Arkansas will be without a lieutenant governor as of Feb. 1 following the announcement late Friday (Jan. 10) that Lt. Gov. Mark Darr, R-Ark., would be leaving office.

News of Darr's impending resignation follows numerous calls for him to step down by Republican and Democratic politicians from Little Rock to Washington and threats of impeachment should Darr refuse to step down after being fined $11,000 by the Ethics Commission for violating state ethics laws stemming from misspending of campaign funds for items including Razorback tickets, clothes for his daughter and meals at restaurants. Darr was also fined for taking excessive campaign contributions. The fine is believed to be the largest against an office holder in Arkansas history.

In all, Darr is estimated to have misspent more than $44,000 in both campaign and state funds.

In his statement of resignation, Darr said he had wanted to share his version of events with the residents of Arkansas. Darr has previously insisted that the facts surrounding his fine for ethics violations were not being accurately reported.

"Throughout this process, it has been my desire to share the facts, and I feel this has been accomplished.  I have been honest, forthright and acted with integrity. I made mistakes, but not one with malicious intent." (His full statement is included at the end of this story.)

Darr said he had been in consultation with both House Speaker Davy Carter, R-Cabot, and Senate Pro-Tempore Michael Lamoureux, R-Russellville, regarding his impending resignation and offered his resignation to the people of Arkansas instead of a politician. The statement appears to be veiled response to Democratic Gov. Mike Beebe's request in December that Darr resign after Darr signed a letter accepting the Ethics Commission's findings, which included an admission of violating the state's ethics laws.

"Effective February 1, 2014 I will resign as Lieutenant Governor and I submit that resignation to the people of Arkansas, not an elected official," Darr wrote. "I have spoken with Speaker Carter and Senate Pro-Tempore Lamoureux to notify them of this decision. They agree with me it is in the best interest for me, my family and the state at this point. I respect these two men for their concern: not just for the state but for me and my family."

Darr also addressed what he said politics had become.

"Politics can be a toxic business," he said. "I will no longer subject my family to its hard lessons. All my forgiveness to those who play the games and all my respect and appreciation to those who serve with class and humility."

It is a drastic reversal from just three days ago, when Darr said he would keep his feet firmly planted in the lieutenant governor's office.

"Today I put a stake in the ground. Not for this office, not for the title or the job, but I put a stake in the ground for those Arkansans who are sick and tired of these types of political games and the people who play them," he said at the time. "It would be an immediate fix to tuck tail and run but I would regret it for years to come."

Darr's announcement of resignation comes about more than four months after Darr entered the race for U.S. Congress from the 4th District. Shortly after Darr's announced run, left-leaning political blogger Matt Campbell published a series of posts questioning campaign and office expenditures made by Darr. Only 17 days after entering the race, Darr dropped out and filed an ethics complaint against himself in order to correct the items called into question.

"When this was brought to my attention, I immediately became pro-active to be transparent and correct those mistakes by requesting that the ethics commission review my previous filings for potential errors, which included filing an ethics complaint on myself," he said, explaining that some of the questionable campaign expenditures were his attempt to repay himself more than $170,000 in loans he made to his 2010 campaign for lieutenant governor.

Prior to the findings by the Ethics Commission of more than $32,000 in misspent campaign funds, the Division of Legislative Audit found that Darr had apparently misspent more than $12,000 in office funds for personal or undocumented expenses. The findings from that audit have been forwarded to Pulaski County Prosecuting Attorney Larry Jegley for review of possible criminal violations.

Calls for Darr's impeachment came on Jan. 2, when the Democratic Caucus in the House said it would pursue impeachment for the first time since the Arkansas Constitution of 1874 was approved should Darr refuse to step down before the beginning of the fiscal session of the legislature in February.

"We as a caucus are (saying) that if a resignation does not occur, that due to his unethical actions in office he has lost the trust of the people of Arkansas and under Article 15, Section 1 of the Arkansas Constitution, we would move forward with the impeachment process in the House of Representatives," said Rep. Harold Copenhaver, D-Jonesboro, speaking on behalf of the House Democratic Caucus.

House Majority Leader Bruce Westerman, R-Hot Springs, told the Associated Press he believed Darr's impeachment would be inevitable should he remain in office by the time the fiscal session was held.

Following Darr's decision to resign, Chairman Vince Insalaco of the Democratic Party of Arkansas said he was relieved that Darr would step down.

“In light of Lt. Gov. Mark Darr’s recent ethics violations, his resignation is the right thing to do for the state of Arkansas. Arkansans hold their elected officials to a standard of transparency and ethical behavior and when an official repeatedly breaks that trust, Arkansans expect them to take responsibility. The Democratic Party of Arkansas is relieved that Mr. Darr did not put the people of Arkansas and the state legislature through the impeachment process.“

The Republican Party of Arkansas, which previously refused to call for Darr's resignation, has not responded to The City Wire's request for comment.

DARR'S FULL STATEMENT
"It is my great honor to be the Lieutenant Governor of Arkansas.  This office has allowed me to meet so many wonderful Arkansans over the past few years.  My family and I are forever grateful for the support the people of this great state have shown us for the past few years and during this extremely difficult time.  We have learned that difficult days demand decisions of faith.

"Throughout this process, it has been my desire to share the facts, and I feel this has been accomplished.  I have been honest, forthright and acted with integrity. I made mistakes, but not one with malicious intent.

"Effective February 1, 2014 I will resign as Lieutenant Governor and I submit that resignation to the people of Arkansas, not an elected official. I have spoken with Speaker Carter and Senate Pro-Tempore Lamoureux to notify them of this decision.  They agree with me it is in the best interest for me, my family and the state at this point.  I respect these two men for their concern: not just for the state but for me and my family.

"Politics can be a toxic business.  I will no longer subject my family to its hard lessons.  All my forgiveness to those who play the games and all my respect and appreciation to those who serve with class and humility."

A small southeast Arkansas town with a population of less than 1,000 residents hosted political leaders and candidates from across state, senators from as far away as Maine and reporters from across the nation for a night of fundraising and coon eating on Saturday night (Jan. 11).

The 71st annual Gillett Coon Supper saw Arkansas politicians gather for the tradition that has now become something of lore.

Gov. Mike Beebe, D-Ark., said it was the Gillett Coon Supper that gave him his start in Arkansas politics, leading to a 32-year career that he said will come to an end when he leaves office a year from now.

“It’s probably my last Coon Supper,” he said with a laugh. “I started here 32 years ago as their state senator, running for their state senator. And this is the place that really kicked off my campaign. Even though I was from Searcy, Gillett may have had more to do with starting my first political campaign than any place in Arkansas.”

Former U.S. Rep. Asa Hutchinson, who is seeking the Republican nomination to replace Beebe, said an event like the Coon Supper — which used to be a traditionally Democratic event — is starting to show the shift in the Arkansas electorate, with more Republicans such as himself coming to the event to meet voters one-on-one, practicing retail politics in its truest form.

“You know, I first came here in 1986, when Gov. Bill Clinton was here, Sen. (Dale) Bumpers was here, and at that time, Republicans…we were really not in this room. It was totally a Democratic function, so this state has changed in terms of politics and I think it’s good for the state whenever you see Republicans and Democrats here, all campaigning in small communities, I think that’s a real benefit for the people of Arkansas.”

The evening’s events, generally called the Gillett Coon Supper, are actually two separate events.

The first event of the evening is the Pre-Coon Supper, held at the farm of former U.S. Rep. Marion Berry, D-Gillett. It included the attendance of U.S. Sen. Dick Durbin, D-Ill., and Angus King, an independent from Maine, in addition to media including MSNBC and ABC News and print reporters from Washington.

According to Berry’s son, Mitch, the event started more than four decades ago as a pre-party for politicians and was held at Berry’s Gillett home.

“You know, they’ve been doing it as long as I can remember, and I’m 41 years old. It started in Mom and Dad’s house, which is right across from the school. People would stop by, get a drink and something to eat before they went over to the Coon Supper. When Dad became a member of Congress, he started using it as a fundraiser.”

Following Berry’s retirement from Congress in 2010, the event became a fundraiser that would provide scholarships to Arkansas State University students doing an internship with a member of the Congressional delegation in Washington, Mitch said, adding that working with interns was one of his father’s great joys while a member of the House.

The last several years Berry supporters have worked to raise the money to start the scholarship, with patrons to the Pre-Coon Supper paying $40 per person for a plate that included duck and other items with the hope that this year’s event would raise the more than $13,000 needed to fully endow the scholarship, a goal Mitch said was met.

Gabe Holmstrom, chief of staff for the Arkansas House of Representatives, serves as the lead organizer of the event at the Berry farm, which he said is not about making political speeches and spouting off talking points.

“There’s no real speaking program here. We’re just here to have a good time and hopefully to mix and mingle,” he said, adding that the event has grown to have sponsors including CJRW, Noble Strategies and Justin Allen with Wright, Lindsey & Jennings Law Firm.

The actual Gillett Coon Supper, which takes place in the school’s gymnasium, offers an opportunity for locals and non-locals alike to hear from candidates, many of whom are seeking statewide office.

But according to local Tommy Holzhauer, who has been involved with organizing the dinner since 1982, the purpose of the event is to help local students, with the goal of this year’s event to raise $20,000.

“It was designed really to raise money, the Farmers and Businessmen Club of Gillett liked helping the football programs and all of that before we lost our schools (to the consolidation with DeWitt). Now we do quite a bit of scholarship programs. It is really a great organization.”

And while the focus of the evening was on food, drinks and meeting the voters, the news of Republican Lt. Gov. Mark Darr’s impending resignation on Feb. 1 following a finding by the Ethics Commission that he violated 11 state ethics laws was a topic of conversation.

Beebe, who said Darr did not notify him of his intentions before announcing his resignation, said the Lt. Governor’s decision to step aside was the right one. But anyone expecting Beebe to soon announce a special election date should have pause, according to the governor.

“It looks like from preliminary research that I may not have any choice (but to call a special election instead of leaving the position vacant). It looks like it might be required to have a special election. If there was some way we could avoid it, I’m certainly amenable to that. But that may not be an option. We’re going to explore all options and talk to lots of folks. Get some guidance from the attorney general.”

Attorney General Dustin McDaniel, D-Ark., was at the event and said he had not yet had a chance to explore the laws.

“Truthfully, I haven’t researched it, but my basic understanding is the governor will declare a vacancy. And the circumstances that warrant that is when there’s a vacancy, and clearly there will be,” he said, adding that he thinks the definition is clear.

House Majority Leader Bruce Westerman, R-Hot Springs, said he and other legislators have been exploring how to change laws regarding filling the Lt. Governor’s vacancy.

“There’s a chance we may change the law in the fiscal session so we don’t have to have a special election this close to the general election. You’re talking $2 million or $2.5 million for a special election, so we’re talking about giving the governor the flexibility through changing the laws to either call or not call a special election.”

Democrat John Burkhalter, who had declared his intent to run for Lt. Governor last year before there was any expectation of a vacancy in the office, said he would seek the position regardless of what the General Assembly decided to do, adding that he thought it was important to have the position filled.

“Fiscally, I’m conservative. I don’t think we should spend dollars we don’t have to, but I think there is a way we can time probably the special primary the same time as the primary for the general election, so we only have to have the special general election sometime in July or August, so we eliminate half the cost right there.”

Beebe said he would continue to consult with leaders in the House and Senate on what his next moves should be regarding the upcoming vacancy in the Lt. Governor’s office, in addition to seeking counsel from McDaniel’s office.

The major security breaches at Target, Neiman Marcus and at least three other anonymous small retailers this past holiday season are sending strong signals to retailers, consumers and local banks about the need for heightened cyber security in this electronic age.

The true cost of fraud to retailers is $2.79 for each dollar of fraud losses they incur, according to a September 2013 fraud study by LexisNexis. The cost rose 10 cents on the dollar from 2012, according to the report. The study attributes the increased cost to a spike in online purchases being driven by the proliferation of malware and data breaches, which facilitate the theft and misuse of consumers’ payment cards and other payment information.

Target CEO Greg Steinhafel told CNBC on Sunday (Jan. 12) that the security breach it suffered between Nov. 17 and Dec. 15. was perpetrated through point-of-sale malware installed in its payment system. This opened the floodgate of consumer information stored by the retailer including the vital payment card and PIN number information for some 40 million customers and the names, phone numbers, email and physical addresses for another 70 million customers.Target said there may be some overlap between the two groups.

Target has promised consumers they will face no liability for the security breach, and the company is offering one year’s free credit monitoring to any of the 110 million shoppers at risk from the recent security breach.

Despite Target’s candidness about the breach and willingness to accept full responsibility there is still a huge cloud over the retailer. Target reduced its fourth quarter earnings guidance by 20% late last week expecting between $1.20 and $1.30 per share, a 30-cent downward departure from the prior estimate, which was given before the hacker attack. Target also lowered its fourth quarter comps, which are expected to decline 2.5% in the period, down from prior guidance of flat comps.

Analysts quickly surmised that the high number of Target customers affected from the security breach likely shopped elsewhere. Faye Landes, retail analyst at Cowen and Company, said consumers do care about about the security breach, no matter what Target does to ensure no liability with the increased fraud risks. She expects the costs to Target will be millions when all is said and done and the lawyers get paid.

INSIDE JOB

Given the most recent update from Target about how the breach occurred, cyber security experts agree the information heist is likely an inside job of sorts.

Scott Schober, cyber security expert, told CNBC the malware had to be installed directly into the system from inside, given that Target does not use outside services like Google. He said the crime is highly sophisticated and unlike the usual breach schemes seen in Eastern Europe.

The retail industry is behind other sectors as they have not updated their point-of-sale infrastructure with the latest technology advances such as chip technology, according to David Kennedy, CEO of TrustedSec.EMV smart chips have been widely adopted in Europe. Kennedy said this chip, in combination with a PIN, unlocks the financial data, with is more secure than the magnetic strip technology now used by U.S. retailers.

He said the time estimates for U.S. retailers to adopt EMV chips is 2020 and until then they are vulnerable to these types of data scraping attacks. Part of the reason for the delay is the cost involved in changing out the point-of-sale systems in thousands of stores across the country. But experts say the timeline for EMV could move up with continued fallout from the recent breaches.

Credit card companies like Chase already use the technology in their Chase Sapphire credit card and Google wallet is also a mechanism for consumers to consider, Kennedy said.

CONSUMER ACTIONS
Kennedy urges consumers who used their cards at Target or Neiman Marcus to cancel those cards. But local banks did not give consumers the same advice regarding card cancelations.

Gaye Wilcox, sales manager for Arvest Bank in Fayetteville, said Arvest chose to handle the card cancellations on a case-by-case basis.

“We did not do a mass reissue from the Target breach. We did talk with several customers who had concerns and we raised the height of our credit monitoring to high alert. Consumers were told to monitor their accounts daily online or via mobile banking and our internal fraud department watched closely those accounts flagged at risk,” Wilcox said.

Karen Cardwell, senior vice president of operations at First National Bank of Fort Smith, said their internal fraud also department uses software to monitor debit card activity on a regular basis. Like Arvest, in the case of a major breach or security hack, Cardwell said the banking group will replace a card for a customer who has experienced a fraudulent charge, or anyone who requests a new card for their own peace of mind. Cardwell said the banking company has locations in Fort Smith and Northwest Arkansas were customers can get a card reissued instantly if they want it.

The bankers said there is often more inconvenience in canceling a debit card than a credit card given that consumers may have automatic payments linked to their debit cards, such as insurance premiums, utility bills, etc.

Arvest said many customers may never experience issues from the data compromise, but they should continue to monitor their accounts because it’s the cautious thing to do.

Four years ago, debit cards passed credit cards, cash and checks to become the most popular form of payment among consumers, according to creditcards.com. Debit card users total some 50 billion in the U.S., growing from 15.6 billion in the past decade.

Some 7% of debit card users and 10% of credit card users in the U.S. have been victims of fraud in the past five years, according to U.S. Department of Justice.

Debit card fraud has been rising by about 30% annually over the last few years, and the liability in case of fraud errors varies by issuer. About one in 14 consumers has been hit by debit card fraud in the last five years.
 Wilcox said Visa provides a no-liability guarantee for both debit and credit card holders, but the emotional stress can be higher for consumers with a debit card breach given it is linked directly to their financial liquidity.

In the typical case of debit card fraud, consumers spend 28 hours making phone calls, dealing with their bank and filing police reports to get the problem resolved.

Republican gubernatorial candidate Asa Hutchinson at a press conference Monday (Jan. 13) in Springdale announced what is likely to be many policy initiatives proposed by a litany of candidates during the 2014 election cycle.

Hutchinson, the former 3rd District congressman, said his education plan would "make Arkansas a national leader in technology education and job creation," according to a press release.

The former congressman's plan focuses heavily on computer science, with the following key points being a large part of the proposed program:
• Computer science courses will be made available in every high school in Arkansas;
• Computer science courses would count toward core graduation requirements, becoming what his campaign has termed a "fundamental part of standard curriculum"; and
• Enhancing curriculum in two-year and four-year colleges to reinforce technical training in high schools.

As part of the computer science curriculum, students will focus on writing computer software.

"This skill set is in demand not just n the tech sector, but in banking, entertainment, medicine and virtually every area," the release said. "Whether our children want to be farmers, doctors, teachers or entrepreneurs, they will all benefit from the creativity and problem-solving skills that are the essence of creating computer software."

Not only do computer programers earn starting wages of between $15 and $20 per hour, but Hutchinson contended that "successful programers earn well above average, they often become entrepreneurs who create new jobs for many others. From their ideas come companies that employ sometimes thousands of people with a variety of non-programming skills."

The campaign cited a June 2011 study by the McKinsey Global Institute report that estimates a shortage of 1.5 million "data-savvy" managers and analysts by 2018, adding that by 2020 there would be more than 1 million additional jobs in computing.

Hutchinson said the plan would not cost any additional money to initially implement, adding that the requirement for computer education as a high school graduation requirement would only require a change in the law to "give math or science credit for computer science courses."

Enhancing curriculum to add computer programming education would require training teachers in basic computer science, the release said, adding that continuing education is already required of public school districts, which would "limit expenses. Cost related to such training could in many instances be provided for by private funds."

Should private funding not be found, the campaign estimates an expenses of less than $1 million across Arkansas' 350 public high schools.

"This cost will go down further when our own state universities begin offering professional training for teachers," the release said. "This training will be an opportunity for Arkansas colleges and will be less expensive for our own teachers when offered in Arkansas."

Hutchinson's plan also proposes the idea of incentivizing the teaching of computer code, though no specifics were given. Hutchinson said his education plan would provide a good career path for Arkansas students as the state's economy continues to evolve and move toward technology.

"Through encouraging computer science and technology as a meaningful career path, we will produce more graduates prepared for the information-based economy that represents a wide open job market for our young people," he said. "Arkansas will also educate entrepreneurs who create and grow new technology businesses. All Arkansans will benefit from a growth of our technology fueled economy. Computer science will no longer be neglected in the State of Arkansas but it will be embraced."

Not long after the Hutchinson education announcement, Democrats responded with their own press release, attacking Hutchinson's record on education while in the U.S. House of Representatives.

“When it comes to investing in education, Arkansans know Asa Hutchinson can’t be trusted. Hutchinson has argued that Arkansas should ‘water down’ standards for public schools," said Patrick Burgwinkle, spokesman for the Democratic Party of Arkansas. "In congress, Hutchinson voted against funding for science education, Pell grants and reducing classroom size. Hutchinson has also admitted that investing in education isn’t a priority for him and that his focus will be on providing tax cuts for the wealthy with any surplus funds."

Hutchinson’s plan also received the expected rebuttal from GOP gubernatorial candidate Curtis Coleman. Coleman said Hutchinson’s plan was “inadequate and out of touch.”

“His proposals inadequately address the need to put ‘shop’ back in high school and more fully tune our community colleges to equipping their graduates with the skills Arkansas employers desperately need,” Coleman noted as part of a statement sent to the media.

The University of Arkansas at Fort Smith made the transition from community college to four-year university just 12 years ago and already, the school is preparing to offer its first master's degree.

Dr. Ray Wallace, provost and senior vice chancellor of UAFS, said the transition to a university granting masters degrees was already well underway.

"We have our first major hurdle completed, which was tentative approval by the University of Arkansas system," he said. "Now we're working with the Arkansas Department of Higher Education, who will send an outside team of evaluators this Spring."

The first master's degree to be offered by UAFS will be a master of science in healthcare administration, Wallace said, adding that the team of evaluators would be a mix of graduate deans, administrators and others in the healthcare and education sectors who will evaluate the school's "readiness to offer this first degree program."

As for why healthcare administration would be the first master's offered at the school, Dr. Carolyn Mosley, dean of the UAFS College of Health Sciences, said it was the university's way of answering a call.

"Our healthcare providers and business partners in the community have asked that we have a master's program," she said. "We consulted with 30 major healthcare institutions and more than 70% said they'd have a position today for someone who went through this program."

While there is a great demand for the program that is expected to launch in 2015, Wallace said the first entering class would be a small group of students, meaning admissions would be highly competitive.

"The very first cap will be 10 students," he said. "Then it will grow quite dramatically. …We want to take 10 through it and then work out the kinds. Then after that, you'll see classes in the 40s and 50s eventually."

The program, Mosley said, would be a 33 hour program which will allow graduates to hold a variety of leadership and administrative positions within a hospital setting.

"The management in healthcare administration is for a person who wants to be an administrator in healthcare," she said. "This degree focuses on that system. Healthcare ethics and laws. All those caution and knowledge areas that that person would have to have and probably would not get in (another graduate program). The focus is healthcare. If that person wants to go into healthcare, this is the program for them."

UAFS Chancellor Dr. Paul Beran said the new degree program was just the latest step forward for a university that recently opened an expanded library on campus in addition to unveiling an updated 20 year master plan.

“This is very exciting for UAFS and the Greater Fort Smith Region,” said Beran. "With the opening of our new library as another significant accomplishment in the last seven years. In the biggest, biggest perspective, the ability to grant master’s degrees — with the library to support it — shows we are meeting the needs of our region’s citizens.”

Wallace said once the university is granted a change in role and scope, allowing it to offer master's degrees, the university would not stick with offering only the master of science in healthcare administration, but instead would explore other degree programs that meet the needs of the Fort Smith region.

"This institution is looking at a limited number of graduate programs to help meet the needs of the community, but also take advantage of the types of faculty we're hiring. They're great teachers, but also great researchers and scholars."

Not only will new graduate degree offerings take advantage of the skill sets offered by UAFS professors, but Wallace said it would "increase the prestige of the institution."

As for what graduate programs could follow a master of science in healthcare administration, Wallace said it is too early to tell.

"Right now, we're looking first and foremost at getting this one through. Down the road, I can see us looking at education programs and other colleges and degree programs that there is a need for in the area," adding that school districts in the region have expressed a need for UAFS to begin offering master's degrees.

And while some districts have expressed a need for graduate degrees in education, Wallace said just as with the Master of Science in Healthcare Administration, it will be based on the needs of the region and business community as a whole.

"When the next one comes, it will be because of local economic development forces, local employers, regional employers have asked us to do it."

Fundraising numbers for the fourth quarter of 2013 have begun to roll in from two statewide campaigns with one reporting its best quarter of fundraising since starting his campaign and another reporting the highest amount raised of any campaign active in Arkansas in 2013.

U.S. Sen. Mark Pryor, D-Ark., in the fight of his political life against Tea Party favorite Tom Cotton, a freshman Congressman from Dardanelle, reported raising $5.3 million during all of 2013, with $1.1 million of that coming in during the fourth quarter of the year.

The campaign starts 2014 with $4.2 million cash on hand, something the Pryor campaign said reflects strong grassroots support from across Arkansas.

“Heading into the election year, Mark will have every resource to remind voters about his record as a reliable and responsible voice for Arkansas families, while drawing clear contrasts with Congressman Cotton’s reckless agenda that puts his own interests ahead of Arkansans,” said Jeff Weaver, Pryor for Senate campaign manager.

Cotton, who formally opened his campaign headquarters in Little Rock on Saturday (Jan. 11), said he was not ready to report his fundraising tally for the fourth quarter of 2013.

“Our accountants are still working on it. We’ll have it out before the deadline at the end of the month. We’re just working to try to get as much support as we can across the state,” he said.

Cotton had reported fundraising receipts of $1.073 million during the third quarter of 2013 compared to Pryor’s $1.068 million during the same period last year. His cash on hand at the time was $1.806 million.

In the race for governor, Republican and former U.S. Rep. Asa Hutchinson announced he had raised $445,000 during the last three months of 2013, the campaign's largest fundraising haul to date in a quarter typically marking some of the lowest giving during an election cycle.

After spending $150,000 during the quarter, Hutchinson's campaign was left with $1.3 million cash on hand, about 80% of the funds he has raised during his campaign.

While the figures are the best yet for the Republican, it still pales in comparison to the fundraising numbers put up by presumptive Democratic nominee Mike Ross of Prescott. During his first quarter of the campaign, Ross raised nearly $2 million — the largest amount ever raised during a quarter ever by a gubernatorial candidate in Arkansas. That was followed by another record breaking quarter of $1.12 million, leaving the Ross campaign with almost $2.4 million cash on hand.

Hutchinson said he was pleased to be improving his fundraising numbers.

“We are so pleased to announce the results of our best fundraising quarter ever," he said. "It shows we are gaining momentum and that Arkansans are excited about our vision for Arkansas’s future; a future of job creation, lower taxes and great educational opportunities. I’m grateful for the support that so many have given to me and my campaign for Governor. Together, we will work for Arkansas’s brightest future.”

The Fort Smith School District unveiled its master plan through the year 2020 on Monday (Jan. 13), detailing plans for the district, plans that include a third Fort Smith high school at a cost that could be in excess of $65 million.

According to Superintendent Dr. Benny Gooden, the need for a third high school is real as enrollment has continued to increase across the district. The district has about 14,000 students, a number expected to increase to about 17,000 by the year 2023.

"In the early 2000s, we started a steady uptick in enrollment and we've continued that until today," he said. "In fact, 2013 was what we thought might be a little plateau. Turns out 2013 was the biggest growth we've had in quite a while."

He said based on the continued increase since the year 2000, he and the Fort Smith Board of Education have been looking at different options for addressing the needs of Fort Smith's High School students. Three options were primarily looked at:
• Do nothing;
• Increase the use of portable buildings on campuses and possibly expand existing campuses;
• Construct a new Fort Smith high school and realign the student populations across all junior high and high school campuses.

The school board chose to go with the latter option, with Gooden stating that a realignment of the secondary campuses would be a phased-in approach, eventually transitioning freshman students into the high school campuses and moving sixth graders to the junior highs.

Were that to happen right now with three high schools, Gooden said all three high schools would have about 1,400 students on a campus consisting of grades 9 through 12. He said a good-sized high school campus is about 1,500 students. Any more, he said, and students start getting lost in the shuffle and can easily fall through the cracks.

As for how to pay for the new facility, Gooden said the school would attempt to find various funding methods in an effort to reduce the burden on taxpayers in the district.

Among these, with the primary outside funding mechanism being state partnership funds.

"Partnership funds are awarded for approved projects pursuant to the Master Facility Plan for approvable costs," read a PowerPoint slide Gooden presented to the public in attendance at Monday's school board meeting. "They are adjusted based on each school district's wealth index which is calculated annually. The FSPS index for 2013-2014 is .34676."

That figure ends up being 34.68% funding for approved projects, he said, adding that other poorer districts can see as much as 70% funding from state partnership funds while other districts such as Fayetteville see very little in the way of funding from the partnership program.

It is not until the district finds out in 2015 how much state partnership money it will receive that leaders on the school board will come to voters to ask for the additional funding by way of a millage increase, something Gooden said the district has not had since 1987.

While he does not want to speculate on what the millage rate increase the district may seek from voters due to the unknown level of funding coming from the state partnership funds, Gooden said it could be as low as 4.5 mills or as high as 6.5, numbers he again emphasized are not set in stone.

School Board President Jeannie Cole said coming to the voters in a year or two for a millage increase would likely be a tough sell, but she and the board are betting on the public's support of public education in a district that appears to be growing at a steady rate.

"We're going to have to do a good, strong media campaign. We're going to have to sell this to the voters, we know that," she said. "But we're just going to have to believe in it ourselves and we're going to have to go out and tell them, 'Hey, this is for the children. This is for the future of Fort Smith.'Someone paid for your education, it's time for us to step up and pay for these children's education.'"

Cole said voters will have to understand that the new high school would not be a project for students currently in upper grades, but instead for the high number of students rising through the district now in elementary school who could face overcrowding once they get to high school should a new high school not be built.

Should the district receive funding for the new school, to be built at Chaffee Crossing, through both state partnership funds and a millage increase, Gooden said it could open by Fall 2018, though he said a more likely date would probably be 2019.

Consumers did show up just in time to partially save the holiday season for retailers, according to the National Retail Federation report which showed December retail receipts increased 4.6% year from the year ago period (excluding automobiles, gas stations and restaurants).

The trade group said severe winter weather disrupted consumer spending during the holiday season. But in the end they finally showed up taking advantage of heavy promotions and last-minute deals. Costco’s Jim Sinegal said this week that the 2013 holiday period looked somewhat bleak until the weekend and final two days of the shopping season, when consumers showed up and in droves to finish out their shopping lists.

Total holiday retail sales, which includes November and December transactions rose 3.8% to $601.8 billion, which was in line with NRF’s forecast of 3.9% and $602.1 billion.This does not include the e-commerce sales of $95.7 billion, up 9.3% from last year.

“Despite facing a truncated holiday season, severe weather, and shaky consumer confidence, retailers rose to the challenge and executed their strategies with proven success,” NRF President and CEO Matthew Shay said. 


December retail sales, released today by the U.S. Census Bureau, which include categories such as automobiles, gasoline stations, and restaurants, increased 4.1% year-over-year.



Economists warn that despite the total increase in sales receipts year-over-year, retailers won’t likely see fatter profits.

 A number of retailers have already guided down their expectations for the holiday quarter and first reporting period of 2014.



Undoubtedly, some of the sales increase came at the expense of margin. Retailers are still stressed and a long-term promotional environment may actually hurt the bottom line,” said Jack Kleinhenz, chief economist for NRF.
 He said as consumer confidence grows, there will be less need for retailers to heavily promote and discount their offerings.
 Kleinhenz said 2013 proved to be a volatile year for retail sales amid wide swings in consumer confidence.



"While economic and policy uncertainties remain, the economy seems set for steady growth in the New Year,” he said.

Consumer spending, while selective, is gaining traction, according to Kathy Bostjancic, director of macroeconomic analysis for The Conference Board.

“There might be a falloff in retail sales growth in January, but that has more to do with inclement weather, and will likely be followed by a recovery in February,” she said.

Bostjancic expects the "resilient" American shopper to spend increased wages in the first half of 2014 on replacement furniture and household appliances, even if they are not on sale.

“And that could be the big economic story for the entire first half of 2014,” she added.

December retail sales by category with annual comparison:
• Building material and garden equipment sales increased 4.2%;


• Clothing and clothing accessories increased 4.7%; 


• Electronics and appliance stores’ sales decreased 1.5%;


• Furniture and home furnishing stores’ sales increased 5%; 


• General merchandise stores’ sales were flat year-over-year;
• Health and personal care sales increased 5.9%; 


• Sporting goods, hobby, book and music sales increased 5.8%. 


Online price transparency has heightened the competition between Amazon and Wal-Mart Stores and there is no sign either side is backing down, according to Kantar Retail analysts who recently released their second annual price comparison between the retail giants.

Contrary to popular belief, Amazon does not have lower “across-the-board” prices than Wal-Mart Stores Inc., according to the Kantar study. However, Amazon continues to gain market share with its loyalty programs and focus on customer service.

Analysts Robin Sherk and Anne Zybowski,also noted that these two retailers are seeking the same consumers with two different strategies. Kantar Retail ShopperScape, found that Wal-Mart shares half (51%) of its past four-week shoppers with Amazon, and Wal-Mart shoppers are twice as likely to frequent Amazon (19%) on a weekly basis than Walmart.com (9%).

However, consumers might be interested to learn that Walmart.com prices were 7% lower than Amazon on the basket of 59 items compared between Walmart supercenters, Walmart.com and Amazon. The supercenter had the lowest overall basket total – some 8% cheaper than Walmart.com and 16% less expensive than Amazon, according to the Kantar study.

Amazon does not claim to have the lowest price but it does push a customer-service message while offering competitive prices on millions of items, many of which can be delivered free in two days for Amazon Prime members. Amazon also believes in rewarding customer loyalty with special discounts for consumers who subscribe for automatic deliveries of certain key staples with the “Subscribe & Save” program.

Wal-Mart’s mission is to save people money as the lowest cost provider in retail every day, and to provide elite price competitiveness online every day.

EDIBLE GROCERY
There were 18 items in the edible grocery sub-basket and the biggest driver in the price discrepancies related to the third party items (products not held in stock by the retailer).

Kantar found that Amazon was heavily dependent on third party items with its recent expansion into grocery. Some 12 out of 18 items in Amazon’s sub-basket category were third-party items.

In comparison, none of the 18 items in Walmart.com sub-basket were third party. The study found that if shoppers just purchased those first-party items, Amazon’s pricing was on equal footing with Walmart Supercenter and 19% less than Walmart.com.

NON-EDIBLE GROCERY
There were 12 items in the sub-basket and again the Walmart Supercenter had the lowest overall total, 3% less than Walmart.com and 11% savings over Amazon.

Again it was the third party items that made the difference in the basket totals. The price differences were huge in this category among some items such as Windex Antibacterial Multi-Surface Cleaner — $2.47 at Walmart Supercenter, $7.07 at Walmart.com and $9.49 at Amazon.

All three retailers had same price on GLAD trash bags at $7.48, Mr. Cleaner Magic Eraser at $6.94 and Finish Powerball Tabs at $5.97.

Amazon won the pricing battle of Similac infant formula at 5.6% cheaper than Walmart.com and the supercenter prices. Bounty paper towels at Amazon were priced  5.7% less than the other two retail options.

Kantar notes that Amazon’s use of Subscribe & Save is an opportunity for the retailer to pick up steam in this category. Four of the 12 items in Amazon’s non-edible sub-basket were eligible for the Subscribe & Save option. Once these items were placed on subscription they became 5%-10% cheaper than at Walmart.com and the supercenter.

Walmart.com and the supercenter still had lower overall sub-basket totals, even with the  reduced subscription rates for the four eligible items at Amazon.

HEALTH & BEAUTY AIDS
There were interesting findings in the health & beauty aid sub-basket with complete parity between Walmart.com and the supercenter total prices. Three items – bar soap, pain killers and eye make-up – were out of stock at the Walmart Supercenter, while the cotton swabs were out of stock at Walmart.com.

Amazon’s sub-basket was 6% more expensive than the other retail options. Six of the 13 items in this sub-basket were third party items for Amazon, which resulted in the higher prices.

GENERAL MERCHANDISE
Amazon was 7% more expensive than the supercenter and 4% cheaper than Walmart.com in the general merchandise sub-basket. But the bigger difference was found between Walmart.com and the supercenter with an 11% price gap in favor of the physical store.

Amazon offered a 50% savings on the XBOX 360 - Call of Duty Black Ops II videogame over the Walmart Supercenter price and came in 28% cheaper than Walmart.com. But both Walmart prices came in 26% cheaper on TaylorMade golf balls than Amazon.

There were several wide price gaps in this sub-basket for the same items, a reminder to consumers to compare prices item by item when shopping online.

KANTAR INSIGHTS
As Walmart.com is focused on vying with Amazon, Kantar expects to see price volatility increase in the next year, particularly in general merchandise as Walmart.com ramps up item offerings and increases the number of third-party relationships.

Kantar said if Walmart.com is going to accelerate its position against Amazon it must find a way to balance its third party assortment expansion while also driving strong online price impressions.

“This will be tricky,” Sherk noted. “It will involve innovative means in additions to price matching, such as showing shoppers price visibility over time or new digital comparison tools versus competitors.”

She anticipates that as Walmart.com becomes more aggressive in advancing its website offerings, it will look to supplier’s support in the process.

Zybowski notes that Amazon’s Subscribe & Save is win-win-win for the shopper, Amazon and the supplier because it locks in loyalty to the item purchase on a replenishment basis. While there is a 5% base incentive or reward for the loyalty, the primary motive is convenience, not price.

“It’s a double win for shoppers as it saves them time and money. This loyalty is a real threat to many trip drivers to a Walmart Store,” Zybowksi noted in the report.

Amazon also has raised the incentives to 15% when five items are ordered for the same delivery time. This may be of great interest to Amazon Mom Prime shoppers who already earn 20% off of eligible items.

Zybowski said as online shoppers get a larger discount and fewer boxes, Amazon wins as it saves on packing and efficiencies within the supply chain.

Early data last year showed the new subscription program was gaining traction with Gen Yers and Baby Boomers. There were 5% of Walmart shoppers using the Subscribe and Save option a year ago. Zybowski said this is a real concern for Wal-Mart Stores because shoppers are no longer going to the physical shelf for these items which makes it difficult to win back their business or capture other sales while the consumer is in the store.

The region appears to have a major primary shaping up as Rep. Terry Rice, R-Waldron, announced Tuesday (Jan. 14) that he would challenge Sen. Bruce Holland, R-Greenwood, for the District 9 Senate seat.

In addition to Rice's announcement Tuesday, Sebastian County Judge David Hudson announced he would run for re-election to the office he has held since 1999.

In announcing his intentions, Rice said he was running for the state senate in order to continue bringing his experience as a business owner to the halls of the General Assembly.

"I'm running for the State Senate with those same principals that have guided me as a State Representative," he said. "As a business owner, I understand the pressures of making a payroll, dealing with taxes and excessive government regulations, along with the additional costs passed on to the consumers who already live on a tight budget. I live by the conservative values instilled in me by my father and grandfather — faith, family, hard work, and mature judgment."

The announcement is a reversal from August 2013 when Rice told The City Wire he did not expect to run for office during the 2014 election cycle, though he left the door open for Tuesday's announcement.

"When I ran in 2008, they called me the third day of filing after it opened and I told them absolutely no," he said, adding with a laugh that he found himself filing his paperwork to run 48 hours later. "I am a wild card to do anything. It's not in my plans right now, but you never know. I have not been out campaigning and not politicking other than trying to take care of some stuff in the interim. But I don't foresee running for anything in this next election cycle."

Rice said he would continue fighting against Obamacare should he be elected to the Senate, adding that he was a no vote on the private option.

"I will be a 'no' vote in the fiscal session, also."

Holland, who is announcing his re-election bid at a campaign kickoff event Saturday (Jan. 18) in Van Buren, said he was caught off guard by Rice's announcement, citing The City Wire's reporting.

"Terry and I have always been friends. We share some of his House district. We've always worked together well. But yeah, it surprised me a little bit that he wanted to run for the office," he said. "Back in the Fall, I believe you guys reported that he said he wasn't running for anything, but I guess he changed his mind."

The 9th Senate District includes parts of Crawford, Franklin, Scott and Sebastian Counties.

HUDSON RE-ELECTION BID
Hudson, a Republican who touts 37 years experience in county government, said his tenure as county judge "reflects conservative financial management while improving services."

A press release from his campaign lists a variety of accomplishments during his time in office:
• $2 million in courthouse renovations;
• A $4 county jail expansion; and
• A new $14.8 million courts facility.

"These projects were implemented within existing revenues without increasing taxes," the press release said.

Hudson's campaign announcement also pointed to the oft-contentious Ben Geren Aquatics Center project as a success during his time in office.

"An updated County Parks Master Plan and thee 2010 County Aquatics Feasibility Study helped guide park improvements including the 2012 Interlocal Agreement with the City of Fort Smith for construction and operation of an $10,900,000 Aquatics Facility at Ben Geren Park."

The project, with an original budget of $8 million, recently had its budget increased by $3 million in order to pay for amenities such as a wave pool, longer lazy river and other items that could not be constructed for the original budget.

Hudson, Vice President of the Arkansas County Judges Association, has no announced opponent in his bid for re-election.

Poultry companies like Tyson Foods and Pilgrim’s Pride along with independent firms such as Simmons and OK Foods are expected to pull back poultry production in hopes of bolstering prices and margins on chicken parts, according to an industry analyst and insiders.

Companies have steadily increasing chicken production over recent months hoping to capture more consumer dollars amid record high beef prices. Broiler production increased 3% in December from a year ago because of higher slaughter and bird weights, according to USDA reports.

BMO Capital Markets analyst Kenneth Zaslow expects the recent poultry expansion to slow. Although production should continue to increase for the foreseeable future, supply expansion likely will slow from fourth-quarter levels, Zaslow said in a note to clients.


“The industry can only extend the productivity of birds for so long,” Zaslow notes.

He predicted the smaller breeding flock will slow production growth to roughly 2% in the first half of 2014. One key metric used to measure future production are chick placements, which rose by 1% in December, pulling back from 3% to 4% pace recorded the past fall.

“The increase in chicks placed should remain somewhat limited as lower hatchability continues to mitigate the increase in egg sets,” Zaslow said.

Local poultry growers polled in December reported roughly a 21-day lay-out period in between flocks for the most of last year. They do not want to see fewer chicks placed as that will further reduce their farm income. But poultry companies saw their operating margins tighten in December on softer wholesale chicken prices, particularly breast meat and leg quarters. At the same time the companies also worked through their supplies of higher priced grains.

Sanderson Farms executives said last month that the softness in the boneless breast market reflects the weakness in the market for protein consumed away from home and higher chicken production numbers throughout the last quarter of 2013.


While foot traffic through food service establishment remains challenged by macroeconomic conditions, the spike in boneless breast late last May was triggered by menu shifts featuring chicken products at fast-food and casual dining venues. Prices subsided as the year progressed, with breast meat prices averaging some 40 cents below the $2-per-pound industry benchmark.

Zaslow expects lower feed costs in conjunction with the a slight pull back in production to help improve chicken prices in the coming months and fuel better margins — above historical averages going forward.

Springdale-based Tyson Foods will reports its quarterly profits on Jan. 30. Wall Street analysts expect the meat giant to earn a consensus 65 cents per share, up from 48 cents a year ago. Revenue is expected to top $8.78 billion, up 4.5% from the same period last year (October through December).


The ups and downs and ins and outs of Wal-Mart Stores, Razorback football and the regional housing market often generate the top stories – in terms of socio-economic impact – in Northwest Arkansas. That held true again in 2013.

5. University of Arkansas budget deficits and football losses
Although enrollment gains continue and significant investments were made in campus facilities at the state’s flagship university, 2013 was not the best of years for UA Chancellor G. David Gearhart and Head Hog Coach Bret Bielema.

A state audit found deficits in the UA Division of Advancement’s budget of $2.14 million in fiscal 2011 and $4.19 million in fiscal 2012.

In September 2013, Roger Norman, director of the state’s division of Legislative Audit, forwarded an investigative report to Prosecuting Attorney John Threet of Fayetteville. Threet eventually decided to not pursue an investigation based on the audit report. Several high ranking UA officials were dismissed in action related to the budget deficits, including Brad Choate, who ran the division, and John Diamond, vice chancellor of university relations.

Gearhart has denied any wrongdoing and has avoided charges and disciplinary action.

On the gridiron, the Razorbacks were hoping for some recovery following the “lost season” of 2012 when Coach John L. Smith delivered a 4-8 season. It couldn’t get any worse, right? Wrong. Bielema, the highly-touted coach recruited away from the University of Wisconsin by Athletic Director Jeff Long, presided over a 3-9 season, with the Hogs failing to win a conference game for the first time since 1942.

4. Regional jobs figures continue to impress
The Northwest Arkansas metro area is the only one of eight metro areas in or connected to Arkansas that has had a monthly jobless rate below 5% since November 2008.

It’s also the only region in Arkansas to see its labor force size and employment levels consistently move higher since 2008. The Northwest Arkansas labor force totaled 241,337 in November, ahead of the 236,832 in November 2012. By comparison, Arkansas’ labor force fell from 1.348 million in November 2012 to 1.325 million in November 2013.

Northwest Arkansas’ employment tally was an estimated 229,639 in November, almost 4,000 jobs more than the 225, 763 in November 2012. Arkansas’ employment tally fell from 1.251 million in November 2012 to 1.226 million in November 2013.

3. Shifts in the regional banking sector
Acquisitions and bankruptcy filings in Arkansas’ banking sector were certainly felt in Northwest Arkansas during 2013.

In June 2013, Home Bancshares acquired Liberty Bank in a deal valued at $280 million that created the second largest bank in Arkansas with assets of $7.1 billion in assets. Liberty Bank had several branches in Northwest Arkansas, and they are expected to remain open.

In September 2013, Simmons First National acquired financially troubled Metropolitan National Bank with a bid of $53.6 million paid to the federal court for the ongoing bankruptcy proceedings of Rogers Bancshares, the holding company for Little Rock-based Metropolitan National Bank. Closings are expected among some of the 12 branch operations Metropolitan had in Northwest Arkansas.

In October 2013, Bentonville-based Arvest Bank acquired Little Rock-based National Bank of Arkansas for an undisclosed amount. Arvest, the state’s largest bank, got a little bigger adding key marketshare in the Little Rock metro area with the purchase of National Bank of Arkansas.

Also during 2013, Chamber Bank acquired Decatur State Bank.

2. Wal-Mart names new CEO
CEO Mike Duke announced his retirement in November with plans for the next CEO to be 47-year-old Doug McMillon. McMillon is set to assume the job on Feb. 1. Duke held the job for five years.

A Jonesboro native and University of Arkansas graduate, McMillon will be the youngest to ascend to CEO since founder Sam Walton, who was 44 when the first Wal-Mart was built in Rogers. McMillon has served as the CEO of Walmart International. From 2006 to February 2009 McMillon served as CEO and president of Sam’s Club, an operating segment of Wal-Mart, with sales of more than $46 billion during his tenure.

In 1984, McMillon began his career with the company as a summer associate in a Walmart Distribution Center. In 1990, while pursuing his master degree, he rejoined the company in a Tulsa, Okla., Walmart store.

McMillon will be fifth CEO for Wal-Mart Stores Inc.

More than a dozen top level personnel shifted to new jobs or left the company as a result of the leadership change at the top.

1. Real estate continued to rebound
When the Northwest Arkansas real estate market showed signs of renewed strength in 2012, some wondered if it would continue into 2013. It did.

For the first 11 months of 2013, the number of homes sold in Northwest Arkansas was up 17.36% compared to the same period in 2012, and up almost 23% compared to 2011. It was the largest year-over-year increase among Arkansas’ four largest metro areas during 2012. For the first 11 months of 2013, the number of homes sold in central Arkansas are up 6.35%, up 13.04% in the Jonesboro area, and up 6.9% in the Fort Smith area.

The value of homes sold in Benton and Washington counties for the first 11 months of 2013 was $3.121 billion, up 13.06% compared to 2012 and up more than 25% compared to 2011.

Benton County had a narrow hold on the top Arkansas county for home sales in the first 11 months. The county, with a population of around 230,000, had 4,202 home sales between January and November. Pulaski County, with a population of around 390,000, posted 4,117 home sales in the same 11-month period.

Paul Bynum, analyst with MountData.com, said the average market time from listing to contract this year has been roughly 50 days, an indication that demand is strong relative to the supply of homes on the market.

The median price-per-square-foot is $84 through October, up from $78 a year ago. The median sales price of $149,900 in the combined two-counties is up 7% from a year ago, Bynum reports.

There was a 6-month supply of homes listed for sell at the end of October, which Bynum deems a balanced market for buyers and sellers.

OTHER NOTABLES
• The previous year also saw the federal case against former high-profile Northwest Arkansas developer Brandon Barber move forward. In March, Barber was arrested in New York City and transferred to Fayetteville. In November, K. Vaughn Knight, a Northwest Arkansas attorney and one-time associate with Brandon Barber, was found guilty on eight charges related to money laundering and fraud related to Barber’s messy bankruptcy. Barber, who has plead guilty to several charges, faces up to 45 years in prison with fines possibly maxing out at $1.5 million.

• The year also saw continued growth in regional sales tax collections, with the overall strength of the economy and enhanced tourism opportunities pushing more dollars through the region.

• Liquor store permits were issued by state officials in 2013 for Benton County liquor stores. County voters approved in 2012 a measure to change the county to “wet” with regard to alcohol sales. The county’s population allows for 55 liquor stores, the state handed out 39 permits in the July hearings. State officials said those applicants who were denied had the opportunity for appeal. The first liquor store in Benton County opened in August – Star Liquor located along Southwest Regional Airport Boulevard in Bentonville.

• Redman & Associates in October announced a $6.5 million investment to relocate its ride-on toy manufacturing business from Shanghai to Northwest Arkansas over the next three years. The move is part of a program by Wal-Mart Stores Inc. to move some suppliers back to the U.S. Wal-Mart officials announced on Jan. 15, 2013, a pledge to purchase in the next 10 years an additional $50 billion in U.S.-made goods. Company officials have said they hope to boost U.S. manufacturing – often referred to as “onshoring” – by purchasing more sporting goods, apparel basics, storage products, paper products, textiles, furniture and higher-end appliances.

• Serco hired more than 1,000 additional workers for its new Rogers data processing center, according to Candy Curtin, vice president of HR for the global service company. Aside from processing paper applications for the Affordable Health Care insurance program, Curtin said the firm also handles Visa processing for immigration and administration work for the U.S. Department of Defense and its family programs.

• Siloam Springs-based Allens Foods could soon be gobbled up by Seneca Foods Corporation as the New York-based fruit and vegetable manufacturer entered into an asset purchase agreement for $148 million in mid-December. The deal had not been approved by the end of the year.

Notable deaths included:
• Doyle Rogers, chairman of the board of Metropolitan National Bank and a highly successful real estate developer and businessman, died in early February. He was 94.

• Robert Owen “Bob” McBride, the longtime owner of Fayetteville-based McBride Distributing Inc., died April 4 in his Fayetteville home. He was 72.

• The famed hotel developer John Q. Hammons died May 27 in Springfield, Mo., the home of his company that developed 210 properties in 40 states. He was 94.

Link here for the top five stories of 2012.

The big Fort Smith regional news stories during 2013 included major moves in the regional medical community, major interstate construction, ups and downs with two local trucking companies, and the effort to build a water park.

Following are the top five regional stories – in terms of socio-economic impact – during the previous year.

5. Cleaning up Whirlpool
A March 2013 push by Whirlpool to ban groundwater wells near their shuttered Fort Smith manufacturing plant began a complicated and often heated series of events that saw Erin Brockovich visit Fort Smith. Whirlpool closed the refrigerator manufacturing plant – which at one time employed as many as 4,600 – in mid-2012.

The focus was on how to best clean up a toxic plume of chemicals, namely trichloroethylene (TCE), that Whirlpool admits leaking into the groundwater during the 1980s. Brockovich, the famous corporate-pollution fighter, eventually decided to not get involved in Fort Smith.

Officials with the Arkansas Department of Environmental Quality faced angry Fort Smith residents on Nov. 12 as they presented official recommendations to Whirlpool on how to clean up the TCE.

The ADEQ released its final Remedial Action Decision Document (RADD) for Corrective Action on Dec. 27 that requires Whirlpool to spend at least $6 million to clean up pollution at its shuttered Fort Smith plant. The RADD states that Whirlpool must begin remediation within 60 days of the effective date (Dec. 27) of the RADD and file quarterly reports every Feb. 15, May 15, Aug. 15, and Nov. 15 as well as annual progress reports on Jan. 15.

4. New contracts and hostile takeover attempts
The Fort Smith region benefits from the corporate jobs created by Fort Smith-based Arkansas Best Corp., and Van Buren-based USA Truck – respectively, a major national less-than-truckload carrier and a truckload carrier that operates with more than 2,200 trucks. ABF Freight is the primary subsidiary of Arkansas Best.

After several delays and votes, a labor agreement between Arkansas Best Corp. and the International Brotherhood of Teamsters was fully ratified in October, with savings from wage and benefit reductions possibly helping the company to avoid three consecutive years of losses.

The five-year contract – set to expire on March 31, 2018 – between Arkansas Best and the Teamsters was approved June 27, but some supplemental provisions were rejected. Officials with both sides negotiated the rejected provisions, and the seven “local/area supplements” were again placed on the local ballots for approval. All but one of the supplements were approved, and on Tuesday the union members of the Central cartage voted to not strike. Following that vote, the Teamsters’ negotiating committee voted to ratify the agreement.

The contract covers about 7,500 employees of ABF Freight System who are members of the union. Most of those workers are drivers.

USA Truck officials spent most of the latter half of 2013 fighting off a hostile takeover attempt. Phoenix-based Knight Transportation made public its bid for USA Truck on Sept. 26. The $9 per share bid at the time was a 39% premium from USA Truck’s share price on Sept. 25. The share purchase and assumption of liabilities creates a $242 million deal. At risk in a deal with Knight would be some or all of the 500 jobs at USA Truck’s corporate headquarters in Van Buren.

The USA Truck management and Board of Directors have rejected the offer, saying it “substantially undervalues” the company and does not reflect the value of potential gains from ongoing turnaround initiatives. The attempt by Knight remains open into 2014.

Full-year financials released Jan. 31 showed a $17.54 million loss for 2012, marking four consecutive years of losses for USA Truck. In February, John Simone was hired by the board to turn around the struggling company. Former CEO Cliff Beckham was moved to the chief financial officer position.

3. $78 million Interstate 540 renovation
Work began in January on the major highway artery into Fort Smith that carries more than 50,000 cars day. The more than $78 million upgrade of Interstate 540 resulted in traffic congestion on the main Interstate corridor through the city.

As part of the 2011 Interstate Rehabilitation Program (IRP) passed by 80% of Arkansas voters, Kiewit Infrastructure South will begin work on seven miles of improvements to Interstate 540 (I-540) from Interstate 40 (I-40) to Highway 22.

Construction has included “rubblizing” the existing I-540 lanes, and replacing nine bridges. It will also include the modification to four bridge structures. The nine bridges include the Highway 22 bridge at Rogers Avenue as well as those at Grand Avenue, Clayton Branch, and the Union Pacific Railroad Overpass.

The Arkansas Highway & Transportation Department expects the contract to be completed “sometime in April or May of 2014” or July 2014 at the latest.

2. The effort to build a water park
Officials with the city of Fort Smith and Sebastian County struggled through 2013 to agree on the budget and amenities for a water park approved by voters in March 2012.

After a year of off and on discussions between the two governments, a joint resolution was approved approved Jan. 6 that would add a wave pool to the Ben Geren Aquatics Center while moving a dive well to near the bottom of the governments' priority list for water park amenities, essentially killing a part of the project that had been the focus of much contention just 11 months ago.

Voters had initially approved an $8 million park, but planning after the vote saw the price rise to $8.8 million, then ultimately the two governments approved a $10.9 million facility. In addition to the wave pool, the facility will now consist of three bodies of waters, a 500 foot lazy river and four water slides for a total footprint of more than 20,000 square feet, making it the largest water park in the region.

There were several times during the process when members of the Fort Smith Board and the Sebastian County Quorum Court were split on the park and the park’s future was uncertain.

1. Changes in the regional health care industry
News from the regional health care sector hit frequently in 2013 with new jobs, changes in owners, new investment and lawsuits between former partners often driving the headlines.

• Health Management additions, changes
Naples, Fla.-based Health Management Associates (HMA) announced in April it would build a regional service center in Fort Smith and employ more than 500 with average annual salaries potentially exceeding $40,000. At the time, HMA was the parent company of Sparks Health System in Fort Smith and Summit Medical Center in Van Buren. The facility opened in September.

In July, a $7.6 billion deal from Franklin, Tenn.-based Community Health to buy HMA was announced. The offer was approved by an HMA Board that was then ousted in a proxy fight pushed by New York City-based Glenview Management. On Sept. 25, the newly installed HMA Board announced a review of the offer. Glenview had previously said the $13.78 per share offer was too low. Ultimately, the new HMA Board approved of the deal. The HMA Board now believes the deal is good for HMA shareholders.

On Jan. 8, both sides said the deal would close by month’s end – barring a rejection from federal regulators.

• Cooper Clinic-Mercy lawsuit
A lawsuit filed Aug. 2 by Fort Smith-based Cooper Clinic against Mercy Fort Smith and St. Louis-based Sisters of Mercy Health System not only more fully reveals a contentious relationship between former medical sector partners, it may signal an end to the hospital-clinic relationships that have been part of area medicine for almost a century.

In the 17-page complaint filed in Sebastian County Circuit Court, Cooper Clinic officials allege that Mercy and its parent company used their economic power to recruit 15 physicians away from Cooper and to the Mercy Clinic between Oct. 31, 2010 and Aug. 1, 2013. Mercy has denied any wrongdoing. The case has carried over into 2014.

• Mercy investments
Work continued during 2013 on a plan announced August 2011 by the St. Louis-based Sisters of Mercy to invest $192 million in the Fort Smith area as part of a 10-year plan to invest $4.8 billion in its operations in Arkansas, Kansas, Missouri and Oklahoma.

Part of that investment was completion of the $42 million Mercy Orthopedic Hospital in Fort Smith that was estimated to add 100 jobs. Also, Mercy formally opened its $10 million Heart and Vascular Center on Feb. 20. The 16,000-square-foot center was built within renovated space within Mercy’s primary hospital in Fort Smith.

The hospital also broke ground in late 2014 on a new $2.34 million clinic to be built a 3700 Cliff Drive in Fort Smith.

OTHER NOTABLES
• The 188th Fighter Wing began converting from its A-10 support mission to a drone and recon mission.

“The new missions: The good thing is we have a mission-a great mission-one that will keep the majority of jobs in the Fort Smith community.  This mission will be RPA and intelligence.  In both areas, we will have  daily engagement in some of the most important and contested regions of the world,” noted a memo from 188th commander Col. Mark Anderson to members of the unit.

• Crawford County Sheriff Ron Brown began the push for a $24 million new jail that would increase the county’s capacity from 88 inmate beds to 317. Members of the Quorum Court were cool to the idea, and a plan to pay for the jail has not yet been approved.

• There are no new jobs planned, but officials with SGL Carbon announced April 17 a $26 million upgrade to their facility in Ozark. The German-based company employs more than 90 people in the Ozark plant, which produces high-power graphic electrodes that create heat in electric arc furnaces used in steel mills. Work on the expansion is expected to be complete by June 2015.

• On May 14, Sebastian County voters overwhelmingly approved renewal of the 1% countywide sales tax, with 78.87% voting for the tax to be in place for another 10 years. Leaders from across Sebastian County had urged voters to renew a 1% sales tax that funds operations in 11 cities across the county, as well as providing county services, such as funding for the county jail.

• An iconic building in downtown Fort Smith that has alternated between consideration for renovation and demolition will soon become the headquarters of Fort Smith-based Propak Logistics. The historic and white tiled Friedman-Mincer building – also known as the OTASCO building – at the intersection of Garrison Avenue and Towson Avenue in downtown Fort Smith was built in 1911.

Steve Clark, founder and president of Propak, finalized on May 21 the transaction to buy the property. With an acquisition and renovation estimate of about $2 million, Clark plans to convert the three-story, 24,000-square-foot building into offices for the about 40 employees of Propak. The company provides logistics, transportation and supply-chain management services.

• Tampa, Fla.-based Sykes added about 200 jobs to its call center in Fort Smith. Employment at the center, housed in a portion of what was once Phoenix Village Mall, is estimated at 600.

• Up to 90 new jobs were expected to come to Fort Smith thanks to continued expansion at the Gerber plant on the city's north side. The company, which has expanding its operations to add a cereal line in Fort Smith, asked for and was granted June 4 by the Fort Smith Board of Directors an amendment to a resolution passed in 2010 providing the company industrial development revenue bonds. The original bond package totaled $90 million while the project taking place at Gerber has grown so much, the company requested an additional $60 million, bringing the total bonds issued to $150 million.

• After more than 30 minutes of discussion at their regular meeting, the Fort Smith Board of Directors on Aug. 20 reversed a city policy in place more than 45 years and gave the city administrator position the hire-fire authority over department heads. The only positions not under the city administrator authority are the internal auditor and district court clerk. The Fort Smith police chief and fire chief fall under the city administrators new authority.

• Immaculate Conception School is the first elementary school in Fort Smith, public or private, and the first Catholic school in Arkansas to receive the prestigious National Blue Ribbon School award. Immaculate Conception has 309 students, including pre-school, Blentlinger said. The school has 22 certified teachers and a total faculty/staff count of 43.

The National Blue Ribbon Schools Program is part of a larger U.S. Department of Education effort to identify and disseminate knowledge about best school leadership and teaching practices. The other Arkansas schools named as a 2013 Blue Ribbon School were Bergman Elementary School (Bergman, Ark.), Central Park at Morning Star Elementary (Bentonville Public School District), and Ellen Smith Elementary School (Conway Public School District).

• A U.S. pet industry that has grown an estimated 22% in the past four years may have helped Mars Petcare officials decide on a $50 million expansion of their Fort Smith manufacturing operation that will add 42 jobs. Officials with Mars Petcare – based in Brussels, Belgium, with a U.S. headquarters located south of Nashville, Tenn. – announced Oct. 23 that they planned to add new equipment and a new line to the Fort Smith operation they opened in September 2009.

• Supporters and officials of the University of Arkansas at Fort Smith pushed beyond a capital campaign goal of $50 million by raising $56.895 million for the UAFS Foundation. More than 200 university supporters and UAFS faculty and staff gathered Sept. 10 on the campus to celebrate the completion of the fundraising effort.

“I hope you feel great about your decision to help thousands of University of Arkansas at Fort Smith students, many of whom you will never know,” said Neal Pendergraft, UAFS Foundation Board member and co-chair of the Giving Opportunity campaign.

• Some of the revenue from the 2009 purchase of Fort Smith-based Sparks Health System could be used to help build and operate a medical school in Fort Smith and generate an up to $100 million a year economic impact. According to Foundation Chairman Kyle Parker, the foundation now has around $50 million and the board is investigating the feasibility of an osteopathic medical school that would, once fully operational, serve 600 students. Efforts to build the school were announced Dec. 18.

Notable deaths included:
• Former Arkansas Sen. Bill Walters of Greenwood, who served in the Senate for 18 years, has died from complications related to his battle with pancreatic cancer. He was 69.

• The famed hotel developer John Q. Hammons died May 27 in Springfield, Mo., the home of his company that developed 210 properties in 40 states. He was 94.

• Popular and acclaimed artist John Bell Jr. died Nov. 8 at his Fort Smith home. He was 76.

• Eddie Christian Sr., a Fort Smith attorney known in wide legal circles as one of the best defense attorneys in the nation, died in mid December following a fight with cancer. He was 72.

• David Banks, the former president and CEO of what was for many years Fort Smith-based Beverly Enterprises, has died in late December. He was 76.

Link here for the top stories of 2012.

The anticipated list of branch closures resulting from Simmons First National’s acquisition of Little Rock-based Metropolitan National bank was made public by the Office of the Comptroller of the Currency this week.


Pine Bluff-based Simmons filed applications to close 27 branches of the pro forma bank with the regulatory agency on Dec. 19, in addition to one other application to close the Simmons branch in Bella Vista, which was recently shuttered. The 27 branches are slated to cease operations on March 22.


A total of 12 branches in Northwest Arkansas made the closure list, including the Simmons branch in Bella Vista.

NWA CLOSURES
Metropolitan National branches
• 300 Walton Boulevard, Bentonville
• 200 Hudson Road, Rogers
• 2691 Mission Boulevard, Fayetteville
• 4000 Great House Road, Springdale
• 3701 Pinnacle Hills Parkway, Rogers
• 4201 Pleasant Crossing, Rogers
• 1950 Pleasant Street, Springdale

Simmons First National branches
• 2971 North College Avenue, Fayetteville
• 5105 South Thompson Avenue, Springdale
• 703 East Douglas, Prairie Grove
• 405 Town Center, Bella Vista (recently closed)
• 3210 South Walton Boulevard, Bentonville

Simmons chose not to release the total of anticipated lost jobs resulting from these branch closures, deferring comment until next week when the holding company will report earnings on Jan. 23. 


The branch closures come as no surprise. CEO George Makris told investors and analysts in September that there would be branch consolidation in Northwest Arkansas and Little Rock. He said the banks’ staffs would work together before the end of 2013 to assess the best course of action for the branch consolidation.
 Makris said the closings would likely take place before April as there is a 90-day notice period required before a branch closure can take place.

Metropolitan operates 12 branches in Northwest Arkansas, seven of which will be shuttered. Analysts have said Metropolitan was a real estate play in Northwest Arkansas given its physical property and inability to grow deposits to sustainable levels in this market.

Simmons operated 10 branches in Benton and Washington counties prior to the acquisition, having since opted to shutter five of those locations. The pro forma bank will wind up with 10 branches in Northwest Arkansas at these locations:
• 4033 North Shiloh Drive, Fayetteville
• 3971 West Wedington Drive, Fayetteville
• 3111 Martin Luther King Boulevard, Fayetteville
• 706 West Sunset Avenue, Springdale
• 2832 West Sunset, Springdale
• 3975 New Hope Road, Rogers
• 111 North 8th Street, Rogers
• 1411 South Walton Boulevard, Bentonville
• Highway 62 South, Lincoln
• 1002 S. Mount Olive Street, Siloam Springs

John Dominick, banking analyst and finance professor at the University of Arkansas, said staff cuts are a long-time coming given many of Metropolitan National’s local branches did not have enough deposits to feasibly support their existence.

Metropolitan noted in the bankruptcy proceedings that there were 438 employees between the two markets – Little Rock metro area and Northwest Arkansas. The bank had just under $1 billion in assets, which breaks down to about $2.25 million in assets per person. The industry benchmark is roughly $4 million in assets per person, with more efficient banks operators achieving $5 million per employee. Substantial staff cuts are likely if the Simmons seeks to normalize employees-per-assets in this pro forma bank, according to Dominick.

Metropolitan’s investment in Northwest Arkansas exceeded $30 million in branch infrastructure between 2005 and 2007. The branches in Benton and Washington counties had a book value of roughly $40 million, according to the bankruptcy filing. But deposits in those branches totaled just $70 million, making them expensive operations for a bank low on capital.

CENTRAL ARKANSAS

16 branch locations in central Arkansas were also tagged to close on March 22.
• Downtown Little Rock, 320 West Capitol Ave., Little Rock
• UAMS branch at 5000 West Markham Street, Little Rock
• 1717 Merrill Drive, Little Rock
• 1818 N. Taylor St., Little Rock
• 11000 Financial Center Parkway, Little Rock
• 11821 Colonel Glen Road, Little Rock
• Chenal Kroger Branch, 16105 Chenal Pkwy., Little Rock
• 3200 JFK Blvd., North LIttle Rock
• 3607 East Kiehl, Sherwood,
• 21 Bill Foster Memorial Hwy., Cabot
• 1025 Markham Street, Conway
• 820 Elsinger Blvd., Conway
• 2400 Donahey Ave., Conway
• 2895 Dave Ward Dr., Conway
• 1210 S. Rock Stree, Sheridan
• 2030 John Hardin Drive, Jacksonville

Gay marriage may be coming to one of the most conservative states in America after a federal judge Tuesday (Jan. 14) struck down Oklahoma's state constitutional amendment banning gay marriage – an amendment similar to one approved by Arkansas voters in 2004 that remains in effect in Arkansas.

U.S. Senior District Judge Terence Kern, based in Tulsa, said the gay marriage ban approved by voters in 2004 violated the U.S. Constitution's 14th Amendment under the equal protection clause.

In explaining his decision in the case, brought by plaintiff Mary Bishop, Kern said Bishop and her partner Sharon Baldwin, who had attempted to obtain a marriage license in Tulsa County, were being denied constitutional rights due to the Oklahoma law.

"Equal protection is at the very heart of our legal system and central to our consent to be governed. It is not a scarce commodity to be meted out begrudgingly or in short portions. Therefore, the majority view in Oklahoma must give way to individual constitutional rights."

Kern said the couple had "been in a loving, committed relationships for many years."

"They own property together, wish to retire together, wish to make medical decisions for one another, and wish to be recognized as a married couple with all its attendant rights and responsibilities," he said. "Part A of the Oklahoma Constitutional Amendment excludes the Bishop couple, and all otherwise eligible same-sex couples, from this privilege without a legally sufficient justification."

Chad Griffin, president of gay-rights group Human Rights Campaign, said Kern's ruling was no different than that of many other judges who have struck down various state laws across the nation that ban gay marriage.

“Judge Kern has come to the conclusion that so many have before him – that the fundamental equality of lesbian and gay couples is guaranteed by the United States Constitution," he said. "With last year’s historic victories at the Supreme Court guiding the way, it is clear that we are on a path to full and equal citizenship for all lesbian, gay, bisexual and transgender Americans. Equality is not just for the coasts anymore, and today’s news from Oklahoma shows that time has come for fairness and dignity to reach every American in all 50 states.”

Gov. Mary Fallin, R-Okla., released a statement late Tuesday attacking Kern's ruling, saying that the will of the people of Oklahoma was being denied with this ruling.

"In 2004, the people of Oklahoma voted to amend the state's constitution to define marriage as ‘the union of one man and one woman.’ That amendment passed with 75 percent support," she said. "The people of Oklahoma have spoken on this issue. I support the right of Oklahoma's voters to govern themselves on this and other policy matters. I am disappointed in the judge's ruling and troubled that the will of the people has once again been ignored by the federal government."

While Kern ruled the gay marriage ban in Oklahoma to be unconstitutional, gay marriages will not soon take place in the state. Kern stayed his ruling, waiting for the outcome of a similar case in Utah, which is to be heard soon by Denver's 10th Circuit Court of Appeals, before any changes to Oklahoma law take effect.

Arkansas voters in 2004 approved Amendment 83 to the Arkansas Constitution which says marriage “consists only of the union of one man and one woman.” The law also prohibits any Arkansas official from recognizing gay marriages performed in other states.

Amendment 83 language notes: “Legal status for unmarried persons which is identical or substantially similar to marital status shall not be valid or recognized in Arkansas, except that the legislature may recognize a common law marriage from another state between a man and a woman.”

The 2004 election had 753,770 votes for Amendment 83 and 251,914 against.

The on again, off again River Valley Sports Complex project appears to be back on again following a study session of the Fort Smith Board of Directors on Tuesday (Jan. 14). But how the project will be constructed may change following disagreements during Tuesday's study session about the use of engineering firms for the project.

The RVSC was one of the projects up in the air as the Board looked for ways to fund its half of an additional $3 million to be poured into the Ben Geren Aquatics Center. On Friday, the Fort Smith Parks Commission recommended approval of an updated five year capital improvement plan that would restore all funding to the RVSC, an amount totaling $1.6 million.

As part of the city's partnership with the group, headed by Sen. Jake Files of Fort Smith and Sebastian County Election Commission Chairman Lee Webb, the city has had to follow state law in regard to the procedure for hiring professional services such as engineers and architects.

At issue during Tuesday's meeting was the city's desire to use Mickle Wagner Coleman Engineers for a cost of $420,000 — the firm City Administrator Ray Gosack said is most qualified for the project — and RVSC's desire to use Brixey Engineers, which has proposed engineering costs of $40,323.50, for engineering of the project in order to have plans in place before the U.S. Army begins grading work on the site at Chaffee Crossing this summer.

According to Gosack, Brixey is not the most qualified because it has only been involved in one type of parks-related project, a trail, and has never engineered a sports facility whereas Mickle Wagner Coleman has. Files objected to Gosack's contention that Brixey was not qualified under state law to engineer the facility.

"His firm typically does high end hotels and to say someone's not qualified to do a concession stand with some restrooms and some storage area that does hotels on a daily basis is just flat false," he said.

Gosack noted that Arkansas § 19-11-801 "clearly requires us to select the firm considered the best qualified, not (simply) qualified." Files challenged Gosack's understanding of the law, explaining that while he was not attempting to be argumentative, he thought there was room for flexibility in how the law was interpreted and used.

"Ray, on the state law issues, when I called the attorneys at the Bureau (of Legislative Audit), they told me there was about four different ways you could look at, the city could look at, of getting the proposals back," adding that there were different ways to evaluate qualifications of various firms.

Unable to come to an agreement on how to move forward on the engineering proposals, Director Keith Lau referred to a phone call he had with Gosack in which Gosack had proposed using an alternate method for fulfilling the city's $1.6 million funding obligation to the RVSC and removing questions regarding interpretation of state law as it relates to the selection of firms providing professional services.

"Maybe this is the time to interject that other option that you and I talked about on the phone and maybe I think you talked with Kevin about it — about the potential of letting them, through performance bonds, do it and then waive the competitive bid process. Is that something we want to talk about?"

Gosack said the issuance of performance bonds would allow the RVSC to design, develop and build the facility to the city's specifications and then the city would purchase the facility, making payments on a timeline according to RVSC meeting goals and deadlines.

The proposal was the one rare point of agreement between much of the Board, with Webb adding that he approved the Board's moving forward in that manner.

"If we do go with a performance bond, I think it's a relief to Jake (Files) and I because then we can go do what we do best, which is get the thing done. We don't have to slow down asking someone to get it done."

Webb said the total cost of the project with donations of materials, in-kind donations of labor and the city's $1.6 million portion would likely be around $3 million total. An expected opening date for the facility is still expected to be Spring 2015.

The Board could vote on moving forward with the performance bond plan by its Feb. 11 regular meeting.

NanoMech announced it has purchased its existing factory and will build an adjoining  25,000 square-foot facility in east Springdale, tripling its size and making room for more than two dozen new jobs by late summer.

“The new factory and expanded headquarters will provide for approximately 25 to 50 new jobs for world-class scientists and support staff,” said CEO Jim Phillips said in a statement. “The space will also allow us to meet current demand for our products while advancing ongoing research and development efforts.”

Incorporating cutting edge assembly lines and laboratories, this new expanded facility will also furnish the latest technologies in security, environmental and safety systems for handling advanced manufacturing and military projects. 

A secure wall and security fencing enclosing the campus are also part of the building plans. While the new facility will connect to the existing building, the company has purchased the adjacent 7.3 acre tract for future development providing the company with the ability to expand on a contiguous 9 acre campus. 

NanoMech chose Miller Boskus Lack Architects, P.A. of Fayetteville to design the new headquarters factory and labs. The architectural plans are complete and construction is expected to be begin in the coming weeks. The new factory and headquarters is expected to be fully operational by later this summer.
 
”This advanced facility will allow us to accelerate the development and commercialization of innovative products that people have only dreamed of before,” said Dr. Ajay P. Malshe, NanoMech Founder and chief technology officer said. “Aggressive demand for our technology suggests the need for rapid scale-up production to meet government and private sector orders for our breakthrough products”.
 
NanoMech, founded in 2002, is the result of a successful public/private partnership (PPP) between the private sector, Arkansas, the University of Arkansas, and the federal government. State and city officials worked alongside company leadership to make the company’s new global campus become a reality.
 
“Projects like the NanoMech expansion show that the city is open for business and interested in helping companies grow and expand,” said Springdale Mayor Doug Sprouse.

Gov. Mike Beebe and Grant Tennille, executive director of the Arkansas Economic Development Commission, have actively supported technology growth in Northwest Arkansas, according to the release from NanoMech. They regularly cite the partnership between NanoMech, the University of Arkansas and the private sector as a model for public/private partnership (PPP) success. 
 
“NanoMech is at the forefront of an industry estimated to have a multi-trillion dollar impact on the global economy over the next decade,” Tennille said in the statement. “This expansion signifies to the industry that NanoMech is one of the world’s leading companies and we believe they will continue to create important, knowledge-based jobs and attract the best scientists from the international stage.”

Former U.S. Rep. Mike Ross' campaign is starting to sound like a broken record after the presumptive Democratic nominee for governor announced fundraising figures for the fourth quarter of 2013 and a record-breaking 2013.

During the fourth quarter, Ross raised more than $550,000. The figure is about $100,000 more than Republican frontrunner Asa Hutchinson announced Friday (Jan. 10), making the closest fundraising quarters between the two campaigns.

Including the amount raised during the fourth quarter, Ross raised more then $3.6 million in 2013, more than double all of his opponents combined, according to a press release announcing the fundraising haul.

The total represents a new record number raised by a candidate for governor in a calendar year, the campaign said. The record was previously held by current Democratic Gov. Mike Beebe, who raised $2.39 million in 2005, according to Ross' deputy campaign manager for finance Dustin Smith.

Ross said donations to his campaign had come from across the state, showing his campaign's "energy and enthusiasm."

“Holly and I are blessed by the outpouring of support we continue to receive from every corner of this state, and I am very proud that Arkansans continue to show energy and enthusiasm for our campaign focused on Arkansas’s future,” said Ross. “I’m running for governor to build on Governor Beebe’s legacy of strengthening education, creating good-paying jobs and cutting taxes for working families – all while maintaining this state’s balanced budget.”

Ross, who has about $2.508 million cash on hand, has started a marketing campaign aimed at introducing the former 4th District congressman to the state, including commercials featuring Beebe and a new television ad introduced late Wednesday entitled "Meet Mike." It was a point made by Smith in the campaign's fundraising announcement Wednesday (Jan. 15).

“Our campaign is beginning to introduce Mike on a much larger scale and we are investing early in infrastructure and voter identification as we continue to build one of the largest, most effective grassroots campaigns in state history,”said Smith. “Mike Ross begins 2014 with a cash advantage of more than $1 million over his opponents and he has strong momentum in the polls. We have exceeded all of our fundraising goals, have signed up more than 7,500 volunteers representing every single county in Arkansas and we are well-positioned to sustain our momentum all the way to victory on Election Day.”

The ad released Wednesday highlights Ross' support of the 2nd Amendment and his votes against Obamacare while in Congress, according to Jarrod Yates, Ross for Governor campaign manager.

“Mike Ross is a pro-gun Democrat who voted against Obamacare four times and voted to repeal the law 23 times, and he was consistently rated by National Journal as one of the most independent Members of Congress.  So, we wanted to highlight his independence and common sense voting record in this new ad,” Yates said.  “Mike’s parents were both public school educators and he and his wife, Holly, were small business owners, which is why education and job creation are top priorities for our campaign.  As 2014 gets underway, we will continue to introduce Mike to more and more voters as we move forward with building one of the largest, most effective grassroots campaigns in Arkansas political history.”

Hutchinson has not begun advertising on a large scale, instead saving much of the donations he has raised for use later in the campaign. The former 3rd District congressman only spent $150,000 during the last quarter, leaving the campaign with about $1.3 million cash on hand, about 80% of the funds he has raised during his campaign.

Republican Curtis Coleman, a businessman from North Little Rock who is challenging Hutchinson in the primary, is expected to release his fundraising totals for the fourth quarter later Wednesday. Rep. Debra Hobbs, R-Rogers, who is also challenging Hutchinson, has not indicated when her fundraising totals would be reported.

This story will be updated later today if other fundraising reports are released.

The days of meter readers venturing out in the elements to measure energy consumption has become a thing of the past, at least at two providers of energy in the Fort Smith area. Smart meter use remains limited in Northwest Arkansas.

Arkansas Valley Electric Cooperative Corporation and Oklahoma Gas and Electric confirm they have rolled out new smart grid technology that, among other things, eliminates the need for a meter reader to visit each customer's locale simply to collect information on energy usage.

"Our smart technology is fully deployed, so each one of our customers today has a new digital meter, a communicating meter," said Brian Alford of Oklahoma City-based OG&E.

According to Alford, digital meters that communicate back to a home base or corporate office communicate not just how much energy was used during a given billing period, but also peak usage times.

"With the smart technology, customers now have access to more information about their energy usage, how they're using energy, what that energy is costing and how it gives them information in real time to make changes rather than seeing a (large) bill show up at the end of the month."

POWER CONSUMPTION DECLINE
Since the rollout, which started in October 2009 and was completed toward the end of 2011, Alford said customers have saved 120 megawatts of power. For residential customers in Arkansas, he said that equals about $83 for the entire summer, averaging about $20 per month in savings.

Greg Davis of Arkansas Valley Electric Cooperative said members of the cooperative posted a reduced level of energy usage for the first time in 2012, about nine years after AVECC began a phased rollout of the system.

"2012 was the first year that we saw consumption go down. It was minuscule, but that's huge considering that for the 76 years we've been in business, it's done nothing but go up," he said. "Again, we still had more customers coming in (to the system), but there was less usage for the first time ever."

With customers now able to see in real time how they are consuming energy and are able to take steps to reduce consumption, Alford said it should help utilities like OG&E delay the construction of new power generation facilities, again saving customers money.

"Our goal is to not have to add any additional incremental fossil fuel generation," he said. "We're wanting to push the need for new power plants to at least 2020. To do that, we have to reduce demand on our system and to do that, we have (given) our customers the tools and technology to do that."

STIMULUS FUNDING
Giving customers those tools did not come without a cost, though OG&E found a way to provide the technology without passing on costs to its customers. Alford said OG&E spent approximately $130 million in stimulus funding provided by the U.S. Department of Energy in order to deploy the smart grid technology.

At AVECC, Manager of Engineering Shawn Walling said it was hard to pinpoint the exact costs since it spanned over several years, but he said it ranged between $5 million and $10 million for the much-smaller cooperative.

Davis said even with the costs, it would save money not only through reductions in energy consumption, but also through reducing the amount of cost associated with sending employees into the field to do the readings now that everything could be read digitally.

LIMITED SMART METER USE BY SWEPCO
Peter Main, a spokesman for Southwestern Electric Power Company (SWEPCO), said his company had only rolled out a limited number of features associated with smart grid technology.

"I guess in terms of meters, we do have a portion of our customer meter base that are one way meters that are read remotely," he said. "They use automated meter reading technology, or AMR. These are one-way meters, strictly for gathering the meter data. They're not true smart meters, which would be two-way communication. So we do have a portion of our system with AMR technology."

Main said the total number of customers on SWEPCO's system in Northwest Arkansas and the Fort Smith regions would be "about 20% of our customers," adding Eureka Springs in Carroll County was the one city "where most of the community is on the system."

Main said there are no plans to expand the smart grid in the area, adding that to do such an investment would be an inestimable task at this point.

SMART METER CHALLENGES
A recent study from Navigant Research highlighted some of the increased costs to local utilities for not just the meters and other external infrastructure, but also IT systems needed to complement the external infrastructure upgrades. The study explained many of the challenges utilities faced, largely explaining why there could be differences in smart grid technologies between utilities, even in areas like Fort Smith and Northwest Arkansas that are served by utilities with vastly different levels of smart grid availability.

Alford said unlike SWEPCO, OG&E's entire system was automated — largely due to the stimulus funds — providing additional cost savings for not only customers, but also his utility, which now has the ability to turn electricity service on or off from a distance, again saving his crews trips into the field.

With two of the area's energy providers fully transitioned to the new technology that has already started yielding lower energy usage, Walling of AVECC said local energy customers have likely seen the last "game change" for the next several years, saying, "As far as a game changer down the road, I don't see one right now."

In what should be his final legislative session, Gov. Mike Beebe proposed a $5 billion budget that includes increased funding for prisons and public schools, projected savings from the private option, and a pay hike for public employees.

Beebe, who is term-limited, will leave office in January 2015.

The fiscal session begins Feb. 10, but state lawmakers have begun the hearing process to review state agency budgets between now and then in an effort to smoothly and efficiently handle their annual budgeting duties. The state’s new fiscal year will begin on July 1, 2014.

Beebe’s budget projects overall revenues of $5.03 billion. It includes:
• A $105.8 million increase in total spending for next year;
• $65 million in new funding for public schools;
• $10 million for prison funding, which includes $7 million for reimbursements to county jails and $3 million to expand prison beds;
• $10 million for the state teachers insurance program, which has had a deficit fixed by lawmakers; and
• A $5.25 million for a one percent cost-of-living adjustment (COLA) increase for state employees

Beebe’s budget also includes $89 million in savings projected from the private option – the bipartisan-constructed use of state Medicaid dollars for private health insurance passed by the GOP-controlled Arkansas Legislature and Democratic Gov. Mike Beebe last session.

The private option narrowly passed both chambers of the legislature in 2013. In the fiscal session, some lawmakers have indicated reservations about renewing funding for the health care program.