a retail strip center shell located at 240 E. Joyce Blvd.

Bentonville issued two new commercial permits last month both listed as convenience stores, with no other detail available.

Other projects on tap in the region according to permits issued by the Arkansas Department of Health include:
• Slims Chickens, W. Wedington Drive and Golf Club Drive in Fayetteville;
• Kum & Go, Huntsville Road & Ray Avenue in Fayetteville;
• Freddy’s Frozen Custard & Steak Burgers, 4507 W. Walnut in Rogers;
• LIttle Caesars, 931 W. Walnut in Rogers; 
• Cherry Berry Frozen Yogurt, 1011 Mt. Olive in Siloam Springs; and
• CVS Pharmacy at Dartmoor Road and Bella Vista Way in Bella Vista.

PERMITS TOTALS (October)
Springdale: $24.312 million, up 199%
Fayetteville: $12.299 million, up 45%
Bentonville: $11.76 million, down 22%
Rogers: $9.836 million, up 27%

(Permits are for new construction, additions and remodels are not included.)

The economy across Benton and Washington counties slumped in September, after a fairly robust spring and summer.

The dip in consumer spending was evident in the 3% decline in sales tax revenue receipts this month, but it doesn’t worry city officials.

The cities of Fayetteville, Springdale, Rogers and Bentonville reported cumulative November tax revenue of $4.29 million, down 2.89% from $4.418 million a year earlier. Three of these cities showed modest gains in revenue receipts this month, but they were offset by double-digit declines in Bentonville.

Each city collects a 2% local sales tax that is split evenly between bond repayment and each city’s general fund. This report tracks the 1% tax going to fund city budgets. The revenue reflects sales in September, creating a two-month lag in the reporting.

November Collections
Bentonville: $599,836, down 27.43%
Rogers: $1,196,429, up 4.24%
Fayetteville: $1,593,272 up 1.33%
Springdale: $900,914, up 3.31%

Denise Land, finance director for the city of Bentonville, has said one month doesn’t make a year. The city’s tax revenue through November is up 9.14%, according to city records.

Rogers continues to report strong sales tax numbers marking 18 consecutive months with revenue in excess of $1 million, according to Casey WIlhelm, finance director for the city of Rogers.

She said new restaurants and retail shops continue to draw traffic and spur on spending in Rogers. It’s been one year since Cabela’s opened in Rogers and Wilhelm said it’s hard to split out the impact from this single venue except to say the city did see a slight revenue increase in November 2012 from the store receipts two months before. She added that it’s one of several attractions that continues to draw consumers to Rogers and Bentonville.

WIlhelm reports that through November sales tax revenue in Rogers is up roughly 8% from a year ago with $12.987 million in sales tax receivables.

In Benton County, sales tax collections totaled $2.829 million in September and are reflected in the counties November revenue report. Revenue dipped 2% from a year ago.

Washington County reported November sales tax revenue of $2.789 million, up 2.12% from a year ago.

Springdale and Fayetteville each report their sales tax revenue through November was up 2.7% and 3%, respectively. City officials said their budgets are in good shape as collections remain steady, despite finicky consumers.

CONSUMER CONCERN
Sales tax revenue is closely tied to consumer sentiment, because consumers don’t typically spend as much money when they are concerned about their jobs or the overall economy.

“Consumer confidence decreased in September as concerns about the short-term outlook for both jobs and earnings resurfaced, while expectations for future business conditions were little changed,” according to Lynn Franco, director of economic indicators for the Conference Board.

Franco noted that consumers’ assessment of business and labor market conditions at that time (September) was a little more positive but they were also concerned the momentum could be sustained in the months ahead.

The government shutdown was also looming when the survey was taken in September and economist feel could have some negative impactive on overall sentiment.

The reduction in SNAP benefits (food stamps) is also taking a $4 billion bite out of the spending which began when the cuts took place Nov. 1. While food is not taxed in many states, consumers reliant on these benefits have less money in their pockets to spend on other things.

The impact to Arkansas recipients is expected to $52 million through September 2014, according to state welfare officials.

NWA GROWTH
Despite weak U.S. job growth, Northwest Arkansas has been the recipient of several new ventures that have or will create some 2,000 new jobs in this region. More than half of those were at Serco, in Rogers, where the average pay is $12 per hour with full benefits.

These local jobs new to the region range from manufacturing, to back office clerical, and sales and are a healthy sign that Northwest Arkansas continues to fare better than many other regions across the country.

Mike Malone, CEO of the Northwest Arkansas Council, recently said that these solid jobs added are yet another catalyst to fuel the ongoing population growth in the two-county area. The council estimates the local metro area will cross the $500,000 population mark by the middle of 2014.

What could be the final battle over the proposed FY14 budget is to take place Dec. 3 following a decision by the Fort Smith Board of Directors to bring the original budget presented earlier in November.

The decision to vote on the original budget versus a scenario presented by City Administrator Ray Gosack on Friday (Nov. 22) would eliminate the possibility of major budget cuts or layoffs the city would have faced under Gosack's scenario.

City Director Keith Lau requested scenarios to eliminate $2.2 million from the city's general fund budget after the original budget proposal showed the city spending $47.919 million from next year's general fund while the city will only show revenues of $45.716 million. Part of the difference includes spending money from the previous year's ending balance, usually set at 7.5%.

The resulting scenario that was ultimately rejected Tuesday (Nov. 26) included revenue increases of $508,000 and reductions in spending of $1.695 million, which included eliminating 14 personnel positions and some employee furloughs.

Lau also expressed concern about a projected budget shortfall of more than $10 million

Speaking about the proposal, Lau said he was not happy with the proposals and wanted to have a better estimate of spending each year instead of having unspent funds rolled over into the next year's budget which he said shows the city is still spending more than it will bring in.

Gosack said he and Finance Director Kara Bushkuhl had intentionally estimated revenues conservatively, which consequently result in higher year-end balances.

"If we make an estimate of what we think those (departments) are going to underspend - if we blow that estimate, then we're going to have to lay people off because we will not have the appropriation to get to the end of the year."

Lau was not satisfied and went so far as to call Gosack's scenario "unrealistic," adding that he was "asking (Gosack) to put together realistic options that do include cutting services or increasing revenues or cost savings and expenses but laid out to us where we can see it and this Board can make that decision as to what we're going to do."

"What's unrealistic about it? I've got a lot of department heads sitting out here and I think they'll want to hear what's unrealistic," Gosack shot back. "Is it the revenue increases? Or is the types of spending cuts we've made? Or is it something else we've missed?"

"I don't think it's anything in particular. I think it's the way that it was presented, to be honest with you. And I think there's other ways to cut and I think you can get more creative than just cutting right to the bone and lopping everything off. That's not what I intended to get out of that when I asked for options. If I remember right, I asked for options, not option."

Gosack said he did present other options in the Board packet made available late Friday, which included his recommended scenario and additional cuts or revenue increases the Board could consider.

Mayor Sandy Sanders said he viewed the discussion over the last several weeks as a good basis for giving the city direction with regard to the FY15 budgeting process. It was an assertion Director Mike Lorenz agreed with.

"We need to make a direction of what to do in 2015 and if they (the city's finance and administrative staffs) can look at in early 2014 any cuts to make during the year," he said. "But to go back and (gut) something they've already done is a waste of man hours and labor is a problem already."

With the Board moving the budget to a full vote, Gosack said it was a sign to the community that the city's financial house was in order.

"I'm happy the Board's taken a direction to adopt a budget and give us a financial plan for 2014. I think it's important for the community and the city organization that we have a financial plan adopted in December before our fiscal year begins."

Lau said he did not regret the actions that did nothing to stop the upcoming vote on Dec. 3.

"I have said my peace," he said. "I have made my stand and it doesn't look like I'm getting any traction. But if I get them to look at expenses because of this shortfall in the future, I guess I've accomplished something."