It’s been six years since Harold Crye, CEO of Crye-Leike Real Estate, expanded the company’s footprint into Northwest Arkansas. He said the local business has grown sales each year from $76 million in 2007 to $385 million last year. Crye-Leike had a 35% share of total units sales last year, with 2,659 properties.

Crye said the economy tanked just as the company ramped up in Northwest Arkansas, but in the past few years the momentum has returned. 

“Our agents in this region had a 15% increase in volume sales from 2012 to 2013. They blew our $370 million goal out of the water and we predict $400 million in total volume for the region this year. That’s about a 5% increase and unless the market really tanks they should reach that goal and more,” Crye said at the company’s 2014 Kick-off breakfast event held in Rogers on Wednesday (Feb. 19).

LOOK AHEAD
Crye said higher interest rates are inevitable and will hurt affordability in many markets. He said as home prices declined in recent years in concert with interest rates, affordability hit a five-year low last summer. But Crye warns as prices improve and rates tick upward, affordability could become a stumbling block later this year.

“This should be creating a sense of urgency in prospective buyers now that the region looks to be thawing out from the winter freeze,” Crye said. 

Another challenge for the business is a lack of inventory. Vickie Briolet, an agent in Crye-Leike’s Bentonville office, said inventory levels are as low as she has seen in many years.

“We all need listings. There are buyers looking and limited properties to show,” Briolet said.

Crye said fewer new homes being constructed is partially to blame for the lower inventory levels across the country. The National Association of Realtors reports new home inventory hit a 50-year low in 2012 at just under 200,000, after peaking at 500,000 in 2006.

Market watchers say housing starts need to reach the 1.5 million level soon on annual basis or there will likely be a persistent shortage of housing inventory for the long-term. For the past six years the residential construction industry has fallen short of the 1.5 million units needed just to keep pace with the new household formation.

Bankers are keeping a tight rein on building, Crye said, and this is likely to continue as long as job growth remains tepid.

“The biggest reason there are less new homes built is because of the weak job growth President Obama has been able to muster. There are families doubling up and grown kids living in basements because they don’t have the financial stability to start a new household,” Crye said.

He said this has set up favorable dynamics for the rental market and he encouraged his agents to get busy seeking out investor deals. In the larger Memphis market, he said the company is working with an institutional investor who is purchasing 1,000 homes for rental. Crye-Leike is also providing the property management in that deal.

Two goals he has for the local region in 2014 is to expand its property management division as well as establish a commercial real estate division.

AGENT GROWTH
Crye-Leike continues to expand its offices westward, adding an office in Grove, Okla., and acquiring the Coldwell Banker office building in Siloam Springs in October. Crye said the company has recruited several agents from other large national firms to work in that Siloam Springs market.

The Arkansas Realtors Association reports there were 8,419 agents working in the state last year. Total agent count is down 46% since 2007. Crye said there are 217 agents working in the Northwest Arkansas market among the company’s eight offices. Crye-Leike added more than 40 new local agents in 2013.

“We continue to recruit and hire new agents, our total number is up in this region and up nationally,” Crye said.

On the national level Crye-Leike operates 106 office with 2,828 agents. The largest market for the company is Memphis where the company has 16 offices and 716 agents with roughly a 40% marketshare, according to Crye. The company has 9 offices in Little Rock, with 351 agents and Crye said he is looking to other growth opportunities.

NATIONAL RESULTS
Crye-Leike posted combined annual sales of $5.2 billion, selling 30,471 units last year. Those results include franchise office sales, Crye said.

The company sales goal for 2014 is $5.5 billion, a 6% increase year-over-year.

“All of our offices are growing and we think this is doable, unless the economy tanks. We have several new offices planned this year, one in eastern Tennessee and two in Georgia.” Crye said.

Higher-than-expected loan losses prompted America’s Car-Mart to amend its credit agreement with lenders. The 2% adjustment to credit losses cut third quarter earnings by $4.9 million, or 68-cents a share, and sent Car-Mart stock to a 52-week low on Wednesday (Feb. 19).

“We still have $220 million in equity, after the $4.9 million aftertax charge off. We looked at our $400 million in loans owned by our 62,000 customers and estimated that if we didn’t sell another car, we could likely collect 23.5% of the money owed to us. The last time we did this calculation it was 21.5%,” Jeff Williams, chief operating officer for the Car-Mart said in a phone interview Wednesday.

He said the credit loss adjustment is a cautious play made by the company based on the competitive climate they are facing in the deep subprime auto lending market.

Car-Mart execs said some of its mature dealerships are experiencing customers defaulting on their loan, parking the car on the Car-Mart lot after they have purchased another car from a competitor offering a lower monthly payment. 

Williams warns that the lower payment is accomplished by a longer term, out to 60 months or so, which is not in the consumer’s best interest at the high interest rates and higher mileage cars. He said Car-Mart does not play that game but instead works to ensure their customers can own the car outright within two and a half years.

The experts agree that large bank lenders are fronting cash to the subprime auto finance market with the belief they have the technology to collect. Car-Mart executives said technology may be giving these bankers the boldness to lend, but it is not a viable substitute for good collections. 

“Even our best customers will need two or three payment modifications when they may have a repair issue or some other personal finance concern. They may need some local help working through this issues. That’s hard to do unless you have brick and mortar stores and local customer service relationships,” Williams said.

Other costs Car-Mart absorbed in the quarter were $300,000 toward GPS systems in the cars sold. This effort is costly on the front-end and average about $3 to $4 per car per month. Williams said it’s part of the company’s investment in infrastructure costs that will pay off over time.

Williams said the company is experiencing more late payments because of higher utility costs. There were more defaults and repossessions among the company’s mature lots as they are being hit hardest by competitive lenders wooing away some of the best customers.

“The hyper-low interest rate environment is attracting more dollars with the subprime auto lending. We thought the competition might have subsided by now, but it has not. And it looks like it may be with us for some time longer,” Williams said.

For the full nine months of this fiscal year the provision for credit losses increased to $91.6 million, up from $65.83 million. These are reserves set aside for losses should they occur. 

CEO Hank Henderson said the company did not get to where it is today by focusing on one or two quarters, but instead, investing for where the company wants to be five years down the road.

“In the past five years we have grown our finance receivables by nearly $200 million, added 20,000 new customers and are selling about 1,000 more cars each month. I would say that’s pretty impressive. While it’s true we are facing some competitive pressures, that’s always been the case in one fashion or another,” Henderson said in the earnings call on Wednesday. 

Car-Mart continues to repurchase its stock. Since February 2010 Car-Mart has repurchased 3.1 million shares or 27% of the company. 

“We will continue to stay focused on cash returns and aggressive expense management. We believe in the long-term value of our company and will continue to invest in the repurchase program when we believe favorable conditions exist. Our first priority for capital allocation will continue to be to support the healthy growth of the business,” Williams said.

Shares of Car-Mart fell 4.87% to close Wednesday at $35.72. During trading on Wednesday the stock set a new 52-week low of $35.50.

Sebastian County's hopes of possibly leasing out the golf course at Ben Geren Regional Park appear dim as the only proposal from an outside firm for the golf course was a management proposal instead of a multi-year lease.

The management proposal by Cypress Golf Management of Orlando, Fla., comes with large monthly fees. It appears to go contrary to the county's desire to reduce expenditures at the golf course. As reported in September 2013, the golf course loses more than $100,000 a year for the county, which continues to fund operations and capital expenses.

The proposal by Cypress would lock the county into a five year management agreement at a rate of $6,000 per month. The plan would also include travel expenditures of up to $1,700 per month. The proposed plan also outlines how the county will still front costs for the golf course, even though Cypress would be managing the property.

"The Ben Geren Park Golf Course will continue to be responsible for all operating expenses and all approved capital expenditures, just as is the case at present," the proposal reads.

The document also noted that it "will be Sebastian (County's) obligation to insure that there are at all times sufficient funds in the operating account to cover all operating and capital expenses."

Also included in the proposal is an outline of additional fees the county would be responsible for should it hire Cypress to management the golf course. Among the fees is a project management fee for capital improvements, should any projects costing more than $25,000 be approved by the county.

"In the even that such projects may be authorized by Sebastian County, it is the intent of both parties that Manager will provide project planning and management services, provided that Manager, in Sebastian County, has the professional expertise and management capability required by the project. Manager shall receive a project management fee equal to ten percent of the cost of any project over $25,000 and $100,000, or a fee equal to seven percent of the cost of any project that exceeds $100,000 and $200,000, or a fee equal to four percent on any project exceeding $200,000."

Sebastian County Judge David Hudson, whose office oversees the golf course, said since the bid had only been unsealed minutes before answering questions fro the media, he had not yet had time to review its contents or comment on the proposal. But he said a review of the Cypress proposal would happen quickly.

"I'm going to review this with the Park (Advisory) Board and the Golf Stakeholder Committee and develop a report and present it to the Quorum Court," Hudson said, adding that the plan would be made at the March regular meeting.

Asked if he would have preferred to receive proposals that would have spelled out a lease of the property, such as a company leasing the golf course for a set rate, he said the point of the bidding process was to see what was available to the County and then make a decision as to whether contracting with an outside group in some fashion was necessary.

Justice of the Peace Danny Aldridge, whose district includes Ben Geren, was on hand for the opening of the proposal from Cypress and said he was surprised that only one proposal was made as a part of the open bidding process.

"I was hoping for a number of bidders, where we would have a choice that would give us the best opportunities to have good golfing for our citizens and reduced any potential losses that the county might have."

Regardless of what happens, Aldridge said frequent golfers at Ben Geren should have no worries about possible changes at the facility.

"Hopefully we can proceed forward into an excellent Spring golfing season either with county management or some other form."

That was ugly. Not only did Wal-Mart Stores miss by a large margin its fourth-quarter earnings expectations, but the global retailer’s full year net income was down 5.7% compared to the prior year and its overall U.S. comp sales for the year was down 0.4%.

Officials with Bentonville-based Wal-Mart reported fourth-quarter and full year earnings Thursday morning (Feb. 20) prior to the markets opening.

Full year total revenue for the company was $476.294 billion, up 1.6% over the previous year, but below the analysts’ consensus estimate of $476.83 billion. The retailer said it felt a $5 billion negative impact from foreign currency headwinds last year. Operating income was $26.872 billion, down 3.1% compared to the previous fiscal year. Wal-Mart’s fiscal year and fourth quarter end on Jan. 31.

Net income for the year was $16.022 billion, 5.7% less than the previous year. Full year earnings per share was $4.90, well off the analysts’ consensus estimate of $5.11. Global e-Commerce sales, including acquisitions, grew to more than $10 billion during fiscal 2014.

Fourth quarter revenue totaled $129.706 billion, up 1.5% compared to the fourth quarter of the prior year and was below the consensus estimate of $130.23 billion. Operating income during the quarter was $7,347 billion, down 14.4% compared to the previous fourth quarter.

Net income during the quarter was $4.431 billion, down 21% compared to the previous year. Earnings per share of $1.37 missed the consensus estimate of $1.59. However, the company posted one-time charges during the fourth quarter that reduced quarterly earnings by 26 cents per share. The charges were related to tax and employment issues in Brazil, store closures in Brazil and China, a transaction in India, and restructuring of Sam’s Club operations in the U.S.

Nevertheless, Wal-Mart Stores President and CEO Doug McMillon and other executives pushed an optimistic view of the numbers in the company’s earnings report. It’s McMillon’s first earnings report since becoming CEO on Feb. 1.

“Our company grew net sales this year to reach more than $473 billion. Global eCommerce sales, including acquisitions, surpassed the $10 billion mark, a 30 percent increase over last year," McMillon said in the statement. "We will continue to grow our global business by focusing on customers and serving them how they want to be served."

McMillon said Wal-Mart will embrace more change this year as it focuses more intensely on customer relevance.

“We must be more nimble and flexible as we operate our businesses to adapt to changing customer shopping habits. Our focus is to invest in capabilities that connect with customers on their terms,” he said.

CAUTIOUS GUIDANCE
One big takeaway from Wal-Mart’s announcements was the cautious guidance the company gave for this year. The retailer forecast first quarter earnings per share of $1.10 to $1.20 with negative U.S. comparable sales recorded in the first two weeks of February because of weather.

Budd Bugatch, retail analyst with Raymond James & Associates, said that guidance is lower than the $1.26 his firm had predicted.

“Clearly there are macro pressures at work here. The weather impact has been hard for investors to gage. Concretely, the company did say it was facing $330 million in added health care costs this year. We know the SNAP cuts are having an impact as well. I think the company using this macro headwind as a time when it invests for longer term results,” he said.

Wal-Mart Chief Financial Officer Charles Holley said during the first quarter of this year, the company will begin to anniversary the increased costs incurred for Foreign Corrupt Practices Act matters, including compliance program enhancements and the ongoing investigations. These costs are expected to range between $200 million and $240 million for the year. 

The company gave a full-year guidance range of $5.10 and $5.45, a wide gap noted by the retailer and analysts. Joe Feldman, assistant director of research for the Telsey Advisory Group, said although Wal-Mart expects to hit the high-end of the estimate, it’s still below Wall Street consensus.

Investors focused on the weaker guidance and tempered outlook as Wal-Mart stock fell more than 2% after the earnings release. Shares traded at $73.25, down $1.60 in heavy volume during the morning market session. For the past 52 weeks the share price has ranged from a $69.72 low to a high $81.37.

In an effort to rally support among investors, Wal-Mart raised its annual dividend by 2.12% in fiscal 2015. The company will pay $1.92 per share, in four quarterly installments of 48 cents per share. 

Wal-Mart said this is the 41st consecutive time it has increased the dividend for its shareholders. While Wal-Mart is a widely held stock, the largest shareholders are still the Walton family. During fiscal year 2014, the retailer returned $12.8 billion to shareholders in the form of dividends and share repurchases.

WALMART U.S.
The cash cow for Wal-Mart Stores Inc. is its U.S. business comprising 59% of the retailer’s total consolidated sales last year. But the business faces a number of problems which showed up in negative same-store sales quarter after quarter.

Comparable store sales are a key metric in the retail industry. Last year Walmart U.S. posted negative comps of 0.6%, compared to 1.6% positive comps the year before. In the recent 13-week period comp sales slid 0.4%, compared to a 0.3% gain a year ago.

Bill Simon, CEO of Walmart U.S., said about 0.4% of the decline in comp sales in the last quarter relate to SNAP cuts. He expects that impact to continue for the rest of the year as consumers adjust. He said last year it was the 2% payroll tax increase that pressured comp sales and the weather is what it is.

“The weather isn’t an excuse but it did have a short-term effect as we had between 200 and 300 stores (closed) at times because of the winter storms,” Simon said in the media call.

One particular area of concern is the continued decline in store traffic, despite slightly higher overall ticket sales. Simon said they are seeing more consumers stock up at a supercenter, but know they are losing out on the fill-in trips as consumers are going to convenience stores, dollar or drug stores for the loaf of bread or gallon of milk.

"Comp sales improvement is a key priority, and we’ll focus on being even stronger item and category merchants, delivering value and improving our service levels," McMillon said. "Well remain focused on our expense structure, and innovate to improve productivity and aid our ability to deliver every day low prices.”

Simon said the Neighborhood Market format compares favorably for these quick fill-in trips, and is seeing strong comp sales at 5% or better in recent quarters. The company plans to accelerate the expansion of its small-store format this fiscal year.

“In our small formats we’re seeing increased traffic, we think we can compliment the stock-up trip with the small store rollout planned this year,” he said.

Simon was asked about Wal-Mart’s position on raising the minimum wage and he said the company’s stance has not changed as it remains neutral on the issue.

“Less than 1% of our workforce makes minimum wage. In states that have already raised the wage, we see very little overall impact,” Simon said.

CNB analysts said a minimum wage hike is largely a neutral issue for retailers like Wal-Mart who have to ability to pass along the extra cost to consumers.

A larger concern — $330 million this year — is a headwind Wal-Mart said it faces with added health care costs as more of its employees are signing up for coverage because of the Affordable Health Care Act.

INTERNATIONAL CHALLENGES
David Cheesewright, the new CEO of Walmart International, said the division has operated in a challenging global environment, with low inflation, relatively high unemployment and fragile consumer confidence leading to modest consumer spending.

Walmart International grew annual net sales to $136.5 billion, an increase of 1.3%. On a constant currency basis, International net sales would have increased 4.6% to $140.9 billion. Operating income for this segment totaled $5.454 billion, down 17.6% year-over-year.

In the recent quarter, International net sales were $37.7 billion, down 0.4%  On a constant currency basis, sales increased 4.3%. Operating income fell 45.8% from the prior-year period.

Cheesewright said a combination of soft sales, price investments, higher expenses and e-commerce expenditures were reasons for the lower operating results.

“We are especially pleased that in this tough environment, we grew market share in most countries and maintained share in a challenging Mexico market. We did experience share loss in the U.K. and Brazil. Competitors remained very aggressive with vouchering in the U.K., and around the world. We continue to focus on expanding price leadership,” he said.

Bright spots for Walmart International include:
• Solid performance in Central America, where net sales increased by 6.1% with comparable store sales increasing 1.8%.

• Fourth quarter net sales grew 5.3% in Brazil, with total comp sales up 4.6%%Average ticket grew 8%, and traffic declined 3.4%
 
• Walmart China sales grew by 3.7% during the fourth quarter, with comp sales up 0.4%. Comps were driven by an 8.6% increase in ticket, while traffic declined 8.2%, as customer behavior continued to shift towards fewer trips and larger baskets.

STREAMLINING SAM’S
Sam’s Club reported full-year revenue of $57.157 billion last year, up 1.3%, fueled by an increase in membership fees. Operating income, excluding fuel, was $1.949 billion, up 1.9% year-over-year.

In the recent quarter Sam’s Club had total revenue of $14.679 billion, up 1.4% from the year-ago period. Operating income declined 15.7% to $412 million from the same period last year. Those numbers exclude fuel sales.

Sam’s Club grew its membership income 9% in the recent quarter, one of the few positives reported by this division, which is undergoing a streamline effort to reduce overhead, increase online presence and combat declining sales from the burdened small business sector.

Sales charged to the Sam’s Club credit card reached record highs in the quarter resulting in a financial benefit from a profit sharing arrangement with the company’s credit card provider. Sam’s Club also earned $24 million for the sale of two real estate properties. These factors contributed to Sam’s membership and other income growth of 23.4% in the quarter.

Continued severe winter storms have resulted in a soft start to this quarter. Sam’s expects comp sales, without fuel, for the 13-week period from Feb. 1 to May 2, to be flat. For the 13-week period last year, comp sales, excluding fuel, increased 0.2%.

Convenience is what consumers want and officials with Wal-Mart Stores said Thursday (Feb. 20) they committed to giving shoppers what they want by doubling the number of small-format stores the retailer previously announced it would build in the fiscal year.

The retail giant is expanding its original capital forecast provided in October, and now expects to add approximately 270 to 300 small stores during the fiscal year, doubling the initial forecast of 120 to150 stores. Walmart U.S. will continue its plan to open approximately 115 new supercenters this year.

“Customers’ needs and expectations are changing. They want to shop when they want and how they want, and we are transforming our business to meet their expectations,” Bill Simon, Walmart U.S. president and CEO, said in Thursday’s earnings report. “Customers appreciate the broad assortment of our supercenters for their stock-up trips as well as our small store formats for fill-in trips. By unlocking this growth opportunity and further combining our supercenters and small store formats with an unlimited selection available through e-commerce, we provide our customers with anytime, anywhere access to our brand.”

The small store fleet has continued to deliver positive comp sales and traffic increases each quarter. Comp sales for Neighborhood Market stores grew 4% for fiscal year 2014, driven by fresh and pharmacy. This compares to overall U.S. negative same-store sales of 0.4% posted for the past 53-week period.

“Neighborhood Market is performing comparable or favorable to leading grocers,” said Simon. “Our small store expansion, in addition to providing customers access to a wide variety of products, including fresh, pharmacy and fuel, will help us usher in the next generation of retail. This will combine thousands of points of physical access with digital retail experiences that include initiatives such as Site to Store and Pay with Cash.”

Joe Feldman, assistant director of research Telsey Advisory Group, said this is a positive sign for the retailer as it shows the efforts to downsize the format is paying off.

Walmart operates 346 Neighborhood Markets and 20 Walmart Express stores. The Express units have performed well and are being expanded beyond the initial three-market pilot.

Walmart U.S. projects to end fiscal year 2015 with net retail square footage growth of approximately 21 to 23 million square feet across all formats, versus its original projection of approximately 19 to 21 million square feet. The projected capital expenditures and square footage details exclude the impact of future acquisitions.

“We have a healthy pipeline of stores in development, and we systematically work to improve our real estate and construction processes, reduce building costs and shorten the time needed to open our stores,” said Simon. “Our small store expansion will also strengthen our market share and create greater efficiencies in our supply chain through a tethered approach that uses supercenters as a supply chain base, links our resources and provides a unique and connected customer experience.”

To fund this additional growth, the company is revising its capital expenditures forecast for the Walmart U.S. segment to $6.4 billion to $6.9 billion, up from an initial range of $5.8 billion to $6.3 billion. This reflects the increased small store growth and the planned new supercenters, which remain an important part of the company’s strategy. In total, across supercenter and small store formats, Walmart U.S. plans to open 385 to 415 units in fiscal 2015, adding considerably to the more than 4,200 stores now open.

Wal-Mart’s newest test in the small store format will get underway in next two months as the retailer opens it first U.S. convenience store in Bentonville, roughly six blocks from the company’s corporate headquarters and Supercenter No. 100, across the street.

At least two analysts have recently noted that perhaps Wal-Mart should buy its way in to more small format leadership by acquiring Family Dollar or Rite Aid. Other industry experts peg a major U.S. acquisition as unlikely, citing regulatory approval hurdles because of Wal-Mart’s already massive size.

Wal-Mart was asked about the likelihood of an acquisition like Family Dollar on Thursday during the call with the media.

Bill Simon, CEO of Walmart U.S., said the retailer is always looking for the right acquisitions. But he also added Wal-Mart has a very efficient model in place for organic expansion. He said the costs of retrofitting competitor stores for the amount of frozen and fresh product it sells would be very expensive, not to mention the regulatory issues that could arise.

The Walmart Express does about four times the volume of a dollar store and the Neighborhood Market does six times more," Simon said.

A poll conducted this month shows that 43% of voters would vote for an unnamed, generic Republican candidate, while 35% would vote for the Democrat and 22% still have not made up their minds.

The same poll asked respondents to identify the political party they are most closely affiliated with. In response, 39% said Democrat, while only 36% said Republican and 26% said independent.

Conducted on Feb. 12, Little Rock-based Impact Management Group polled 1,202 likely Arkansas voters to ask their opinions on the private option issue and a variety of other questions, as well, including the candidates for U.S. Senate, Arkansas governor and Arkansas lieutenant governor. The poll has a margin of error of +/- 2.83%. Poll questions also included voter opinions on Arkansas’ private option plan.

The numbers, which suggests Arkansas voters are willing to break from political ideology in the 2014 election, do not come as a surprise to Dr. Janine Parry, director of the Arkansas Poll at the University of Arkansas in Fayetteville.

"The first thing that came to my mind is this is just typical," she said of the poll numbers. "Arkansans were revealed to be rather schizophrenic in their politics, most generally in the 1968 general election. So it's nothing new to us."

She referred to the long-known tendency among Arkansas voters to "split" their ballots.

"We've done quite a lot of that. We've been consistently independent in our vote choices since that time (1968), so we're very comfortable and we were doing this before the rest of the country. We are very comfortable voting Republican at the top of the ticket and still pretty comfortable identifying as Democratic and voting Democratic on other positions."

Notable examples of ticket splitting at the top of the ticket in Arkansas include Gov. Winthrop Rockefeller's win in 1966 and Gov. Mike Huckabee's ascension to the lieutenant governor's office in 1993, re-election in 1993, and election to a full term as governor in 1998 and a second full term in 2002. In the case of both Republicans, they held statewide office while the General Assembly was controlled by Democrats.

Another recent example would be the 2010 election, which saw Gov. Mike Beebe sweep all 75 counties in the state while those same voters sent then-U.S. Rep. John Boozman, R-Rogers, to his first term in the U.S. Senate.

Clint Reed, a partner at Impact Management Group, said the numbers in his firm's poll are about more than just ballot splitting. He said right-leaning independents are the key.

Specifically, he pointed to the the number of Independents who said they would vote for the Republican, 46%, versus the 13% who said they would vote for the Democrat and the 41% who said they are still undecided. 

"Those independent numbers and those Democratic numbers, that's how to explain why that is, why (there is) that discrepancy there. Independents are overwhelmingly supporting the generic GOP candidate."

He also said the "independents are the crucial voting block. It is an advantageous election cycle for Republicans across the board." Reed said with so many independents being right-leaning, the party and its candidates "for the first time count them as one of their own."

It is a trend that he sees continuing in this election cycle.

"In Arkansas, Democrats have long held onto the ability to capture the all important white, male voting bloc. Whether (former U.S. Sen. Dale) Bumpers, (former U.S. Sen. David) Pryor, (former President and former Gov. Bill) Clinton, (Gov. Mike) Beebe. But it's just not the case anymore. We started seeing some of that with the first election of Barack Obama, but saw a lot of it after he took office. The so-called liberal policies, cap and trade, universal health care — these things turned those white male voters off in a substantial way. Democrats in Arkansas have not been able to regain that."

As for whether that means Arkansas becomes solidly red like the states of Alabama, Georgia or Mississippi, Reed said that remains to be seen because Arkansas politics tend to have "pendulum swings."

"That trend is matching what you're seeing in Mississippi, Alabama and Georgia. But will it hold? Probably not. It's a pendulum that swings. It's all part of the election cycle. Arkansas has been slower in that pendulum swinging back in the strong candidates we've had in Clinton, David Pryor and Beebe."

The real test, he said, will be the 2016 election and the potential candidacy of former Secretary of State Hillary Clinton, who served as Arkansas first lady during her husband's several terms in the governor's mansion.

"The real test will be a Hillary Clinton candidacy for President and how Arkansas would play into that. …The relationships they have, the home state of the former president. Could they change the outlook of what the independent voters see and look like? It's possible. That's the true test. If she runs, does Arkansas become a swing state, a target state in a presidential campaign? It will be awful hard with potentially four Congressional seats in the R column and two Senate seats (possibly held by Republicans) for the Clintons to make this a swing state. That's a far stretch, but that's where Arkansas is in its political growth, if that makes sense."

Parry said Arkansas will not go solidly red until Independents officially make the full commitment to the Republican Party.

"What I think is interesting is those independent leaners aren't committing to the GOP brand. They certainly aren't committing to the Democratic branch, even though the Democrats are losing (self-identified voters). The independents want a finger in both pies."

She said while poll numbers may be good for Republicans, if the party plans to maintain the momentum it had in 2010 and 2012, the party and its candidates will have to work for it.

"The Republicans should recruit good candidates and not just ride the tide," she said. "Clint Reed and others know they were trying to get a bench of candidates and the national tide (in the last two elections) was good for Republicans. It was a one-two punch of finally breaking through for them."

A looming doctor shortage in the U.S. that Kyle Parker classifies as a “crisis” is one of the primary reasons the Fort Smith Regional Healthcare Foundation is planning to invest more than $58 million to build a college of osteopathic medicine in Fort Smith.

The foundation announced the project Feb. 18, along with an announcement from the Fort Chaffee Redevelopment Authority that it would donate 200 acres – valued at $4 million – to the college. Once fully operational, the college will serve about 600 students,  with about 150 graduating each year. The college is also estimated to employ around 65 (full-time equivalent jobs) with an average salary of $103,000. The school is targeted to accept its first cohort of students in the fall of 2017.

Parker, chairman of the FSRHF, said Tuesday that one of the most frequent questions has been, “Will you be able to recruit students?” The answer to the question, according to Parker, is a definite, “Yes.”

He said there are about 2,500 applications for every opening in U.S. medical schools. He also said the country will have to produce more doctors to push back against a possible shortage of 140,000 doctors by 2030. That number could rise to 250,000 if the federal Affordable Health Care Act if fully implemented.

“We are in a medical crisis in the United States,” Parker told the more than 85 people who attended the Tuesday press conference.

PHYSICIAN ‘BOTTLENECK’
That sense of urgency to expand medical training is also shared by the Association of American Medical Colleges. The group predicts that a shortage of 91,500 doctors by 2020, with the shortage increasing to 130,600 by 2025. Of the 91,500, the AAMC estimates a 45,400 shortage among primary doctors and a 46,100 shortage in surgeons and specialists. The group also estimates 250,000 doctors will retire by 2020.

During a Jan. 14 interview on C-SPAN, Dr. Atul Grover, chief public policy offer for the Association of American Medical Colleges, said the “silver tsunami of baby boomers” will be a big cause of physician shortages. He also said there is a “bottleneck” at the residency level, and he blamed Congress for curbing support of residency training. According to Grover, Congressional passage of the 1997 Balanced Budget Act reduced funds for residency support.

Grover said medical colleges have boosted enrollment a combined 30% since 2006, but residency openings have shown less than 1% growth. He said what Congress has “failed to do is to address a freeze on support for physician training that’s been in place now for 16 years.”

The AAMC website notes that “Medicare support of graduate medical education (GME) includes paying its share of the costs of training, as well as supporting the higher costs of critical care services, such as emergency rooms and burn units, on which communities rely. Without adequate support, the ability of teaching hospitals to provide essential patient care is threatened.”

MEDICALLY UNDERSERVED AREAS
Reports from Kaiser Health and the Pew Center also point to a shortage of doctors.

A Kaiser report notes that the federal Health Resources and Services Administration estimates that 20% of Americans – roughly 55 million – live in areas with too few primary care doctors. The agency also says that 16% of Americans have too few dentists, and 30% live in areas with not enough mental health care doctors and providers.

The Pew Report says federal government estimates are that the number of doctors will grow by 7% in the next 10 years, but the number of Americans over age 65 will grow by 36%. The nation would need more than 15,000 additional providers to meet the target ratio of one primary care practitioner for every 3,500 residents, according to federal estimates. Massachusetts, according to the Pew report, has the most primary care doctors per capita and Mississippi has the fewest.

The Pew report also notes that income may also result in fewer primary care doctors. Primary care physicians earn around $3 million less during their career than their colleagues in specialty fields.

150 TOWARD SOLVING THE PROBLEM
Parker said Tuesday that the new college of osteopathic medicine will play a small role in attempting to address the shortage.

“We’re happy to put out 150 (graduates) a year to help solve that problem,” Parker said.

He also praised area physicians and medical facility managers for working together, “despite being competitors,” to “get clinical rotations worked out” and address other issues to provide enough residency positions in the area to support the new college.

“You can’t say enough about that kind of commitment,” Parker said of the collaboration among area doctors and medical operations.

Sebastian County property owners are among the first in the state to be able to not only pay personal property taxes online, but also receive eStatements and receipts online, as well.

According to Sebastian County Treasurer-Collector Judith Miller, the county's new online system is part of a new $46,000 software package the county purchased from Little Rock-based TaxPro to comply with new state laws dictating municipal and county bookkeeping. The same software package, which went live for Sebastian County at the beginning of 2014, will also be used by Pulaski, Saline and White Counties, though Miller said she believed her office was the first in the state to offer all of the services online for property owners.

The upgrade allows property owners to get the information they need in a quick, timely manner.

"Before we even mail our statements out, these people will get an (e-mail) out from our company saying, 'Ok. This is your statement. Sign in and get it.'"

In order to receive eStatements, Miller said property owners would need to opt-in to the service through the Treasurer-Collector's office.

Even if property owners have not opted-in, Miller said property owners are still able to visit ArkansasTaxSearch.com/Sebastian.html in order to look up past receipts of tax payments or to find out how much is owed instead of calling the office.

Another website, SebastianCountyTax.org, allows property owners to pay their taxes online. The online payments not only provide a convenience to taxpayers, but also saves time and effort of the staff, according to Chief Deputy Collector Kathy Caperton.

"On the day of the deadline, we had to go in and manually enter all of those payments and balance it," she said recalling 2013's tax payment deadline in October. "It took two people a day and a half to do it, to make sure we balance. The way we can do it now — it's downloaded. We can do it in less than five minutes and it's balanced, which saves a lot of time."

Miller also said the amount of time saved with the new online system would allow her office to officially close the books and start pursuing delinquent taxes within days of the personal property tax deadline in October.

"I'd say by the 18th (of October), we normally have everything (done)."

Not only is the county saving money through the electronic bookkeeping done by the new software, but it is also able to seamlessly calculate taxes due by individuals and the site updates automatically once payments are made and clear the bank, removing any chances for human error.

And while the updated software, mandated by the state, came with a large price tag, becoming the state's first completely electronic treasurer-collector's office will allow the county to save money, assuming a large number of taxpayers choose to receive eStatements and conduct their business electronically.

According to Miller, for each piece of paper (i.e. statements, receipts, delinquency notices, etc.) her office sends out, her staff spends 56 cents. The cost includes envelopes, postage, and printing.

With 2,000 property owners already signed up for eStatements and an additional 8,710 property owners who paid their taxes online in 2013, the county has already saved an estimated $5,992. While the figure may seem small — only 13.03% of the overall cost of the new software package — Miller said it could grow to much greater savings should a larger fraction of the county's 94,000 personal property owners choose to go electronic this year and in the years to follow.

And for those early birds wanting to get an early start on their taxes, Caperton said statements for 2013 are already available thanks to the new system. Miller said the books are already open and her office is ready to accept payments, however they are made.

"We want people to really start to use this," she said.

Individuals wanting to opt-in can e-mail jmiller@seb.arcoxmail.com.

Notes about the importance of size, a real-world example of how Obamacare halted a business expansion and the push to sustain sustainability are part of the Northwest Arkansas Friday Wire for Feb. 21.

NOTES & ANALYSIS
• Size matters
We learned this week that the top bosses at Wal-Mart Stores are going to double the number of small format stores they build in fiscal 2014 compared to their previous construction plans.

Why? Because one size does not fit all. If you are on a tight budget and want to stock up for the week or the month and have the time to spend 90 minutes or more wandering from car batteries to peppered bacon to Covergirl blush, then the supercenter is the place to stop.

But if you’re leaving work, in a hurry to get home and just need a gallon of milk and a box of Cocoa Puffs for that guilty-pleasure breakfast you’ve been promising yourself, then that Dollar General or Harp’s or other smaller retail outlet is likely your stop. Ain’t nobody got time to walk a country mile for a dose of dairy and box full of sugary, chocolatey heaven.

How do we know that size matters, but that one size does not fit all? Comparable sales for Wal-Mart’s Neighborhood Market stores (smaller format) were up 4% in the most recent fiscal year. Comp sales at the larger stores were down 0.4% during the same time period. 

Where would you invest more capital? Exactly.

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

• Sustaining sustainability
In his first public forum as CEO of Wal-Mart Stores Inc. Doug McMillon challenged employees and suppliers to innovate, saying he would push the envelope in testing these new ideas that will drive the retailer’s future growth.

• Negative pressures at Car-Mart
A recovering economy, more lenders in the subprime auto space and higher charge-offs have thrown a monkey wrench into the operations of America’s Car-Mart, a large buy here, pay here auto dealer.

• Real estate market share growth
It’s been six years since Harold Crye, CEO of Crye-Leike Real Estate, expanded the company’s footprint into Northwest Arkansas. He said the local business has grown sales each year from $76 million in 2007 to $385 million last year. Crye-Leike had a 35% share of total units sales last year, with 2,659 properties.

NUMBERS ON THE WIRE
5.7%: Decline in net income for Wal-Mart Stores Inc. between fiscal year 2014 and fiscal year 2013.

42%: Level of support among likely voters for both Mike Ross, the Democrat candidate for Arkansas Governor, and Asa Hutchinson, the Republican candidate for Arkansas Governor. The poll was conducted by Little Rock-based Impact Management Group.

393: Number of homes sold during January in Benton and Washington counties, down slightly from the 395 in January 2013.

OUTSIDE THE WIRE
• Democrats compare Walker investigation to Christie
For more than three years Wisconsin Gov. Scott Walker avoided political fallout from a criminal investigation that ensnared six of his former aides and associates, winning a recall election even as his opponent ran ads attacking him on the scandal. But with the Republican up for re-election this year and considering a run for president in 2016, questions are intensifying over how much he knew about illegal campaign activity going on in his county executive office as he launched his bid for governor.

• Governors pitching for jobs
As the U.S. economy gains strength and states are in their best financial position in years, governors are proposing unconventional tactics to create jobs, especially in health care and high-tech.

• Keystone ruling favors Obama politically
A Nebraska judge's ruling on the Keystone XL pipeline could let President Barack Obama delay his final decision on the project until after mid-term elections and avoid political damage, analysts say.

WORD ON THE WIRE
"We've done quite a lot of that. We've been consistently independent in our vote choices since that time (1968), so we're very comfortable and we were doing this before the rest of the country. We are very comfortable voting Republican at the top of the ticket and still pretty comfortable identifying as Democratic and voting Democratic on other positions."
– Dr. Janine Parry, director of the Arkansas Poll, discussing the split among voters self-identified as Democratic but saying they will vote Republican in a poll released this week by Impact Management Group

“We would’ve probably already been open in Little Rock with a third store if this whole health care thing wouldn’t have taken place. But it scared the heck out of us.”
– Joe Donaldson, co-owner and general manager of Sam’s Furniture in Springdale, about the company pulling back expansion plans because of uncertainty surrounding the federal health care law

A note of thanks, positive home sales in January and the fourth push for a tax to build a new jail in Crawford County are part of the Feb. 21 Friday Wire for the Fort Smith region.

NOTES & ANALYSIS
• A moment for gratitude
Jim Walcott issued the challenge to make a difference, and here we are now several years later with the reality that a more than $58 million college of osteopathic medicine will be built in Fort Smith. Sure, some last minute goofiness could derail the project, but we’re likely to have an operational medical college by the fall of 2017.

Walcott, serves on the board that emerged from the Sparks Health System Board when the hospital sold to Naples, Fla.-based Health Management Associates. That deal left more than $50 million in a foundation to be used to advance health care needs. Walcott wanted to make a big splash with the money rather than just throw out nickels and dimes.

Kyle Parker, an attorney and Fort Smith resident who is independently wealthy, assumed much of the responsibility for Walcott’s challenge. To be sure, there have been many people involved in the effort to see the college be a reality, but Parker has been a key behind-the-scenes driver to keep the project on track.

If you’ve ever wondered if the folks with financial means are doing something meaningful to leave a positive legacy for the Fort Smith region, well, here you go. Mr. Parker will certainly seek to deflect credit, but he should know we are grateful for someone in Fort Smith who is willing to envision what is possible.

ICYMI
Following are a few stories posted this week on The City Wire that we hope you didn’t miss. But in case you missed it ...
• $58 million osteopathic medical college planned for Chaffee Crossing
Fort Smith could soon be home to Arkansas’ first college of osteopathic medicine and one of just 31 in the U.S., thanks to a more than $58 million investment from the Fort Smith Regional Healthcare Foundation (FSRHF) and a grant of 200 acres from the Fort Chaffee Redevelopment Authority (FCRA).

• No action against Whirlpool
A proposal that would have seen the city of Fort Smith seek to impose fines against Whirlpool Corporation for violating the city's nuisance ordinance by spilling trichloroethylene (TCE) at its site more than 30 years ago, a spill that eventually spread to the neighborhood north of the site, failed at Tuesday's (Feb. 18) meeting.

• A good January for area home sales
January home sales in Crawford and Sebastian Counties posted increases from the same period last year, with both counties posting values more than 40% higher in January 2014 than in January 2013.

NUMBERS ON THE WIRE
• 43.5%: The increase in sales volume for Crawford County home sales from January 2013 to January 2014. The values increased to $3.89 million last month from $2.711 million during the same period the year before.

• 2-5: The vote of the Fort Smith Board of Directors on a contract that could have had the city imposing fines against Whirlpool Corporation for polluting not only the company's former manufacturing site on the south side of the city, but also up to 50 surrounding properties that sit above a plume of trichloroethylene (TCE), a toxic chemical that can cause cancer if ingested.

• 42%: Level of support among likely voters for both Mike Ross, the Democrat candidate for Arkansas Governor, and Asa Hutchinson, the Republican candidate for Arkansas Governor. The poll was conducted by Little Rock-based Impact Management Group.

OUTSIDE THE WIRE
• Democrats compare Walker investigation to Christie
For more than three years Wisconsin Gov. Scott Walker avoided political fallout from a criminal investigation that ensnared six of his former aides and associates, winning a recall election even as his opponent ran ads attacking him on the scandal. But with the Republican up for re-election this year and considering a run for president in 2016, questions are intensifying over how much he knew about illegal campaign activity going on in his county executive office as he launched his bid for governor.

• Governors pitching for jobs
As the U.S. economy gains strength and states are in their best financial position in years, governors are proposing unconventional tactics to create jobs, especially in health care and high-tech.

• Keystone ruling favors Obama politically
A Nebraska judge's ruling on the Keystone XL pipeline could let President Barack Obama delay his final decision on the project until after mid-term elections and avoid political damage, analysts say.

WORD ON THE WIRE
"We enclosed three of the four exercise yards, we've manipulated walls — we've done everything we can. Still we're not in compliance (with state law). And I think that we can show, or I know I can show the voting citizens of Crawford County the numbers and the need for this. We're a growing population. We are in the top 12 (counties based on population) and we've got a small jail."
– Crawford County Sheriff Ron Brown explaining why a new $20 million jail is needed in the county

"We've done quite a lot of that. We've been consistently independent in our vote choices since that time (1968), so we're very comfortable and we were doing this before the rest of the country. We are very comfortable voting Republican at the top of the ticket and still pretty comfortable identifying as Democratic and voting Democratic on other positions."
– Dr. Janine Parry, director of the Arkansas Poll, discussing the split among voters self-identified as Democratic but saying they will vote Republican in a poll released this week by Impact Management Group

“We would’ve probably already been open in Little Rock with a third store if this whole health care thing wouldn’t have taken place. But it scared the heck out of us.”
– Joe Donaldson, co-owner and general manager of Sam’s Furniture in Springdale, about the company pulling back expansion plans because of uncertainty surrounding the federal health care law

It’s been less than three months since the city of Bentonville unveiled an ambitious project involving the redevelopment of an 18-acre southeast extension to downtown. The plan called for two distinct areas dubbed the Arts District and the Market District  which are connected by two main thoroughfares  — Southwest A Street and Main Street.

Community and economic development director Troy Galloway said private investment has begun to flow into both districts.

“There is already a great deal of buzz around these two experience districts. ERC Construction out of Fort Smith announced plans to build a 60 unit multifamily project with mixed used space as well. That project will be located at the corner of Southwest A and Southwest 4th Streets. They plan to break ground in the next 30 to 45 days, so we will soon be seeing construction in this new Arts District,” Galloway said, during his comments at the Business Matters breakfast in Bentonville on Friday morning (Feb 21).

Business Matters is a new Bentonville-Bella Vista Chamber of Commerce event that provides a look at development and growth projects each quarter.

The city approved the large scale development in November and rezoned for higher residential density levels. The project includes 44,000 square feet of mixed-use development consisting of 62 residential units and 1,760 square feet of flex space. The ERC project name is “Thrive.”

“We worked with ERC for sometime to find them the right location and we are very excited about this project as it will provide more housing for these developing districts. The businesses that locate there will need the foot traffic. The ERC project will change the entire face of the new Arts District,” Galloway said.

Rob Coleman, an owner and vice president of ERC Properties, said the company was not yet ready to discuss project costs. He did say the company “is excited to be rolling out this new urban look.”

Across the street from the ERC development in the old lumber yard area is planned a new pizza restaurant and office space that Doing Business in Bentonville (DBI) is relocating to in the next few months.

“This is a significant amount of activity in this immediate area and a great extension to downtown,” Galloway said. “The city is also planning to redo Main Street from the Square all the way to Highway 102, that includes brand new curb and guttering, landscaping and storm water drainage control. This street work will begin in next 90 days,” Galloway said.

The city street project will serve as a gateway to the expanded downtown area and as one of the connectors between the new experience districts. Galloway said once the Main Street improvements are completed, the same work will begin on Southwest A, the other major connector between the Square and the new redeveloped areas.

MARKET DISTRICT PLANS
The Market District encompasses the old Tyson Foods plant, the Kraft cheese facility and the Icehouse. Galloway said there are several investors now working in the area. The Tyson building is being stabilized with some of the exterior manufacturing equipment being removed. It is also being painted with the intent that the interior can be redeveloped into a market area, perhaps overflow from Farmer’s Market as well as other culinary, wholesale and retail food venues.

The Icehouse is being refurbished into office space and the large kitchen in that facility will used for catering opportunities. Galloway said the Kraft plant is being looked at by several investors for redevelopment.

The biggest project announced so far is the ERC development.

“We worked with ERC for sometime to find them the right location and we are very excited about this project as it will provide more housing for these developing districts. The businesses that locate there will need the foot traffic. The ERC project will change the entire face of the new Arts District,” Galloway said.

David Deggs, the executive director of Downtown Bentonville, said downtown is more than just the square. In Bentonville it encompasses 1,790 acres.

“We are at the forefront of what is going on in the new Arts District. We are moving our office to 401 Southwest A. Street into the old Grant building. It is going to become what is called the Hub. It’s adjacent the trail system for the Razorback Greenway. Our office, Bike Bentonville, Bike Rack Brewery and a new pub and pizzeria will be located in the Hub,” he said.

The new ERC housing project will be located across the street from the Hub, which Deggs says will bring an added population that can help to revive this neighborhood as an extension of downtown square.

He said First Friday events brought more than 42,000 people out to the Bentonville square last year and DBI has added several new downtown programing events in 2014. DBI also is looking forward to this year’s Farmer’s Market as they had 70 vendors in 2013.

“It’s a great way to support our local farmers and this year we are adding some healthy cooking demonstrations and other unique features,” Deggs said.

RECREATION CENTER
Also on tap for the city of Bentonville is a brand new $16 million recreation center. The 80,000 square foot complex will include two pools, a zero-depth entry recreation pool for all ages and a competitive swimming pool that will be used by Bentonville schools, who contributed $1 million to the overall project for sharing rights.

David Wright, director of parks and recreation, said the center will be located near Highways 12 and the 112 in the southwestern part of the city. Construction has begun and is expected to take 18 months.

“We are excited about this project, it’s the grand-daddy of them all as far as parks and recreation goes. This zero-depth entry pool is like a playground in the water. There is a large playground in the middle. There is a slide that actually takes you outside the building and back into again for the landing. There is an area for laps and a river float section,” Wright said.

He told the group that during certain hours the leisure pool would be used for senior programing like water resistance strength classes or yoga. The center also features a designated area for senior citizens as well as a basketball court, volleyball court and fitness center.

The recreation center is slated to open in early 2015 and Galloway said there will be use fees charged. Those rates have not yet been set. While out-of-city residents are welcome, they will likely pay a slightly higher rate for the amenities, he said.

U.S. Sen. Mark Pryor, D-Ark., endorsed a proposal to raise the state minimum wage incrementally to $8.50 over the next three years, signing a petition to support the ballot effort.

The measure is seeking to collect signatures to qualify for the November 2014 ballot.

“We have a lot of hardworking folks here in Arkansas making minimum wage, and it’s time these families got a raise,” Pryor said in a Little Rock press conference at the Bullock Temple CME Church. “It’s just not acceptable that our state is one of four with a minimum wage set well below the federal level, even as tens of thousands of Arkansas families struggle to get by. Let’s come together and raise Arkansas’ minimum wage. It’s the right thing to do and the right time to do it.”

Give Arkansas A Raise Now (GARN) is the citizen committee pushing for the proposal. The group needs 62,507 qualified voter signatures by July 7th to meet the threshold to qualify for the ballot.

Arkansas is one of four states where the minimum wage is lower than the federal minimum wage. Currently, Arkansas’ state minimum wage is $6.25 per hour, while the federal minimum wage is $7.25.

According to the Arkansas Department of Labor, employers generating less than $500,000 in annual sales and without interstate commerce may pay the state minimum wage versus the federal minimum wage. Efforts to tie the state minimum wage to the federal level have failed in previous legislative attempts, and the last time the state minimum wage was raised was in 2006.

According to information provided by Arkansas Advocates for Children and Families, 168,074 Arkansas workers – roughly 15% of the state’s workforce – would benefit from raising the state minimum wage.

The average salary for an Arkansas worker under the current state minimum wage is $12,750 annually. If the wage were eventually raised to $8.50 per hour, a full-time employee would earn $17,680 annually.

In his weekly address, President Barack Obama advocated for Congress to increase the federal minimum wage to $10.10 for all workers. Obama has already pushed an executive order to raise all federal contract workers’ pay to $10.10 per hour.

Pryor said he was opposed to raising the federal minimum wage.

“I like the Arkansas approach better. I like the phase-in approach,” Pryor said, adding that it was a grassroots effort that required voter approval.

A spokesman for Pryor’s Senate challenger, U.S. Rep. Tom Cotton, R-Dardanelle, said he opposes raising the federal minimum wage and remains undecided on the state minimum wage issue.

“This is a rare issue where Senator Pryor and Tom agree,” said Cotton spokesman David Ray. “A ten-dollar minimum wage imposed by Washington is bad for Arkansas workers and businesses – it would hurt the very people we’re trying to help. Tom believes this issue is best left to the states and it’s a good idea to let Arkansas voters decide the matter. Tom will carefully study this proposal with an open mind and an eye toward making the best policy for Arkansas’s working families.”

Bella Vista Property Owners Association is seeking a 62.5% rate increase in the monthly fees paid by homeowners in Bella Vista to combat a $60 million shortfall in reserves by 2023.

The rate increase, if approved by a majority vote, will be phased in over the next three years. The biggest step increase would be in year one as the $24 monthly assessment would rise to $37 in 2015, adding $1 in each of the next two years.

Unimproved lot owners could see their monthly assessments increase from $16 to $18 over the same three-year period, if the rate issue passes in the May election.

Tommy Bailey, general manager of the POA, said the higher assessments have been a longtime coming as the last increases were received in 2001 and 1984. Bailey spoke about of the need for the higher assessments at the recent Business Matters breakfast, a program of the Bentonville-Bella Vista Chamber of Commerce.

“We formed in 1965 and there were no inflationary triggers built into our governing documents. There have been just five increases in the past 49 years," Bailey said. “We cover 50 square miles and offer 126 holes of golf, 15 parks, outdoor pools, indoor pool and fitness centers and keeping these amenities up takes money.”

He said the goal of the proposed rate increases is needed to provide a sound financial future for the association, as well as maintain the level and quality of the amenities offered to local residents. In doing so, Bailey said property values should be favorably impacted.

The POA reports a $60 million shortfall in its 10-year baseline review out to 2023, if a rate increase is not obtained. Bailey said for the first time in years, the POA adopted a budget that allocated reserve funds for needed capital projects that could not be completed because of insufficient forecasted revenues from assessments and user fees. He said these expenditures are necessary to ensure that the recreation amenities are adequately maintained, and to protect property values. Additionally, the 2014 budget reduced operating expenses by more than $900,000 compared to 2013. These reductions represent a 14% cost savings in operational spending, Bailey said.

The POA board limited the increase to a three-year period, noting that if more money is needed, another election would have to take place at that time. Without an additional vote, assessments would remain at the 2017 level.

Bailey said the components of this campaign for higher assessments is to raise capital that can be used to improve current amenities, replace some aging amenities and add some new items for local residents.

He said if the higher assessment passes, property owners that pay the $37 rate will be able to use many of the amenities without the user fees that were tacked on about 20 years ago. The pools, tennis and fitness centers, shooting ranges, pavilion rental and lake and boat fees, will be all-inclusive in the $37 fee. Golf green fees will be reduced for those paying the higher assessments. Bailey said the lot owners who wish to have the inclusive amenities can pay the higher access fee and purchase a POA-issued photo identification card. 

The POA authorized $7,500 to advertise the need of the assessment and the upcoming election. A POA forum to discuss the assessment is slated for 6:30 p.m. on Tuesday, March 11 at Riordan Hall, and residents are invited to attend. The board's next regular meeting will be at 6:30 p.m. Thursday, March 20, in the board meeting room at the Bella Vista Country Club, 98 Clubhouse Drive. The meeting is open to the public. 

Detailed information about the plan, a fact sheet, a proposed fee schedule, PowerPoint slides and frequently asked questions, are available on the association's website.

Sales tax revenue dipped 3.5% across Northwest Arkansas’ four largest cities in February. Bentonville, Rogers, Springdale and Fayetteville cumulatively received more than $4.894 million in sales tax revenue, compared to $5.075 million a year ago.

All four cities posted lower revenue numbers, citing snow and ice throughout the month for the less foot-traffic and a dip in overall sales. Weather has been blamed for rough retail and restaurant sales as well as declining home and auto purchases. The same cities reported tough year-over-year comparisons in hospitality collections for December, which put downward pressure on their fourth quarter reports.

February revenue reflects sales tax collected in December, creating a two-month lag in the reporting. Each of these cites collect a 2% sales tax. One percent is devoted to bond repayment and the remaining 1% goes into the cities’ general fund. This report reflects the latter 1%.

February 2014 Revenue
Fayetteville: $1.713 million, down 2.4%
Rogers: $1.409 million, down 3.8%
Springdale: $879,035, down 4%
Bentonville: $893,260, down 4.6%

Jack Kleinhenz, chief economist for the National Retail Federation, said it’s tough to quantify the direct impact to the retail sector from the eight named winter storms already in the books, when there’s still four more weeks of winter expected for much of the country. Kleinhenz expects some retailers will make up some of the losses when spring does arrive. Not only have consumers been snowed in more this year, but bitterly cold temperatures have pushed utility bills higher and that is curbing spending habits as more income is going to heating costs.

FORWARD OPTIMISM
Northwest Arkansas city officials said 2014 is off to a sluggish start, but they expect to see revenue pick up this spring and summer. Rogers is looking forward to the July opening of the Walmart Arkansas Music Pavilion.

“We see the AMP as an overnight destination when some of the really big acts take the stage. That is going to mean more folks drive here, eat dinner, shop and spend the night, all which they do within a stone’s throw of the new music venue,” said Allyson Dyer, executive director for Visit Rogers.

At the same time Springdale is looking forward to the new Walmart Supercenter at Elm Springs Road and Interstate 540, which is slated to open later this year.

Kalene Griffith, director for the Bentonville Convention and Visitors Bureau, said last week that the spring calendar for tours and groups visiting the city continues to fill up. She said bus tours are one segment that have exploded in growth since the opening of Crystal Bridges.

“Before 2011 we might have had 15 bus tours a year. Now it’s more than 100 bus tours and we are getting more and more interest from international groups. This summer there is a group out of Ireland, that is coming through Bentonville on a multiple city bus tour,” Griffith said.

She said about 50 sporting events also are planned for this year intended to bring hundreds of people to the region for the day or perhaps the weekend.

The debate over whether Arkansans can openly carry a firearm in public continues, and this time the University of Arkansas' law school has thrown itself in the middle of the debate.

In an article published on the Arkansas Law Notes section of UA Law's website, Associate Professor of Law Laurent Sacharoff and law student Jacob Worlow explain that "(s)ometimes the legislature — well — screws up."

They say while HB 1408, which would have allowed for open carry of licensed individuals, failed to win enough votes for passage, HB 1700 likely did accomplish "that very goal, and perhaps even permitted concealed carry without a license," even though the title of the bill said it was only enacting "technical" changes to the state's current gun laws.

Sacharoff and Worlow point to the language of Section 120 of the old and new laws.

"First consider the old Section 120, which made it a crime to possess a handgun with the “purpose” to use it as a weapon 'against a person.'…The new Section 120 changes the language of this purpose element by adding the word 'unlawfully.' It is now illegal to possess a handgun only if the person has the 'purpose' to use it 'unlawfully' against a person."

That said, the authors said "since practically anyone can reasonably say they intend to use the gun for self-defense, that would mean nearly anyone can carry a gun without a permit, open or concealed."

Even though it appears the law, which is in affect, would allow any law-abiding citizen to openly carry a firearm, the authors said it could still come under judicial scrutiny, largely based on questions of legislative intent and also the history of similar laws in the state.

That said, Sacharoff and Worlow said it was likely "a court facing a defendant arrested with a gun would interpret the statute based upon its plain meaning. When all is said and done, how can the court punish a person for following the literal and unambiguous meaning of the statute? A person should not be expected to consult the history of the law’s passage, or its political context, to understand what it proscribes."

LAW NOT A SCREW UP
Rep. Denny Altes, R-Fort Smith, said in a Facebook post Sunday linked to the UA Law article that he and his fellow legislators "did not screw up."

Altes said open carry had "been the law in Arkansas since at least the 1800s. He said through several attempts to update the law through the years were unsuccessful, he was able to strike the right balance with the language of HB 1700 to please groups including the Sheriff's Association, the Chiefs of Police Association, the Prosecutors' Association and the State Police.

"The old code was written so there were many defenses to carrying a weapon. So, I asked why not make it a right with exceptions. This met with approval from everyone. It seems that it is two sides of the same coin," he wrote. "So, we didn’t really change the law, we only clarified that it is a right to keep and bear arms according to the Second Amendment of our Constitution (According to Webster’s 'bear' means 'to carry')."

ATTORNEY GENERAL OPINION
Attorney General Dustin McDaniel in August of 2013 said the new law did not allow for an individual to do more than possess a handgun within that person's personal transportation when on a journey outside of the person's residential county, adding, "In offering this conclusion, I must stress that Act 746 in no way modifies the rights and obligations conferred upon those individuals who have obtained a concealed handgun permit pursuant to the pertinent provisions of the Arkansas Code."

That has not stopped a large number of law enforcement agencies and prosecutors from across Arkansas from declining to arrest or prosecute individuals found openly carrying a firearm. Among them, Fort Smith Police Chief Kevin Lindsey and Fort Smith Prosecuting Attorney John Settle, who said prior to an open carry protest walk in Fort Smith that there has to be proof of an “attempt to unlawfully use” a weapon against another person.

Reached for comment, Public Information Officer Aaron Sadler of the AG's office said, "The (Attorney General's) opinion speaks for itself."

OPEN CARRY RESPONSE
Steve Jones, communications director and a board member for the pro-2nd Amendment group Arkansas Carry, who organized the Fort Smith walk and several others around Arkansas, said the lack of consistency between McDaniel and others is a "shame."

"That's a shame that they cannot get on the same page even with the law department at the University of Arkansas," he said.

Jones said while Fort Smith was not abiding by McDaniel's opinion, other agencies are.

"I've contacted the Arkansas State Police back in August and they are going with what the Attorney General says. Any law enforcement who does not want to read the law exactly as it is written refers back to the Attorney General's opinion, which is basically ignoring what the law says. That's a shame because it's just flat wrong,” Jones said.

Since the law went into affect, there have no known arrests except of "people who were already committing crimes, which is how the law reads," according to Jones.

"Other than that, we do not know of anyone. We're looking and waiting to see if someone could be arrested to see how a law case would come out."

But if that is going to happen, it would require more and more agencies to take the stand of the ASP instead of the reception some open carriers have been receiving.

"I know there are individuals across the state who open carry in Walmart, restaurants, and we've had no problems at all. We've even had law enforcement contact without any arrests,” Jones explained.

That said, Jones said as questions about open carry continue, it is important for Arkansas gun owners to use caution before strapping on a gun and leaving the house.

"We ask them if they want to carry a gun to contact law enforcement in their area and see how they are approaching this law. We are not telling people to open carry because it's legal. I want them to be sure to stay safe."

He said while it is the opinion of Arkansas Carry that openly carrying a firearm is legal, he has been surprised by the Attorney General and others who have said HB 1700 does not allow such behavior.

"Everyone who reads the law and reads it as a law that basically does not punish a person for exercising their rights can see that it's legal, except law enforcement. For some reason, law enforcement wants to arrest law-abiding citizens for carrying a handgun."

More consumers plan to sock away their tax refunds which is bad news for retailers like Wal-Mart who are sitting on higher inventory levels two months removed from what was a disappointing holiday season.

Last week the National Retail Federation warned members that a new survey predicts 46% of those expecting a tax refund this year intend to save the money. The so-called savers outnumber last year just slight at 44%. About 67% of consumers surveyed said they anticipate a refund check from Uncle Sam.

The NFR Survey Results include the following findings.
• 38% plan to pay down debt
• 25% need the refund for everyday expenses
• 13% will spend it on a vacation
• 11% will treat themselves

The NRF also reports that about one in four of those surveyed had already filed taxes. Another 37% plan to do this month (February), and 26% said they would file in March and 15% said they would wait until the last minute.

Given this slower pace to file, retailers are holding out hope they can still woo shoppers in with big clearance sales, especially on big ticket items such as electronics, left over from unsold holiday inventory.

Bill Simon, CEO of Walmart U.S., said during last week’s media call that tax refund activity is running behind this time last year, but has started to pick up a little momentum.

Retail analyst Doug Hart, with DBO USA, said it makes sense that consumers plan to save back refunds this year, given that consumer debt has been on the rise, especially in December and January.

INVENTORY LEVELS
Simon said last week that recent fourth quarter inventory grew 3.8%, moderating from prior quarters but it was still higher than the rate of sales. He said the retailer remains committed to disciplined inventory management and is well positioned for spring seasonal conversion.

Inventory overruns are leading to deep discounts for many large ticket items such as Apple iPad 2 16 GB for $299 or 60” Vizio LED HDTVs for $798, a savings of $201.99. Large displays of unsold televisions are positioned to catch shoppers eyes as they enter some supercenters. Other stores have them lined up in the rear “Action Alley” aisle and Walmart.com continues to feature them in daily email notices to customers that have previously ordered online.

Wal-Mart also noted that its entertainment category, which includes toys, posted negative comparable sales in the fourth quarter. Sales were negative mid-single digits, according to Simon. The retailer said it was able to pick up market share with positive reactions from the “one-hour guarantee” program on Black Friday. 

“While we were pleased with the our share performance, we continued to face challenges related to ongoing entertainment industry contraction,” Simon said.

According to research firm NPD Group, consumer electronics sales fell 2.4% to $22.9 billion during the 9-week holiday period.

The inventory excess and discounts are not limited to electronics, as Wal-Mart advertises “thousands of clearance items” in its February Savings Day’s marketing campaign. Tires, mattresses, camping gear and small appliances are some of the other  categories featured in Wal-Mart’s newest rollback campaign.

WEAK FORECAST
One main concern from analysts following Wal-Mart’s recent tepid forecast for this quarter is that this aggressive pricing to move out inventory is further eroding gross margins. This could hinder top and bottom line results if the consumer stays cautious.

Comparable sales at Walmart U.S. were down in the first two weeks of February due to bad winter weather. For the 13-week period ending May 2, Walmart U.S. expects comp store sales to be flat. Comp sales declined 1.4% in the prior-year period.

The weak forecast was enough to prompt Stifel Nicolaus to downgrade its rating on Wal-Mart shares to a “hold,” or neutral position, as it plans to sit on the investment sidelines to see how the retail behemoth navigates through the next few quarters.

Shares of Wal-Mart Stores (NYSE: WMT) closed Monday at $73.35, up 23 cents. The shares have been on a downward trend since the start of this year. For the past 52 weeks the share price has ranged from an $81.37 high to a $70.44 low.

Development and business friendliness took center stage for much of a more than hour long brainstorming session of the Fort Smith Board of Directors on Monday night (Feb. 24).

The session, which was absent a set agenda in order to allow a free flow of ideas among Board members and the administration, started with City Director Keith Lau simply asking what the city could do to make it easier for citizens needing to do business with the municipality. He cited specific examples of individuals having trouble with permitting for construction and subsequent inspection issues.

City Director Mike Lorenz said from his perspective, it seemed that all complaints seemed to center around inspections.

"I think it truly is the difference between…an inspector knows the rules of what can and can't be done, what is code, what isn't code. But that isn't translated correctly at all,” Lorenz said.

City Director Pam Weber, who acknowledged receiving two inspection-related complaints on Monday alone, said city staff "has to be careful how we say things," adding that reducing rules and regulations already on the books as some citizens have called for would not fix the problem. She said one of the goals of the administration should be to help staff in the planning department find a way to work with customers, developing "a customer service attitude."

Among the talk of inspections, permitting and planning came ideas for expanding the city's use of online building permits to streamline the process, something City Administrator Ray Gosack said had been re-introduced to the city last year after a multi-year absence. The absence was brought on, in part, by the low usage compared to the cost of upkeep for the online portal, he said, adding that he was hopeful usage would increase with the online procedure being re-introduced.

City Director Philip Merry also floated the idea of having retired volunteers on site to help individuals and business owners find their way through the permitting process at the city offices on Garrison Avenue, though Weber said a simpler procedure would simply be to provide individuals a list of what they would need to do to fulfill the city's requirements for permitting and inspection.

During the discussion on making Fort Smith more friendly to businesses and residents, which the Board hoped would attract industry, Weber floated the idea of purchasing more items for the city locally.

"I know there's some rules on who we do business with, how we do it. But part of the things we do is we give a lot of contracts worth a lot of money and I know we have to bid those and that type of thing. But it really irritates me that we don't do local. Like we buy cars in Texas, that type of thing. And I'm wondering if there is a rationale?"

She questioned Police Chief Kevin Lindsey about why new Tahoe police cruisers for his department were not purchased locally, to which he said no local dealership had the vehicles he needed therefore necessitating buying the vehicles from a dealership outside of the Fort Smith area.

Deputy City Administrator Jeff Dingman said the city could look into the possibility of an ordinance that would require taking a local bid if it was within a certain percentage of the lowest overall bidder, though he said city attorneys would have to explore the legality of such an ordinance within the state of Arkansas.

Gosack did not speak against any such action, though he said it was important for the Board to keep in mind that not taking the lowest bidder on large contracts could turn into large amounts of additional taxpayer dollars being spent.

"You know, last week you awarded a sewer construction project for nearly $13 million. If you had a 5% local preference in there, you could leave three-quarters of a million dollars sitting on the table. …Arkansas used to on construction contracts, the state did have a policy allowing 5% in-state bid preference and I think they realized when you get into these multi-million projects, it's a lot of money that could be left on the table."

Other ideas discussed at the meeting included:
• Implementing a building design standard for all city-owned buildings;
• Exploring whether a casino was still a possibility along the Arkansas River near downtown;
• Possibly hiring additional city planners to fill the needs of the city; and
• Improving railroad crossing safety across the city.

The Board did ask for a resolution to be developed that would state the city's willingness to conduct itself in a more business friendly fashion.

The next brainstorming session of the Board will be held May 27.

Day One of political filing in Arkansas saw contestants for U.S. Senator, Congress, Governor, and Lt. Governor file paperwork at the state capitol.

Arkansas’ candidate filing period for this year’s election cycle opened at noon on Monday (Feb. 24) as more than 250 candidates put their names on the dotted line.

U.S. Rep. Tom Cotton, R-Dardanelle, filed for the U.S. Senate. Former U.S. Rep. Asa Hutchinson and Curtis Coleman filed for Arkansas Governor for the GOP primary, and U.S. Rep. Tim Griffin, R-Little Rock and Rep. Andy Mayberry, R-Hensley, for Lt. Governor.

No Democrats filed for those offices on day one, but they are expected to file later in the week.

For Congress, Democrat James Lee Witt made his Fourth District candidacy official as did Republican Rep. Bruce Westerman. U.S. Rep. Rick Crawford, R-Jonesboro, and U.S. Rep. Steve Womack, R-Rogers, filed for re-election for their First and Third District seats, respectively.

In the Second District Congressional District, Democrat Pat Hays filed as did Rep. Ann Clemmer, R-Benton, and Republican French Hill.

All told, more than 135 candidates filed for races that included federal offices, constitutional offices, state representatives, and state senators. Another 125 filed for judicial or prosecutorial offices.

The candidate filing period will close at noon on Monday, March 3.

Whirlpool Corporation has submitted yet another revised Revised Final Work Plan to the Arkansas Department of Environmental Quality (ADEQ) as the company prepares to start remediation efforts well ahead of previous estimates.

In the previous update to the remediation plan in January, the company stated that three phases of chemical oxidation would be necessary for the company to begin to break down trichloroethylene (TCE) in the groundwater below its former Fort Smith manufacturing facility and a neighborhood to the north of the shuttered factory. The first phase was scheduled to begin in Spring 2016, with a second phase to begin a year later.

Earlier plans had indicated a completion date for remediation of 2018.

The latest plan submitted Monday (Feb. 24) outline a revised schedule which would begin phase one remediation work this month, continuing until April. Phase two would begin in May and continue through June, with subsequent phases to follow "based on results of earlier phases," according to the document submitted Jeff Noel, Whirlpool's corporate vice president of communications and public affairs.

Noel wrote that the schedule was able to change significantly due to ADEQ's previous approval of Whirlpool's plans to begin pre-design activities late last year.

"The pre-design data collection has now been completed, which will provide critical information needed to push forward with the next steps," he said.

He said certain uncontrollable circumstances, such as weather and completion of "access agreements," could delay the schedule.

No date was given for when an impermeable soil cover would be applied to the Whirlpool site. The cover was a requirement from ADEQ to ensure that TCE would not resurface at the company's former manufacturing site.

Deputy Fort Smith City Administrator Jeff Dingman said he was pleased with the sped up timeline, though he said the quicker timeline for implementation was not a result of any added pressure from the city.

"No, but throughout the process they've continued to show interest in doing what they need to do and getting it done," he said, adding that the change in schedule was "encouraging."

City Director Keith Lau openly questioned whether the Board of Directors'deliberation on whether to impose nuisance fines against the company as a result of the TCE pollution of not only its site, but the neighborhood north of the site, played any role in the sped up timeline.

"I wonder what, if any, our conversations in the last month have promoted that (speed up) or if that's just something that's happened (coincidentally). Either way, it's good."

Noel gave no further indications for why the company was speeding up the remediation, though he said Whirlpool's commitment to correcting the situation had not wavered.

"As we have stated previously, Whirlpool remains committed to staying in Fort Smith to work with ADEQ, area residents and the City of Fort Smith until this project is complete."

A U.S. Chamber of Commerce official warned an Arkansas audience that overregulation of fracking practices in the oil and gas industry could cost jobs, tax revenue, and the overall economy.

Karen Harbert, the president and CEO of the U.S. Chamber Institute for 21st Century Energy, was a featured speaker at an Arkansas State Chamber of Commerce/AIA luncheon held at Heifer International’s world headquarters.

Harbert touted a litany of energy statistics that highlighted that in the next 35 years the world’s electricity demand will increase by 140%. Harbert also noted:
• The oil and gas industry created 9% of all American jobs in 2011;
• Oil imports are expected to decrease 60% by 2020;
• Oil and gas production has led to an American manufacturing renaissance as well as a return of chemical, fertilizer, and steel industries.

She said that the natural gas “fracking revolution” has helped feed the nation’s energy demand. Harbert said that Arkansas is now the No. 4 natural gas producing state in the U.S., according to recently released 2013 data from the U.S. Energy Information Administration (EIA). According to a “marketed production” report from the EIA, Arkansas ranked 8th in 2012 in natural gas production.

During the past decade, shale gas production has risen from two percent of the nation’s energy mix to 30% today. That number is expected to rise to 50% by 2035. But Harbert said regulatory intervention by the Environmental Protection Agency (EPA) could undermine that trend.

“What if the 13 federal agencies looking to regulate fracking are successful?” she said. “We have to keep it attractive.”

Harbert said a Colorado ballot initiative to allow local governments to supersede state fracking laws could also be detrimental if other states follow suit.

According to Harbert, Arkansas’ natural gas industry is expected to create 52,000 new jobs and produce nearly $900 million in tax revenue by 2020.

A relatively higher price and the continued production of natural gas from existing wells resulted in a record of $62.685 million in Arkansas’ gross natural gas severance tax revenue during 2013. The tally was up more than 53% compared to 2012 collections and up more than 6.4% over the previous high set in 2011. In 2009, the first year of the severance tax hike, Arkansas joined the list of the nation’s top marketed natural gas producers when sales of Arkansas natural gas spiked 57.5% to 690 billion cubic feet (Bcf). Arkansas natural gas sales rose another 36.1% to 939 Bcf of annual production in 2010, according to figures from the Arkansas Department of Finance and Administration and the federal Energy Information Administration.

Harbert also touted that coal, gas, oil and nuclear power must remain a crucial component of the nation’s energy policy. She said that there is no quick or easy way to remove U.S. dependence on low-cost coal as a fuel for generating electricity despite efforts to replace it with alternative fuels.

“The dinner party is still going to be the same,” she said. “”We’re going to need it all.”

Harbert is a former assistant secretary for policy and international affairs at the U.S. Department of Energy (DOE). She was the primary policy advisor to the DOE Secretary and to the department on domestic and international energy issues, including climate change, fossil, nuclear, and renewable energy and energy efficiency.

Scott Hamilton, director of the Arkansas Energy Office at the Arkansas Economic Development Commission, said Harbert’s message is a welcome discussion in the state.

“The points she made are very valid,” he said. “We have to have an energy focus in the U.S., and Arkansas has to continue to find ways to educate [this need] at the local level.”

The U.S. Chamber has developed a nine-point action plan for U.S. energy policy.