The largest banks in Arkansas continue to get bigger through active mergers and acquisitions in recent months. Home Bancshares/Centennial Bank, Simmons First and Bank of the Ozarks have been on shopping sprees, growing their footprints well beyond the Natural State.

This active M&A climate is fueled by stronger balance sheets by the mid-tier banks and higher regulatory costs which are more burdensome for the smaller community banks.

“One of the reasons for consolidations is the elimination of overhead costs by combining banking institutions It costs the same for a $100 million bank as it does for a $500 million bank in compliance costs. Larger organizations are generally more efficient,” said Garland Binns, bank attorney with Dover Dixon & Horne. 
 
Tom Michaud, president of Keefe, Bruyette & Woods, recently said during the Boston Bank Conference that investors recognize regional banks can grow faster than their larger counterparts. Investors are also just generally more supportive of investing in the the financial sector where there are fewer regulatory hurdles. 

Michaud said Wall Street is supportive now, largely because fewer deals are auctions and more are negotiations which allows for ample due diligence. He said “Regional Champions” like Home Bancshares remind him of something he recalls from the 1980s where regional compacts for interstate banking created an artificial barrier to letting some acquirers in. He said today the artificial barrier is SIFI – Systemically important financial institutions with more than $50 billion in assets).

“You're not seeing SIFI banks active in M&A and I think it's because they're still adjusting to the new regulatory framework, including the stress tests. But, there is a runway here for these $5 billion to $50 billion banks to build their companies and build these new Regional Champions,” Michaud notes.

FLORIDA MARKET
Home Bancshares is not just garnering praise from Michaud.

“Home Bancshares is trading at a 3.6 times (book) valuation and 15 times analyst’s projected earnings for 2015. Their price to earnings are inline with other similar acquiring banks. They keep doing transactions that are accretive to future earnings which is building share value,” said Mark Saunders, managing director for Banks Street Partners.

He told The City Wire that the nine deals Home Banschares has done in Florida involve about $2.5 billion in added assets and now comprise about one-third of the bank’s assets.

“Florida is a pretty attractive market for growth. ... In Arkansas there are three metro areas in the 500,000 population range – one of those is Memphis. In Florida there are nine metro areas 500,000 or more and most are growing faster than the national average,” Saunders said.

He said Home Bancshares has a solid enough presence in Florida to see more running room, which is why investors view the stock a growth play, even though it’s trading at higher valuations.

HIGHER  VALUATIONS
The heightened interest in M&A this past year has pushed bank valuations higher, according to industry experts. There were 19 bank acquisitions across the country in January with a total value of $1.8 billion, compared to deals worth $767 million in the prior year period, according to the Atlanta-based Banks Street Partners. They also report the average tangible book value rose to 160%, from 101% a year ago.

Experts agree that healthier balance sheets and a rising stock market are the two main ingredients making more deals possible like the Bank of the Ozarks purchase of Summit Bancorp for about $216 million in cash and stock. Bank of the Ozarks agreed to pay around 160% of tangible book value for Summit, in line with the industry average. Also, the deal was expected to be immediately accretive to earnings.

"Ozarks has a very strong currency, and they're able to use that currency to create attractive pricing,” Saunders said.

He said Bank of the Ozarks was aggressive with bids on failed banks a few years ago and had some home run bids that have helped to build franchise value. In Texas, he said Bank of the Ozarks has been able to increase its value and brand given the investments made there.

“Texas banks have higher valuations. Population density is growing and businesses are relocating there because of lower tax climate. Bank of the Ozarks benefits because of its Texas presence,” Saunders said.

Binns agreed that the pricing of banks has increased during the past year. 

“In the Southwest region of the U.S. the medium price-to-tangible book multiple was 174.3. Liberty, Delta and Summit had a multiple of book of approximately 1.6. The value of the currency of a bank such as Home Bancshares and Bank of the Ozarks which trades at approximately 3.5 times book adds to the value of their currency in an acquisition of another bank,” Binns said.

BANK OF OZARKS
Bank of the Ozarks shares rallied earlier this year on news of the $216 million Summit purchase, outpacing the KBW Bank Index by a three to one margin. But, Bank of the Ozarks shares (NASDAQ: OZRK) have regressed some after the first quarter results that were a little softer than expected.

Share were trading at $58 per share on Thursday (May 8) down from $63 a share in January following the announcement of the Summit deal. The Summit purchase came of the heels of smaller $23 million cash acquisition of Bancshares, a small Houston, Texas-based bank in December.

Seeking Alpha contributor Stephen Simpson of Krastisto Investing, notes that Bank of the Ozarks paid less than 1.0 times tangible book value for the Texas assets, a cheaper deal than the Summit 1.6 times valuation. 

He said the Summit deal was an ideal fit for Bank of the Ozarks because Summit’s model (50% real estate and construction lending) compliments its own and more than half of the offices are within two miles of an existing Bank of the Ozarks office, suggesting a good cost reduction potential. Analysts project Bank of the Ozarks will shave 38% from Summit’s operational expenses with synergies.

“Even with these deals, Bank of the Ozarks could still acquire additional assets if the right deal came along. I would project that Texas, North Carolina, South Carolina, and Tennessee would be attractive target markets,” Simpson said.

Bank of the Ozarks CEO George Gleason said in a January conference call that the bank is "seeing more [M&A] opportunities than we can take a look at.”

SIMMONS FIRST
Saunders said Pine Bluff-based Simmons First National is trading 12.9 times its projected earnings at $38 per share. It’s discounted valued of 2 times book shows there is room for this stock to rise.

On Tuesday (May 6) Simmons acquired Community First Bancshares of Union City, Tenn., for $243.4 million. This deal was priced at 177% of book value, which was more expensive than average pricing multiple in the region. Saunders said Simmons was able to pay that high price because of the untapped value in its share price.

The Community First deal came less than two months after Simmons announced the $66 million acquisition of Little Rock-based Delta Trust and Bank, and comes less than a year after Simmons’ $53.6 million bid to buy Little Rock-based Metropolitan National Bank out of a bankruptcy process.

In a recent interview with Talk Business, Simmons First CEO George Makris Jr. hinted that the next moves might be in Kansas or Missouri.

“We really would like to fill in our footprint in Missouri and Kansas. We have a strategy now for de novo growth. We’ve got some really good bankers in those markets,” Makris said in the interview. “We need a little more scale in those markets to be able to do some of the things that we really want to do.”

RIPE FOR CONSOLIDATION
Saunders expects the consolidation to continue. He said there are fewer failed bank deals, but much room for strategic plays by up and coming regionals.

“In Atlanta, where we are located, it was ground zero for failed banks. There have been none this year. But, we have seen five whole bank deals for institutions between $150 million and $200 million in assets,” Saunders said.

The experts agree the timing is ripe for more consolidations of smaller banks that cropped up in the past decade with plans to sell when valuations rose. 

Saunders said the small banks have a tougher time competing on loans, and their regulatory oversight costs are rising to the point where earnings are squeezed.

Officials with Community Health Systems, the parent company of Sparks Health System in Fort Smith, moved fast to remove interim CEO Tim Schmidt following a racially insensitive remark he made during an employee meeting.

On Tuesday, Schmidt was addressing a group of 100-150 hospital employees. During the question-and-answer portion, Schmidt was asked why he wanted to move from Laredo, Texas – a larger city with population of about 240,000 – to Fort Smith.

According to three sources who spoke to The City Wire, Schmidt responded: “Have you ever been to Laredo, Texas? It’s 97% Hispanic.” The sources said the comment soon made its way through the hospital, with Hispanic employees – to include at least one physician – expressing displeasure with the comment.

According to the U.S. Census Bureau, Laredo’s population was 95.6% Hispanic in 2010. The city is the third most populous city on the U.S.-Mexican border, trailing San Diego and El Paso.

“Laredo continues to be a community on the rise,” notes the Laredo Chamber of Commerce website. “With four bustling international bridges, three modern hospitals, a constantly-evolving university and an expanding system of infrastructure, Laredo and Webb County provide a safe and promising environment for families and entrepreneurs alike.”

Officials with Franklin, Tenn.-based Community Health decided Thursday to announce that Schmidt would no longer be employed at Sparks. It is uncertain if he will remain employed by Community Health.

“Sparks Health System continues its search for a new CEO after the interim candidate for the position was taken out of consideration. The hospital continues to identify and evaluate qualified candidates,” noted a statement Sparks Health System sent The City Wire on Thursday (May 8). “Sparks is a vital community asset, a trusted healthcare provider and a major employer. We look forward to identifying the experienced, dynamic, community-minded leader who will build on strengths of our medical staff and dedicated employees and lead our health system to continued success.”

One of the three sources who spoke to The City Wire said Community Health plans to send officials to Sparks next week to directly address the issue with hospital employees.

Schmidt, who has more than 20 years experience in hospital administration and previously served as CEO at hospitals in Illinois, New Mexico and Texas, was in March named the interim Sparks CEO.

Sparks has had a tough time finding a CEO. Schmidt was the third interim or named CEO to resign or be dismissed since the January 2013 departure of CEO Melody Trimble.

Gary Blan was picked to succeed Trimble when she was promoted to president of Naples, Fla.-based Health Management Associates' Southern and Western Group. Trimble’s promotion was effective Jan. 1, 2013. HMA was then the parent company of Sparks. Blan resigned in May 2013, less than three months after being hired.

Charles Stewart was then named CEO in September 2013, but his resignation would come less than six months later.

Sparks and Summit were part of the sale of HMA to Community Health Systems, a company whose portfolio of hospitals was nearly double the size of HMA's portfolio. Locally, CHS owns four Northwest Arkansas facilities — Northwest Medical Center-Bentonville, Northwest Medical Center-Springdale, Siloam Springs Regional Hospital and Willow Creek Women's Hospital in Johnson.

Capital is the lifeblood startup ventures, particularly those like PicaSolar and Overwatch that are in the midst of bringing new products to market. Expanding into new markets is also a go for Oh Baby Foods and EcoVet, while DataRank continues to add to its local staff in Bentonville.

“We are presenting to a number of angel and venture groups in the coming weeks. Things are looking positive for closing our next round of funding,” said Douglas Hutchings, spokesman for Fayetteville-based PicaSolar.

He said more money – an estimated $1 million – is needed if the company is going to be able to add four to five new jobs this summer.

“We submitted our application for the next Tier of the SunShot Incubator Program which if successful would provide $1million in additional capital,” Hutchings said.

PicaSolar was one of the SunShot Incubator winners in October 2013. The startup invented the N-type solar cells that are more efficient that tradition solar cell models. The company had been testing the viability of its product with the help of the Department of Energy with plans to bring this new technology to market with a manufacturing site in Arkansas. The first round of tests were good.

The DOE program managers for the SunShot program recently visited Fayetteville, according to Hutchings, who said they gave a talk at the University of Arkansas about other initiatives with the DOE that entrepreneurs could engage.

“We will be presenting our company and results at the SunShot Grand Challenge Summit the week of May 18 to May 22 in Anaheim. We will also be visiting our partner Meyer Burger in Germany on June 3 to discuss technology scaling opportunities and challenges,” Hutchings said.
 
He said the solar industry is beginning another expansion cycle which means this is the time to be selling equipment. 

“We need to be quick to get to that point to take full advantage,” he added.

Hutchings also said the company recently added former Arkansas Lt. Gov. Bill Halter as a new board member.

“I believe he will be a great help as we progress into the next stages of the company,” Hutchings said.
  
CRUNCH TIME FOR OVERWATCH
High school senior Josh Moody, CEO of Overwatch, is finishing his finals in preparation for his May 15 graduation. In his spare time, Moody works with his partners — Joe Saumweber and Michael Paladino, software developers in Bentonville — to get the hardware gaming product prototypes approved and the software application completed in time for a late June, or early July product launch.

Moody told The City Wire he will hit the ground seeking more investors as soon as he graduates next week.

“We are seeking $300,000 in additional capital to bring the products to market in a big way. We have a matching interest of $50,000 from a local angel group and we would like to get all the funds instate if we can to further Arkansas’ entrepreneurial base,” he said.

Overwatch created a real life gaming simulation app for mobile phones and the hardware gun mounts and arm bands that secure the phone during the gaming play.

“In the next two weeks we will be testing sample designs of the arm bands and case mounts and choosing the final selections for manufacturing. The mobile application is 100% complete of iOS and 95% completed for Android.”

He said the backers who signed up to test the product on Indiegogo.com will be getting their promotional packages shipped next week. These contain shirts, stickers and the airsoft guns and gear they ordered. He said the mounts will be shipped later as the manufacturer is still working on them. In the next six weeks, Moody said he and his partners will decide on the final hardware designs, complete the Android application, raise the needed capital and launch the Overwatch gaming experience by early July at the latest.

“Our plans are to launch successfully, grow the Overwatch user community and this as big as we can. Selling the company is also option, but we hope to grow it first,” Moody said.

Overwatch was formed last summer in time to get into the Ark Challenge competition last fall. If the trio is successful they will have taken an idea on a napkin to national market in one year’s time on a budget of $450,000. And for 18-year-old Moody, running his own company, slightly overshadows other events during his senior year of high school at Little Rock Catholic.

ECOVET SALES OUTLET
Drake Vanhooser, founder of EcoVet, said the startup’s furniture struck a chord with Sam’s Club after a few road shows in the past couple of months. The high-end wooden furniture is now being sold on SamsClub.com.

Vanhooser said the company also has been active in providing assistance following the recent tornadoes.

“Some of our veterans went down to the tornado disaster area to help. This week as well, they are working with the Fontanini Meat Company from Chicago to deliver food to the tornado victims,” he said.

DATARANK’S ACCOLADE/ ADDITIONS
Matthew Seubert, who joined DataRank as an intern in 2012 and full-time after he graduated in 2013, was voted as one of NWA's Fast 15, by the NWA Business Journal. Seubert leads all research at DataRank as director of client services.

CEO Ryan Frazier said over the last six months Seubert more than doubled revenue for his team with the help of Daniel Harris who joined DataRank in October 2013 and wears several hats. 

“Building on his success Seubert recently hired two new analysts graduating from the University of Arkansas Honors College in May; James Brown and Lauren Hayes who will be joining the company in the coming weeks,” he said.

DataRank is a “big data” analytic firm in Bentonville with a growing Fortune 500 customer base. 

GROWING OH BABY
Oh Baby Foods CEO Fran Free said the company moved into a larger office last week, hired a new business manager that began work on Monday (May 5) and on Tuesday (May 6) got word the baby food is ready for sale in 11 more states come August.

The City Wire will have more details in an update from Oh Baby Foods next week.

Benton County Circuit Court Judge John Scott granted Bank of the Ozarks and Summit Bank one more week to file their answers to the Arvest interpleading regarding Dennis Smiley’s Arvest stock proceeds.

Bank of the Ozarks and Summit, now merged, each have their own answers to file with the court about the funds they are owed from Smiley – loans that could have been guaranteed by his Arvest stock account.

Judge Scott gave the two banks until May 16 to file their responses. Arvest placed $551,754.58 on deposit with the court in its April 2 filings as an interpleader, asking the court to disperse the money to the creditors, as it had no way to determine how to divide the proceeds between the 21 banks making claims for the money.

A hearing date on the Arvest interpleading is expected to be set after the May 16 extension.The court agreed to Arvest’s motion and accepted funds into the registry on April 4. Since that time a flurry of filings, answers and counter suits have been entered with the court. 

The Bank of Fayetteville was the first to respond on April 7 with a 200-page filing that included a counter suit against Arvest Bank and the other lenders who loaned money to Smiley. Bank of Fayetteville is owed $250,000.

On April 11, First National Bank of Fort Smith filed its own suit against Dennis Smiley and Arvest Bank claiming loan defaults to Smiley totaling $383,384.

On April 21, Integrity Bank filed an answer to the Arvest interpleading and also sued Dennis Smiley doing business as Design for the Home, claiming $159,781 is in default. 

First State Bank Russellville also filed its answer on April 21 and countersued Arvest Bank and Dennis Smiley asking for judgments totaling $145,965. First Security Bank also filed its answer to the court on April 21, providing no details for the amount its owed  by Smiley and his business interests.

On April 22, First National Bank of Fort Smith, filed an objection to the Arvest interpleading claiming a breach of fiduciary responsibility.

First State Bank of DeQueen filed its answer April 28 to the Arvest interpleading. First Bank of Hampton filed its answer to the Arvest interpleading on April 30, and countersued Arvest Bank and Dennis Smiley for $180,000 it is owed. The two loans were made to Smiley, who pledged his Arvest bank stock as collateral.

First State Bank NWA, now Today’s Bank, and Centennial Bank each filed an answer to the Arvest interpleading on May 1. No details were given on the amount owed. 

Benefit Bank filed an answer to the Arvest interpleading on May 2. Dennis Smiley also filed his answer that same day. Smiley asked the court to deposit the funds to him to cover his legal costs.

Signature Bank of Fayetteville entered their answer to the Arvest interpleading on May 5. No details were given on the amount owed to Signature on loans made to Smiley in 2009 and extended several times.

Bank of Oklahoma, Chambers Bank and Legacy National Bank have yet to file an answer with the court regarding the Arvest interpleading. Summit and Bank of the Ozarks asked for and were granted filing extensions until May 16.

OTHER SUITS FILED
Delta Trust & Bank filed its own suit against Smiley on March 25. Smiley has answered that claim admitting that the loan made to he and his father Henry Dennis Smiley Sr. for $245,126, and the corresponding documents might have contained signatures that were not original. Smiley Sr. also answered the court confirming that he did not sign or authorize any loan in his name. Delta has asked the court for a judgment against Smiley Jr.

Simmons First Bank sued Dennis Smiley doing business as Design for the Home on May 2, asking the court for judgments totaling $67,879. Simmons also sued Centennial Bank who may have claims against the same collateral that is residential property in Fayetteville which Smiley sold to Debra Parker-Ladd in August 2013 for $1, according to Washington County real estate records. 

On April 11, First State Bank of Lonoke filed suit against Smiley for $159,000 for three loans made and renewed between 2011 and 2012.

First Federal Bank also sued on April 24 against Smiley for nonpayment of loans totaling $70,000 that were guaranteed by a family trust. 

WHAT’S NEXT?
The civil suits will be heard in Benton County. Meanwhile, the ongoing federal criminal investigation has not resulted in any criminal fraud charges. It is possible the banks who can prove fraud in relation to their loans made to Smiley could be pulled into the federal proceedings and eligible for restitution if awarded by the court.

Legal counsel familiar with the case told The City WIre that there are a couple of scenarios in which Smiley could face criminal charges. Given the mounting evidence of fraud entered into the circuit court proceedings, there is a high probability a grand jury indictment could be waived. 

The other scenario would involve a “Filing by Information.” This would involve a defendant’s attorney working out a deal with U.S. Attorney’s office. In this scenario, a defendant would waive indictment and enter a negotiated plea. 

Tim Tarvin, law professor at the University of Arkansas, said in federal cases there is an incentive to come forward and cooperate because in doing so the defendant could shave points off of the sentencing formula. Tarvin has no connection to the Smiley investigation and was speaking merely about the process.

He said the fastest way for creditors to get paid is to race to the courthouse and file their judgments. But given the number of mounting claims, he said creditors are likely to get pennies on the dollar when all their legal costs are factored into the equation.

A new Wal-Mart grocery drive-in experiment, problems at an area non-profit, Beaver Lake water facts and dumb federal policies are part of the Northwest Arkansas Friday Wire for May 9.

NOTES & ANALYSIS
• The 15,000-square-foot experiment
One of the most beautiful structures and spaces in Arkansas is the Crystal Bridges Museum of American Art in Bentonville, but a soon-to-be built structure in Bentonville that looks like a cross between a Sonic Drive-In and an automated car wash will soon be one of the most closely monitored sites in the retail world.

Wal-Mart Stores received approval this week to build a drive-in grocery fulfillment center near the intersection of South Walton Boulevard and J Street. The 15,000 square-foot retail warehouse facility will have 52 parking places with 33 spaces for customers driving through to pick up grocery orders and 19 for employee parking. Also, the facility is expected to house 10,000 fresh and dry grocery products – from cereal, chips and bread to fresh produce, meat and milk.

Wal-Mart officials say the concept will allow consumers to shop online for their grocery items, schedule a pickup time at their convenience then drive up like they would at a Sonic drive-in, call to the associates who then bring their grocery order to car.

The retail world is in the midst of a scramble to figure out how to make the retail experience more convenient among shoppers who use a variety of technologies to compare prices, compare products and compare delivery methods. All those baby boomers who made the supercenter concept work will soon be wholly replaced by generations who are blowing up the supercenter model with their fancy-schmancy smart phones and tablets and iPads and other highly disruptive devices.

This 15,000-square-foot project may not be an answer – and likely will not be THE answer –  to the question of providing convenience to the shopping decision makers of tomorrow. But if it meets certain corporate expectations, don’t be surprised to see hundreds of them pop up around the U.S. and help secure Wal-Mart’s retail leadership for a few more decades.

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 ...

• Whole Foods on for Fayetteville
A project that was all but confirmed thanks to artist's renderings submitted to the city of Fayetteville as part of a planned retail development has now been officially confirmed.

• New Arvest poll
Consumer sentiment is a strong factor in economic performance given that household purchases comprise about 70% of the nation’s gross domestic product. National polls like the Thomson/Reuters Michigan Sentiment Survey and the Consumer Sentiment Index are reported monthly. But, Arvest Bank seeks to drill down to a more regional and local reading of consumer sentiment with a poll of its own.

• Nonprofit problem
An organization that raised $10,000 at a fundraiser in February is not recognized as a tax-exempt 501(c)(3) organization by the Internal Revenue Service or as a charitable organization by the state of Arkansas.

NUMBERS ON THE WIRE
$243.4 million: Expected price that Pine Bluff-based Simmons First National Bank will pay to acquire Community First Bancshares based in Union City, Tenn.

45 million: Average number of gallons of water pumped daily from Beaver Lake to a treatment facility in Lowell. For every 100 gallons treated, just one gallon is used for drinking water, the rest goes to maintaining homes and industry across Benton, Washington, Madison and Carroll counties.

$175,000: Starting salary for Randy Massanelli, the newly named University of Arkansas vice chancellor for governmental relations. Richard Hudson, who now holds the vice chancellor position, is retiring July 31.

OUTSIDE THE WIRE
• Technology and dumb federal policies
Regardless of political persuasion, few who ever visited or tried to use HealthCare.gov after its launch would argue that the Obamacare website was anything other than a colossal acquisition failure. The site wasn’t openly bid. It was limited to companies “pre-qualified” to do IT business for the feds. But the HealthCare.gov fiasco is only the visible tip of the iceberg that is federal government procurement, and notwithstanding the titanic disaster of that experience, neither Congress nor the administration is trying to fix it.

• The payday lender debate continues
The demise this week of a Louisiana bill that would have reined in payday lending demonstrates how hard it is for states to regulate the quick loan industry, which consumer groups criticize as a trap for the working poor.

WORD ON THE WIRE
“When I think about the vision a few men had to create an abundant water supply for this region, it’s amazing. Without it, there is no way our region would have been able to experience the exponential growth it has seen over the past 20 years. Before we had Beaver Lake each town had to find it’s own water source.”
– Springdale Mayor Doug Sprouse during the recent ceremony to publicize Drinking Water Week

“Prayer is an important part of my daily life and in the lives of countless Americans and I am thankful the Supreme Court has upheld this core American value.”
– U.S. Sen. Mark Pryor, D-Ark., in response to the 5-4 vote of the U.S. Supreme Court to uphold public prayer as part of a public meeting

Reducing the Whirlpool footprint, a rise in area building activity, prayer at public meetings and dumb federal policies are part of the May 9 Friday Wire for the Fort Smith region.

NOTES & ANALYSIS
• Reducing the Whirlpool footprint
The importance is primarily three-fold that Columbus, Ohio-based Spartan Logistics is purchasing the large (620,000 square feet) distribution facility on the shuttered manufacturing site owned by Whirlpool.

First, it puts part of a facility that once was home to more than 4,500 good-paying jobs back to full use. Spartan officials say the facility could be home to as many as 200 jobs, and while they may not come with the pay and benefits of union-member manufacturing jobs, they are jobs. And it is a start.

Second, it proves to Fort Smith residents and the national business world that the facility is usable; that the space may again be productive. And with part of the overall Whirlpool complex tainted with cancer-causing leftovers, that proof is more important than we might have realized.

And third, it reduces Whirlpool’s ownership of assets within the region’s economy. In stark contrast to the many years that Whirlpool may have been a good actor in the regional economy, the company did not make a graceful exit.

We should thank Spartan officials for their selection of Fort Smith to help grow their business, and also tip the hat to the Fort Smith Regional Chamber of Commerce and other local interests who helped secure the deal.

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 ...

• Rise in building activity
Building permit values for the cities of Fort Smith, Greenwood and Van Buren increased 26.23% in April from the same period in 2013. Permits issued in the three cities were $23.163 million, compared to $18.35 million in April 2013.

• New Arvest poll
Consumer sentiment is a strong factor in economic performance given that household purchases comprise about 70% of the nation’s gross domestic product. National polls like the Thomson/Reuters Michigan Sentiment Survey and the Consumer Sentiment Index are reported monthly. But, Arvest Bank seeks to drill down to a more regional and local reading of consumer sentiment with a poll of its own.

• ‘Shop Local. Sell Global’
The 2014 Business Expo, hosted by the Fort Smith Regional Chamber of Commerce, emphasized growing businesses in a global economy. "Shop Local. Sell Global." was the message chamber members heard from numerous speakers.

NUMBERS ON THE WIRE
$243.4 million: Expected price that Pine Bluff-based Simmons First National Bank will pay to acquire Community First Bancshares based in Union City, Tenn.

53.5%: Number of respondents in a new Talk Business-Hendrix College survey who said they will vote for U.S. Rep. Tim Griffin, R-Little Rock, in the GOP primary for Arkansas Lt. Governor.

$21.759 million: Value of permits issued by Fort Smith during April, up 23.24% compared to April 2013.

OUTSIDE THE WIRE
• Technology and dumb federal policies
Regardless of political persuasion, few who ever visited or tried to use HealthCare.gov after its launch would argue that the Obamacare website was anything other than a colossal acquisition failure. The site wasn’t openly bid. It was limited to companies “pre-qualified” to do IT business for the feds. But the HealthCare.gov fiasco is only the visible tip of the iceberg that is federal government procurement, and notwithstanding the titanic disaster of that experience, neither Congress nor the administration is trying to fix it.

• The payday lender debate continues
The demise this week of a Louisiana bill that would have reined in payday lending demonstrates how hard it is for states to regulate the quick loan industry, which consumer groups criticize as a trap for the working poor.

WORD ON THE WIRE
"There've been some national baseball and softball contacts we've made who've contacted us about getting this thing up and going with tournaments and high-level activity to the complex. It's exciting to us and it's the economic development that we've stressed all along that would be a benefit to our region."
– Sen. Jake Files, R-Fort Smith, about the ongoing development of the new River Valley Sports Complex at Chaffee Crossing

“Prayer is an important part of my daily life and in the lives of countless Americans and I am thankful the Supreme Court has upheld this core American value.”
– U.S. Sen. Mark Pryor, D-Ark., in response to the 5-4 vote of the U.S. Supreme Court to uphold public prayer as part of a public meeting

It seems as if the mailers filling the mailboxes of Senate District 9 voters will continue the back and forth between incumbent Sen. Bruce Holland, R-Greenwood, and Rep. Terry Rice, R-Waldron, as they inch closer to the May 20 primary that will decide who will represent the district in the next General Assembly.

A previous Holland mailer about Rice’s voting record on taxes also resulted in a war of words between the two Republicans.

The latest mailer from the Holland campaign claimed that Rice did not support Senate Bill 131 when it was being considered in the legislature in 2013. The bill, which made private the the identities of concealed carry permit holders, was overwhelmingly approved in both the Arkansas House and the Arkansas Senate.

Holland voted in favor of the legislation, which he points to in the mailer, before stating that Rice did not support the bill.

"Two years ago, liberal media outlets published the names and addresses of every concealed carry gun permit owner in the state of Arkansas. Bruce Holland sponsored and passed legislation to protect your privacy. Terry Rice did not support SB131 to protect your gun rights."

In a statement released Friday (May 9), the Arkansas Carry Political Action Committee took issue with the Holland mailer in an attempt to "set the record straight."

According to the press release from the group, Rice did not vote for the legislation when it came up in the House, but not because he was opposed to the bill.

"Representative Terry Rice was out of the state on February 19, 2013, when SB131 was voted on in the House, making it impossible for him to vote in support of the bill that day," the statement read. "His absence should not be construed as non-support of a bill that gave concealed carry permit holders complete privacy from both the anti-gun press and the general public."

The statement from ACPAC went on to detail Rice's voting history with regard to Second Amendment legislation.

"Representative Rice showed his support for complete privacy of CHCL permit holders when he co-sponsored HB 1623 in 2009. Terry Rice co-sponsored HB 1623 after the media published the permit holders' list in 2009 (not 2 years ago as Bruce Holland claimed in the mailer). This bill originally provided complete privacy for all permit holders until Governor Beebe had it amended to keep names and zip codes public as Act 1291. SB 131 completed the job that Representative Rice and colleagues began in 2009."

ACPAC initially declined to support either candidate due to both men's history of support for pro-Second Amendment policies and legislation, the statement said, and did not expressly endorse Rice Friday, though the group said voters "in Senate District 9 should keep these facts in mind when voting for their next state Senator."

While ACPAC would not come right out with endorsement, Nicholas Stehle, chairman of Arkansas Carry, personally endorsed Rice in a statement released Wednesday (May 7).

"Today, I saw a political mail piece that claimed Terry Rice didn't support protecting the identities of conceal carry permit holders. This is just not true. Representative Rice was an original co-sponsor of this bill in 2009 and voted FOR this legislation. Representative Rice was also an original co-sponsor of the 'open carry' legislation, and he has an 'A' rating by the NRA," Stehle said in a statement. "Desperate, untrue political attacks just to try and win elections should not be tolerated. Today, because of this untruthful mail piece, I'd like to offer my personal endorsement of Representative Terry Rice for State Senate."

In a statement to The City Wire, Rice said Holland was making accusations against him in an attempt to deflect criticism for his support of the Private Option, which Holland has been a steadfast supporter of, even declaring in an April forum hosted by the Van Buren Chamber of Commerce that he cast "the deciding vote on it, that's fine. I did."

"Bruce is again having a hard time with the facts," Rice said. "I was an original co-sponsor of the legislation to protect the identity of concealed carry permit holders. I’m a concealed carry permit holder myself. I also have a strong 'A' rating form the NRA – the same as Bruce. He is just doing all this to try and change the topic away from his support of implementing Obamacare  – the largest expansion of government in Arkansas history."

Reached for comment Friday, Holland said the statement from ACPAC did not change the facts, which he said show Rice did not vote in favor of the legislation.

According to Holland, Rice could have "paired" his vote with someone who was present when SB131 was voted on in February 2013. Pairing is a little-known parliamentary procedure that essentially allows an absent member of one of the legislative bodies to be absent for a vote but have it counted so long as they are paired with a present member of the same body who is voting opposite of the absent member. In short, Rice could have voted for the legislation even though he would not have been present in for the vote if he had paired his vote with a member of the Arkansas House who would have voted against the legislation.

"Irregardless of any of that, there was no vote on that bill from Rep. Rice and so it's accurate (to say) he didn't support it," Holland said. "You have to vote for a bill to support it. That's the proof. That's what we have to run on, is our voting record."

Rice said even if he had tried to pair his vote, it would not have been possible based on his travel and when the vote was called.

"The vote was held on Tuesday the 19th, and I left town on the previous Friday. The bill would not have been put on the list that Friday before I left," he said. "Nonetheless, the bill passed 84-3. I supported the bill in 2009, and I supported the legislation in 2013. Facts matter, and  Bruce Holland is not being honest.”

Regarding the controversy Holland's mailer has raised or Stehle's endorsement of Rice as a result of the mailer, Holland said, "It certainly didn't change the fact that I'm endorsed by the NRA (National Rifle Association) or that I have a perfect 100% voting record on pro-gun issues. There's no question on my record."

Wal-Mart Stores Inc. does not agree with the recent denial from U.S. Magistrate Judge Erin Setser regarding its motion to dismiss a shareholder lawsuit filed by a Michigan pension fund in 2012.

Setser entered her denial recommendation for Wal-Mart’s motion to dismiss on Thursday (May 8) in Fayetteville. The denial ruling is subject to review by U.S. District Judge Susan Hickey. 

Robbins Geller Rudman & Dowd representing the plaintiffs said they are encouraged, and are hopeful Judge Hickey agrees with the findings.

Wal-Mart does not concur.

“The motion to dismiss simply points out that even if the allegations in the complaint were true, they would not meet the standard necessary to move the case forward. We respectfully disagree with the magistrate's opinion, and continue to believe that the complaint does not meet that standard,” said Randy Hargrove, Wal-Mart spokesman.
“We are considering our options, including the filing of objections.

Wal-Mart has 14 days to file an objection to the denial, according to the ruling.
 
The City of Pontiac, Mich., general employees retirement system sued Wal-Mart Stores and former CEO Mike Duke for failure to disclose the suspected corruption in its Mexican business unit when it first learned of the violations. The lawsuit was filed in May 2012, less than a month after the New York Times reported the investigation, and seeks class-action status for the Dec. 8, 2011, to April 20, 2012, period.

The plaintiffs, led by the pension fund, claim that top Wal-Mart officers, including Duke, knew as early as 2005 about bribery practices in Mexico to facilitate the rapid building growth in that market. In the court filing the plaintiffs believe Wal-Mart had the opportunity to “come clean” long before they did, given there were emails between legal counsel and Duke in October 2005.

In Wal-Mart’s fiscal 2012 10Q, the plaintiffs also allege that Wal-Mart had worded the corruption disclosure as if they had just learned of the allegations, covering up the fact that some top executives had known for several years and chose to investigate internally.

Setser noted in the denial ruliing that the plaintiffs have “sufficiently alleged that omission of the 2005 revelation of the suspected corruption and defendants’ 2005 and 2006 investigation rendered defendants’ statements in the Form 10-Q materially misleading to a reasonable investor.”

She adds that “Without any reference to the 2005 and 2006 events, a reasonable investor could have certainly been left with the impression that defendants only learned of the suspected corruption in fiscal year 2012, and that, upon learning of the suspected corruption at that time, defendants promptly began investigating and referred the matters of the Department of Justice and the Securities and Exchange Commission.”

Wal-Mart reported in late April that it had spent $439 million in legal fees, compliance costs and other expenses in the past two years related to the alleged violations of the U.S. Foreign Corrupt Practices Act.  Wal-Mart officials said during the February earnings call that compliance costs for this year would range between $200 million and $240 million, a figure that also includes the company’s internal compliance overhaul.

Link here for a PDF copy of Setser's May 8 ruling.

The ban on same-sex marriages has been struck down Friday (May 9) by Pulaski County Circuit Judge Chris Piazza in his decision with Wright v. Arkansas.

Arkansas voters in 2004 approved Amendment 83 which legally defined marriage as between one man and one woman. The language, which was approved by 74.9% of those voting in the 2004 general election, makes it unconstitutional for the state to recognize or perform same-sex marriages or civil unions. Legal status for unmarried persons which are identical or substantially similar to marital status shall not be valid or recognized in Arkansas, except that the legislature may recognize a common law marriage from another state between a man and a woman.

The Wright case also sought to strike down a 1997 Arkansas law restricting same-sex marriage rights.

Piazza’s ruling follows the January 2014 ruling by U.S. Federal Judge Terence Kern that struck down Oklahoma’s ban on gay marriage. Kern, based in Tulsa, said the gay marriage ban approved by Oklahoma voters in 2004 violated the U.S. Constitution's 14th Amendment under the equal protection clause.

"I want to congratulate the plaintiffs in this case, as well as lead attorney Cheryl Maples and co-counsel Jack Wagoner, on this historic victory for Arkansas values,” Human Rights Campaign president and Arkansas native Chad Griffin said in a statement following the ruling. “All across my home state, throughout the South, and around the country, LGBT people and their families are seeking basic respect and dignity. This victory is an essential step on the journey toward full equality for all."

Piazza ended his ruling with a strong statement supporting broad access to marriage rights.

“It has been over forty years since Mildred Loving was given the right to marry the person of her choice. The hatred and fears have long since vanished and she and her husband lived full lives together; so it will be for the same-sex couples. It is time to let that beacon of freedom shine brighter on all our brothers and sisters. We will be stronger for it,” Piazza wrote. (Link here for a PDF copy of the ruling.)

Piazza also noted in his ruling case law that supported overturning Amendment 83.
• “Justice Brown, in Arkansas Dep't of Human Serttices v. Cole, noted ‘that Arkansas has a rich and compelling tradition of protecting individual privacy and that a fundamental right to privacy is implicit in the Arkansas Constitution.’ 20ll Ark. 145, 380 S.W. 3d. 429, 435 (2011) (citing Jegley, id. at 632).”

• “The Arkansas Supreme Court applied a heightened scrutiny and struck down as unconstitutional an initiated act that prohibited unmarried opposite-sex and same-sex couples from adopting children. Id at 442.”

• “The exclusion of same-sex couples from marriage for no rational basis violates the fundamental right to privacy and equal protection as described in Jegley and Cole, supra. The difference between opposite-sex and same-sex families is within the privacy of their homes.”

Arkansas Attorney General Dustin McDaniel, who is on record as supporting same-sex marriage rights, said Friday he would immediately move to file an appeal of Piazza’s ruling. As Arkansas’ attorney, McDaniel is obligated to defend a constitutional amendment.

“We respect the Court’s decision, but, in keeping with the Attorney General’s obligation to defend the state constitution, we will appeal,” McDaniel’s office said in a statement to Arkansas Times. “We will request that Judge Piazza issue a stay of his ruling so as not to create confusion or uncertainty about the law while the Supreme Court considers the matter.”

According to the Human Rights Campaign (HRC), the Arkansas case on which Piazza ruled is one of more than 70 marriage equality cases in the U.S. judicial system. These cases have been filed in 29 states plus Puerto Rico and account for hundreds of plaintiffs taking on state marriage bans.

Also according to HRC, same-sex couples can legally marry in 17 states and the District of Columbia, and 33 states have a law or constitutional amendment restricting marriage to the union of one man and one woman.

Arkansas opinion on the issue leans against same-sex marriage, according to a January 2014 poll conducted by Talk Business-Hendrix College. The Jan. 19 survey of 520 likely Arkansas voters included a question about same-sex marriage.
Q: Which of the following policy positions most closely resembles your own view regarding relationships between two people of the same sex?
21.5% Gay couples should be allowed to legally marry
24% Gay couples should be allowed to form civil unions or domestic partnerships, but not legally marry
50% There should be no legal recognition of a gay couple’s relationship
4.5% Don’t know

“Survey data across time has show that, while Americans as a whole are shifting views on marriage equality consistently and fairly swiftly, Arkansas is one of a handful of states where attitudes are changing decidedly more slowly,” Dr. Jay Barth, professor of political science at Hendrix College, said in his analysis of the poll results.

At least one member of the Arkansas House of Representatives has confirmed that he is pursuing impeachment against Pulaski County Circuit Judge Chris Piazza following his ruling Friday (May 9) that overturned the state's ban on gay marriage. But the speaker of the Arkansas House has vowed to block any such impeachment proceedings.

When Piazza overturned Arkansas' ban on gay marriage Friday, it was a ruling that sent shockwaves throughout the country as Arkansas became the first Southern state to have legalized gay marriage.

And while it did not take long for same-sex couples to start lining up at the Carroll County Courthouse to receive marriage licenses Saturday (May 10), it also did not take long for members of the Arkansas General Assembly to start discussing possible impeachment proceedings against Piazza.

According to Sen. Jason Rapert, R-Conway, he has been in touch with unnamed members of the House who are interested in pursuing the charges against Piazza.

"I was contracted earlier this morning (May 10) by some of the House members who are inquiring as to whether or not that could be done," he said. "The procedure is that the House of Representatives would bring impeachment (charges) against any elected official or judge who has violated their oath to uphold the Arkansas Constitution."

Once charges are brought, a trial would take place in the Senate.

According to Rapert, there is ample cause for the House to impeach Piazza, explaining that the judge overturned the 2004 constitutional amendment against the will of the 75% of voters who voted for the amendment that limited marriage to one man and one woman.

"With the Arkansas marriage amendment, this is a clear example where the will of the people has been trampled by one judge. …It flies in the face of the foundation of this (country). It is very disappointing when you see the will of a majority of our nation…when someone like an activist judge thinks their will is greater than the majority of our state."

Rep. Justin Harris, R-West Fork, confirmed that he would pursue impeachment of Piazza, though he has not been part of an organized group of other representatives pushing for impeachment.

"We ask you to interpret the Constitution," he said of judges. "It kind of opened my eyes to how important circuit judges are. But to have total disregard of our Constitution, that's why I would move forward with impeachment and going toward that."

Rep. David Meeks, R-Conway, is another representative in favor of impeachment.

"Based on yesterday's ruling and how it was done, yes, I would generally be in support of impeachment," he said.

Meeks said even though it appears to him that there is a growing call for impeachment, it would be difficult to even get impeachment proceedings to take place with the legislature out of session.

"I think it would be something that would be up in the air because the House would have to start it and I don't know, since we're not in session, if the governor would have to call a special session."

Democratic Gov. Mike Beebe has said on previous occasions that he supports traditional marriage between one man and one woman. But Beebe spokesman Matt DeCample said the governor would not call a special session to consider impeachment of Piazza.

"No, because when it comes to the judiciary, you don't try to impeach a judge just because you don't agree with his ruling," DeCample said. "That's what the appeals process is for. That's the path we already know it going to be pursued."

Asked whether there was a procedure in which the legislature could consider impeachment without the governor calling the General Assembly back into session, DeCample said he was unsure and referred questions to the Arkansas Attorney General's office, which is closed on Saturdays.

The last time impeachment proceedings were considered by the House was earlier this year during the scandal that led to the eventual resignation of then-Lt. Gov. Mark Darr, who left office following an ethics scandal that showed he had misspent tens of thousands of dollars in both his office and his campaign accounts. The resignation occurred before impeachment proceedings could take place.

During the run up to Darr's resignation, there were questions on procedure since no impeachment has taken place under Arkansas' Constitution in modern history.

"Impeachment is not clear on how it should be done," Meeks said. "Because it hasn't been done in 100 years, there's not a procedure for how to go forward with it."

Even if House Republicans could convince Beebe to call a special session to consider articles of impeachment against Piazza, Speaker of the House Davy Carter, R-Cabot, said he would put a stop to any move toward impeachment, adding that his action would have nothing to do with Piazza's ruling.

"Notwithstanding the controversial subject matter of the decision, we are not going to impeach the circuit judge because members of the House don't like the decision," he said. "That's just not going to happen. That's a slippery slope. That's why we have separation of powers. That's the most absurd thing I've ever heard."

Carter continued, again stating, "I'm telling you that it's not going to happen."

He said such a move would fundamentally challenge the Constitutionally-established separation of powers in Arkansas and the United States.

"The General Assembly can't set precedent. I don't even know how you would do that. I don't know if it's possible. That's so far outside the boundaries of how this country has ran itself for centuries with separation of powers. I can't even get my mind around that concept to start impeaching circuit judges because we don't like their decisions. That's absurd. There's an election process. We have circuit judges that are elected, the Supreme Court, the appellate level. That's the way it works."

DeCample echoed Carter's remarks, saying that a planned appeal by Attorney General Dustin McDaniel — who personally supports gay marriage but is defending the state's Constitution in his role as the state's top attorney — is the proper way to handle disagreements with judicial rulings.

"That would be pretty unprecedented to impeach a judge for doing the job he was elected to do, which is interpret the law as he sees it. And if, in fact, his interpretation is incorrect, then that's what appeals proceedings are for."

Harris took issue with Carter's view on separation of powers and his insistence on stopping any impeachment moves by House members.

"That is flying in the face of us as far as separation of powers with the judicial branch making (a legislative decision). I respect the speaker. He's an attorney, but that goes against what the Constitution says. There is separation of powers and that's why we can impeach a judge. … It surprises me that he would go that far. He's one man, but he cannot rule on what the majority of the body would say, which would be hard to get (a majority for impeachment). But my understanding is that it would only take one member to get impeachment (considered by the full body)."

With the speaker not on board, only time will tell if Republicans pursue impeachment this year or during the 2015 legislative session.

Booneville-based First Western Bank has filed its response to the Arvest Interpleading and countersuits stemming from the Dennis Smiley loan saga, which cost him his job as a top bank Arvest bank executive in March.

First Western is one of 20 banks known to have loaned the former Arvest Bank-Benton County president an estimated $4 million since 2011. At least 10 of those banks were defrauded by Smiley who used the same collateral – his Arvest Group Bank stock gifted to him as a top executive – for each loan.

Arvest Bank noted in its April 2 interpleading with the Benton County Circuit Court that Smiley knew the stock was not transferable when he pledged it as collateral. Several banks including First Western have provided documents to the court that show at least three other top Arvest executives signed security control agreements on behalf of Arvest Bank granting the lender access to the shares in case of default.

First Western noted its May 9 filing that Arvest knowingly allowed and directly participated in Smiley’s fraudulent pledge of his shares of Arvest Bank Group shares as collateral for a loan of $125,000 in February 2011 for real estate investments. Unknown to First Western at the time of the loan was that Smiley had already pledged that same collateral in loan with the Bank of Fayetteville.

First Western said it relied on financial statements provided by Arvest agent Euva Phillips and Smiley showing the shares could be used as collateral when making the loan. Absent the fraudulent statements from Arvest’s authorized agent and Smiley, First Western said it would not have made the loan, much less entered into a second loan arrangement with Smiley. In November 2013, Smiley borrowed another $85,983.86 from First Western through his limited liability company HDS Holdings.

First Western said Smiley did the same song and dance by misrepresenting his true financial status and again pledging the Arvest Bank shares as collateral through a signed control agreement by an Arvest officer Jeb Mills.

Phillips and Mills continue to work at Arvest Bank and spokesman Jason Kincy told The City Wire, and no other executives have resigned or left the company as a result of the Smiley situation.

First Western said it is owed $210,899.85 from Smiley’s fraudulent pledges in two loans made with Arvest signatures which shows that the bank knew or should have known of Smiley’s actions to pledge the stock as collateral. First Western notes that Arvest breached its contract to provide payment out of the stock account in case of default.

In its filing First Western said it reserved right to countersue any of the parties involved. The bank has not yet done so as of the close of business on Friday (May 9.)

Arvest has already been sued by Bank of Fayetteville, First Bank Hampton and First National Bank of Fort Smith, with each alleging that Arvest knew the collateral was pledged multiple times, given the same Arvest signatures appear multiple times on control agreements which they have disclosed to the court.

Outside of the Arvest interpleading on April 2, the bank has not made any public statements about their discovery of the Smiley situation. Kincy said the bank does not comment on pending litigation.

Arvest notes in its interpleading that Smiley knew he was not permitted to pledge or otherwise encumber the shares in the Arvest Bank Group common stock plan. Counsel for Arvest asked the court for a release of any liability related to Smiley’s stock proceeds ($551,754) which were deposited with the court on April 4.

There have been no criminal charges filed against Smiley or his former employer. There is a federal criminal investigation underway into Smiley’s loan activity. Sources believe there is enough evidence to waive a grand jury seating and move straight to a plea bargain with the U.S. Attorney’s Office.

It will be up to courts to decide the extent of Arvest’s liability in the alleged loan fraud perpetrated by Smiley, an officer and high ranking bank official. Acts of individual employee fraud can protect companies to a certain extent. But, the Federal Deposit Insurance Corporation notes in its regulations that bank management is responsible for preventing and detecting fraud and insider abuse: “The primary responsibility to prevent fraud and insider abuse rests with the board of directors and senior management.”

Smiley was senior management, but the FDIC states there should be checks and balances in place to circumvent and detect suspicious activities at the executive level.

When Fran Free launched Oh Baby Foods in 2009 she saw herself in an apron making baby food in her kitchen well into retirement. She had no idea the natural baby food business she founded would sprout wings and soar, but that’s what has happened.

“Oh my gosh we are so busy. We outgrew our new offices and had to move to a larger suite last week. We have seven offices now and I think a little more growing room,” Free said.

Next Monday (May 18), Free will travel to California to her processing facility for a second production run of the six varieties of natural baby food pouches in her product line.

“It will be a fast trip. My food scientist Dan Heiges, will meet me out there. The three 16-hour days will start at 4 a.m. We sample and test each batch that comes off the line for quality assurance and several taste and texture attributes,” Free said.

This is her second production run of a half million items, split between the six flavors, since transitioning to the baby food squeeze pouch product in August. 

“This production round kind of snuck up on us. We sold out of product much faster than we planned. Our production is slated to go quarterly after this round,” Free said.

Free received word May 6 from her largest customer, Whole Foods, that she had made it to national distribution status, which granted her access into nine more states and regions. Those areas are: Colorado, District of Columbia, Kansas, New Jersey, New Mexico, Ohio, Pennsylvania, Utah and Virginia.

Whole Foods has 11 regions, and Oh Baby has been accepted into all but three of those – the Northeast, Florida and the South.

“We have another retailer with 32 stores in the Northeast who wants to bring us on. This new account is on hold until after our production run next week. After that I will back in touch to set up that business,” Free said.

LOGISTICS & STAFF ADDITIONS
Now that Fayetteville-based Oh Baby Foods is a national brand for Whole Foods, Free said sales are expected to spike higher in the new states, particularly the Rocky Mountain states where Whole Foods has a large market share.

“We are now working with CaseStack to help us with the logistics of our growing company. Our product will ship out to CaseStack warehouses in Illinois and Southern California. They will store the product and broker the LTL shipments with tracking ability every step of the way to retailer,” Free said.

She said the company has used two different providers — one for warehousing and one for LTL shipments. 

“But these two businesses didn’t talk to one another and I had to be the monitor to make sure the product got to where it was supposed to go on time. I never dreamed I would be running a logistics operation as a baby food maker,” Free said.

She is hopeful the new relationship with CaseStack will free up her time to concentrate on building more sales with new clients. Oh Baby also uses United Natural Foods Inc. as its food distributor which helps set the pricing and sales forecasting for the retail stores.

Oh Baby also recently hired Audrey Chancellor as its office manager. She handles all the accounting and general invoicing for the growing company.

“I no longer go the mailbox. Again Audrey is freeing up my time for other things,” Free said. “Dan, the food scientist, is now on a 20-hour per week contract, that is huge for me, because he handles raw souring protocol, recall process and works with the manufacturer on quality assurance issues.”

Kelley O’Callaghan works as the opportunity analyst for Oh Baby. Free said she tracks daily, weekly and monthly sales through the Whole Foods portal. She also works with retailers and brokers on sales forecasts. All of this help allows Free to concentrate on product expansion and growing company sales through more retail outlets.

Two weeks ago Free went to the Whole Foods headquarters in Austin to get feedback on opportunities to grow the product line to toddler and big kids snacks.

“I am definitely going to pursue this product expansion this fall when the apple harvest is ripe. Until then, I am surveying the market to see what other products are already available in the natural foods segment,” Free said.

A League of Women Voters forum in Fort Smith Monday (May 12) pitted two county officials against each other as they battle for the position of Sebastian County Treasurer/Collector.

Hotz and Miller are Republicans. No Democrat filed to run for the office, meaning the winner of the May 20 primary will win the general election and take the oath of office in January.

Incumbent Treasurer/Collector Judith Miller, who began serving in the office in 1999, is fending off a challenge from Sebastian County Human Resources Director Steve Hotz, who in his opening remarks said his little more than two years in county government has shown him inefficiencies within Miller's office.

"I'm seeing redundant expenses that I think are a waste of taxpayer's money," he said, citing computer, internet, e-mail and consulting expenses that he said could be done in-house by the information technology department already employed by the county.

During her opening statement, Miller offered a defense of her office, explaining that certain redundancies are required under state law.

"Mr. Hotz is talking about the redundancy in the office. Well, yes, we do have (redundancies), if you want to say that. I do have a separate internet, which we must have. We have to be up and running at all times. If you, as a taxpayer, come in and you're not able to pay your taxes, you get very upset with us. So we have to have a system that will continuously operate and never be down."

An issue both candidates addressed early in the forum, held at noon Monday at the Golden Corral on Rogers Avenue in Fort Smith, was the office's automation fund. Use of money from the fund has been an issue of contention as Miller has attempted to use the funds to enter into a contract for computer hardware maintenance that Sebastian County Judge David Hudson has refused to sign. As recently as April 15, Miller was threatening to sue Hudson if he continued to refuse to sign the contract, which totals $18,000, though no lawsuit has ever been filed.

Hotz said while state law is restrictive in the uses for the fund, he would find ways to use the money across the county.

"I realize it's restrictive on what leftover money can be used for, but we'll find uses even if we have to go back to the legislature or whatever it takes to find those uses. But any dollars used are going to be used wisely. If they're not needed, we'll find a use for them to enhance the county's system and make it better. So automation funds will be used for automation. If there's more than that's needed for automation, we'll find a way to use them wisely for the county. I don't know those answers yet, but first I have see what we have and what we have left over. But as far as using it just because you have it, just because it's there, that's not a wise use of taxpayer's money."

Miller said the treasurer's and collector's offices have automation funds and by state statute, the money cannot be pushed to other county offices, as Hotz proposed.

"We are governed by this law that says you can only spend this money for anything that makes your office operate better. It also says you cannot use this money for another office. You can pay a little bit on a system, but you cannot take the money and give it out. The county clerk is the only one that has an automation system like this. The treasurer's automation has to be used for the treasurer's office and the collector for the collector's office. There's no ifs, ands or buts about that. There is a law that states it and that's how we operate it."

One area where the candidates showed clear disagreement was on the office of the comptroller, which is currently overseen by Hudson's office. Miller said she would like to see the office merged with her's, while Hotz said it was a good check and balance outside of the treasurer/collector's office.

"I don't think it's too redundant. It gives you a second answer for looking at the books. It's not just the treasurer looking at your numbers, but when you're through at the end of the month, the treasurer puts out a number and the comptroller's office also puts out a number. But they can still do that on the same system."

The mention of a new system refers back to a previous attempt by Miller to switch to an Arkansas-based software company to code software for her office at a cost of $700 per month after another software package that cost the county $500,000 failed to deliver the needs of Miller's office. She said at the time that she agreed to the software package at $500,000 at Hudson's urging, though after 16 months she still did not have a working package, meaning both offices were working in different software systems.

Miller said during the forum that she was in favor of merging the offices, adding that the existing set up was wasting taxpayer dollars.

"I think they should be under the treasurer's office because they are dealing with the same things we are. …Right now, out comptroller's office is duplicating everything that, by law, the treasurer should be doing. We're the ones supposed to be doing booking, we're the ones supposed to be doing the general ledgers, we're supposed to be keeping up with all the money. It is the treasurer's job to do this and if we could bring them into the treasurer's office…it was three people in that office. Now it's five because they're duplicating everything (in) the treasurer's office. That's a waste of money. We can bring two people up to accounts payable and payroll make this very simplified. I think it would be better under the treasurer's office."

Friday's (May 9) ruling by Pulaski County Circuit Judge Chris Piazza that overturned the state's ban on gay marriage had many assuming that the path to same-sex marriage was finally cleared for all gay and lesbian couples across Arkansas. But the landscape for gay couples wanting to tie the knot Monday (May 12) was not all green pastures.

Most counties in the Fort Smith and Northwest Arkansas areas declined to issue marriage licenses to same-sex couples following Attorney General Dustin McDaniel's request for a stay on Piazza's decision and his filing of an appeal in the case.

Sebastian County Clerk Sharon Brooks issued a press release Monday morning explaining that her office would not be issuing licenses to same-sex couples "until ordered to do so by a court of competent jurisdiction." Brooks said onsultation with the Sebastian County prosecuting attorney led to her decision in relation to Piazza's ruling.

"I have consulted with Daniel Shue, Sebastian County Prosecuting Attorney, who has advised me with regard to the legalities of this very important matter. The ruling from the Third Division Court of Pulaski County is not binding on my office, and I will await the decision of the Supreme Court of Arkansas."

She added that the decision was her's "to make, and my office will continue to uphold the Constitution of the State of Arkansas as amended by Amendment 83."

The story was much the same in Benton and Crawford Counties, where the local county clerks both declined to issue marriage licenses to same-sex couples. Crawford County Clerk Teresa Armer said her decision came about following consultation with a deputy prosecutor in the county, who told her Piazza did not have jurisdiction over Crawford County.

Benton County Clerk Tena O'Brien said the county's legal counsel advised that Piazza's ruling only applied to defendants in the case of Wright v. State of Arkansas.

"Benton County was not named in that suit, so I am following the Arkansas law, the Arkansas Constitution right now," she said. "It's not a personal decision, it's because I took an oath of office in support of the Constitution of the United States and the Constitution of the state of Arkansas. Until a decision is handed down for the whole state, or the decision of the the circuit court (is issued) against me, I cannot issue a license."

Washington County, one of the named defendants in the above-mentioned case, did begin issuing marriage licenses to same-sex couples Monday. Of the 83 licenses issued Monday (as of 3 p.m.), an employee in the county clerk's office said 80 of those were for same-sex couples.

Attorney Matt Campbell of the Pinnacle Law Firm in Little Rock and the man behind the left-leaning Blue Hog Report blog told The City Wire in January that he thought Piazza would use the 14th Amendment's equal protection clause to overturn the state's 2004 ban on gay marriage, a prediction that turned into reality Friday.

Campbell said questions regarding the authority of Piazza's ruling were off base, adding that even though he is a circuit judge in Pulaski County, he "has the power to invalidate a state law. The counties didn't have a say when it (the Constitutional amendment banning gay marriage) was passed to enforce it. If a judge overturns it, they don't have power. The counties just exist to enforce the laws as they exist at the time."

In some counties, including Sebastian, some couples were at courthouses at opening time Monday to apply for marriage licenses but were greeted with the decisions of some local county clerk's to not issue the licenses.

While Campbell said under normal circumstances those couples would likely have grounds for a lawsuit, he said it was unlikely to see any lawsuits against Brooks or others since the Supreme Court is expected to issue a stay sometime Tuesday (May 13) or Wednesday (May 14).

"They are (entitled to be married), but the window (to do so before a stay is issued) is going to be so small that I don't think anybody will (file suit). If there's not a stay and they continue to do it (deny licenses), then they open themselves up to a lawsuit. …Once there is a stay, it's harder to bring a suit, even if you were denied a license today."

The deadline for plaintiffs in the case to respond to the stay request is noon Tuesday, though Campbell said it could be as late as October before oral arguments are heard since the Supreme Court will be taking a recess in the next month.

Any sort of decision as a result of those oral arguments is unlikely for at least a month to three, he said.

Ultimately, Campbell said the case would likely be appealed to the U.S. Supreme Court, adding that Arkansas' case would likely be heard before a case in neighboring Oklahoma since the Arkansas case has fewer legal hurdles.

"If it gets appealed to the U.S. Supreme Court, it could get ahead of the Oklahoma case. It would not have to go through the multiple (federal appeals courts) levels that the Oklahoma case does. It just jumps from our Supreme Court to the U.S. Supreme Court, so it could fast track it."

Snowy winter weather did not ding the local hospitality sector among the Northwestern Arkansas’ four largest cities as they cumulatively reported a 7.57% gain in hotel and restaurant taxes collected in the first three months of 2014. Hospitality tax receipts totaled $1.235 million, compared to $1.148 million in the same period of 2013.

The cities of Bentonville, Rogers, Springdale and Fayetteville collect a 2% room tax on hotel and meeting space. Bentonville and Fayetteville also collect a 1% tax on prepared food.

HOTEL REVENUE RISES
Allyson Dyer, executive director for Visit Rogers, said she is pleased with the first quarter hotel collections.

“I was expecting weather to be a factor but we had another record January and February collections. We hosted the Arkansas Municipal League Winter Meeting in January and that really helped our month,” Dyer said.

Rogers reports hotel tax collections of $157,814 for the first three months of 2014. Receipts rose 3.33% from the year-ago period. The hotel industry STR report indicates 98 hotels in the two-county area posted cumulative sales revenue of $27.719 million in the first quarter of 2013, a 4.7% increase from the same period in 2013.

STR reports occupancy rates averaged 47.2% in the first quarter, up from 45.6% in the same period in 2013. February was particularly strong with a 51.8% occupancy rating, compared to 48% a year ago. 

With better demand from business travelers, average room rates were $79.89 in the quarter, an increase of 2% from a year ago. Roger Davis, general manager for the Holiday Inn in Springdale, told The City Wire in recent months that there are less promotional rates given because personal and business travel is picking up steam.

Bentonville reported lodging receipts worth $118,544, up 12.62% from $105,261 collected a year ago. The city expects the Sheraton Four Points Hotel to open later this year in the former Clarion space. The new hotel will have roughly 105 rooms in addition to meeting space. 

Davis said the Sheraton Four Points and a new $12 million Hilton Garden Inn near Interstate 540 exit 64 and Wedington Drive in west Fayetteville will mean excess capacity in the region. The Hilton Garden Inn will have 115 rooms.

“There is still an excess room capacity in this market and both of these hotels will also add meeting space — 20,000 square feet combined estimate. Right now 2014 is off to a very slow start, but we expect when the weather clears that leisure and corporate business travel will pick back up. Even so, these two new venues will add to the excess room capacity,” Davis said.

Springdale reported hotel tax receipts of $62,021, compared to $57,905 last year, a gain of 7.10%. 

Fayetteville reported hotel receipts of $60,168, up 1.68% from a year ago, according to the Fayetteville Advertising and Promotion Commission report onfApril 14. 

Marilyn Heifner, director of the A&P, said two events — the Tyson Invitational Indoor Track & Field event and the Ozark Juniors Volleyball Club Tournament — picked up 2,290 room nights in February with an economic impact of $2,594,130.

FORWARD LOOK
Four new events booked will result in 10,780 room nights and will have an economic impact of $3,535,429, Heifner noted in the April 15 report. (The economic impact is annualized and includes food sales.)

“I expect a very healthy second quarter as June is always one of our biggest months with Walmart Shareholders, Poultry Festival, LPGA, and Daisy BB Gun Competition, plus the AMP opens June 7 and I believe that has potential to help our weekend hotel stays as well,” Dyer said.

Davis and Heifner also predict strong summer receipts as each city is aggressively pursing and booking more group travel.

On a national scale, the STR United States hotel forecast predicts revenue-per-available-room growth in 2014 and 2015 will slow. The forecast recently released by STR expects an approximate 5.3% RevPAR growth in 2014 and 4.7% growth in 2015. This comes on the heels of 5.4% growth in 2013.

FOOD SALES SHIFT
Bentonville reported food tax receipts of $278,576 during the first quarter, rising 5.27% from the year-ago period. The five McDonald’s restaurants in Bentonville reported taxes of $19,503 in the quarter making them the highest grossing restaurant group reporting. Tax receipts were down slightly in the period from $19,644 a year ago.

The Eurest Dining Services that run the Wal-Mart Cafeteria at the home office reported tax receipts of $18,953 in the quarter, down from $22,626 in the year-ago period.

Chick-Fil-A picked up sales from a year ago with tax collections of $8,563, up from $7,785 reported a year ago. Panera Bread had less sales taxes of $6,119 down from $6,272 a year earlier.

Upscale restaurants like The Hive at 21c reported improving sales. The Hive had total food tax receipt of $4,584 in the recent quarter, up from $2,750 a year ago. The restaurant opened in January 2013. Eleven at Crystal Bridges also grew its sales year-over-year, tax receipts rose to $3,956 from $3,063 a year earlier.

Fayetteville’s food tax receipts totaled $558,542 in the first quarter of 2014, up compared to $552,971 in the year-ago period.

Chick-Fil-A is the highest grossing eatery in Fayetteville. With three locations the chicken quick-serve venue has combined tax revenue of $29,684 in the quarter, up slightly from a year ago. 

Other top grossing restaurants include: Olive Garden, Red Lobster, Penguin Ed’s and Shogun Japanese Steakhouse. Fayetteville is opening a food truck court downtown on Dickson Street that will provide consumers more food options of the go.

The Shulertown food truck court has already signed up seven vendors who will soon stake out the spot in the former lot that was the outdoor beer garden for the Phoenix bar. The vendors signed up to date include:
• Shakedown StrEAT Grill
• Feltner Brothers
• Greenhouse Grille
• Mamma Deans
• Great Dane Pies and Tamales
• Baller Food Truck
• Burton’s Comfort Cremery

The project must get final approval from Fayetteville Planning Commissioners on May 27. If approved, the businesses plan to open immediately.

THE NUMBERS
Hospitality Tax Revenue
Fayetteville 
2014: $618,710
2013: $612,226
1.04%

Bentonville
2014: $397,120
2013: $369,900
7.35%

Rogers
2014: $157,914
2013: $152,726
3.33%

Springdale
2014: $62,021
2013: $57,905
7.10%

Economic developers across Arkansas are pushing for a position from gubernatorial prospects on the Governor’s Quick Action Closing Fund, at one time a $50 million discretionary fund that allowed the state’s chief executive to close job prospects.

The fund, which was established in 2007, did not receive new funding for next year in the most recent fiscal session. Its balance has dipped below $7 million and the existing pool of money must last until July 2015.

Gov. Mike Beebe has used the Quick Action Closing Fund to close a number of economic prospects, such as Hewlett Packard, Nordex, and Welspun Pipes. The money has been used for workforce training, infrastructure such as roads and railroad spurs, as well as site preparation or relocation expenses. Now, a coalition of chamber leaders at the state and local level are requesting positions on the Quick Action Closing Fund from leading candidates for Arkansas Governor.

In a letter dated last week, State Chamber of Commerce CEO Randy Zook, Arkansas Economic Developers President Lou Ann Nisbett of Pine Bluff, and Rogers-Lowell Chamber vice-president Whitney Yoder signed a letter to gubernatorial candidates. The letter said, in part:
“We shouldn’t have to explain the tactical benefit this incentive plays. Thousands of jobs and dozens of projects in every corner of our state can be traced directly back to this incentive.

“Incentives are only a part of economic development. But it is short-sided to think that the targeted funding the closing fund offers is anything but essential to deal-making. Consultants, local industry and growing businesses around the world need to know that Arkansas has the capacity to compete when the deal is right.

“Will you join us in the fight to create quality jobs for Arkansans? Will you pledge to support budgets that replenish the Quick Action Closing Fund annually? Please let us know so that we can let our members and economic development practitioners around the state know what candidates are willing to compete for tomorrow’s jobs.”

Talk Business & Politics had also solicited the major party gubernatorial candidates for their position on the Quick Action Closing Fund. Candidates were asked, “Do you support the fund and do you support restoring its balance to $25 million a year?”

Curtis Coleman – R
“We need an empirical evaluation of the effectiveness of the Quick Action Closing Fund. Let’s take the time to understand the ROI on the use of the Fund thus far. If it’s been effective and has given Arkansas taxpayers a good solid ROI, let’s continue the fund at it’s authorized $25/million per year funding. If not, or if the data is inconclusive, let’s reconsider if this in a worthy investment of Arkansas taxpayers’ money.”

Asa Hutchinson – R
“As Governor, before I would reauthorize funding I would require (1) stronger protections for the taxpayers in the clawback requirements when an industry does not create the jobs promised; (2) I would require a cost benefit and risk analysis prior to the release of funds; and (3) there should be greater transparency when a company fails to meet its end of the bargain.”

Mike Ross – D (statement from his spokesman, Brad Howard)
“Unlike Congressman Hutchinson who called it a ‘slush fund’, Mike Ross has always fully supported the Governor’s Quick Action Closing Fund, and the results so far have been overwhelming with the announcement of 30,000 new jobs in Arkansas. As governor, Mike will bring Democrats and Republicans together to secure the annual $25 million we need for the Governor’s Quick Action Closing Fund so that we can continue to compete with surrounding states for more and better-paying jobs in Arkansas.”

Democrat Lynette Bryant did not respond to a request for comment.

Arvest Bank has responded to the Benton County Circuit Court in the countersuit filed by First National Bank of Fort Smith, and in the response denies that it had any knowledge whatsoever of a control agreement and letter issued by Chad Evans as executive vice president. 

First National Bank of Fort Smith claimed that it had followed protocol by obtaining a signed control agreement on the collateral being pledged by then Arvest executive Dennis Smiley, for loans being granted by FNB. The signature of Chad Evans, intermediary for Arvest Bank, is present on a letter and the security control agreement for Smiley’s loans with First Nation Bank. 

Arvest also says in the filing that the account number ending in 586 referenced in the letter which was said to contain the assets being pledged for collateral was a fake. Arvest said in the filing there was never any assets in the an account ending in 586.

Lastly, Arvest said the control agreements were signed in the capacity of Arvest Bank — not Arvest Bank Group, the true holder of the stock. Evans is still employed at Arvest Bank, as are two other executives whose signatures appear on collateral pledge forms for loans made to Smiley.

Arvest asked the court to dismiss the suit and require the plaintiffs to cover all the legal costs involved in this proceeding.

SMILEY SR. RESPONSE
Henry Dennis Smiley Sr., the father of Dennis Smiley, also was sued by First National Bank for loans made to HDS Holdings, Smiley senior filed his answer with the court on Monday (May 12). The senior Smiley notes that he did not sign any loan documents with First National Bank of Fort Smith, and that someone signed his name without his knowledge.

The senior Smiley claims he was a victim of fraud in this matter and his counsel asked for a jury trial. He asked the court to dismiss the case against him and HDS Holdings because they knew nothing of the transaction made in their name. First National Bank is owed $50,000 on loans made to HDS Holdings and $144,258 made to Dennis Smiley in 2013.

Simmons First Bank also sued Smiley Sr. for loans it said it made to HDS Holdings beginning in 2008. Simmons loaned and renewed loans to HDS of $85,000 and $30,750. There was a balance owed of $84,816 as of April 11 when Simmons asked the court for a judgment against Smiley Sr. and the HDS Holdings.

The senior Smiley has also filed his answer with court on the Simmons suit. Again Smiley Sr. said he did not sign any paperwork relating to loans for HDS Holdings. He said his name was signed without his knowledge or consent.

Smiley Sr. again claims he was a victim of fraud perpetrated in his name without his will or knowledge. He is asking the court to consider a jury trial, if it choses to proceed forward.

Consumers tempered their spending in April despite weather improvements, as retail sales remained flat against stronger March spending patterns, according the National Retail Federation. 

April retail sales, which exclude automobiles, gas stations and restaurants, were unchanged seasonally-adjusted month-to-month on the heels of a 3.6% bump upward in March. That said, retail sales increased 4.7 % unadjusted year-over-year. 

“The shift in Easter to April did not provide enough bounce to retailers as retail sales struggled to keep their strong spring pace,” NRF President and CEO Matthew Shay said. “With consumer spending accounting for roughly 70% of total economic activity, NRF remains hopeful that the uninspiring April retail sales figures are just a temporary seasonal fluctuation.”

The U.S. Census Bureau also reports retail sales, which are inclusive of automobiles, fuel and food. They report April sales of $434.6 billion, up 0.1% month-to-month. The Census Bureau said retail sales increased 4% on an adjusted year-over-year basis.

“Even though retail sales were weaker than anticipated, the fundamentals of the economy, including improving job growth and income gains, remain positive,” NRF Chief Economist Jack Kleinhenz said. “While the shift in Easter played into the seasonal figures, NRF remains optimistic that retail sales will keep their positive trajectory, albeit in fits-and-starts, in the second quarter.”

The nation’s largest retailer Wal-Mart will report its fiscal first quarter earnings on Thursday (May 15). This quarter includes the months February, March and April. Wall Street is awaiting the results as Wal-Mart is seen as a barometer for the broader economy. The retail giant’s sales comprise roughly 10% the nation’s retail spending, excluding automobiles. The average family of four spends $4,000 a year at Wal-Mart and one in every four grocery dollars are spent at Wal-Mart.

The consensus estimate among analysts who cover Wal-Mart Stores is that the retailer will post per share earnings of $1.15 on revenue of $116.29 billion. Both estimates are slightly higher than actual income and revenue in the same quarter in the previous fiscal year.

Segment Sales Gainers (year-over-year)
• Building materials, garden equipment and supply sales increased 2.7%
• Clothing and accessory sales increased 5.2%
• Furniture and home furnishing sales increased 3.6%
• General merchandise sales increased 5.3%
• Health and personal care sales increased 6.6%
• Online retailers’ sales increased 5.8%

Segment Sales Losers (year-over-year)
• Electronics and appliance sales decreased 1.8%
• Sporting goods, hobby, book and music sales decreased 0.6%

It is something typical in the days and weeks leading up to a big election — individuals canvassing entire neighborhoods in an attempt to get the word out about their chosen candidate. What made Saturday's canvassers across Van Buren different was that instead of the typical local volunteer, many likely Republican voters in the city were greeted at their homes by state senators from as far away as Texarkana asking them to re-elect Republican Sen. Bruce Holland of Greenwood.

Sen. David Sanders, R-Little Rock, was joined by Republican Sens. Jon Woods of Springdale, Jonathan Dismang of Beebe, Eddie Joe Williams of Cabot, and Jimmy Hickey of Texarkana in his efforts to get out the vote for Holland, who is seeking a third term as state senator from District 9. Rep. Terry Rice, R-Waldron, is challenging Holland.

Breaking it down by numbers, just more than 14% of the 35-member Arkansas State Senate spent the better part of Saturday (May 10) wearing out shoe leather and knocking on doors for Holland. According to Sanders, the two-term state senator from Greenwood was worth the drive from Little Rock.

"I'd say first and foremost, those of us who are in the Senate recognize the enormous contribution Sen. Holland made in the previous session, even in his first session (in 2010). He was always the go-to guy in the Senate when it comes to economic development and agriculture. He's a solid voice for rural Arkansas, but also for our cities and our towns. He's a great resource. That's the first and foremost. We recognize that and that's why we need him back."

‘YOUTHFUL CAMARADERIE’
Woods echoed Sanders, explaining that Holland worked with him and other legislators on issues that mattered in their home districts.

In discussing the weekend's canvassing, Woods said the work done by the group of five was believed to have been the first of its kind in the Senate.

"I think it says a lot about how well Bruce is perceived and how well his Senate colleagues enjoy working with him. I think it says a lot about Bruce. A couple of us said that a few times — this is probably historical to see something like this. It shows a youthful camaraderie."

Sanders said one of the most important pieces of legislation Holland supported during the last session was the Private Option, which has been a point of contention during the election. Sanders and Dismang were co-authors of the legislation that created the so-called Private Option, using federal dollars intended for Medicaid expansion and instead using it to purchase health insurance for qualified Arkansas residents.

In discussing the legislation and how it has come to be defined during the election, Sanders said Rice and his supports are out to "score cheap political points" by trying to link Holland to the federal Affordable Care Act, which, among other things, mandates personal health insurance coverage for all Americans. According to Medicaid.gov, the legislation did "expand Medicaid coverage to millions of low-income Americans and makes numerous improvements to both Medicaid and the Children's Health Insurance Program (CHIP)."

"It's easy to say the Private Option is Obamacare, but it isn't," Sanders said in his defense of the legislation. "Numerous members of the legislature who aren't supportive of the Private Option have said that. It's not. It's an effort to offset the problems of Obamacare."

RICE SUPPORTERS
But it is the support of the Private Option that has Republican Sen. Bryan King of Green Forest, a backer of Rice, pulling out the stops to support him.

King, as well as the General Assembly's Crawford County delegation of Republican Reps. Gary Deffenbaugh, Charlotte Vining Douglas, and Charlene Fite, have all announced their support of Rice and also have gone door to door in the final weeks of the campaign.

And according to King, Rice's opposition to the Private Option has placed him in a strong position going into next Tuesday's (May 20) primary against Holland.

"It'd rather be in his position if I was in the race," he said, adding that Holland has been anything but honest about his vote for the Private Option.

"I've been disappointed in Sen. Holland for saying Rice is misleading people. Are we misleading people? No. The Private Option is Medicaid expansion. The reason it happened is because of Obamacare and the state expanding Obamacare."

King said he and others were on the ground for Rice to combat other misleading information he said has come from the Holland campaign, pointing to a recent direct mail piece from Holland that he said was out of line.

"On the gun issue, I have a 100% rating, the same as Sen. Holland does by the AAI (Advance Arkansas Institute). You have Rep. Douglas and Fite that have different ratings in the House sometimes based on the difference in the Senate and House bills. But to say that Terry Rice is not a 2nd Amendment advocate is a lie. I've served six years in the House with him and there's no one better than Terry Rice,” King explained.

To show the level of support Rice was generating across the state and not just in Crawford County, King pointed to the recent Rice endorsement by Sen. John Cooper, R-Jonesboro. Rice was also recently endorsed by the Fraternal Order of Police Lodge 39 and former Rep. Rick Green, R-Van Buren, who lost to Holland in 2012. King added that until election day, Rice would have support on the ground from his backers just like Holland.

Asked whether voters in other parts of the state should expect to see large contingents of senators showing up at their home to ask for a vote for their colleagues, Sanders said it could be the sign of a shift, with endorsements requiring more than a handshake, a written statement and a rally or two.

"I think, yeah, I think it's sort of a new paradigm. We have an increasing number of GOP primaries. And (this is) more of a recognition of Sen. Holland's work, the respect that his colleagues have for him. I think it's a testament to the fact that the River Valley has a fantastic state senator and we want to be supportive of him. Maybe it's the new normal, I don't know."

King said regardless of who wins next Tuesday, hard feelings would not follow him and other senators back to the General Assembly in January.

"I think a lot of times, the dust settles after the election. You realize you have to work together. If you have a good idea, you have a good idea and if you don't, you don't."

For Mercy patients in the Fort Smith and Northwest Arkansas areas, the next trip to the doctors office may not include shaking the doctors hand. Instead, the healthcare provider's patients could soon see their doctors on a television screen and undergo a virtual examination.

If it sounds far fetched, you may not be wrong, according to Mercy Clinic president Dr. Cole Goodman, who said the idea of virtual examinations was something he was not sure would have been on the horizon even three years ago.

But Tuesday (May 13), Mercy Health System joined its 32 hospitals in four states — including its hospitals in Fort Smith and Rogers — for a virtual "groundbreaking" event, making the start of construction on the nation's first virtual care center.

According to Lynn Britton, the healthcare system's president and CEO, construction of the Chesterfield, Mo., – a suburb of St. Louis – virtual care center will allow Mercy to reach patients across the nation with specialists without having to leave the comfort of their local medical clinic.

"Telemedicine lets us provide the best possible care to people where and when they need it — even when patients wouldn't otherwise have access to specialists, such as neurologists and pediatric cardiologists," he said. "The center will bring together the nation's best telehealth professionals to reach more patients, develop more telemedicine services and improve how we deliver virtual care through education and innovation."

The new virtual care center will be a four-story, 120,000-square-foot building that will house 300 physicians, nurses, specialists, researchers and support staff, according to Mercy.

"This is a great day for Mercy and our Northwest Arkansas community. This virtual care center will create access to the best and brightest physicians in the country while allowing the convenience to our patients and their families right here in their hometown,” said Eric Pianalto, Mercy NWA Hospital president.

Patients will receive care any time day or night "via audio, video and data connections to locations across Mercy as well as outside of Mercy through partnerships with other health acre providers and large employers." The healthcare provider expects to log more than three million telehealth visits in the next five years.

An example of what may be more prevalent recently played out in Northwest Arkansas. According to a story in The Kansas City Star, Bob Quinlan, a resident of Rogers, Ark., traveled to St. Louis in August to correct his atrial fibrillation.

“Rather than make the nearly seven-hour return trip for a checkup, Quinlan drove to the Mercy hospital in his hometown. There, monitors allowed his St. Louis specialist to see how Quinlan's heart was functioning, even listen to his heartbeat through a stethoscope connected to a computer,” the story noted.

Quinlan, in a statement provided to The City Wire by Mercy NWA, said the technology provided a health benefit.

“Being able to see my specialist in St. Louis right here in my doctor's office is convenient. It's much easier for me to take an hour out of my day than take a day and a half trip to follow-up and stay on top of my health,” Quinlan said in the statement.

And while the virtual care center is not slated to open until 2015, Mercy Fort Smith President Ryan Gehrig told a crowd assembled at his local facility that telemedicine was already in use across the healthcare system's hospitals.

"We're already using telemedicine in a lot of avenues. Mercy SafeWatch eICU — as you may know, Mercy has the largest virtual ICU network in the country and we are one of the community hospitals that has that (infrastructure)."

Goodman said with the rise of telemedicine and anticipation of the virtual care center, Mercy Clinic is constructing new clinics with the infrastructure installed to handle telemedicine, allowing patients to see specialists when needed.

Gehrig explained that having the virtual care center and telemedicine capabilities allowed the hospitals across the system to bring specialists into the local market, meaning that while recruitment of specialists to the region would continue, patients would no longer have to travel out of town to get needed care.

Mercy Fort Smith Chief Operating Officer Matt Keep said even if Fort Smith or Northwest Arkansas clinics and hospitals under the Mercy banner land a specialist and no longer need to virtually connect to one, it would not stop them from providing services to other clinics across the system.

"We'll still obviously recruit for the needs that we have in our community. A good example in this is two ways. It's not just services that we'll be receiving from a virtual care center. We have physicians that are already part of working through the virtual care center. Our neurologist is doing teleneurology for other communities. When he has some downtime, he's volunteered to do that. So he's taking care of patients in other communities."

Gehrig said the patient capacity for the virtual center would be practically limitless, with such a large number of specialists on hand in Chesterfield and others available throughout the system.

It was a point Britton made, as well, as he pointed to Mercy's more than 10 years experience in telemedicine.

"We've pioneered a telehealth plan that no longer limits advanced care because of age, illness or geography. We can deliver a higher level of care to more people, and the virtual care center is at the heart of it — providing care for today while also developing the health care of tomorrow."