U.S. Rep. Markwayne Mullin, R-Westville, Okla., could be in hot water now that the House Committee on Ethics has received a referral from the Office of Congressional Ethics regarding outside employment activities of the eastern Oklahoma congressman.

At issue is Mullin's continued involvement in Mullin Plumbing, a Broken Arrow-based business he and his wife have owned for the last 17 years. Since taking office, Mullin has continued to be the face and voice of the company on television and radio in the Oklahoma City and Tulsa media markets, while also continuing active involvement in the company's day-to-day operations, according to the OCE referral.

While Mullin reported personal income of $91,731 in 2012 when he was elected to Congress, the OCE report that was referred to the Committee on Ethics states that Mullin last year received income from Mullin Plumbing and other companies he owns in excess of $600,000.

"If Representative Mullin received more than $26,955 of outside earned income in 2013, he may have violated House rules and federal law," the report states, adding that he may have also violated House rules and federal law if it is proven that he “endorsed any services pursuant to outside employment,” as well as serving as an officer or member of the board of directors for one or more companies.

In addition to the previously stated allegations, the OCE said "there is substantial reason to believe that the income he received is earned income because: (1) his share of the profits from the plumbing companies are, at least in significant part, for attracting or retaining clients; and (2) his 'distributions' from the company his wife wholly owns are not a return on any equity that he holds."

Washington, D.C.-based attorneys for Mullin have disputed the allegations in the OCE referral to the Committee on Ethics, stating that Mullin sought guidance from the OCE during his time in office and attempted to follow the advice he received. The attorneys, Robert Walker and Jan Witold Baran of Wiley Rein LLP, said that any income Mullin received in 2013 was not earned income.

"None of this income was earned income or income in connection with services to those businesses, but the OCE grossly exaggerates the amount which could even arguably be viewed as earned or as personally received in connections with services," they wrote in their Jan. 22, 2014, response.

The attorneys claim that only $95,000 "was income personally received by Rep. Mullin," further elaborating on how the plumbing company's specific type of corporation functions.

"To simplify a great deal, in Subchapter S corporations — such as each of the Mullin family businesses under consideration here — payment of the corporation's tax obligations and other business expenses 'flow through' the individual owners/shareholders of the corporation. Thus, with respect to the Mullin family business corporations, of the 'over $600,000' attributed as income to Rep. Mullin in 2013 by the OCE, the following amounts actually satisfied tax and other obligations of the business corporations:
• $387,425.00 — tax payments to the IRS and to the Oklahoma Tax Commission
• $69,983.44 — payments to Rep. Mullin's father for purchase of the business
• $87,702.00 — for purchase of rental properties

"For tax and accounting purposes, these payments were treated as distributions to Rep. Mullin. Nonetheless, they were business payments and expenditures of the corporations. In fact, all checks for payments and expenditures included in the above-cited totals went directly from the paying corporations to the payees and not to Rep. Mullin. Certainly, therefore, none of these payments or expenditures constituted 'earned income' to Rep. Mullin as that term is used by the Committee."

In the response, Mullin's attorneys explain that the congressman spent "thousands" of dollars to restructure his companies — which include five different companies valued in the millions of dollars, according to his 2012 financial disclosure report — in order to be in compliance with the OCE and the Committee on Ethics.

In an interview Monday (March 24) with KOTV in Tulsa, Mullin said part of his efforts to be in compliance with the law included hiring a CEO for the company, in addition to the restructuring of his companies at the suggestion of the OCE.

In announcing that the Committee on Ethics would review the matter based on referral by the OCE, Ethics Committee Chairman K. Michael Conaway, R-Texas, and Ranking Member Linda Sánchez, D-Calif., explained the reason for their committee's investigation.

"Pursuant to House Rule XI, clause 3(b)(8)(A) and Committee Rule 17A, the Chairman and Ranking Member jointly decided on February 6, 2014, to extend the Committee’s review of the matter.  In order to gather additional information necessary to complete its review, the Committee will review the matter pursuant to Committee Rule 18(a).  The Committee notes that the mere fact of conducting further review of a referral, and any mandatory disclosure of such further review, does not itself indicate that any violation has occurred, or reflect any judgment on behalf of the Committee," they said, adding that no further public statements would be made until after the completion of the initial review.

In a statement, Mullin took aim at unnamed members of the House for what he claimed were more egregious ethics violations and again said he followed the OCE recommendations.

"Apparently it’s acceptable for Members of Congress to own stock in companies we regulate in Congress, but somehow our plumbing company crosses some line. This is more of the kind of thing that leaves people scratching their heads and saying ‘only in the government,’" he said. “After first getting elected we set up a meeting with the House Ethics Committee to determine what we needed to do to comply with all House ethics rules regarding our businesses. We have followed those recommendations to the letter, even at significant expense to our company."

Following is Mullin's full statement regarding the actions of the House Committee on Ethics.

“This review - based on an anonymous complaint - is referring to whether we want citizen legislators or just professional politicians making laws that impact our jobs, our families and our communities.

“The politicians said Dr. Tom Coburn couldn’t deliver babies when he got elected to the U.S. Senate. Now they are trying to say that I shouldn’t be involved in the family plumbing business that my wife and I have spent the last 17 years building. Apparently it’s acceptable for Members of Congress to own stock in companies we regulate in Congress, but somehow our plumbing company crosses some line. This is more of the kind of thing that leaves people scratching their heads and saying ‘only in the government.

“After first getting elected we set up a meeting with the House Ethics Committee to determine what we needed to do to comply with all House ethics rules regarding our businesses. We have followed those recommendations to the letter, even at significant expense to our company.

“Many of the problems facing our nation today require the kind of commonsense, practical business approach that citizen legislators can provide. The politicians believe Congress is a place for other professional politicians and now the bureaucrats are trying to say I shouldn’t be allowed to work in the company I have spent the last 17 years of my life building.

“I will continue to fight for the right to stay involved in my business. The stakes in this fight are not just my rights as a business owner. We are talking about the very nature of our government. Will we continue to allow real citizen legislators to serve in Congress as our Founding Fathers envisioned? Or do the bureaucrats have the power to say that only career politicians are allowed?”

The past few months have been a blur of activity for execs at Silicon Solar Solutions/Picasolar and Overwatch, both tagged as startups to watch in 2014 by The City Wire. Each of the two startups have been in the midst of product design and testing as they work to get their inventions to the manufacturing phase.

The startups also are working to secure more capital to see their products into production and manage long-distance relationships between principal members.

PICASOLARTESTS WELL
Flying high from a national SunShot grant, Douglas Hutchings, with Silicon Solar Solutions and its sister startup Picasolar, said their technology for the N-type solar cells came through the first battery of federal testing with strong results.

“We passed UV testing and that is a big milestone we are glad to have behind us,” said Hutchings. 

The startup received test results Monday (March 24) from the National Renewable Energy Laboratory. He said the improvements ranged from 4.41% to 9.67% with an average efficiency improvement of 7.6%. The goal was to be at 5% by October, which puts them ahead of schedule.

“There is still a lot more work to be done in terms of optimizing the process to be ready for high throughput, but this is definitely a big step in the right direction. These results were delayed significantly because a third party vendor broke several of our samples which caused all sorts of scrambling to catch back up,” Hutchings said.

The startup also is dealing with less than optimal communication among vital team members. One principal is sorting out some immigration related issues that is forcing him to work from abroad which is not ideal given the time zone differences. In the meantime, Hutchings said they are finalizing the paperwork to add a fairly high profile Arkansan to its board of directors.

“The individual is highly accomplished and should bring a lot to the team having held industry and political positions where he has been very successful. We should be collecting final signatures over the next couple of days so we can announce something,” Hutchings said.

The startup also continues to work on plans for local manufacturing of its solar equipment.

“We have engaged AEDC and other stakeholders within the state to start ironing out infrastructure needs. We recently recruited Rick Schwerdtfeger as chief operating officer who has built a $1 billion manufacturing company in the past at ARC Energy. We are leveraging his skills and prior experiences. Ultimately the facility would create around 113 jobs by 2017 if we are successful.” Hutchings said.

Picasolar is actively engaging investors for its next round of funding. Hutchings said the group will make visits outside the state to find more funding sources. He said the company has received letters of intent from two customers wanting to purchase the new technology. The two sales, if made, exceed the company’s total projected sales through 2017. Hutchings said this shows investors there is good demand for their product, which is why the startup is eager to get this new technology to market. The Picasolar technology is part of the SunShot Incubator Program, sponsored by the U.S. Department of Energy.

“We successfully submitted another proposal for the next tier of the SunShot Incubator Program. ... We proposed a $1 million project to the Department of Energy and we should start receiving feed back in the coming month or so,” he said. 

OVERWATCH COMPLETES DESIGN
Josh Moody, CEO of Overwatch, told The City Wire the Bentonville-based startup is reeling with excitement as its gaming application is 90% complete.

“We have just finished the designs for our hardware case mount and are sending it to Cyber Gun this week (March 25),” Moody said. “Their manufacturer will likely tweak the design some and we expect to hear back in the next two to three weeks.”

After that, Moody said they will work on packaging, but in the meantime, the lean and long-distance team has focused on promotional marketing plans for a product launch in June. Moody is finishing up his senior year at Little Rock Catholic High School and working on the designs and marketing plan in his spare time. His partners, Joe Saumweber and Michael Paladino, of RevUnit in Bentonville, are providing the software engineering and technology services to Overwatch.

Moody said the software gaming application is nearing completion and will be distributed to the startup’s beta testers within the next month. 

“We have a lot to pull together for a June product launch,” Moody said. “We expect the hardware will be ready to ship to retail stores in June and we want to package the software application with the hardware case mounts.” 

Overwatch is closing up a funding round for $300,000 in capital, which Moody said is needed to get the product to market. He said the startup will likely get the full amount needed from Arkansas investors, but the company is not opposed to looking outside the state if necessary.

“We are in talks in now for the funds we need to cover the final expenses of getting this product launched into retail,” Moody said.

A journalist who sparked a wave of negative publicity for Bill and Hillary Clinton in the ’90′s shared his “cautionary tale” of fostering Clinton-hating and his conversion to supporting the Clintons, including his hope for a 2016 Presidential run by Hillary Clinton.

David Brock – who once wrote scandalous stories involving Paula Jones and Arkansas state troopers for the conservative magazine, The American Spectator – said he was duped by right-wing opponents of the Clintons into writing stories he later discovered should have been discredited.

Brock, founder of the non-profit watchdog group Media Matters for America, returned to Arkansas for the first time since the 1990′s to give a lecture at the UA Clinton School of Public Service titled “Countering the Culture of Clinton Hating.”  During the speech, Brock  apologized for the journalism he once produced that resulted in the slew of negative Clinton press.

“As I did my reporting, I came to see what Hillary Clinton’s admirers saw in her, what we all see in her today – a steadfast commitment to public service and a deep desire to affirm the good and virtuous in politics all too rarely seen in her generation of politicians,” Brock said in his speech.

“So I had a choice. Twist the facts to give the conservatives what they wanted. Or, stick to the facts, and reclaim my integrity. Which actually was no choice at all,” he said in describing his conversion to correcting the record.

Brock works for and raises money for a super PAC called American Bridge, which is also funded by Clinton supporters such as George Soros. Soros has also directly supported Media Matters.

Brock said he feels those who despise the Clintons operate from a position of fear for the potential change their politics represent. His turn away from the destructive politics he once helped create had an air of vindication.

“Despite our best efforts, the American people didn’t buy what we were selling, and they sent the Clintons to Washington. And in a democracy like ours, that should have been the end of it. But this time something was different,” Brock said. “The conservative powers-that-be wouldn’t accept the legitimacy of the victory by a young, dynamic, progressive couple who threatened the established political and social order. They were serious agents of change. So the conservatives defied 200 years of American history and set the stage for a coup.”

TROOPERGATE
Brock said his reporting of state trooper tales involving the Clintons, a scandal dubbed “Troopergate,” was mostly fiction. As an enterprising young reporter in his 20′s working for the right-wing funded American Spectator, Brock said he was tipped to the troopers’ stories and he pounced on the opportunity.

“As you can imagine, I quickly became suspicious of the troopers’ motives in speaking out. To make matters worse, there was no way to tell if what they were saying was true or not. But I knew I was expected to deliver. I took them at their word and printed it all anyway,” Brock said.

“I later learned something else that I found particularly disturbing and that warrants special emphasis. A political partisan close to would-be House Speaker Newt Gingrich had paid off the troopers to talk – a revelation that exposed the whole experience as a set-up, a sham, a fraud on the public,” he added.

Brock warned that the shadow of his previous benefactor, billionaire Richard Melon Scaife who underwrote the American Spectator, can be seen in modern-day allegations from business interests such as the Koch Brothers who make claims that Brock said “should never see the light of day.”

“The money behind it all comes from the likes of the Koch Brothers, Charles and David, two billionaires with a seemingly bottomless treasure chest who have displaced Richard Mellon Scaife as leading financiers of the far Right. The Koch Brothers view their donations not as investments in their country, but as investments in special favors for their company,” Brock warned.

“Already this year, a tidal wave of false Koch-funded advertising against the Affordable Care Act is misleading voters. The Kochs believe that conservative control of Congress – through which they will try to dismantle ObamaCare and stage endless investigations – is a critical step to taking back the Presidency in 2016 – perhaps with their own man at the top of the ticket,” he said.

Link here for the text of Brock’s speech.

A Disney World theme park vacation may be every kid’s dream, but with the escalating costs of a one-day ticket such a fairy tale trip could be out of reach for many middle-class families.

Walt Disney World raised its daily ticket price to $99 in February, the second price hike in less than a year. The ticket costs have doubled in the past decade. Meanwhile, the median family income has declined 8% since 2007 to $51,017 in 2012, the latest available data by the U.S. Census Bureau. The median income in 2012 was at the same level it was in 1995, a setback of 17 years.

The theme park prices continue to rise annually, but Fiona O’Donnell, a leisure analyst with Mintel, said this year the price hike came earlier than expected. She doesn’t think the $4 increase will keep vacationers away.

Disney spokeswoman Kim Prunty, recently told CNBC that ticket pricing reflects the “high quality experiences” offered and the company’s ongoing investments in their park facilities.

“We offer a variety of ticket options that provide a great value and find that most guests select multi-day tickets that offer additional savings," she said.

Disney did not immediately respond to The City Wire’s request for comment made on Tuesday (March 25).

A three-day ticket costs $274 which is $91.34 per day for park patrons aged 10 and up. Children ages 3 to 9 would pay $255 for the same ticket, a daily average of $85, according to the Disney’s website. 

A family of four that includes two small children would plunk down $1,058 for three-day passes, and that doesn’t include parking, food or lodging. A one day trip to the Magic Kingdom would cost $384 for the same family. Analysts said if pricing put the parks out of reach for traditional clients, they will likely go far less often, perhaps once in a lifetime.

CONSUMER REACTION
Consumer sentiment has been mixed on the rate increase, according to several people interviewed by The City Wire. Carlos Collier, an avionics technician at the Tulsa International Airport, said “$500 for a family of five sounds a bit ridiculous to me.”

Mitch Clendening, a television news director in Houston, said the $99 ticket price is steep. But he added that he has taken his family to Disney several times via complementary passes made available to the media. Peggy Treiber of Fayetteville said she thought the price was a bit much until she got to Orlando.

“Now I would consider it too high if you went during spring break or on a holiday and ended up spending most of your time in line, other than that, not really.”

A February report from IBIS World notes that the amusement park industry has focused on growing in-the-park spending as a way to compensate for lighter crowds in recent years. The higher ticket prices also help to keep annual revenue constant as it may take some families several years to save up for their Disney vacation.

REVENUE REBOUND
The amusement park industry derives the majority of its revenue from ticket sales. In 2014, admissions and ticket upgrades are expected to account for 55% of industry revenue, according to the IBIS report. 

This segment has held a steady share of revenue in the five years prior to 2014, and it is expected to continue providing the majority of industry revenue in the five years to 2019, noted Andy Brennen, analyst and report author at IBIS World.

Walt Disney’s theme park segment revenue is on the rebound after a bumpy ride from 2008 to 2010. Segment revenue dipped 7.3% in 2008 to $5.12 billion. The following year revenue was flat. Ticket costs rose from $69 to $76 for a one-day pass during the same years.

Disney park revenue rebounded 9.6% in 2010 and 2011 to $5.66 billion and $6.2 billion, respectively. Last fiscal year revenue topped $6.5 billion, up 5.4% annually, according to  corporate filings.

INDUSTRY MARKET SHARE 
The amusement park industry is a $15.4 billion market this year, and profits are forecast at $1.6 billion up 4% since 2009, according the IBIS report. The Walt Disney Company has a 44.5% share of that market, well ahead of Universal Parks at 15%, Sea World at 10.6% and Six Flags at 7.9%.

The industry is increasingly dependent on U.S. residents and that is especially true again this year with continued global economic slowing. IBIS estimates about 80% of the industry’s total visits this year will be from domestic patrons.

The largest demographic of domestic visitors are children and teens — 25.6% of the market. The parents or these kids ages 35 to 54 represent about 21.6% of the visitors. Senior citizens represent about 19.2%.

Combined personal incomes in Arkansas during 2013 grew 2.2%, below the 2.6% U.S. average, with the state’s per capita average of $36,086 pushing the state’s national ranking from 45 in 2012 to 46 in 2013.

The U.S. Bureau of Economic Analysis on Tuesday (March 26) reported preliminary estimates that showed overall U.S. personal income growth of 2.6% in 2013 was down from the 4.2% growth in 2012. Inflation, as measured by the national price index for personal consumption expenditures, slowed to 1.1% in 2013 from 1.8% in 2012.

“The slower personal income growth reflected the effects of several special factors including the expiration at the beginning of 2013 of the ‘payroll tax holiday’ (a temporary two-percentage point reduction in the personal contribution rate for social security) and the acceleration of the receipt of income, especially personal dividends and salary bonuses, into 2012 in anticipation of changes in individual income tax rates for 2013,” noted the BEA report.

Earnings grew in 2013 in every industry except civilian federal government, which fell $6.7 billion. Earnings growth slowed, however, in most private-sector industries in 2013. Among the few exceptions with accelerating growth, construction and farming were notable. Earnings growth was greatest in professional services (up $44.6 billion), construction (up $44.3 billion), and health care (up $42.5 billion). These 3 industries contributed the most to earnings growth in 2012 as well.

Mining (including oil and gas extraction) was one of the major contributors to earnings growth in North Dakota, Oklahoma and Texas in 2013. Earnings growth rates in these three states have outpaced the national average not only in 2013, but in each of the four years since the recession.

Personal income, according to the BEA, is the sum of net earnings by place of residence, property income, and personal current transfer receipts.

Arkansas’ personal income in 2013 totaled $106.792 billion, up 2.2% from 104.508 billion in 2012. Oklahoma saw personal income growth grow 3.3% in 2013 to reach $160.128 billion. Personal income growth in Missouri during 2013 totaled $241.145 billion, up 2.3%.

Of the 2.2% growth in Arkansas, 1.4% growth was reported in net earnings (typically income from a job) and a 2.9% increase in income from dividends, interest and rent. Income from transfer receipts – payments to Arkansans from federal sources, for example, Medicaid and Medicare – rose 3.5% in 2013.

Earnings growth in Arkansas was up $1.977 billion in 2013 compared to 2012. Following is a breakdown on earnings gains and losses compared to 2012 in key Arkansas economic sectors.
• Management of companies: up $469 million
• Farming: up $321 million
• Healthcare and social care: up $275 million
• Retail trade: up $116 million
• Utilities: up $102 million
• Transportation: up $87 million
• Finance and insurance: up $51 million
• Real estate: up $27 million
• Non-durable goods manufacturing: up $20 million
• Durable goods manufacturing: up $7 million
• Mining: down $45 million
• Construction: down $51 million

Arkansas’ per capita personal income of $36,086 ranked 46th. West Virginia ranked 47, South Carolina ranked 48, Idaho was at 49, and with an average per capita income of $34,478, Mississippi ranked last.

The top five were:
Connecticut: $60,847
North Dakota: $57,084
Massachusetts: $56,923
New Jersey: $55,993
Maryland: $54,259

Sales tax collections for the city of Fort Smith were down in both city and county sales taxes for a period that included the typically busy Christmas shopping season.

Each of the city's 1% sales taxes (1% for streets and 1% for water and sewer projects) collected $1.456 million in the February report, down 2.74% from the same period in 2013.

The collections in the February report were 4.76% below budget estimates. (Because the state of Arkansas has a two-month delay in reporting collections back to the cities, the city of Fort Smith — for budgeting purposes — has historically reflected the collections on a one-month delay. Which is to say, the tax collections remitted to cities in February are from taxes collected in December and transferred by merchants to the state in January.)

Collections so far in the 2014 reporting period of the two 1% taxes were $3.342 million, while the same period in 2013 saw collections of $3.426 million. The same period in 2012 saw $3.634 million and $3.315 million in 2011.

Total collections in the year 2013 of the two 1% taxes were $38.937 million. Collections in 2012 of the two 1% taxes totaled $39.21 million, slightly ahead of the $38.683 million during 2011. The 2011 collections were 3.9% above 2010 collections.

Fort Smith's share of the county 1% sales tax in the February report was $2.583 million, down 2.55% from last year's total during the same period of $2.651 million. The collection was down 3.01% compared to the revenue estimate.

The countywide tax generated $15.353 million for Fort Smith during 2013, up 0.49% compared to 2012 and down 1.99% compared to budget forecasts. The countywide tax generated $15.279 million in 2012, just ahead of the $15.15 million in 2011, but lower than the peak collection of $16.61 million in 2008.

The countywide tax collection is critical because the revenue is a little more than 40% of the city’s general budget of roughly $42 million. A majority of the general fund budget general supports fire, police and other critical city functions. The dip in collections compared to budget estimates has resulted in city officials seeking 4% budget cuts from all departments.

POSSIBLE BUDGET CUTS
It was April of last year when discussion of budget cuts came to the forefront, with the city requesting a total cut of 4% from all city departments.

Deputy City Administrator Jeff Dingman said no discussions of budget cuts have taken place yet, as the sales tax report was just released late Tuesday (March 25).

He said while there is concern with the city's pair of 1% sales taxes showing declines in revenue, the city's real concern would be the countywide sales tax due to it's impact on the city's general budget.

"The county could (require us to trim budgets). It doesn't look great, but it certainly could be worse. But we haven't talked about the timing of when we might evaluate it for the purposes of budget reductions."

Dingman said it would take more time before the city administration makes recommendations for possible budget cuts, adding that it was too early to even know what those cuts could be.

"With just two months here in the bank, I don't know that we're ready to start making those decisions at this point. Like I said, we did it in April and May time frame (last year)," he explained. "As far as a set benchmark where we say we need to change something, I don't know that we have a set threshold."

PREVIOUS ANNUAL COLLECTION INFO
Fort Smith 2% sales tax collection (1% for streets; 1% for water/sewer bonds)
2013: $38.937 million
2012: $39.210 million
2011: $38.683 million
2010: $37.229 million
2009: $37.554 million
2008: $41.226 million
2007: $37.858 million
2006: $36.840 million

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

The Congressional delegations from Arkansas and Oklahoma released a letter Tuesday (March 26) requesting funding for a study that would allow the U.S. Army Corps of Engineers to fix a recurring problem versus "putting a band aid" on the problem.

The letter, signed by all of the congressmen and senators from both states minus U.S. Sen. Tom Coburn, R-Okla., was written to Jo Ellen Darcy, assistant secretary of the Army for Civil Works, and requests $100,000 so the U.S. Army Corps of Engineers can study an ongoing problem at the convergence of three rivers where the McClennan-Kerr Arkansas River Navigation System begins.

"The Three Rivers Study would investigate ongoing threats to navigation and bottonland hardwoods at the confluence of the Arkansas, Mississippi and White Rivers in southeastern Arkansas," the letter reads. "As we understand, the MKARNS is being threatened with a breach between navigation miles 3 and 8 on the White River."

The letter goes on to claim that should a breach occur on the MKARNS, it would halt navigation for more than 100 days while costing the economies of Arkansas, Oklahoma and Kansas in excess of $300 million, "including the loss of thousands of acres of wetlands."

Marty Shell, owner of Five Rivers Distribution on the Arkansas River in Van Buren, explained in simpler terms why the study was necessary.

"Through time, all rivers change course. You have high water and low water events that always want the Arkansas and White Rivers to merge into one another. The study is one that the Corps wants to do to stop the White and Arkansas from joining up with one another."

Shell added that while the majority of the Arkansas River is able to handle navigation, the last few miles before emptying into the Mississippi River have never been navigable, meaning that the White River is used. Should both bodies end up overflowing into one another, that would result in the disruption of commerce mentioned in the letter and the result could be a loss of business for himself and other businesses that rely on the flow of goods up and down the river.

The Corps now repairs any flood damage or other issues on a per-incident basis, which Shell said has been the status quo for "many years now."

"The Corps of Engineers spends $1.5 million a year putting in rock and stuff of that nature down there to stop it. But they are not solving the problem, they're just putting a band aid on it year by year. With O&M (operations and maintenance money) from the Corps, that is the money they give them to tackle this problem."

He said even if funding the study is approved, it will not fix the problem of the Corps not having the funding necessary to prevent the possible merging of the rivers.

"We can study it until the cows come home," he said. "But until we have a president and a House and a Senate who wants to distribute earmarks (to fund infrastructure investment), they can study it but not much is going to happen to it."

Shell said securing earmarks, which have largely been banned since Republicans took control of the U.S. House of Representatives in 2010, are what will move local economies along the river forward.

"Some call it earmarks, but I call it economic development. It is in your own backyard. When it's right here for us, it's economic development being spent right here in the state versus other states."

He said while a merging of the different bodies of water is unlikely in the next five to 10 years, he could see it possibly happening in the next 50 to 100 years, when the region will be even more reliant on river commerce and he said for that reason, it's time to stop putting band aids on the problem and instead heal the wound.

"The Little Rock District (of the Corps) does a great job. The Corps themselves does a great job. But they have their hands tied on what they can do. The administration and the federal government needs to realize they need (to invest) infrastructure dollars into a river system. ... For many years, we haven't put money back into the infrastructure of our country. It's time we wake up and realize if you don't put oil into an engine for 50 years, it won't run for you."

According to the letter signed by the two-state delegation, the MKARNS brings between $1.5 billion and $3 billion in trade transportation to Arkansas, Oklahoma and Kansas per year. They also said 42 different countries have been involved in trade of some sort along the navigation system.

A decision on whether to fund the study has not yet been announced.

Wal-Mart Stores Inc. planted more seeds in Silicon Valley recently by opening a technology center in Sunnyvale, Calif., that is dedicated to growing the retailer’s digital sales.

Located about 30 miles from its San Bruno base for @WalmartLabs, the new technology branch employs about 500 with plans to double that workforce in the next few years, according to Walmart e-commerce spokesman Bao Nguyen.

Nguyen said Walmart.com chose Sunnyvale to take advantage of the talent density of engineers and software developers in the area. This is the sixth technology center rolled out by the retailer who already operates tech development hubs in Bangalore, India; Sao Paulo, Brazil; San Diego, Portland, Ore., and its e-commerce home base in San Bruno.

These centers are tasked with app development and digital coupon projects that can drive e-commerce sales. Last year Wal-Mart’s e-commerce sales totaled more than $10 billion, up 30% from the prior year.

Charles Holley, chief financial officer for Wal-Mart Stores, said the retailer is targeting a $13 billion mark for e-commerce revenue in fiscal 2014.

“We expect to grow global e-commerce sales to over $13 billion this fiscal year, with continued focus on the U.S., U.K., China and Brazil,” Holley said during the Feb. 20 earnings release.

Holley said Wal-Mart will continue to boost investments in Pangaea, its global technology platform, which helped drive sales across the retail websites in the U.S., the U.K. and Brazil last year.

“Our online websites had their most successful year in fiscal 2014, and we continue to offer a great omni-channel experience for our customers,” he said.

Carol Spiekerman, CEO of NewMartketBuilders, said the innovation labs that retailers are opening in record numbers are a big driver for the active experimentation now happening in retail. She said Wal-Mart has enjoyed a big first-mover advantage after launching @WalmartLabs in 2011. That move pressured many other retailers to do the same. Target to Home Depot, Staples, Tesco and Amazon are just some of the retailers to have opened up labs that operate largely independently from their headquarters.

Unlike the others, Spieckerman said Wal-Mart’s lab was seeded through an acquisition (Kosmix) and Wal-Mart has been more aggressive than other retailers on the acquisition front as well.

“The upshot is that retailers are once again becoming decentralized, only this time their satellite offices aren’t focused on regional buying as they have been in the past, but on developing digital and social shopping specialization,” Spieckerman said.

In effect, these tech labs are figuring out the best ways to give shoppers what they want and more. The lean, agile and entrepreneurial spirit inherent with the labs has a positive impact on a retailers’s decision-making processes and overall agility, she added.

“In the past, any proposed initiatives were vetted through retailers’ legacy systems and processes – it was very much a dare-to-succeed environment. Now, retailers are challenging their legacy organizations to rise to these new digital occasions. That’s going to raise the retail bar quickly and speed up innovation. Wal-Mart deserves a lot of credit for driving this shift,” Spieckerman said.

Planning for the future of parks and recreation in the city of Van Buren is moving along with the expected approval in April of a contract with Bentonville-based CEI Engineering to create a parks master plan for the city.

According to Van Buren City Planner Joe Hurst, moving forward with the creation of the master plan is a response to community needs and input.

"I think it's really a response to the input from the public. We've had ... it just seems to be growing involvement by the citizens to engage in recreation. I think that the culture is shifting that way from not only in the state of Arkansas but really everyone around the country. Cities are starting to understand the needs of providing parks and recreation opportunities for its citizens."

Even though CEI has yet to have its contract approved by the city council, the city has already invested in parks and recreation using $1.5 million in bond money from the city's 1% sales tax passed in 2012 to pay for improvements to the city's inventory of parks. Improvements include upgrades at the city's tennis courts adjacent to the high school, as well as installation of a disc golf course at the city park.

The city has also accepted a donation of 55.35 acres of park land in far northwest Van Buren that will eventually be turned into a wilderness park and has entered into a 25-year lease agreement with the U.S. Army Corps of Engineers for Lee Creek Park.

"We've listened to the public and this is something that they want the city to provide," Hurst said. "It's starting to become more of a priority in this city."

In developing the master plan, Hurst said the city and CEI will be listening to citizens, but also looking at what other cities have done in the region, including Bentonville, where CEI is based and developed a master plan.

In previous public meetings held to determine how to spend some of the $1.5 million in parks funding provided by the sales tax in combination with state parks and recreation grants, Hurst said a trail system was mentioned time and again.

"We know how successful that has been in Northwest Arkansas. CEI, our contractor, they worked on that and they have experience with connecting a trail system throughout that region. From our public hearings that we held when we got our grant, that's something that got mentioned time and time again — people wanting some sort of trail system. So we want to look into that. That's something that I see us at least investigating and seeing how we can connect it throughout the city."

While trails and other forms of recreation will be a major part of the parks master plan, Hurst acknowledged that paying for any proposed projects that could be included in the plan would be a large task.

"If we have anything extravagant, we'll have to get funding to do that. As we do this plan, we'll stress that the sky is the limit as far as ideas go, but there's always a question of money and how do we pay for that."

He said the city's previous combination of city funding combined with state grants was always an option. Hurst also alluded to the way Bentonville and other cities, including Fort Smith, have started to fund trail system and recreation improvements and expansion.

"They had millions of dollars donated (to their trail system). I think it was the Walton Family Foundation. And they supplemented that with city funds."

Regardless of whether the city is able to secure funding from a charitable or granting organization, the possibility of extending half of the city's 1% sales tax scheduled to expire in 2019 is another option for funding parks and recreation improvements in the future, according to Hurst.

But before any extension of the sales tax is explored, he said it was necessary to complete the projects underway, including a new police department, new fire department and a new senior center.

"We're dedicated right now to being good stewards of the tax money that was given," he said. "Once we prove that we were successful with those projects, it's always possible to go and try to fund a whole new project."

And it is something that was already on the radar of Van Buren Mayor Bob Freeman when the sales tax passed in July 2012 when he told The City Wire that the tax would sunset “in seven years unless voters decide otherwise.”

Republican gubernatorial candidate Curtis Coleman released a plan Wednesday (March 26) that would cut income taxes for two groups of Arkansas taxpayers, while also creating so-called "tax-free enterprise zones" across the state.

As part of Coleman's plan, the longtime businessman proposed eliminating a variety of taxes, including corporate taxes on what he calls "Arkansas''Mom and Pop' business, small businesses with net taxable income of less than $1 million."

The plan includes a proposal to exempt military retiree pay from state income taxes, which Coleman said was "simply the right thing to do."

The enterprise zones would be created in counties with median household income of less than $40,100 and would allow a new business entering a designated county to operate with no corporate tax payments during its first 10 years of operations, so long as the new business was not in competition with established businesses operating within the county.

The plan also proposes dropping income tax rates in the state by up to 20% over the next eight years, eventually dropping the top tax rate for workers earning more than $50,000 to only 5.53%, while those earning between $20,000 and $49,999 would pay 4.66%. Individuals bringing in between $10,000 and $19,999 would pay 3.19%, those making $4,100 to $9,999 would pay 1.18% and those earning below $4,100 would not pay income tax.

The state's top income tax bracket is now 7% and starts with annual wages of $34,000.

The Coleman campaign did not disclose how much the proposed tax cuts would cost the state of Arkansas, though the plan included a proposed goal to reduce the cost of state government per employee by not less than 20%.

In a press release, the founding CEO and president of North Little Rock-based Safe Foods Corporation said he was confident the plan could be successful.

"Arkansas has the capacities and resources to be one of the most prosperous states in the country. The adjustments we need to make are not radical or extreme. My proposals just give us an opportunity to successfully compete with other states for better paying jobs and more opportunities to be the successful people we can be."

HUTCHINSON’S TAX CUT PLAN
Coleman's tax plan is the latest to be released during the 2014 race to replace term-limited Democratic Gov. Mike Beebe.

A plan proposed by former U.S. Rep. Asa Hutchinson, Coleman's opponent in the May 20 Republican primary, would reduce the income tax rate from 7% to 6% for those earning between $34,000 to $75,000 a year, and from 6% to 5% for those earning between $20,400 to $33,999 annually.

Hutchinson's tax cut proposal would cost in the range of $100 million, with the former congressman adding that the state finished last year's fiscal year with a $299.5 million surplus.

“My number one priority as Governor will be job creation,” he said. “One way to spur job growth is through tax reduction and I am committed to providing across the board relief to all Arkansans.”

ROSS’ TAX CUT PLAN
Former Democratic U.S. Rep. Mike Ross' tax cut plan is substantially larger than Hutchinson's, with a price tag in the neighborhood of $574.5 million, according to the Arkansas Department of Finance and Administration.

A Talk Business report said the crux of Ross’ plan would be to retroactively index Arkansas income tax brackets taking a 1997 state law and applying it to the 1971 realignment of the tax code. Act 328 of 1997 tied state income tax brackets to inflation on a forward-going basis.

The proposal also includes reductions of one-tenth of a percent to the personal income tax rates passed under Act 1459 of 2013. When fully implemented, Ross’ plan would achieve the following:
• Wage earners making less than $9,000 would pay at a 0.9% tax rate;
• Those making $9,000 to $17,999 would pay at a 2.4% tax rate;
• For workers earning $18,000 to $26,999, they would pay at a 3.4% tax rate;
• $27,000 to $44,999 would pay a 4.4% tax rate;
• $45,000 to $75,099 would pay a 5.9% tax rate; and
• Those making $75,100 or more would pay at a 6.9% tax rate.

“I want to modernize our income tax code in a way that means lower, fairer taxes for working families and small businesses in Arkansas, and I want to do so in a fiscally responsible way that maintains our balanced budget and protects vital state services like education, Medicaid and public safety,” Ross said. “Just like Governor Beebe did with the sales tax on groceries, I will also gradually phase in my tax cut plan as the state can afford to do so.”

Ross' Democratic opponent, Dr. Lynette Bryant, has so far been silent on a tax cut proposal since announcing her candidacy.

It didn't take long for new Sebastian County Election Coordinator David Mansell to tender his resignation following the discovery of a mistake on the Republican primary ballots to be used in the upcoming May election.

According to Election Commission Chairman Lee Webb, the mistake on the Republican primary ballot involved the candidates for lieutenant governor.

"The Republican lieutenant governor's race had the positions in the wrong place on the ballot. He had them in the wrong order. Basically, they were already at the printers and we had to stop the printers."

Webb said the error was caught on Thursday (March 20) by former Election Coordinator Jerry Huff — who had previously agreed to assist the county in training Mansell throughout this year's elections — as the county's printing vendor was preparing plates to print the ballots.

"It wasn't his job anymore, but he went back and caught this error. He asked Mr. Mansell if that was correct and he said yes, he had messed up."

The mistake was far from the first issue to arise since Mansell took the job, Webb said.

"We'd had some other issues prior to that. But being new in the position, I think there was more to the job then he thought there was to it. It's not an easy job. You have to be meticulous about checking and double checking. And it didn't get done. It was a bad enough mistake, I think he decided he should resign before it got…he resigned before I even heard about the full extent of it. Before I heard what the whole problem was, he had resigned."

Webb stressed that Mansell was not asked to resign by him or others on the commission, since "none of the commissioners had talked to him before resigning. It was completely his own decision."

The resignation of Mansell is just the latest twist in a saga that started in November 2013 with the interview process for the election coordinator position.

At the time of the interviews, Hudson had attempted to conduct an executive session so interviews could be conducted privately, which on its own is not illegal. According to A.C.A. § 25-19-106, section 2a, states, "Only the person holding the top administrative position in the public agency, department, or office involved, the immediate supervisor of the employee involved, and the employee may be present at the executive session when so requested by the governing body, board, commission, or other public body holding the executive session."

At issue in the meeting was Sebastian County Judge David Hudson's request that County Clerk Sharon Brooks participate in the executive session, even though she would not have direct supervision or hire/fire authority over the elections coordinator.

The City Wire, the only media outlet to attend the meeting, objected to the inclusion of the county clerk's office in the executive session based on The City Wire's understanding of A.C.A. § 25-19-106. Once Hudson agreed to conduct the executive session in a legal manner, three candidates, including Mansell, met with the Election Commission and Hudson.

Webb said the commission was not satisfied with the candidates interviewed during the executive session and wanted to keep the position open while more applicants were sought for the position, but he said the commission was shut out of the process following that meeting.

"Initially, in that meeting that you referenced, our initial thought was to interview more people. We had three people that we interviewed and for some reason, I chose to look further. But the reason we hired one of those, I don't know. I didn't have any input on that. Originally we were going to look for other people."

Speaking by telephone Wednesday (March 26), Hudson refused to discuss Mansell's hiring process.

"The background on David Mansell is water under the bridge," he said. "It's not really conducive to moving forward to evaluating the (procedures that lead to Mansell's hiring). What I'm going to do is move forward at this point and work with everybody as effectively as I can. Get someone in the position as quick as I can and get them trained and continue to have effective elections. I'll work with the Election Commission and the county clerk. I understand the organizational structure and the relationships and we'll move forward."

Asked again to answer Webb's accusations that the commission was shut out of the hiring process for an election coordinator to work out of its office, Hudson again sidestepped the issue.

"I think that what I would want to do is communicate with you after I've reviewed this in more detail and I can give you something in a memo format. I will continue to work with Lee in a pro-active and cooperative fashion just like I have done to this point. I think if you look at the record, that is the record. That's what I'll continue to do."

Hudson said the search for Mansell's replacement would begin immediately, adding that he hoped to have someone in place before the May 20 election.

Webb said Huff would continue to assist the county to ensure a smooth election.

The University of Arkansas had no detailed comment on a Wednesday (March 26) ruling that football players at Northwestern University could unionize, but some of those watching the issue or have been involved in the system say the ruling could change the relationship between universities and college football players – especially at the Division I level.

Big dollars are at stake. A recent Forbes series on college football estimated that the top 20 most valuable college teams have a value of $85 million a year and generated a combined $1.3 billion of revenue in the most recent year. A September 2013 BusinessWeek article noted that 10 top college football programs saw their combined annual revenue rise from around $300 million in 2000-2001 to more than $759 million by 2010-2011.

Kain Colter, a former quarterback for Northwestern, has been the signal caller for an effort to allow players at the Chicago-based university to unionize and potentially share in the growing revenue pie. His argument is relatively simple: College football is nothing more than a commercial enterprise that garners millions of dollars – if not billions – for many university programs around the country, and the players are essentially the labor for the programs.

Peter Sung Ohr, a regional director with the National Labor Relations Board based in Chicago, agreed with Colter and his attorneys in a 24-page document released Wednesday.

“In sum, based on the entire record in this case, I find that the Employer’s football players who receive scholarships fall squarely within the Act’s broad definition of ‘employee’ when one considers the common law definition of ‘employee,’” Ohr noted.

Also in the ruling, Ohr wrote: “The Employer’s scholarship players stand in stark contrast to those student janitors due to the fact that they: (1) work in excess of well over 40 hours per week during training camp and the football season; (2) work virtually year round and have a much longer employment tenure; and (3) do not have a ‘very tenuous secondary interest’ in their employment. This is clearly established by the undeniable fact that the scholarship players’ interest and skill in playing football are far greater than a ‘very tenuous secondary interest’ but in fact a primary interest. Moreover, but for their football prowess the players would not have been offered a scholarship by the Employer.”

While Colter praised the ruling, his alma mater promised an appeal.

"While we respect the NLRB process and the regional director's opinion, we disagree with it. Northwestern believes strongly that our student-athletes are not employees, but students. Unionization and collective bargaining are not the appropriate methods to address the concerns raised by student-athletes,” noted part of a Northwestern statement.

The ruling applies directly to Northwestern, but has obvious reach for all college athletic programs. Also, the ruling will be subject to a review by the full NLRB in Washington, D.C., and could also face action in the federal court system. Wednesday’s ruling in no way immediately changes the relationship between college athlete and the university.

Because of the lack of immediacy, Kevin Trainor, associate athletic director at the University of Arkansas, declined to elaborate on the ruling.

“As today’s ruling is likely the first of many steps for this issue within the legal system, it would be premature to make any comments on the matter at this time,” he said in a statement to The City Wire.

Matt Ketcham, who played Division III college football and at one time was a certified agent for the National Football League Players Association, is doubtful that Ohr’s ruling will survive intact.

“This may be 10 years in the making. And even if it came out intact at the other end of the wash, it will be decades away before we would see anything close to that (unionization),” said Ketcham, who is an attorney at the Fort Smith-based law firm of Nolan Caddell Reynolds.

Ketcham is not totally sympathetic with the players, but he said the ruling could force the National Collegiate Athletic Association (NCAA) to review the player-university relationship.

“I’m all for the players, but to say it’s reasonable to expect a cut of the profits is crazy. But I do think they need to revamp the system and somehow acknowledge that the college player is not your average student,” Ketcham explained. “This NLRB decision may be the impetus for some type of change that has been talked about for years. Perhaps this and the appeals that will come with it will force the NCAA to change how they treat college athletes.  ... That’s probably what you’ll see come out of this thing.”

Dennis Dodd, writing for CBS Sports in a Jan. 19, 2014, column, said the effort begun by Colter is not likely to fizzle into nothing.

“If players at Northwestern can get union cards, is it worth the NCAA even existing to negotiate with them? Point being, you know it isn't going to end with Northwestern. Labor laws make it easier for private institutions to unionize right now. Even if the current movement fails, there will be appeals and appeals of appeals,” Dodd wrote. “The movement isn't going to die. This seems like some larger Norma Rae moment. Northwestern quarterback Kain Colter may have been that figure on Tuesday as the movement's de facto leader. But this isn't some Southern textile mill. This is college athletics as we know it. Unionizing attacks the very underpinnings of the entire NCAA enterprise.”

Link here for a PDF of the Ohr ruling.

Northwest Arkansas, particularly Benton County, continues to be a hot attraction for chain restaurants looking to expand their reach. Some of the fastest growing chains in the country – Dickey’s Barbecue Pit, Longhorn Steakhouse and Twin Peaks – have new restaurants planned or recently opened in Rogers near the Pinnacle Promenade.

A new report from Technomic indicates the 500 largest U.S. restaurant chains saw average sales growth of 3.5% last year, a significant decline from the 4.9% recorded in 2012. The top 500 grew to an estimated $264 billion in 2013, up more than $8.8 billion versus 2012.

"Competition for share of stomach is getting more and more challenging," said Ron Paul, president of the foodservice consultancy. "But some brands that have found a way to differentiate themselves are gaining market share."

BARBECUE AND YOGURT
Among chains with annual sales over $200 million, the fastest-growing last year included Dickey’s Barbecue Pit which was up 32.9% to $331 million. In 2013, Dickey’s opened a second location in Rogers and has since planned a third regional restaurant in Fayetteville at 3316 W. Grove Road. 

As barbecue goes, an Oklahoma Sooner legend has plans for a new Billy Sims Barbecue restaurant in Bentonville, 3511 S.E. J. Street. Plans were submitted to the Arkansas Health Department earlier this month.

Among chains with annual sales under $200 million, the fastest-growing according to Technomic included Twin Peaks and CherryBerry. Twin Peaks, despite some opposition, is going ahead with plans to build a new restaurant at Pinnacle Hills Promenade across from Target. Plans were submitted to the health department on March 25. The Twin Peaks chain grew sales 68.4% to $165 million last year.

Yogurt bar CherryBerry has opened four locations in the two-county area in the past 18 months. The chain grew sales by 63.2% to $62 million last year, according to the Technomic report.

PANDA AND LONGHORN
Limited-service restaurants saw an average sales gain of 3.9% last year. Within this category, Asian, bakery cafe and coffee cafe categories saw the greatest growth with Panda Express up 10.7%.

Last year Panda Express expanded its footprint in Northwest Arkansas with a second location at Pinnacle Hills and a third location on Martin Luther King Boulevard in Fayetteville. This California-based chain opened near the Wal-Mart Home Office more than two years ago.

Full-service restaurants saw 2.4% average sales growth, slightly down from 2012's 2.9% gain. The full-service steak category continued to show healthy gains of 6.2%, led by LongHorn Steakhouse up 12.8%. This chain opened its first restaurant in Northwest Arkansas March 17 at 2206 Promenade Blvd. in Rogers. 

LOCAL FARE
In addition to national chain restaurants the region also is seeing some local venues apply for permits.

In Rogers, Brick Street Brews applied for a permit with the health department on March 6. The location for this pub-eatery is 208 W. Walnut in downtown Rogers.

In Fayetteville, Wood Stone Pizza applied for a permit on March 19 for an eatery at 5575 S. School Avenue. Mr. O’s Nutrition Smoothie Bar also plans to open at 3980 W. Wedington, Suite 11, in west Fayetteville, according to a permit filed March 18.

A new Arkansas coalition of business owners has formed to push for national tax reform, immigration changes, and expanded trade opportunities.

The Main Street Growth and Opportunity Coalition announced its formation on Thursday (March 28). The group said it has a network of businesses, local trade associations and concerned individuals “committed to supporting a common sense, pro-growth agenda for America.”

“Business owners and families in Arkansas are frustrated with Washington,” said Martha McCaskill, a Little Rock business owner and founding member of the Arkansas coalition.

“Gridlock has put too many important priorities aside. Businesses need certainty so they can plan for the long term. Uncertainty stifles job creation and investment and holds back economic and wage growth. It’s time for action. Our coalition looks forward to educating members of Congress and residents of this state about the benefits of a pro-growth agenda.”

Arkansas is one of six states to form a coalition under the “Main Street Growth and Opportunity” moniker. California, Florida, North Carolina, Pennsylvania, and Tennessee also have coalitions.

A press release from the group said one of its first priorities will be to advocate for passage of tax reform legislation. The coalition cited a draft being discussed in Washington, D.C. led by House Ways and Means Committee Chairman U.S. Rep. Dave Camp, a Republican from Michigan.

Camp’s plan:
• Collapses the current seven federal tax brackets into two – a 10% and 25% bracket;
• Reduces corporate tax rate to 25%;
• Allows for a larger standard deduction for individuals and joint filers;
• Increases the child tax credit and adjusts the credit for inflation;
• Alters mortgage interest deductions to a $500,000 cap;
• Eliminates several credits and deductions, such as interest on education loans, green energy residential improvements, and moving expenses.

“Businesses all across America need Congress to act on comprehensive tax reform. Our tax code is just too complex. We need reform that promotes fairness and stimulates economic growth. Congress needs to stop governing from crisis to crisis and fix our tax code to make it easier for businesses to grow and create jobs,” said State Rep. Allen Kerr, R-Little Rock, a member of the coalition and an insurance executive.

The Main Street Growth and Opportunity Coalition said it will “start a dialogue with federal lawmakers and state residents” on the economic benefits of tax and immigration reform and expanded trade opportunities in the coming weeks and months.

Consumers, banks and merchants fall prey to some $11.3 billion in card fraud annually creating chargebacks and losses of $3.4 billion in 2012 for credit card issuers, according to eConsumer Services, an online merchant mediator.

The U.S. is the only country where card fraud is consistently growing. The rise of chargeback fraud is negatively affecting credit card issuers and increasing the costs of services they provide.

“Consumers are failing to realize that chargebacks are no longer an ace-in-hole and come with steep consequences,” said Gary Cardone, co-founder of eConsumer Services.

He said nearly one-third of merchants contest all chargeback claims filed, and 40% of those cases are won by merchants, resulting in an increased number of unhappy customers contacting their banks for answers. In turn, the banks become cost centers for issuers and those costs are then passed down to consumers through increased prices and fees for products and services, Cardone added.

TIME & MONEY
The average time it takes to process a credit card dispute is about 15 minutes, in comparison to the fraction of time it takes to complete the majority of other cardholder services. 

Cardone said chargeback processing is a lengthy manual process because the claim must first be validated – and taking shortcuts on this process can lead to customer dissatisfaction, or may result in the cardholder losing the right to the temporary refund they initially receive.

Local banks recently told The City Wire, they have had to add fraud divisions in recent years because of the rise in debit card usage and scams associated with electronic payments.

When a consumer realizes their debit or credit card has been used to fraudulently purchase something online, they can dispute the charge with their banks in writing. This requires time to physically go into the bank and sign the forms.

The bank can generally reverse the fraudulent charge, but will also investigate any delivery of product with the help of the merchant involved. The merchant is charged-back for the cost of the item and then will often attempt to seek payment directly from the cardholder.

eConsumer notes that there is a growing number of fraud cases that involve products delivered but consumers who say they never received their order. In these cases the merchant is apt to win out, leaving the banks and consumers at odds over the charge. 

PAYPAL TARGET
PayPal is a popular payment option but it too has been subject to negative publicity on consumer blogs resulting from chargebacks and related fees, when a purchaser and seller are odds over a transaction. As more consumers use PayPal to conduct international business they are also a target for heightened chargebacks.

Sidney Simpson from ShortsnShirtShop notes in an Aug. 26, 2013 blog: “A customer filed a chargeback on Paypal against me after I gave her a partial refund that she agreed to. I submitted all the information to Paypal showing that she agreed to the refund and she decided to go to her credit card company to resolve the issue since Paypal didn't seem to be agreeing with her. She won the case and I was charged a $20 chargeback fee over a $4 dispute.”

Other bloggers said the PayPal resolution process favors buyers not sellers. PayPal said the two most common reasons for reversals or chargebacks occur when a buyer’s credit card number is stolen and used fraudulently or a buyer doesn’t think the seller fulfilled their end of the deal.

When PayPal is notified that a buyer has filed a chargeback against a seller, PayPal emails the seller as soon as possible. Then, the seller can log into their PayPal account and go to the Resolution Center to monitor the status of the case and provide information to help resolve the matter, according to the PayPal website.

When a chargeback occurs, the money that is subject to the chargeback is deducted from PayPal's bank account. In turn, PayPal places a temporary hold on the same amount in the seller's PayPal balance (the funds related to the transaction are frozen).

PayPal encourages sellers to protect themselves against chargebacks by tracking packages, keeping records of payment proof, photos of the items shipped and saving all correspondence with the buyers.

Two months is not a trend, but home sales in Arkansas’ four largest metro areas are up almost 7% for the first two months of 2014 and were up 7.3% during February. The number of homes sold in all of 2013 was up 12.93% compared to 2012.

However, the average sales price in the four markets was down 1.88% in February and is down 3.51% for the first two months of the year.

The City Wire’s Arkansas Home Sales Report captures home sales data in the state’s 14 most populated counties within the state’s four largest metro areas — Central Arkansas, Fort Smith area, Jonesboro/Northeast Arkansas and Northwest Arkansas. The report, which records closed sales, accounts for between 70% and 75% of total Arkansas home sales.

The report, which counts the number of sales closed in February, is sponsored by Fort Smith-based Weather Barr.

FEBRUARY NUMBERS
February home sales totaled 1,350, up 7.31% in the four markets. The average price per home in the four markets was $156,897, down 1.88% compared to February 2013, but up 3.43% compared to February 2012.

There were 633 homes sold in central Arkansas, up 10.47% compared to February 2013, and up 10.66% compared to February 2012.

February home sales totaled 446 in Northwest Arkansas, down just 0.45% compared to February 2013, and up 18.62% compared to February 2012.

Jonesboro area home sales totaled 158, up 28.46% compared to February 2013 and up 18.8% compared to February 2012.

In the Fort Smith area, home sales totaled 113, down a slight 0.55% compared to February 2013, and down 19.8% compared to February 2012.

The value of the sales during February were up 1.45% in central Arkansas, up 7.4% in Northwest Arkansas, down 26.83% in the Jonesboro area, and down 1.43% in the Fort Smith region.

THE REGIONAL PICTURE
Central Arkansas — Home sales
Jan.-Feb. 2014: 1,217
Jan.-Feb. 2013: 1,142
Jan.-Feb. 2012: 1,032

Fort Smith area — Home sales
Jan.-Feb. 2014: 225
Jan.-Feb. 2013: 193
Jan.-Feb. 2012: 203

Jonesboro area — Home sales
Jan.-Feb. 2014: 280
Jan.-Feb. 2013: 224
Jan.-Feb. 2012: 216

Northwest Arkansas — Home sales
Jan.-Feb. 2014: 844
Jan.-Feb. 2013: 840
Jan.-Feb. 2012: 717

The top five counties in terms of Jan.-Feb. 2014 home sales:
Benton — 545, up compared to 489 in 2013
Pulaski — 536, up compared to 523 in 2013
Washington — 299, down compared to 351 in 2013
Craighead — 224, up compared to 174 in 2013
Saline — 212, up compared to 172 in 2013

Link here for a PDF document of the February 2014 data.

RENTAL PROPERTY PUSH?
Bob Miller and Jessica Plouch of Crye-Leike Reatlors in Benton said they’ve experienced an increase in call volume from perspective buyers, which is a trend they said began last year and has held since. Average prices in the area did fall a bit in the first two months of the year, but Plouch said it’s hard to pinpoint what could have caused that drop.

“I don’t think that’s necessarily a trend,” she said. “That just happens from time to time.”

Miller speculated that falling average prices could have something to do with a noticeable increase in interest from investors who are looking to purchase mid- to low-range homes and turn them into rental properties. It is no secret that credit standards have become tighter over the past few years and that has led to an increase in the demand for rental homes.

Miller said one thing that is still driving sales in Saline County – and markets around the state – is the U.S. Department of Agriculture’s Rural Development program has been popular as it is one of the few vehicles available for people wanting “zero down” mortgages. That program isn’t available everywhere – in Saline County, for example, every area is eligible for the program except the city of Benton.

The popularity of Rural Development could have an impact on the average price of homes selling in area. While there are a number of variables involved, the rule of thumb in central Arkansas is that a family of four applying for a loan under the program must have an adjusted gross income of $74,950 a year or less. That being the case, Rural Development is a viable option for families that can carry a mortgage on a low to mid-priced home, but not higher priced ones.

POSSIBLE WINTER IMPACT
The City Wire Economist Jeff Collins said it is difficult to pick up on any trends from looking at numbers for the first two months of the year for a couple of reasons. First of all, he said sales numbers may vary significantly from month to month, but those variances often level out over the course of a year. Picking up on trends from a couple of months’ worth of data, then, is inadvisable but economists are in a better position to discuss those trends when they have are armed with data from the first one or two quarters of the year.

Collins also said the Arkansas winter was considerably more harsh than normal. That means prospective buyers aren’t likely to go out looking at homes when there is ice or snow on the ground or if winter precipitation is in the forecast.

Still, Collins said there are reasons to be optimistic about sales growth in 2014. For one thing, 2013 was an improvement over 2012 and there is no evidence to suggest that shouldn’t continue. Also, positive growth is still the norm in Arkansas and that is particularly true in Northwest Arkansas. The Northwest Arkansas Council, last month, projected the area will grow from the February population estimate of 496,000 to 500,000 by this summer.

Collins said jobs growth and population growth in northwest Arkansas are higher than other areas of the state – statistics that translate into improved home sales in the area.

It turns out the order of Republican candidates for lieutenant governor was not the only mistake on Sebastian County ballots.

Following news Wednesday (March 26) that former Sebastian County Election Coordinator David Mansell resigned over an error which placed the GOP candidates for the state's number two job in the wrong order, Election Commission Chairman Lee Webb said his office discovered an additional error on the Republican ballots Thursday (March 27).

According to Webb, U.S. Rep. Tim Griffin's last name is spelt wrong on the Republican ballot. Griffin, who is running for lieutenant governor, had an "e" added to his last name, resulting in the ballot reading, "Congressman Tim Griffen."

The difference between the error which initially led to Mansell's resignation and this latest error is the fact that the error involving Griffin made it to press, which means Republican ballots in the county must be reprinted at a cost to the county, Webb said.

"We get reimbursed from the state for ballots, but we don't get reimbursed for wrong ballots," he said.

County Judge David Hudson said it is too early to tell how much the error will cost.

"We have a line item, so it will come out of the budget. If it's not reimbursable, it will come out of the general fund."

Hudson said estimates from the county's printing vendor should be available Friday (March 28).

As for how unusual it is for two errors to be caught on a ballot involving one race, the judge said it was not all that unusual for errors to occur. Which is why a system is in place which is designed to catch such errors.

"I don't know the details (of this particular situation), but whenever you're dealing with all the different pieces of detailed activity with these ballots, periodically things come up. It's not unusual from my perspective in the last 16 years I've been associated with the process. That's why we have checklists."

Webb elaborated on the process of catching errors, which include having not only the election coordinator inspecting ballots for misspellings, but also the respective chairman of the county's political parties.

In the case of the mixup on Griffin's name, an earlier misspelling which had his first name as "Tine" was caught and corrected before any other proofers saw the error. But in the latest case, Sebastian County Republican Chairman Rex Terry reviewed the ballot and found no errors, according to Webb, deepening the mystery of how the misspelling made it to the printers in the first place.

Hudson said the mistake will cause him to work with the Election Commission to review procedures and make changes if necessary to keep any other costly mistakes from occurring.

"At this point, I don't know how many people looked at them and what exactly happened. that's why you have the documentation and steps. Typically we have pretty good processes. We've had pretty good, error-free (ballots) with past elections. I think that's our record."

For his part, Griffin said in an e-mail to The City Wire that he was not upset about the errors.

"It was an honest mistake, and I am confident the County will get it corrected."

Wal-Mart showcased its futuristic truck Wednesday (March 26) at the Mid-America Trucking Show (MATS) in Louisville, Ky., a month after the world got its first glimpse during a video aired at retailer’s sustainability milestone meeting in Bentonville.

The Wal-Mart truck prototype is a tractor-trailer combination that looks like a sports car married an aerodynamic train. The companies working on the project over the past two decades believe the concept truck is the future for sustainable logistics. The WAVE is the result of collaboration between the retailer and Peterbilt, ROUSH, Great Dane and Capstone Turbine. (See the video below of the new truck.)

Walmart Logistics said its trucks log millions of miles every year, so when it comes to sustainability and fleet efficiency, the goal is simple: deliver more merchandise while driving fewer miles on the most efficient equipment. As of last year, the company achieved an 84% improvement in fleet efficiency over its 2005 baseline.

“Wal-Mart is continually looking for innovative ways to increase our efficiencies and reduce our fleet’s emissions,” said Tracy Rosser, senior vice president of transportation at Wal-Mart. “The Walmart Advanced Vehicle Experience (WAVE) is a bold step in transportation technologies that, although not on the road in its current form, will serve as a learning platform for the future that will accelerate our progress toward our goals.”

Innovation is key to improvement, and the project aims to demonstrate a wide range of new technologies and designs Wal-Mart hopes will improve overall fleet fuel efficiency and lower the company’s carbon footprint. Although the prototype runs on diesel, its turbine is fuel neutral and can run on compressed or liquid natural gas, biofuels or other fuels, the company said.

Rosser said it’s important that Wal-Mart and its partners continue to work collectively on future innovations and challenge themselves to look boldly at fleet efficiency in new and different ways.

BUILDING A CONCEPT
Wal-Mart and Peterbilt had collaborated on aerodynamic, hybrid electrification and alternative fuel projects in the past, each with incremental gains in fuel efficiency and emission reductions. The new concept tractor combines many of these projects in a single vehicle, Wal-Mart said.

“Peterbilt’s goals of producing the most fuel-efficient, aerodynamic, and lightweight trucks in the industry mirror those of Wal-Mart,” said Landon Sproull, chief engineer at Peterbilt. “Our combined efforts help build a business case for these technologies in the future, as well as support one of our best customers.”

The truck’s shape represents a 20% reduction in aerodynamic drag over Wal-Mart’s current Peterbilt Model 386. The company said by placing the cab over the engine, the truck’s wheelbase is greatly shortened, resulting in reduced weight and better maneuverability. 

Wal-Mart worked with product development supplier ROUSH to carry out the vehicle’s construction with detailed design specifications for optimum fuel efficiency. Tom Topper, ROUSH’s executive director of prototype services said the design is “revolutionary and truly world class.”

Wal-Mart said the truck is a hybrid designed to reduce the energy storage capacity for trucks to run on batteries alone. The company said with its distribution centers now located closer to metropolitan areas, transport vehicles have shorter transit times to their delivery destinations. These shorter trips reduce the vehicles’ average trip speed and create more opportunities to recover energy through regenerative braking. The generator and energy storage on the truck are scalable based on the range desired.

The truck also features a microturbine generator developed by Capstone Turbine Corporation. The company engineered the truck’s integrated hybrid drivetrain that allows the turbine to remain at optimum operating revolutions per minute (RPM), while the electric motor/energy storage handles acceleration and deceleration.

“We developed this microturbine hybrid electric drive system by assembling the best team of technology leaders in the industry,” said Steve Gillette, director of business development for Capstone. “We look forward to the day when these energy-saving features are standard offers for the market.”

The vehicle’s trailer, manufactured by Great Dane, is built almost exclusively with carbon fiber, including one-piece carbon fiber panels for the roof and sidewalls, saving nearly 4,000 pounds when compared to traditional designs, the company said. The trailer’s convex nose also enhances aerodynamics while maintaining storage space inside the trailer.

“This road-ready prototype trailer is a bold step in transportation technologies,” said Adam Hill, vice president of product and sales engineering at Great Dane. “We look forward to further collaboration with Wal-Mart to create more fuel-efficient vehicles of this type in the future.”

WALL STREET APPROVAL
Investors seemed to approve of this more sustainable vehicle sending the share prices of some of the suppliers higher since the design was first revealed Feb. 17.

Shares of CapStone Turbine (NASDAQ: CPST) rose more than 4% to $2.15 on Thursday (March 27) after Wal-Mart showcased its futuristic truck. Capstone shares have risen 35% since the design was first revealed during the sustainability conference last month.

Peterbilt shares are up 5.8% over the past five weeks since the truck was first unveiled. The shares (NASDAQ: PCAR) closed Thursday at $65.92.

Shares of Wal-Mart (NYSE: WMT) closed at $76.14, down 9 cents on Thursday. In the past five weeks the share price has risen 1.77%. Great Dane and ROUSH are not publicly traded.

While the Fort Smith Planning Commission unanimously approved the proposed planned zoning district for a proposed $20 million renovation of Fianna Hills Country Club, its future before the Fort Smith Board of Directors is far from certain. What is more certain is that the owner of the club is ready to close the doors if the Board rejects or significantly amends the new zoning district.

When the PZD comes up for a vote at the Board's April 1 meeting, at least one group of residents will come armed with a petition to limit possible uses within the PZD, according to Lisa Clay, who is leading the petition efforts.

"We are asking that (the Board) approve it as amended," she said.

The amendment, Clay said, would remove several property uses from the PZD, including medical concierge, doctor office and clinic, residential detached, family group home and professional office.

"I think that the main issue is the professional offices, medical and doctor offices and clinic," she said, adding that there is concern of what could happen to the country club should the planned $20 million development by developer Lance Beaty with Fort Smith-based FSM Redevelopment Partners fail.

"Our main issue is if the country club doesn't have enough interest, if he doesn't have that, then what is he going to do with the country club? I asked him this and he said he would use it for one of the proposed uses."

Clay's petition, which has more than 200 signatures, has attracted a lot of attention, including from the Fianna Hills Property Owners Association. FHPOA President Pat Ross said his organization has been supportive of the proposed development of the country club ever since Beaty brought the idea to property owners.

"We support the building of the Fianna Hills Country Club and Suites as Mr. Beaty has proposed and indicated he was going to do," Ross said.

But Ross said his view of the project changed following a presentation to the association by Clay, in which she explained what could happen should the country club under Beaty's ownership not be successful. As a result of the petition and Clay's assertion that Beaty could convert the country club into offices or even possibly develop the golf course into homes and apartments under its current R-2 residential zoning, Ross said he spoke with Beaty.

"Mr. Beaty called me and we started talking. I told him the board supports him building the country club and the suites. We're fully supportive of it," Ross said. "He said the (original business model of obtaining) 500 members at $30,000 apiece will probably not work. That will probably never come close to working. Basically what I'm going to do is build an office complex there and build homes on the golf course. I said that's news to me and I was not aware of that. That's where the property owners association has come in and said we'll support a new country club or renovation, but we're not supporting anything other than that. The PZD needs to sustain itself exactly where it is. The country club, we're in favor of it remaining there. That's kind of where it is."

Reached for comment, Beaty denied telling Ross that offices and homes were part of the plan.

“That comment is simply not true or is completely out of context,” Beaty said.

Beaty said his plans are to construct the country club as presented to the FHPOA and the Planning Commission. Should it need to be scaled down, it will be — all depending on market conditions.

“The plan out there is what you might call an A10 plan. If we have to go down to an A7 or A5 plan, depending on what the market will support, I will. But I’m telling you the highest and best use of that property is a club and golf course,” Beaty said.

Clay has said she has concerns regarding any sort of so-called plan B from Beaty's group and has said residents are looking at their own options should the amended PZD fail to be approved. She said there is also interest in Fianna Hills from a Dallas-based developer, ClubCorp.

"They buy country clubs that are failing and keep them a country club. They don't have a plan B that has the option to turn it into a professional office complex. So those are two pretty good options. We (wouldn't) have to worry about Mr. Beaty's plan B. Let someone else buy it who will keep it a country club."

Reached for comment late Thursday (March 27), ClubCorp Communications Specialist Patty Jerde would neither confirm nor deny that the company is looking to purchase Fianna Hills Country Club. David Mille, the owner of Fianna Hills Country Club, and Beaty said they approached ClubCorp and Troon Management. ClubCorp was not interested, but Troon has said it is interested in managing the golf course and club if Beaty is able to gain city approval to proceed on the $20 million project.

As for whether the Board will approve the originally proposed PZD or an amended version as requested by Clay and her petitioners, it is anybody's guess. Polled in just the last few weeks, there was not consensus on how the Board would vote.

Even without a consensus in the Board's responses to The City Wire, Clay said she felt confident an amended PZD would pass.

"We've heard back from most Board members, but we're still meeting with Board members. The response has been positive. Most are completely on board with keeping it a country club and member suites. They are still investigating and trying to learn more about a plan B and what these other uses could do for the community."

Mille, who owns Mid-South Steam Boiler and Engineering, scoffed at Clay’s assertions that there are ulterior motives with the plan.

“That’s totally ridiculous,” Mille said when asked about Beaty wanting to close the club to build an office complex. “Think about that. ... He’s got hundreds of thousands of square foot of open space remaining there (former Phoenix Mall). He surely doesn’t want to turn the golf club into an office complex when he’s got all that other space at Phoenix that he’s trying to sell for office space.”

Mille also countered talk that others were willing to buy the club if Beaty’s plan were not approved, saying that he has not been approached with any offers. He also challenged assertions that his talk of closing the club if Beaty’s plan is not approved is just a hollow threat.

“It’s not an idle threat. I assure you. My problem is that I’ve been subsidizing the operating capital of that club for years, and it’s gotten to the point that it’s taking a toll on me financially. And if he (Beaty) doesn’t buy it, i’m going to close it immediately.  ... when it starts to hurt your other businesses, I mean, I’m just not going to do it anymore.”

Continuing, Mille noted: “These people opposing this and spreading rumors and bad information to try to stop this, they don’t see what they are doing to Fort Smith. I have a lot of friends who are members there and I enjoy having a place for them to buy a drink or whatever, but I can’t keep subsidizing all that just because they are friends. ... Nobody is lining up to do this (buy the club), and so if this (Beaty plan) doesn’t work, you’ll see a lot of weeds and grass on the course, because I’m not doing it anymore.”

Despite a tough inquisition from Congress and the national media, Acxiom CEO Scott Howe says his company supports stronger privacy laws to protect consumer data.

Howe spoke a week ago to the Delta Trust and Bank 2014 Investment Outlook in Little Rock. He told an audience of nearly 200 that while a majority of consumers convey a “Big Brother” feeling from some data marketers, they’re also okay with it if they receive something of value in return.

“[Consumers say] I will share my information with you if in fact I get money for it, if in fact I get better offers for it, if in fact I have better interactions with companies I love,” Howe said.

Acxiom has been one of several companies under scrutiny by U.S. Sen. Jay Rockefeller , D-W.V., through the Senate Commerce Committee. Rockefeller has been holding hearings for more than a year regarding the practices of the data broker community, targeting companies like Acxiom, Epsilon and Experian.

The Little Rock-based data firm was also mentioned in a recent “60 Minutes” news report that expressed concerns about the amount and detail of data that can be collected from the public through web sites and other outlets.

Howe said he has told anyone who will listen that Acxiom supports privacy regulation of its industry if it addresses specific concerns not vague concepts.

“In every interview I have done in the last year – when I talk to ’60 Minutes,’ when I talk to CNN, when I talk to the New York Times, when I talk to the Wall Street Journal, when I talk to Sen. Rockefeller – I always say the same thing, which is: you might be surprised to learn that Acxiom is in favor of much stronger privacy regulation. And we are,” Howe said.

He outlined five areas he said could result in meaningful reforms to weed out bad players in the data mining industry and ensure protections for consumers. Howe said consumers should have a “bill of rights” that includes:
• Disclosure of the data being collected about them;
• Limiting data use to marketing only;
• Restricting use of sensitive data;
• Enforcement of security and data breaches; and
• Transparency and choice for consumers.

In recent days, Howe has also given interviews to two different advertising industry forums reinforcing his positions communicated in Little Rock last week. You can read more here and here, including Howe’s contention that drafts of privacy regulation laws being considered would be worse than the complications of health care reform.

Howe also explained to the Delta Trust audience the purpose of data collection and Acxiom’s position in the data collection ecosystem. He said “big data” and what a marketer is trying to do with it involves improving customization for shoppers and other audiences.

“They want to capture a bunch of information so they can have a better conversation and deliver a better experience to you,” Howe said.

“The goal of a global marketer, metaphorically, is to create the world’s largest spreadsheet. One that had a single row for every person on the planet – seven billion rows. And it had hundreds of thousands of columns – one for every observable piece of data,” he noted.

Howe said as the picture of data is completed, a user of the information can customize pitches to individuals to more smartly reach the right audience in a highly personalized way.

He also disclosed that Acxiom’s offer for consumers to “opt-out” of its data collection efforts has resulted in less than 2% of nearly 500,000 users choosing to do so.