Van Buren-based Arkansas Lamp has launched a new product line and a new company name to signify the growth the company is experiencing. President Jeff Null of Arkansas Lamp said the company would be changing its name before the end of the week to Arkansas Lighting to coincide with the launch of the company's new line of LED fixtures which include ceiling lamps and wall sconces.

"Instead of being Arkansas Lamp, it's going to be Arkansas Lighting," Null said. "When most people think lamp, they think table or floor lamp. But we're more than that, so we're trying to broaden the perception of what we do."

Null said the new line includes more than the lamps the company started with in 1972 and allows what will now be called Arkansas Lighting to seize an opportunity in the marketplace. The company has about 60 employees.

"We have seen an opening in the market for decorative LED wall or ceiling sconces, and not just in our core (hospitality) business, but others like multi-family (housing) or medical. We think this is a perfect niche for that. It enhances our existing market and gives us new ones."

He said residential and business customers are looking for "energy efficient, no maintenance, excellent light quality" products and moving into the LED market would be good for both consumers and the Van Buren manufacturer, what Null said was "a win all the way around."

Null acknowledged that consumers in the past have complained about newer types of bulbs having a blue-ish tint or not becoming bright quickly enough, "but LED doesn't have that problem," with Vice President Greg Null discussing the benefits of LED.

"These highly efficient fixtures consume about 80% less energy than their incandescent equivalents and about 40% less than fluorescent fixtures. Plus they last many multiple times longer so that owners don't have to spend maintenance time and effort on replacing burned out bulbs."

As for whether the company was changing directions with the introduction of the new product line and the name change, Null said the company is just taking opportunities that present themselves.

"It's not that we're changing directions, we're trying to expand the opportunity. These (fixtures) are fully usable in a hospitality setting and we expect to sell a lot of them, but it's good (to have a product available) for other segments we've not been in before. So we hope to broaden our market."

The new product line was launched at the HD Expo in Las Vegas May 14, with another showing at the LightFair on June 3 and since that time, Null said the company had sold "several thousand" fixtures to companies in the multi-family residential industry though he declined to provide specific sales figures.

He said many locals will not see a huge difference with regard to the launch of the new product line other than the change in name and logo for the time being, but that could change as the LED fixtures become a larger and larger part of Arkansas Lighting's core business.

"If that continues, we'll add permanent people to the (LED fixture assembly) line. Right now, we can handle it with the people we've got."

But even a small bump in sales could push the company to expand either its assembly line or warehouse space or possibly both in addition to the company's already announced expansion earlier this year.

"We think all of those things will happen. We've done some limited expansion of one of our assembly lines. We're still at the scaling point to operate more or less like we've always done. But it won't take much more growth before we start looking at more assembly lines or more warehouse space, but we're not there yet."

Northwest Arkansas is known for calling those hogs, but at Mason Creek Farm near Fayetteville, it’s not about sports, it’s a way of life. Rose Konold, owner of Mason Creek Farm, has developed a new hog breed known as Boston Mountain Hogs.

She said the breed is a sturdy lean and long hog suited for pasture raising, which she does year round, selling winglets for finishing to other smaller local farms and finishing some herself which are marketed to local restaurants and area farmer’s markets.

Realizing that there are strength in numbers, Konold recently organized a local breeder’s association for the Boston Mountain Hog. The group of about 30 met in Fayetteville Wednesday, (June 18) to select their board of directors. The group also has a trademark pending for the recognized breed.

Members in the local breeders group came from as far away as Edmond, Okla., to hear more about marketing opportunities with new brand trademark, which is also U.S. Department of Agriculture, and Animal Welfare approved.

Konold recently met with Whole Foods, who toured her Fayetteville farm looking for potential pork suppliers this region, which will include the new store coming to Fayetteville, in Little Rock and soon-to-be two in Tulsa.

“By pooling our resources the farmers in this association will be able to supply enough meat all bearing the same quality label for larger retailers like Whole Foods,” Konold said.

The group is also eager to work with B&R Meat Processing, new meat processor which recently opened in Winslow. B&R also is USDA and Animal Welfare certified, key for the Boston Mountain Hog trademark.

“I think the timing is ripe for our breeder’s association to take off. We continue to get requests we can’t meet for winglets to raise. We have about two dozen members in our group with breed sows at this time. We expect the trademark approval by early 2015,” Konold said.

BREED SELECTION
The Boston Mountain Hog breed was bred for more bacon and longer loin meats, Konold said.

“Everybody wants the bacon, but’s there’s only so much bacon on the Berkshire and Tamworth breeds we were raising. So through gene selection we bred for a longer hog, with large litters. Because it’s pasture raised and not confined, it needs big eyes and ears and hair to better weather the elements,” she said. “The breed also gives a consistent chop with just enough marbling to be forgiving to the general public who tends to overcook their pork.”

Because the breed is pasture-raised they are leaner than commercially produced hogs, but Konold said she also uses some grains to help finish the hogs at Mason Creek.

“Hogs are what they eat. They graze and eat roots for six months and they get finished with grain, at Mason Creek,” she said.

Al Tynon runs a large hog farm in Northeast Oklahoma raising Tamworth, Berkshire and soon, Boston Mountain Hogs. His farm is located near the Lo Ma organic dairy and he feeds whey from that dairy to his hogs which are raised on pasture.

“Our hogs are leaner and known for their sweet flavor,” Tynon said.

He markets his hogs online and is eager to see what co-oping as a breeder group will do for overall sales.

RETAIL OUTLETS CHANGE PORK HABITS
The group said they were surprised to see the markup at retail when selling directly to grocers like Whole Foods, Ozark Natural Foods and Allens.

“Whole Foods gets 50% to 60% mark up. It’s half that Ozark Natural Foods and less at Allens, when I worked them,” Konold told the group.

She said Ozark Natural Foods sells out of the pork when they have it because people who try it can taste the difference.

As more consumers want to know where their food comes from and who it’s sourced, retailers are taking note. Springdale-based Harps Foods announced a new partnership with Seaboard Foods to supply 100% natural pork, minimally processed with no solution or other additives to the regional grocer.

“The new pork program will improve our customers experience and will allow us to provide a more consistent quality pork product at the same great price points,” said Carey Otwell, Harps director of meat and seafood. “Sometimes it pays to not be the biggest guy on the block because being a smaller company, we have the ability to partner with single source suppliers, which means one pork processor can supply all of our pork needs and we can control quality at a whole new level this way.”

The new Harps branded pork program will roll out to the public this fall in which Harps will begin branding their pork under the “Harps” name. All of Harps meat is cut in-store by meat cutters.

Harps said Seaboard Foods raises its pigs on farms located throughout the Plains, including neighboring Oklahoma and Kansas, and is a 100% USA owned and operated company, with headquarters in the Kansas City metro. Seaboard Foods controls every step along the way in its integrated pork production system.

ANIMAL WELFARE
SeaBoard is a commercial pork processor that still uses a controversial practice known as gestational crating. Many food retailers and restaurants have joined the movement to abandon pork sourcing from companies that use the gestation crates. 

Cargill, announced June 8 it will end the use of gestation crates on its company-owned pig facilities by 2015 and its contractors’ facilities by 2017.  

“Cargill’s decision brings us closer to the day when gestation crates will be relics of the past in the pork industry. Americans simply don’t support locking animals in cages barely larger than their bodies, and Cargill is right to be leading its industry away from the practice,” said animal rights activist Paul Shaprio, vice president for the U.S. Humane Society.

Cargill’s announcement follows similar announcements from more than 60 of the country’s largest food retailers— including McDonald’s and Costco—declaring plans to eliminate the confinement cages from their supply chains.

Additionally, Smithfield Foods announced plans to move away from gestation crates, and meat giant Tyson Foods said “future sow housing” should allow animals to turn around.

For Konold and her fellow breeders who adhere to the Animal Welfare Approved criteria,  pasture raising is the only method that will do.

The days of once a week shopping trips for the family groceries have morphed into something more complex according to analysts with Willard Bishop, a marketing and research firm for retailers and suppliers.

The theme for grocers today is “ready, set, change,” as the Millennial generation, armed with smartphones and limited budgets continue to disrupt the status quo in traditional grocery that has served the past two generations.

Willard Bishop reports that the overall traditional grocery segment raked in $522.8 billion in sales last year, an increase of about 1% in total revenue with a slight dip in market share to 46%.

Traditional supermarkets like Kroger and Publix saw their sales slide 0.4% in 2013, with a cumulative revenue of $444.2 billion and a 39.1% market share. This format experienced the largest dip in market share as more consumers – 39% of the food spending market – spread their spending among Dollar Stores, supercenters and e-commerce, according to the study. Convenience stores and other quick stop stores accounted for 15% of food spending in 2013, unchanged from 2009 and down from 16% in 2006.

A bright spot in the grocery segment are the fresh formats which as a group saw a 10.4% growth in sales to $14 billion last year. The study notes that this format added 1,000 new stores last year with Sprouts, Whole Foods, The Fresh Market each posting double-digit sales growth from the prior year.

Limited assortment stores such as Aldi continued to grow at a steady pace of 4.1% last year with sales of $31.1 billion. Willard Bishop said Aldi is the leader in this category, with plans to add 650 new stores in the U.S. over the next five years.

Supercenter sales grew at 4% last year to reach $200.3 billion, and the store count rose 3.2% to more than 3,800 stores. Willard Bishop notes that Wal-Mart, Target and Kmart all had declining same store sales in 2013.

Craig Rosenblum, partner at Willard Bishop, said Wal-Mart’s move to expand its smaller formats will continue to put pressure on traditional supermarkets. He said food is everywhere today, with even Ace Hardware is selling drinks and snacks.

DIGITAL IS HERE
The traditional shopping experience is evolving partly because four out of five consumers are carrying a smartphone. Jim Hertel, managing partner with Willard Bishop, said e-commerce is not optional for grocery retailers, it’s now essential.

“It will have to become part of all grocers’ strategy going forward,” he said. “As store format change is daunting, it’s essential for retailers to connect with Millennials for future growth opportunities.”

Hertel said mobile is the Millennial’s best friend, and retailers that can figure out home delivery and integrate it into their strategy will be the biggest winners.

Capturing the attention of world “gone mobile” is no easy task. Hertel said 70% of all mobile searches result in action in less than an hour. He said the average person responds to email in 90 minutes, but it takes them just 90 seconds to answer a text. This “want-it-now” society is forcing commerce to at warp speed, he added.

HUGE POTENTIAL
Hertel said e-commerce now accounts for one nickel out of every $1 spent, which demonstrates a huge potential going forward.

Willard Bishop reports the race for the subscription dollar is on among retailers such as Amazon with Prime Pantry, and Sam’s Club’s with My Subscription. Target and Wal-Mart also are testing subscription ideas.

Rosenblum said site-to-store programs which allow shoppers to order groceries online and retrieve the picked order curbside or at a depot are also gaining momentum. But he adds that the consumer has yet to cast a vote on these services because they are not mainstream. 

He suggests that retailers with underperforming stores take a look at possibly turning them into fulfillment centers for online orders, especially if they are open 24 hours a day and already staffed and stocked.

PRICE TRANSPARENCY
Hertel said price is critically important for everyone whether they are the high-end shopper at Whole Foods or the budget conscious Aldi, Wal-Mart and Dollar Store consumer. He predicts that those two diverse ends will perhaps intersect with Wal-Mart’s new Wild Oats Organic line that is bringing premium prices downward.

“Price comparisons are easier than ever and research indicates 59% of shoppers use their phones to check prices when they are in the store. Some 38% have stopped an in-store purchase because they found it cheaper via price checking with their mobile phone,” Hertel said.

Willard Bishop reports that Kroger abandoned its double coupons in an effort to lower prices across the store and better compete with Wal-Mart and other low cost retailers.

Hertel said Wal-Mart’s new Savings Catcher will bring even more transparency in pricing among local competitors. He said it’s important for grocers to win consumer trust with consistent pricing, because they will know when prices are too high and will likely be offended.

ArcBest's announcement of a new corporate headquarters at Chaffee Crossing, bringing with it nearly 1,000 jobs to Fort Smith, is just the latest big news to come out of what was once an aging U.S. Army Base.

Since the Fort Chaffee Redevelopment Authority was formed in 1997 to redevelop 7,000 acres of land returned to local governments by the military, the area has transformed from thousands of acres of empty fields, forests and unoccupied buildings into an economic bright spot in an otherwise rocky local economy.

Following the ArcBest announcement, FCRA Executive Director Ivy Owen said the authority was down to about 3,000 acres left for development, "just less than half."

Of that, he said about 25% of the undeveloped land, located in Barling and Fort Smith, was intended for residential development, while roughly 40% to 50% was targeted for commercial and retail development. The remaining land, he said, was intended for industrial development.

Just in the last year, Chaffee has seen a mix of all of those developments, with the announcement of a new 70 store shopping center along Arkansas Highways 22 and 59, the creation of the Arkansas College of Osteopathic Medicine and the construction of several large housing developments. An expansion of Umarex was also completed within the last year.

The area is also home to modern manufacturing facilities operated by Graphic Packaging and Mars Petcare. Unfortunately, Chaffee Crossing is also home to a modern manufacturing and assembly building owned by Mitsubishi that was never utilized for its purpose of wind turbine production. The more than 400 jobs planned with the Mitsubishi plant faded when economics changed within the wind energy industry.

DIFFERENT DEVELOPMENT PHASE
Owen said FCRA is now transitioning into a different phase of development.

"I think there's going to be smaller scale developments just because, and particularly here at Chaffee Crossing, because of the configuration of our property now. We've sold a lot of large tracts and because of that, we now have a lot of smaller, specialized pieces of property."

He said the land available is suited for more high-end retail and specialized industrial sites like research and development labs or small-scale assembly plants "that didn't have to accommodate 1,000 employees."

As more land is sold and development continues, so does the need for upgraded roads and utilities. Owen said water and other utilities have now been installed for practically the entire 7,000 area and road projects have been following.

One road project underway is the H Street extension in Barling, which will lead to additional residential development by developer Steve Beam. The new shopping center will be south of the H Street extension, though Owen did not say whether any road projects are planned around the development.

Where Zero Street and Wells Lake Road meets near the site of the medical college and a proposed third Fort Smith high school, Owen has said repeatedly that a re-working of the intersection and relocation of Wells Lake Road would need to happen, as well as widening of Frontier Road. The project will take cooperation between the FCRA and the Arkansas Highway and Transportation Department, though it still remains to be seen what will happen until the Fort Smith School Board holds an election in 2015 on whether to approve a millage increase that would fund the new high school.

THE INTERSTATE IMPACT
The completion of McClure Road will no doubt help traffic flow near the ArcBest headquarters and likely spur further development. At the opening of McClure Road in November 2013, Owen said construction of the last mile of McClure to Wells Lake could take place following a large land purchase along the route. So far, no plans have yet been announced for an extension of McClure to Wells Lake Road.

As for other development, Owen said the public should see a mix of commercial properties the Chaffee Crossing area now lacks, including pharmacies, dry cleaners and convenience stores. He said the opening in October of a 6-mile stretch of what will eventually be part of Interstate 49 will have a positive impact on development.

"We've sold property in the last year and a half for (those types of businesses) and I think once that interstate opens and these two things break ground, as you say (the medical college and ArcBest), then those things will start popping out of the ground."

But bringing infrastructure like I-49 or McClure Road into the area to spur development does not come cheap. To complete the small section of McClure that opened last year, the city and FCRA split the $1 million cost. The I-49 stretch's final cost is expected to ring in at more than $95 million.

DEVELOPMENT DEBATE
It is something often mentioned by advocates of downtown Fort Smith, who have made allegations that development at Chaffee is hurting the urban core of the city and any chance at development in the more than 100-year-old section of town.

As late as Tuesday (June 17), Central Business Improvement District Chairman Richard Griffin — himself the owner and developer of several downtown projects — during a meeting about the closure of A Street and the city's concerns about access to the river, commented that the city makes deals with developers and businesses looking to go in at Chaffee all the time and yet, he contends, no such deals happen for downtown development.

"We've had those cooperative efforts out east of town when things have gone in at Chaffee Crossing. 'We'll do this if the city will do such, Chaffee Crossing trust will do such.' It's not unusual."

Owen said he is a supporter of downtown and asserts that development at Chaffee has not been at the expense of downtown.

"If I were a property owner downtown trying to get my property developed, I would probably feel the same way. Not so much it's a detriment, but maybe Chaffee has an upper hand in attraction of these businesses. I've been trying to neutralize that feeling for a long time now because we're not competing with downtown or the older parts of town. Businesses come here because they want to be here. We have not recruited, as far as I know … to my knowledge, we have not recruited any business away from downtown Fort Smith that would have otherwise located down there."

He said the growth was going to happen somewhere and if the land at Chaffee had not been available for development, businesses would have found someplace else to locate.

Whatever cost there is to bringing businesses to Chaffee, Owen said it is offset by an improved tax base and the creation of jobs.

As for how much longer the public can expect the redevelopment authority to be in existence, Owen said it would likely take another eight to 10 years before enough of the property is marketed, sold and developed for the FCRA to wind down operations.

"We will fade into the sunset. Probably what will happen is that the existing employees by that time, they'll have enough pre-warning that that is going to happen that they can secure other jobs or the businesses out here may be able to hire some of those people. Or the city and the county might be able to hire some of those. But by that time, as we dwindle down in terms of assets, so will our staff. We won't need as much staff at the end of the 12 years as we do now."

How close is too close for Wal-Mart to put a Neighborhood Market to its cash cow supercenters? The retail giant said Thursday (June 19) that one to two miles outside a supercenter is the minimal distance guideline for placing Neighborhood Markets.

Jeff Davis, chief financial officer for Wal-Mart, was asked that question during a global consumer conference held in Nantucket, Mass., and sponsored by Jeffries, a global investment banking firm.

He said Wal-Mart has noticed when it locates a smaller format store in communities where it has strong brand recognition from a supercenter, it is other retailers that lose market share.

“We don’t really see supercenter’s losing share,” Davis said.

Walmart U.S. CEO Bill Simon has said the smaller formats are a way for the retailer to capture sales they are losing to dollar-store formats and other convenience competitors for the fill-in trip — a market valued at $415 billion a year. Wal-Mart said it has just 10% of that fill-in share, but aims to grow the share this year with an accelerated ramp-up of smaller format stores.

Northwest Arkansas is an area where Wal-Mart is building out its store infrastructure with 12 projects announced or in progress in Benton and Washington counties. Centerton, a small bedroom community five miles from Bentonville, recently hosted a grand opening for a Neighborhood Market, and will welcome a supercenter next summer.

Springdale, a town of 70,000, has been comparatively underserved by Walmart with just one supercenter and one Neighborhood Market. But the retailer is about to open a new supercenter this fall. The outlying towns of Farmington and Pea Ridge are each also welcoming a Neighborhood Market in the coming months.

Wal-Mart is also investing in at least two area downtown regions with Neighborhood Markets planned for Rogers and Bentonville next year.

The rural town of Decatur will get a Walmart Express format early next year. The town is  located between Gravette and Gentry, both of which already have these small formats.

Bentonville, Wal-Mart ground zero, is home to five projects announced, completed or with construction in progress.
• Supercenter on the Bella Vista / Bentonville line
• Neighborhood Market in SW Bentonville
• Neighborhood Market downtown Bentonville
• Walmart to Go, convenience store
• Walmart online grocery drive up depot

Simon recently said the 200 new small formats going up this year might not be enough to move the needle for a company with nearly a half trillion dollars in annual revenue. But, he added that 2,000 of these small stores might.

Simon said going forward he expects to see more small stores built than supercenters as the retailer works to fill-in markets where it has already has staked a claim. He said the Neighborhood Market comparable sales are on par with top grocers like Kroger and performing well with little to no realized cannibalization at nearby supercenters. 

“Think of it this way, a Walmart Express with site-to-store, ship-to-store, full grocery, gas and pharmacy can drive the same sales as three to five Dollar Stores. He said the hybrid Neighborhood Market can drive the sales of 10 Dollar Stores, and both models make better use of capital given their reduced building costs," Simon said in October during an investor conference.

Gov. Mike Beebe said Thursday (June 19) he’s not calling a special session on changes to the public school employee insurance program until he sees a roll call from each chamber of the legislature with a big majority in both.

The Governor also said he wants to deal with the prison overcrowding situation in a special session and he’s open to a provision to restrict lottery games, but beyond that he does not anticipate adding to a special session agenda.

In a Talk Business & Politics interview on Thursday morning, Beebe said he still wasn’t sure if he would call a special session on the insurance issue.

“We don’t know yet,” he said. “If the bill we’ve already seen and that theoretically is being circulated among the members of the General Assembly is the bill, then I will support that bill and will call a (special) session if I get a roll call from each house that suggests that there is significantly over the majority needed to be able to pass it.”

Beebe said he has heard from lawmakers who are troubled by the potential solution to the teacher insurance crisis, which includes eliminating part-time employees from the plan as well as spouses who have other insurance options. Also, lawmakers are talking about earmarking a portion of state funding that goes to general education needs specifically to paying for insurance premiums.

“I think feedback that I’ve gotten is there is some disagreement among members of the General Assembly,” Beebe said. “I think there is opposition to taking part-time [employees] off. And I think there is some opposition to re-directing some of that FICA saving money, that’s theoretically going to be generated, away from the public schools generally and into insurance payments.

OTHER ITEMS
Beebe is open to adding other items to his call for a special session, if it materializes.

“If we’re going to have a session then we’re going to have to address the problems our counties are having in county jails and our prison back-up,” he said.

County officials are housing a backlog of state inmates, which is putting a strain on local resources. There is also a funding shortfall that is preventing the state from access some existing prison beds, but Beebe said there is a way to free up $6.3 million to resolve the problem.

“That $6.3 million will get you 600 beds in existing areas,” he said. “It could reduce that backlog.”

Beebe said he is also open to adding the issue of a potential lottery restriction to a special session’s call. State lottery officials have expressed interest in adding monitor games as way to boost sagging lottery revenue; however, some lawmakers are worried it will lead to more addictive gambling behavior and they want to enact legislation to restrict the new game’s introduction.

“I will include the lottery restriction on the call for a special session if the consensus is there in both chambers,” Beebe said.

Beebe said he did not foresee a possible call item to include changing a state law allowing more access to the state’s ARE-ON network, which offers super high-speed bandwidth and is restricted to research universities and medical networks.

State education officials and some members of a task force studying broadband access for K-12 schools have advocated for allowing the schools to tie into the ARE-ON network. Broadband providers have expressed skepticism on the costs and need for the move in certain areas of the state.

Beebe, who supports a law change to allow for more ARE-ON access, said the broadband law needs to be addressed, but he doesn’t think the legislature has had enough discussion on the subject to add it to his special session call.

“That’s not ripe. The legislature is not ready to address that,” he said. “There hasn’t been enough discussion about it. There’s still a lot of stuff that needs to be worked out. They’ll probably have to deal with that later.”

Also of interest, if a special session is called, the Arkansas House of Representatives is undergoing a massive renovation in its main chamber. The House would have to meet in other quarters. Sources say the Big Mac building and the Old State House are two venues being considered.

It’s just after 5 p.m. on Wednesday afternoon (June 18) and the Schulertown Food Truck Court on Dickson Street in downtown Fayetteville is already buzzing with eager patrons ready to sample cuisine from one of the shiny new food-trucks lining the lot.

At the far corner of the courtyard, which is nestled between Jose's and The Rogers Rec-Room, Bryan Brandon Jr. is hard at work prepping his truck – Wicked Wood Fired Pizza – for another long evening in the kitchen.

Like most of the trucks on the lot, ''Wicked'' will stay open until 3 a.m., making the bulk of the day’s money in the last two hours. The long nights are just the cap to a very long day which begins early as Brandon prepares dough and searches for fresh ingredients to spice up his ever changing menu.

"We prep all of our dough at Ozark Natural Bread, which is owned by my parents," said Brandon. "I try to use as many local ingredients as I can. I recently did a farmers market pizza that was a big hit."

Brandon cut his teeth in the kitchen, working at Ozark Natural Bread with his parents for nearly 20 years. He has a bachelor's degree in baking and heads up the sales and marketing for Ozark Natural Bread. 

Like all the proprietors parked in the Dickson Street food court, Brandon leases his space from the lot’s owner — restaurateur Zac Wooden, who also owns 21st Amendment and Los Bobos Tacqueria. Wooden requires a one-year lease from the tenants who park in his new food court.

COST OF OPERATION
The National Restaurant Association estimates the average food truck investment ranges from $55,000 to $75,000, which is a fraction of the $250,000 to $500,000 or to open a restaurant. Other benefits cited by the association with food trucks are the flexibility the mobile units have in testing new menu concepts and recipes.

Brandon said he spent more than $40,000 on his food-truck venture. Most of the money went toward the truck and its custom wood-fire oven. It is the only cooking appliance on the truck, but the oven more than pulls its weigh. The 3-convection heating system use white oak and hickory logs and can churn out a hand pressed pizza in 3 minutes. 

"Our craziest times are definitely right after the bars close," said Brandon. "The last hour is all hands on deck."

While the inside of the truck is roughly one quarter the size of a standard kitchen, Brandon uses a three-man crew to handle the late-night rush. The 11-inch custom pizzas are the fastest ticket times in the lot, which is packed with top-notch munchies like Mama Dean's and Green House Grill.

"I think we all had our own hurdles to climb in terms of seeing this courtyard come to life," said Brandon. "It was a ton of paper work and legal stuff. ... I am just glad to get that aspect out of the way. There is a lot of room for growth in this industry. ... Right now things are going great."

IBISWorld estimates the fragmented food truck segment will do about $1 billion in annual revenue, growing at about 8.4% over the past three years. The research estimates there are roughly 31,000 food trucks operating in the U.S. and it’s one of the fastest growing food segments in terms of traffic and sales since 2008.

A report by Intuit Inc. and Emergent Research in late 2012  forecast that the roving restaurant sector is on track to be a $2.7 billion national industry by 2017.

Celebrities and large corporations are also riding the food truck wave. Taco Bell, Red Robin, Nabisco and Rachel Ray have their own food trucks.

LAW CHANGES
Earlier this year, the Fayetteville City Council passed new regulations designed to facilitate roving food trucks and businesses that operate inside mobile vendor courts.

One of the new laws allows for the creation of mobile vendor courtyards on private land if the owner is granted a conditional use permit by the city. Vendors who park in the courtyard are not required to get a conditional use permit, but they must provide the city with a site plan, copies of the necessary health permits and regular inspections.

The new law also addressed roving food trucks that park in public areas. The city requires food truck owners to pay an annual $100 mobile vendor fee and cover any fees charged for public parking spaces used.

The city said public parking access for roving food vendors will be given on a lottery basis. A drawing will be held each year to determine which vendors are allowed to set up shop in public parking spaces or inside city parks. One-third of all vendors who apply each year will be awarded a permit through the lottery, with a minimum of three permits granted each year.

The initial lottery will take place before November, according to city officials.

The accounting battle grows larger between retail suppliers and the big retail companies as each side becomes more aggressive to collect or retain the billions of dollars that float in the realm of product discounts, chargebacks, post-payment deductions and other small-print contract details.

In a nutshell, the numerous financial arrangements between retail suppliers – ranging from the largest consumer packaged goods companies to a small 2-3 person shop – and retailers include payment and reimbursement exceptions that may result from problems with back orders, partial orders, labeling/packaging mistakes, product substitutions and issues with timing on special pricing discounts.

The City Wire first began to report on the issue in January 2013, when some suppliers began to complain about a rising number of monthly audit claims against their contracts with Wal-Mart Stores and other retailers. In January 2014, The City Wire noted that such audits may increase with retailers seeking relief following a soft holiday sales season that left them with excess inventory.

THE BIG BUSINESS OF ‘LEAKAGE’
Some estimates suggest as much as 0.01% “leakage” – disputed payment, reimbursements, etc. – for every $1 billion in transactions between a retailer and its supplier community. Considering the amount of total retail sales to consumers, this is a huge market for auditors, audit software companies and others who may work with one or both sides in the accounting conflicts. Just for Wal-Mart, the leakage could total as much as $5 billion.

According to the U.S. Census, there were $4.344 trillion in U.S. retail sales (excluding food service sales) during 2012 (latest year Census data is available), with general merchandise stores accounting for $649.754 billion of that total. End of year inventories held in 2012 by general merchandise stores totaled $75.147 billion, according to Census estimates.

Randy Hargrove, a spokesman for Wal-Mart Stores, said the company has a supplier outreach program that includes efforts to reduce audit claims. He said the company has reduced the number of claims in recent years, but did not know if the dollar value of claims also has fallen.

“We work with all of our merchants and suppliers to ensure that our billing is correct,” Hargrove said.

Boyd Evert and Harry Arthur, with Bentonville-based Harvest Revenue Group, and other sources said recently that audit intensity continues to grow and is primarily driven by third-party audit companies that don’t make money unless they find recoverable money for the big retailers.

“It’s no longer about the spirit of the agreement,” Evert said during a recent interview, adding that audit firms working for retailers seek any nuance within a contract between the supplier and retailer to “find” a financial benefit for the retailer.

However, Evert said the position on audits by some retailers “has softened” in the past year, with some of that driven by the need to maintain working relationships with suppliers, and some softening the result of “just knowing that we (firms representing suppliers) are now here” and are “bringing the sunlight” to the issue.

‘INTENSE COMPETITION’
The language used by the companies who work with the major retailers give some idea of the nature of relationships. Apex Analytix promotes its “FirstStrike” software designed to “prevent overpayments to suppliers, identify risk and fraud” and automate systems between retailers and the supplier community.

“In the Retail industry, making the most of your buying power calls for having aggressive internal controls in place to manage it, leverage it, improve margins, and create profit,” notes the Apex website, with a January 2014 statement on the website noting that “pressures on procure-to-pay teams to make a strategic contribution to the business have never been greater.”

Greensboro, N.C.-baseed Publix Super Markets announced May 5 it would begin using FirstStrike “to audit large volumes of data.” Publix is the largest employee-owned grocery chain in the U.S.

An April 2014 promotional by Apex said “wide-ranging audits” are now the norm, with 92% of retailers auditing for cash discounts, 69% auditing for freight compliance and 100% auditing to review statements and check for duplicate payments.

“Intense competition and an unrelenting focus on cost control and profitability are causing retail merchandising and payment teams to upend the status quo. New audit best practices are emerging with 50% having recovery results-based incentives, 86% of retailers using external audit services and 100% of retailers surveyed are implementing shared services,” Apex noted.

Atlanta-based PRGX is a global “recovery audit services” operation that works with companies in more than 30 countries and, according to company literature, works for more than 75% of the top 20 global retailers. The PRGX tagline is: “Discover Your Hidden Profits.”

NO SLOWDOWN IN 2014
Evert and Arthur said the contract audit process has been active since the late 1950s, but the pace gradually began to rise in the mid- to late 1990s and ramped up in the late 2000s.

Arthur smiled and shook his head in the negative when asked if the pace might soon slow, and then noted that in some recent cases it has reached “egregious” levels.

Harvest Revenue, which opened for business in 2010, represents suppliers during the audit process. Their business has boomed. Revenue grew 300% in 2012, and the company has grown from less than a handful of people to around 20 employees today. Evert and Arthur, who prior to Harvest Revenue worked both sides of the supplier/retailer audit puzzle, said 2014 is shaping up to be by far their busiest year.

Evert and other sources said large suppliers are not immune from the intense audit process. Harvest first began to work with smaller suppliers, but has seen more interest from larger suppliers in recent years.

Another reason for the growing intensity is competition for business among the auditors who represent the retailers.

“If you promise (the retailer) to get more (money from post-payment audits), then you have to deliver those numbers,” Evert said.

Rapid Training Solutions doesn’t provide suppliers with direct help when facing audit claims, but the Bentonville-based company does provide an “Understanding Chargebacks & Deductions” class. It’s one of just seven classes in its “On Demand” course schedule.

Jami Dennis, a supplier consultant and retail expert with Rapid Training Solutions, has said suppliers may be most at risk for potential errors or audit claims during peak sales seasons. Pricing errors, “masterpacking,” and errors related to purchase orders are some of the leading causes of chargeback deductions, Dennis said.

Evert also says suppliers have a responsibility to learn the retailer system. He has credited Wal-Mart for its Retail Link system that provides suppliers with product tracking and other information.

“Wal-Mart gives suppliers an immense amount of information within Retail Link that can be used to track the products through the point of sale. Other retailers don’t come anywhere near this level of visibility. But no one is babysitting the supplier. It’s up to them to jump in there and figure it out,” Evert said in a January 2014 interview.

‘VENDOR ABRASION’ CONCERNS
The industry has matured enough in the past few years that interesting terms have developed. For example, PRGX seeks to minimize “vendor abrasion levels,” which means they work to push aggressive audits while trying to maintain good relationships with suppliers. 

“By combining four decades worth of audit experience with the latest proprietary data management and analytics tools, we now audit closer to the transaction; audit faster than ever before; identify new insights into your data and address the sources and causes of overpayments before they occur,” PRGX notes on its website. “The result: optimized recovery dollars, minimized vendor abrasion levels and best practice service level agreements - all at the industry's lowest total cost of recovery.”
www.prgx.com

Hargrove, with Wal-Mart, said the retailer works to “streamline” the process to ensure it is more efficient for all parties. He said it is in the retailer’s best interests to collaborate with all suppliers in order to keep products on shelves, inventory managed and prices low.

‘MOST DOMINANT’ AUDIT FIRM
Connolly, based in Wilton, Conn., and claiming to be the world’s largest privately-held recovery auditing firm, reviews more than a trillion transactions a year and recovers almost $2 billion annually in overpayments. Connolly works only in the retail and healthcare sectors, with company materials saying its clients include 19 of the top 20 retailers and seven of the top eight healthcare payers.

Evert said Connolly is the “most dominant” auditor with respect to audit claims between Wal-Mart and suppliers.

Connolly includes “case studies” on its website to explain how it helps retail clients. Those include the following.
• “A large pharmacy retailer’s indirect purchase contract with a major pharmaceutical manufacturer had different effective dates for rebates when compared to quarterly rebate terms. Connolly’s audit determined the exact details for every change in both terms and timing for the contract period. In their research, the auditors worked closely with the manufacturer to rectify the discrepancies, ensure the accuracy of the financial calculations, and recover nearly $800k for the pharmacy retailer – a 25% understatement of rebate dollars due the retailer.”

• “Connolly’s audit identified a large promotional purchase that reduced the product’s retail price. During the promotion, however, retail sales of this product far exceeded the amount purchased specifically for the promotion. It was in fact determined that most of the product received and sold at retail for the promotion was paid for at the higher non-promotional cost. Connolly built the supporting documentation and recovered $327k in price protection funds due the retailer per industry standards."

Fort Smith was home to Arkansas'first compressed natural gas (CNG) fueling station and now Fort Smith is home to one of the few independent CNG conversion businesses in the state. The business, Falcon CNG, handles everything from single vehicle CNG conversions to fleet-wide conversions.

Owner Barry Rowton said the business is more than just conversion, saying he provides "maintenance, service and repair of the same."

Rowton, who spent more than 11 years with Arkansas-Oklahoma Gas (AOG), said with the growth of CNG in the region — including an expected second regional fueling station in Fort Smith operated by AOG — the time was right for him to launch a conversion business.

"With the markets around us and our market picking up, along with the price of natural gas staying low while petroleum is going up, with the interest in western Arkansas going up, the market was a perfect fit."

Rowton said he is the only employee of the business located at 3707 Wheeler Ave., in Fort Smith, but he does have two technicians he can call in for assistance as needed.

While not providing revenue figures, Rowton did say that in the month he has been open, he has already had more than 20 people "either call or show up wanting conversions or service and we have a couple of fleets wanting conversion."

He said conversion costs have fallen in recent years, making it more affordable for more everyday drivers and fleet managers to justify the cost. The cost for a half-ton pickup truck, Rowton said, would be about $6,500 for a 13.5 gallon CNG tank installation.

What could help businesses invest in conversions is the possibility of a new program from the state that could rebate up to $4,500 or 50% of the conversion cost for fleets of three or more vehicles, Rowton said.

"The Arkansas rebate is supposed to be released in July," he said. "The details are only verbal from the Arkansas Department of Energy."

It would not be the first time the state has provided CNG-based incentives. In 2011, the Arkansas Energy Office made available $470,000 in grant money to build at least two CNG fueling stations in the state.

Arkansas is not the only market Rowton is eyeing for business. He hopes his proximity to Oklahoma and the existence of a CNG fueling station at the On Cue Express in Arkoma, Okla., a small town located across the street from Fort Smith, drives business.

While Arkansas could be offering rebates for conversion as soon as July and the rebates will only apply to EPA-certified CNG conversion kits, Oklahoma offers an income tax credit that Rowton said allows all CNG conversions to qualify.

But no matter which of the two states a customer may call home, Rowton is ready to make the conversions a reality. And for people possibly interested in CNG for cost savings but are worried about using CNG instead of conventional gasoline, Rowton said converted vehicles still has gas tanks that can carry conventional fuel so individuals driving outside of a CNG fueling area are not left in the middle of nowhere with no way to refuel.

"A lot of people don't understand that you do not give up the ability to drive on gas," he said. "The vehicle is not modified, you simply add on a fuel storage, management and delivery system. … If you run out of CNG, the computer instantly switches to gas. The car doesn't die."

In all, Rowton said there are about five independent CNG conversion businesses in Arkansas, including his own. He said several other places offer CNG conversion, including car dealerships (Smith Auto Group in Fort Smith being one), but the conversions are typically limited to the dealer's specific brand, meaning a Toyota could not be converted by a GM dealership and vice versa.

"If you have something outside of that (brand), you can't go to that (dealer for a conversion). That's where someone like me would be a better fit."

Arkansas’ jobless rate fell to 6.4% in May, but the state’s labor force continues to decline in size, and the number of employed during May was the lowest level of the year. Overall, the state’s labor force size and number of employed remains below pre-recession levels.

The May rate of 6.4% was below the April rate of 6.6% and below the May 2013 rate of 7.5%, according to the report issued Friday (June 20) by the U.S. Bureau of Labor Statistics. The May figures are subject to revision.

Year-over-year, the Education and Health Services sector was up 3,800 jobs, the state’s tourism sector gained an estimated 3,000 jobs, the Trade, Transportation and Utilities sector was up 2,800 jobs, and the construction sector was up 1,500 jobs.

Arkansas’ labor force was an estimated 1.315 million in May, below the 1.322 million in April, and down 0.08% compared to 1.326 million in May 2013. The year-over-year comparison shows an estimated 10,952 fewer Arkansans in the labor force. There are 45,513 fewer Arkansans in the labor force compared to May 2007, a decline of almost 3.34%.

The number of employed in Arkansas during May was 1.231 million, below April employment of 1.235 million, buit up an estimated 4,649 jobs compared to the 1.226 million in May 2013.

The number of unemployed was an estimated 84,124 during May, down from the 86,761 in April, and well below the 99,725 in May 2013.

Arkansas’ annual average jobless rate fell from 7.9% during 2011 to a revised 7.5% during 2012. The initial annual average jobless rate for Arkansas during 2013 is 7.5%.

UPDATED INFO:Greg Kaza, economic researcher and executive director of the Arkansas Policy Foundation, said the 1,800 new Arkansas jobs in May “means the state's labor market has regained nearly 80 percent of payroll employment lost as a result of the Great Recession.” He added that the jobs market in Arkansas “is slowly approaching the peak achieved in the previous cycle, 1,209,800 (February 2008).”

Kaza also noted that BLS figures show that 30 of Arkansas' 75 counties added new jobs from the end of the Great Recession (June 2009) through December. The top five counties for job gains are: Benton (+9,718), Washington (+5,244), Craighead (+4,379), Faulkner (+2,210), and Pulaski (+1,686) counties.

ARKANSAS SECTOR NUMBERS
In the Trade, Transportation and Utilities sector — Arkansas’ largest job sector — employment during May was an estimated 243,500, down from 243,600 in April and ahead of the 240,700 during May 2013. Employment in the sector hit a high of 251,800 in March 2007.

Manufacturing jobs in Arkansas during May totaled 153,700, down compared to 154,600 in April and above the 152,200 in May 2013. Employment in the manufacturing sector fell in 2013 to levels not seen since early 1968. Peak employment in the sector was 247,300 in February 1995.

Government job employment during May was 214,800, down from 215,800 in April and below the 215,200 during May 2013.

The state’s Education and Health Services sector during May had 175,900 jobs, up from the 173,400 during April and up from 172,100 during May 2013. Employment in the sector is up more than 23% compared to May 2004.

Arkansas’ tourism sector (leisure & hospitality) employed 107,800 during May, down from 108,700 during April, and above the 104,800 during May 2013. Employment in this sector reached a high of 109,100 in March.

The construction sector employed an estimated 47,000 in May, down from 47,400 in April and above the 45,500 in May 2013. The sector is off the employment high of 57,600 reached in March 2007.

NATIONAL, REGIONAL DATA

The BLS report also noted that 49 states had unemployment rate decreases from a year earlier, and one state had and increase. Alabama’s jobless rate was 6.8% in May, up from 6.4% in May 2013. The national jobless rate during May was 6.3%, and was down from the 7.5% in May 2013.

Rhode Island had the highest unemployment rate among the states in May at 8.2%. North Dakota again had the lowest jobless rate at 2.6%.

The May jobless rate in Oklahoma was 4.6%, unchanged compared to April and down from 5.4% in May 2013.

Missouri’s jobless rate during May was 6.6%, unchanged compared to April and down from 6.7% in May 2013.

The Walton Family Foundation is a major economic engine in its own right, providing more than $34 million in grant funding last year to dozens of local charities, educational efforts and other ventures to improve quality of life in Northwest Arkansas.

In 2013, the Walton Family Foundation invested more than $325 million across the globe in the areas of K-12 education reform, water conservation and improving the quality of life at home. That support went to more than 1,700 initiatives around the world, according to the foundation's annual report.

“The Walton Family members carried forward a philanthropic approach of sustained and focused giving, believing that it is the key to achieving lasting change, and they continue to challenge the foundation to find new, innovative solutions as well as measure impact from the individual grant level to the effectiveness of overall strategies,” noted Buddy Philpot, executive director of the foundation.

Two of the largest local projects underway because of major Walton Family Foundation funding are the Amazeum, a family learning center and children’s museum in Bentonville, and the Razorback Greenway, a 37-mile trail that connects Lake Bella Vista to Fayetteville.

The foundation gave the Amazeum a $10 million matching challenge grant that was met in short order thanks to sizeable contributions from Walmart Stores Foundations, General Mills, The Hershey Company, Nickelodeon, the Willard and Pat Walker Charitable Trust and Johnelle Hunt. Shelley and Doug McMillon – Doug now serves as Wal-Mart Stores CEO – were the latest major donors to this project.

Amazeum is close to its $28.6 million goal, with less than $6 million needed as of an April 17 report. The hands-on children’s museum is slated to open in 2015.

The Razorback Greenway was the vision of Walton Family Foundation, who anted up $15 million to match a federal grant received in 2010 to design and construct the 37-mile off road trail linking six cities in Benton and Washington counties. A survey completed by the foundation in 2012 indicated that trail system was used by 63% of the residents, Crystal Bridges was the second most used foundation supported amenity at 42%. The Jones Center and Walton Arts Center ranked close as the third and fourth most used amenities at 41% and 40%, respectively.

In 2013, The Jones Trust received a $1 million matching grant from the Walton Family Foundation and the Jones Center received another $20,000 in grants. The Walton Art Center received grants totaling $3.35 million from the foundation last year.

Other area recipients receiving large grants from the Walton Family Foundation in 2013, include:
• Camp War Eagle: $5.341 million
• Endeavor Foundation: $5.896 million
• NWA Regional Planning Commission: $4.867 million
• Walmart Associates in Critical Need Fund: $4 million
• Razorback Foundation: $2.007 million
• Bentonville Child Care Development Center: $787,487
• University of Arkansas Foundation: $519,508

The Walton Family also supports investment in downtown communities giving more than $1.98 million to area towns and cities for individual projects. Siloam Springs, Bentonville, Fayetteville, Rogers, Springdale, Pea Ridge, Elkins and Farmington are among the local cities receiving funding from the Walton Family Foundation in 2013.

Philpot notes that the successes of the Walton Family Foundation investments “continue to inspire us to carry forward Sam and Helen Walton's vision for creating opportunity so that individuals and communities can live better in today's world.”

The Arkansas Legislative Council passed on a voice vote an interim resolution by Faulkner County Republican Sen. Jason Rapert that affirms the council's support of Act 83, a constitutional amendment passed by Arkansas voters in 2004 that banned same-sex marriage in the state.

The resolution comes more than a month after Pulaski County Circuit Judge Chris Piazza struck down the ban on same-sex marriage, which temporarily opened the door for same-sex couples to marry in the state before a stay was eventually issued in the case.

The resolution passed Friday (June 20) asked the Arkansas Legislative Council to "explore legislative remedies to prevent the Arkansas Constitution and the will of the people of this state from being negated by judicial activism which violates the separation of powers ensured in our form of government."

So far, it is unknown what that legislation could be, though there has been talk by some in the House of impeaching Piazza.

Sen. Jon Woods, R-Springdale, said he voted in favor of the resolution and said Friday's move by the legislative council — which he described as running the day-to-day of the state between legislative sessions — would not likely result in specific actions against Piazza other than the legislative council's endorsement of Act 83.

"No, I think that's it," he said.

The resolution notes that "marriage between one man and one woman is the building block upon which our society is based," and that the "power to regulate marriage is a power reserved to the people that lies within the domain of state legislatures and not with the courts."

As reported by the Arkansas Times, the resolution easily passed the body, though he said "eight people were on hand to object to the resolution, including a Little Rock teacher who lost her job at Mount St. Mary Academy after marrying her partner. Rep. John Walker, a giant in the civil rights struggle for African-Americans, rose in opposition to Rapert's resolution."

Another to rise in opposition of the resolution was Democratic Sen. David Johnson of Little Rock, according to the Arkansas Times report.

"Johnson noted that Judge Chris Piazza, blistered in the Rapert opinion, had issued a decision in keeping with that by numbers of judges across the country. All have found equal protection and due process violations in state discrimination against gay couples."

Former Arkansas House Minority Leader Greg Leding, D-Fayetteville, made his feelings on the vote clear in a post to his Twitter account.

"That Legislative Council must waste breath on an embarrassing (if legally impotent) resolution this morning is a shame," he wrote.

Sen. Uvalde Lindsey, also a Fayetteville Democrat, attended the Council meeting but missed the vote. However, he was one of eight on the council to vote no on a suspension of the rules that allowed Rapert’s resolution to be heard. Lindsey told The City Wire he believes people seeking same-sex marriage are protected by the U.S. Constitution.

“I may not agree with all the gay marriage stuff, but that doesn’t matter when it comes to the Constitution,” Lindsey said. “People have a right to do certain things under the Constitution, and that’s what Judge Piazza was saying (in his ruling).”

Lindsey also said he does not believe it is a proper role of the Arkansas Legislature to “castigate the judicial branch.”

Rep. Terry Rice, R-Waldron, told The City Wire that he spoke in favor of Rapert’s resolution because he believes in “traditional marriage and that marriage is between one man and one woman.”

Rice, who recently defeated Sen. Bruce Holland, R-Greenwood, in the Senate District 9 GOP primary and does not have a November opponent in that race, also said Judge Piazza “created a crisis that wasn’t necessary, when he didn’t rule completely.” 

“I just felt like he was irresponsible the way he did that. ... He did it on a Friday evening as an activist judge,” Rice said, adding, “I try to be respectful of everyone’s rights and view points,” but believes the Legislature has the right to question the actions of the judicial branch.

As to if the issue of same-sex marriage will eventually be settled by the U.S. Supreme Court, Rice said he isn’t sure of the outcome, but hopes “traditional marriages” are upheld.

"We’ve got a divided nation, and I think that one fundamental thing we have, and the stability we have, is the family and that’s one man and one woman. ... And when that goes it opens us up to things that I don’t think we’ve thought about,” Rice said.

For his part, Woods said he supported the resolution because he was standing up for the rights of his constituents, who he said voted overwhelmingly for the gay marriage ban back in 2004.

"It stirred up emotions and I got a lot of phone calls over the weekend (of the ruling) and into the following week (asking), 'What are you going to do about it?' A lot of people were upset and a lot of people who voted for the amendment in '04 felt disenfranchised.”

Woods also voiced sentiments similar to Rice, saying that the timing of Piazza's ruling was nothing more than political games, especially by issuing the ruling near the close of business on a Friday afternoon, and this Friday's vote by the legislative council was just a way to show Piazza that it can go both ways.

"The reason I would say I supported Jason Rapert's resolution is because if the judge wants to play games at the last minute going into the weekend, then I hope he enjoys the resolution we just passed," Woods said. "If he wants to play games at the last minute going into the weekend, then Jason (Rapert) wants to have his resolution and be heard and people in my district want to be heard. So OK, then. That's why I supported the resolution."

The Human Rights Campaign, which has lobbied to overturn Amendment 83, also noted the “gamesmanship” in the timing of the resolution passed by the Council.

"The Arkansas Legislative Council can't intimidate the judiciary into ignoring the fact  that gay and lesbian couples have a constitutional right to marry,” Human Rights Campaign President and Arkansas native Chad Griffin said in a statement. “This is a matter of basic fairness and shouldn't be subject to political gamesmanship.”

Gov. Mike Beebe is heading overseas for his third European trade mission in five years. In a recent Talk Business & Politics interview, Beebe said he will travel to London, Paris and the Czech Republic beginning July 12.

“Hopefully, they won’t kill me like they did in the China trip a couple of years ago. We were 11 days in China, 13 days counting the travel times. We were in eight different hotels in eight different cities and provinces,” Beebe said.

Beebe traveled to London, Paris and Hamburg in 2009 for a series of high-level meetings with existing companies doing business in Arkansas and new ones he hoped to land. The governor also visited France in 2012 for an agricultural related economic trip to meet with French government officials interested in promoting food exports and research between the two entities. That trip also included visits with Dassault Falcon Jet, which announced a $60 million expansion of its jet completion campus in Little Rock several months later.

Also in 2012, Beebe made his earlier referenced extensive economic development tour of China in an effort to open up talks for more business exchange.

The upcoming European trade trip will last nine days from July 12-21.

Beebe plans to attend the London Farnborough International Air Show — one of the world’s largest aerospace and aviation manufacturing trade shows in the world. Representatives from several Arkansas companies will also attend, and Beebe plans to travel to France to meet again with Dassault Falcon Jet, the Paris-based high-end aircraft builder that has one of the largest international footprints in Arkansas.

“We have expanded that [Dassault] with the potential for even further expansion and maybe even a supplier there too,” Beebe said.

The Czech Republic is new territory for Arkansas economic development officials, but the former eastern bloc country sports growing manufacturers, including gun-related and automobile-related companies.

“They’ve had very little, if any, state gubernatorial contact in the Czech Republic and there are a number of businesses that are looking at a North American presence,” Beebe said. “It’s a fertile field because everyone is going to China and Taiwan and Paris and London and all those other places. We’d like to get in on the ground floor of what the Czech Republic companies might be interested in.”

A failed May 1 vote on whether to unionize workers at an OK Foods facility in Heavener, Okla., could be dismissed by the National Labor Relations Board after it claimed the company interfered with the vote.

In a letter written by NLRB Field Examiner Amy Novara, she details a long list of allegations against the company related to the May 1 vote, including financial incentives to ensure the unionization vote failed.

"During the past six months, the Employer granted wage increases and retroactive pay to employees, including prior to the filing of the petition on March 20, 2014, and during the critical period after the filing of the petition, in order to discourage union activities and support of the union in violation of Section 8(a)(3) of the Act," she wrote.

She also said after March 20, OK Foods denied wage increases and retroactive pay to employees that had engaged in union activities.

Novara's letter continued, alleging the company threatened employees if they voted in favor of unionizing with the United Food and Commercial Workers Union Local 1000 during the May 1 vote.

"In or about February 2014, the Employer, but Supervisor Sparks, informed employees that they could not address wage increases and retroactive pay because of the Union and threatened employees with loss of wages if employees selected the union as their collective bargaining representative, in violation of Section 8(a)(1) of the Act," she wrote.

Other similar allegations were made in her letter against OK Foods CEO Trent Goins, who she said "informed employees that wage increases and retroactive pay were being withheld because of union activity in violation of Section 8(a)(1) of the Act."

An attempt to contact Goins for this story was unsuccessful.

Novara stated in her letter that a settlement agreement attached to her letter "notifies employees or members that the Charged Party (OK Foods) will cease and desist from engaging in conduct proscribed by the Act," adding that the May 1 election would be thrown out and another election on unionization would be held.

Even though the NLRB's field examiner has laid out her case, with 18 different alleged violations of the law, OK Foods has not acknowledged that it has agreed to the settlement by the deadline date of Thursday, June 26. Novara stated that if the company did not accept the settlement, a formal complaint could be filed against OK Foods.

The UFCW said after the failed vote that it would file and objection, with UFCW's Anthony Elmo saying the company "subverted the vote as much as possible."

In a statement Monday, UFCW Local 1000 President Ricky Burris said forming a union would protect workers from the types of actions alleged in the NLRB letter.

“We want these workers to get a fair chance to have their voices heard. OK Foods has to rely on lies, threats, and coercion to scare these workers away from forming a union. In reality, forming a union will help protect them from a company that obviously has no respect for them whatsoever. I’m excited that these workers are being given a chance to vote again," he said.

The union said workers have complained to the UFCW about "low wages, expensive healthcare benefits, and unfair and unequal treatment at (the) OK Foods chicken processing plant in Heavener."

It is unclear when a new election could be held.

Efforts have also been made to unionize Fort Smith and Muldrow, Okla., OK Foods facilities, though no formal votes or actions have taken place like the May 1 vote in Heavener.

OK Foods is a subsidiary of Industrias Bachoco (IBA), a company which boasts several unionized facilities in its native Mexico. Shares of Industrias Bachoco were trading at $52.67 during mid-day trading, up nearly a tenth of a point.

Gov. Mike Beebe says math, not health, may eventually determine the fate of the Private Option.

During an interview with Talk Business & Politics, Beebe said it would be difficult to throw 180,000 people off health care, but he said percentages and dollar figures are likely to influence votes to see if the Medicaid expansion-funded health care program survives.

“We are going to be paying for this whether we take the federal money or not,” Beebe said, repeating an argument he made when the program was first funded.

The Private Option takes federal tax dollars to be used for expanding Medicaid under the Affordable Care Act and uses that money to subsidize insurance plans for working Arkansans. With the loss of two key Senate votes in recent elections, funding for the Private Option appears in jeopardy.

“Here is another reason for my optimism,” Beebe said. “If you’ve got 74% of the legislature that is for this and 26% that is against, do you think that 74% is going to let the 26% get away with that? I suspect there will be as much, because it takes a three-fourths vote. I expect there will be as much of that 74% as is possible to force somebody’s hand.”

Beebe is term-limited and will not be Governor in 2015 when the Private Option is debated again. Lawmakers must approve funding for the program, which will require a three-fourths vote of both chambers of the General Assembly.

Last week, lawmakers also rolled out several new phases of the Private Option that will begin implementation in the next year. Dubbed the Private Option 2.0, those new elements include independent savings accounts, cost-sharing, and changes to transportation payments.

Beebe contends that because of political rhetoric boxing some legislators into positions from which it will be hard to pivot, additional changes may be made to the Private Option in next year’s legislative session.

“That’s why you may see some tweaking to the point that it allows some cover for those folks that once they look at the whole world and see the whole picture, they back off the rhetoric,” he said. “When they were running and didn’t know any better and when they look at the realities, there’s a $100 million hole in the budget if they do away with it. You’re not going to take it away from education, the Supreme Court won’t let you. Prisons are already in trouble. Where are you going to get the money?”

Beebe also discussed positive results from the state’s Payment Reform Initiative, a cost-containment effort he started two years ago. The effort moves Medicaid reimbursement away from a “fee-for-service” model to a “bundled services” model.

Hospital executives say it is bending the cost curve, while improving health care.

“America has to do this and I think the other 49 states are going to follow Arkansas,” Beebe said. “I think the federal government is going to follow Arkansas. The old ‘fee-for-service’ model is unsustainable. It’s never going to continue to be able to work. This is the way the country has to go and Arkansas is leading the way.”

A WORKFORCE CZAR
As changes are being made to overhaul the state’s approach to workforce education, Beebe is not closed to the idea of creating a workforce czar to push for faster reforms.

“[T]here is a good point to be made that a good governor has so many plates that he has to balance from education to prisons to health care to all sorts of things that sometimes it’s hard to devote as much time to that one topic,” Beebe said. “So if a governor is not going to do it, a czar certainly could. But you could also have an agency that with a cabinet head that you designate as a lead to go get it done. Right now, the Legislature is doing a good job of being a czar on this expanded and collaborative effort. So I expect you’ll see, you may end up with, a bunch of czars which may be as problematic as not having one at all.”

Beebe was complimentary of efforts by Sen. Jane English, R-North Little Rock, who begins this week a series of meetings focused on reviewing workforce training and education programs.

English says the series of meetings over the next several weeks and months are aimed at educating lawmakers on the resources that exist and the possibilities for better coordination among programs.

Beebe says it is imperative to streamline the moving parts of workforce training in order to continue successful economic development.

“What we don’t have is the kind of coordinated, across-the-board, everywhere success stories that you would like to have, and workforce development may be the number one key to economic recruitment, retention, expansion,” he said. “We hear stories that a lot of people are unemployed and we’ve got a lot of jobs open and waiting. But the skill levels of the people unemployed don’t match the needs of business and industry so it’s part of the state’s responsibility.”

Beebe added, “What’s going on now — and Senator Jane English deserves a lot of credit, but so does my workforce cabinet — pooling the resources from all of those different resources that currently exist and trying to do it a comprehensive and cohesive way gets the best bang for the taxpayer’s buck.”

Keeping shelves better stocked to boost sales and top line revenue is a priority among Wal-Mart executives working to break the cycle of negative to flat comparable store sales that have dogged the retailer for the past year.

Jeff Davis, chief financial officer for Walmart U.S., recently outlined the retailer’s strategy to drive sustainable sales growth by leveraging what they believe are strong Wal-Mart fundamentals. Davis spoke at the Jeffries Global Consumer Conference in Nantuckett, Mass., on June 19. He said the retailer desires to drive sales in physical stores but also across their digital platform and that effort starts with ensuring the shelves in all stores are well stocked.

Davis and Bill Simon, CEO of Walmart U.S., have each said the retailer recently revamped the way the product gets to the shelf and is reordered.

“What we've done this past year is we really try to demystify what we were doing. Previously we had a number of algorithmic exercises we were asking our associates to go through in order to make sure we had the right product in the right place. But we just quite honestly we got down to the basics and went back to simplifying the process,” Davis said. “It is about receiving inventory in the evenings and getting it on the shelf. It's about making sure that if it is not on the shelf that it is appropriately put into a bin in the back.”

He said when the items are sold, Wal-Mart’s point of sales data system lets them know to go pick it and get it back on the shelf.

“It is that simple,” Davis said. “And what is amazing about this is we actually have seen a significant improvement not only in our associate satisfaction, our productivity, the customers are also responding and we are actually seeing a lift in our comps in those stores that are actually executing the best on this what we call OSA First.”

ROOM TO GROW
Simon also said the in-stock percentages are higher after the retailer moved to the less cumbersome method of tracking inventory in the store. During the recent shareholder media day (June 5) he said simplifying the process “eliminating the algorithmic gymnastics in the former system” has made a difference in execution and the result has been improved in-stocks for the retailer, better than historical levels.

Davis said the in-stock goals of 95% have been increased as high as 97%. With nearly $280 billion in U.S. sales last year, just one percentage point improvement holds potential for sales to grow.

“We're really pleased by what is happening there and it is helping us drive our comps in certain key categories,” Davis added.

With reduced store labor and thousands of new products added to the average supercenter, on-shelf availability has been at the forefront of Wal-Mart and its suppliers’ minds for sometime.

SPARC 2.0
Duncan Mac Naughton, chief merchandising officer for Walmart U.S., has said the out-of-stock issue is a multibillion dollar opportunity for the retailer and its supplier base. Last summer, these phantom sales prompted Wal-Mart to announce the testing a program called SPARC 2.0 to help give suppliers more visibility into their inventory sitting in stores.

In theory, SPARC 2.0 allows suppliers and third party merchandisers to access inventory data with their smart phones instead of having to wave down a Walmart worker and use a “telzon” device to see their in-store inventory. It also gives the supplier using the application the ability to print labels for missing products and “pick lists” to get the shelves restocked as soon as possible.

SPARC 2.0, dubbed the the Supplier Portal Allowing Retail Coverage initiative, was put to use in about 150 stores last fall in hopes of raising on-shelf-availability of product sold by the retailer. Wal-Mart admitted that out-of-stocks were problematic in some stores and expected SPARC 2.0 to make a difference.

The retailer did not provide an update on the SPARC 2.0 program despite two requests, but one of the early adopters — Crossmark — gives the program high marks. As a third party merchandiser, Crossmark works inside Wal-Mart’s stores on behalf of the retailer as well as supplier customers.

“I think SPARC 2.0 has been a great success. The ability to get the important OSA-related work done in-store without asking for the help of a Walmart Store associate is very important to our productivity and the return on our client’s investment,” said John Owen, executive vice president for Walmart and Sam’s Club Team at Crossmark.

Owen said the industry strives for 99% in-stock percentage.

“I applaud Walmart for being forward thinking on this. When on shelf availability improves we all win, and most importantly we do a better job of serving our Walmart customer,” he said.

Citing an improved labor market and sales tax collections, the city of Fort Smith was the top performing of 16 Arkansas cities measured by an economic index created by Arkansas Tech University. The data presented in the index may be “counter intuitive” when compared against other data that shows weakness in labor markets and sales tax collections, said an index author.

The Arkansas Tech Business Index (ATBI) uses a labor index, housing market index, construction index and retail sales index to compare 16 Arkansas cities. The March 2014 index gave Fort Smith an index rating of 106.32 for the first quarter of 2014, the highest rating among the 16 cities measured on the index.

The index is based around 100. A city reading above 100 indicates that the city is doing better than the state average from 2009 to the present. In the March report, seven have an index rating above 100 and nine have an index rating above 100 for the first quarter of 2014.

“Fort Smith came on strong in the first quarter ATBI,” Dr. Marc Fusaro, associate professor of economics at Arkansas Tech and developer of the instrument for the Arkansas Tech Business Index, said in the statement. “This strength is led by the retail sector, which is always strong for Fort Smith, having an ATBI retail sales index value of 116.7 in the first quarter. Helping to drive the strong showing is a drop in the unemployment rate to 6.5 percent in March from an average of 7.5 percent in 2013.”

Following is the March index for the 16 cities.
Bentonville: 104.38
Conway: 102.49
El Dorado: 93.31
Fayetteville: 105.64
Fort Smith: 108.36
Hot Springs: 100.85
Jonesboro: 99.87
Little Rock: 98.53
North Little Rock: 95.27
Pine Bluff: 91.58
Rogers: 105.85
Russellville: 96.25
Searcy: 99.59
Springdale: 104.58
Texarkana: 94.45
West Memphis: 93.06

Fort Smith Mayor Sandy Sanders said the March index from ATU reflects the city’s ability to adjust to economic change.

“The data from Arkansas Tech University is a testament to the perseverance of our citizens, and the ability of our businesses and entrepreneurs to adjust in a rapidly-changing economic environment. Almost every day we spend time on jobs and economic growth,” Sanders said in a statement. “Our corporate citizens continue to innovate, as does our military. Emerging technologies are a focus in nearly every sector, bringing with it specialized jobs and higher wages. … In the past 18 months, we’ve seen announcements from new and expanding organizations in our region – worth $400 million and commitments for 2,300 new jobs.”

While the ATU report gave the city a high index number for retail sales, Fort Smith sales tax collections have not shown growth in recent years. Collections so far in the first quarter of 2014 were $11.688 million, while the same period in 2013 saw collections of $11.702 million. The same period in 2012 saw $13.586 million, and $12.932 million in 2011.

The labor market index of 103.05 for March 2014 comes with the number of employed in the Fort Smith region being 119,603. By way of comparison, the region the city had an index of 91.82 in March 2009 when the number of employed in the region was 123,574, almost 4,000 more employed, or 3.21% better than March 2014. Also, the monthly employment average in first quarter of 2014 was 118,807, just 0.14% above the average during the first quarter of 2013, and 1.96% below the first quarter of 2012.

In March 2014, the Fort Smith metro workforce totaled an estimated 128,695, down more than 4.3% – or 5,847 – compared to 134,542 in March 2009.

When asked about the index comparison to regional jobs figures and sales tax collections, Fusaro said the index is relative and simply compares Fort Smith to the other 16 cities.

“For example, from March 2009 to March 2013 the Fort Smith labor force fell from 42255 to 39551. The ATBI labor force index rose from 99.85 to 102.79 in the same period. This seems counter intuitive. The reason for this is that the labor force for the state fell at an even faster rate during this time period. So Fort Smith has done relatively well compared to the rest of the state,” Fusaro noted in an e-mail response. “The best way to evaluate the labor market performance in absolute terms is to just look at the size of the labor force. The ATBI is not designed to replace looking at raw data. It rather, provides different information, the relative performance across the state.”

Steve Schotta, director for the Northwest Arkansas Children’s Shelter, was on Monday (June 23) handed the keys to a new Chevrolet 3500 cutaway van with a 15-foot cargo box attached. The shelter is one of the local charities to benefit from this year’s LPGA-Walmart NW Arkansas Challenge event which will run through Sunday at Pinnacle Country Club in Rogers.

“Our old cargo van had around 298,000 miles and it didn’t hold much product. This new box truck will allow us to pick-up palletized donations around the region. Even though the state places the children in our care, they only fund about 25% of the costs associated that care. Without the help of many corporate donors we would not be able to do it,” Schotta said.

The shelter has had the large truck on its wish list, but did not have the budget for the large purchase, according to Schotta. The shelter operates with a $3.5 million annual budget and Schotta said they will serve 50,000 meals this year. During the 20 years the shelter has existed, more than 7,200 children have been served.

The new box truck is valued at $50,000 and fits nicely with this year’s tournament theme “Drive for Hope.” It was veteran LPGA player Liselotte “Lotta” Neumann, who has 13 LPGA wins to her credit including a U.S. Open Woman’s Open title in 1988, who presented Schotta the keys to the new box truck on half of the LPGA.

“If feels good to give back to the community and further causes like this shelter,” Neuman said.

With this new larger truck, Schotta said, they will be able to more easier pickup in-kind donations that help us stretch out budget.

“Our old van could only hold a couple of pallets and we would have to take the items off the pallets during transport and then restock them back on the pallets when they arrived at our warehouse.”

Tournament sponsors Proctor & Gamble, General Mills, Kimberly Clark and Mondelez International filled the truck with pallets of donated products on Friday (June 20). Todd Hanus, customer vice president at Mondelez, said his local team of 38 ordered the product shipped to their office and they loaded the truck on Friday with food, including healthy snacks as well as Oreos, Teddy Grams and other comfort items.

“We are a food company, and while this team may do more outreach than other teams, it’s part of our corporate mission. Through giving we can see the real needs in our local community. The children’s shelter is a mission we feel strongly about helping throughout the year, Hanus said.

Jay Allen, tournament chairman, said the LPGA event is about “quality of life in Northwest Arkansas” and during the week there will be a local gift presented each day to a charity.

“This year this tournament will top $2 million in gifts given back to the community since we have been hosting here,” Allen said.

On Tuesday (June 24) the Walmart Foundation will present a $450,000 grant to the Northwest Arkansas Council to support the council’s projects. The ceremony will be in the Five & Dime Suite on the 18th Hole at the Pinnacle Country Club in Rogers.

Allen said the other gifts throughout the week will come directly from the tournament and its sponsors.

Fort Smith Public Schools Superintendent Dr. Benny Gooden told the district's school board Monday (June 23) that should a special session take place to address teacher insurance costs, he fears whatever solution passes out of the General Assembly could put the district on the hook for more than $250,000.

There are two proposals being floated as a fix for the rising teacher insurance premiums, as reported by The City Wire content partner Talk Business. One would remove part-time school employees who work less than 30 hours from eligibility.

In the other bill, employee spouses who have health coverage through another group health plan would not be eligible for school and state benefits. The bill also would require verification of dependent eligibility. It would require employees with high-deductible plans to be enrolled in a health savings account. It also would provide more flexibility in covering gastric bypass and other bariatric surgeries.

“The governor is satisfied with them. Now it’s about the vote count,” Matt DeCample, spokesman for Gov. Mike Beebe, told Talk Business last week.

But Gooden said the proposals are not satisfactory to him and do not address the cause for the spike in premiums.

"We're certainly not pleased with the proposals as they are, but as I've been told, 'Get over it. That's probably what you're going to get whether you like it or not.' My concern is what they're proposing does not address the root problem of the teacher/school employee health insurance plan because the root problem is we don't have a healthy mix of plan participants.”

He defined a health mix as "young and healthy.”

"We have too many people who do not take the insurance who are young and healthy, and us old and those sick people always take it and that's not good for the plan. That's not what group insurance is based on. They're not doing anything that in my view would induce more people, more young people, to take that program.”

Gooden said the plans will push more of the burden to the school districts which adversely impacts large districts with high health insurance participation rates.

"Their solution is to find some money and don't spend any more state money and have the schools put it up and we're concerned about they way their doing it because they're going to detrimentally affect school districts like Fort Smith who have a high participation rate already.”

He said Fort Smith's participation rate is at about 85%.

Just in the case of Fort Smith, Gooden claimed the district would be on the hook for between a $250,000 and $300,000 increase in costs when it comes to teacher health insurance premiums. Asked after the meeting where the district would get the additional monies to fund its obligations should either of the bills gain approval, Gooden said it could come from district staff's future pay raises.

"The next time we come up with salary negotiations … let me just give you a made up number, but let's say the amount of money we have to send in, that might be $200 we couldn't put on a base salary for all employees because it could be $200,000 or $300,000. So you're talking about a lot of money.”

Gooden said whatever the legislature decides, should a special session be called, it would not have an impact until next school year since "obviously the money's already committed right now.”

"All we can do is just watch because I've pretty much been told no changes will be made at this point," Gooden told the school board.

In other business, the school board:
• Approved increasing the cost of school lunches by 25 cents, to $2.50 per meal at secondary schools and $2.25 at elementary schools;

• Approved the offering of free school lunch to all Fort Smith students beginning with the 2014-2015 school year; and

• Approved an agreement with Mitch Llewellyn for legal services to be provided for the district from July 1, 2014, through June 30, 2015, at the rate of $200 per hour.

Whirlpool’s attempts to get vapor intrusion monitors installed in structures above the potentially cancer-causing plume of trichloroethylene (TCE) have not gone according to plan.

The company recently disclosed to the Arkansas Department of Environmental Quality that it had not found a property owner who would allow the company to install the monitoring equipment. As a result, the company has been granted a 30-day extension to comply with a request of the city of Fort Smith.

The disclosures on Whirlpool's difficulties and a subsequent request for an extension were included in letters exchanged by the company and ADEQ.

It was in a letter dated April 28 that environmental consulting group ENVIRON, Whirlpool's hired consultants who are tasked with carrying out the remediation plan, told the ADEQ that it was having problems gaining access to structures to install the equipment.

ADEQ acknowledged receipt of the letter and in response, Whirlpool's Corporate Vice President of Communications and Public Affairs Jeff Noel requested the extension on Thursday (June 19).

"In response to the May 19, 2014 ADEQ letter responding to ENVIRON's April 28, 2014 letter regarding our difficulty in gaining access to install soil vapor monitoring points on properties throughout the neighborhood north of the Whirlpool facility in Fort Smith, Arkansas, we respectfully request an additional sixty (60) days to respond in order to allow us to continue our discussions with property owners to gain access to conduct this additional monitoring.”

The request for an extension on the soil vapor monitoring is a reversal from last year, when the company said it was ready to begin work on vapor monitoring earlier than was required by the ADEQ's final remedy work plan, which was not yet approved.

The company said in a letter at the time that it would work with ADEQ to determine locations for the monitoring sites based on two criteria:
1. Proximity to existing off-site groundwater monitoring wells with higher concentrations of TCE; and
2. Proximity to an occupied residential building.

"The idea is to install additional soil gas monitoring points at locations that have higher potential for vapor intrusion to occur compared with other locations in the area," Principal Consultant Greg Gillespie said in an e-mail to ADEQ at the time.

Gillespie also said the work would "commence independent of the Revised Risk Management Plan (RRMP) and Work Plan currently being reviewed by ADEQ," work that now appears to have not yet taken place.

In the request to begin off-site soil vapor monitoring, Whirlpool's environmental consultants said at the time that while their data backed up the company's claims that dangerous levels of TCE have not been found in the soil vapor, "Whirlpool concluded that additional soil gas monitoring points should be installed in order to enhance coverage of the off-site plume.”

In a letter dated Monday (June 23), Tammie Hynum, chief of ADEQ's hazardous waste division, granted an extension to the company, but stopped short of granting the 60 days requested.

"ADEQ grants Whirlpool a thirty (30) day extension to submitting additional soil gas monitoring locations," she wrote. "If Whirlpool continues to have difficulties securing access from the local property owners after this extension, all documentation showing the efforts put forth by Whirlpool should be submitted to ADEQ.”

Hynum also directed Whirlpool to submit a map within the next month detailing existing soil gas monitoring locations, as well as proposed locations.