An announced settlement in a class action lawsuit against Whirlpool Corporation related to property damages from trichloroethylene (TCE) contamination has hit a snag following an objection filed by attorneys representing residents affected by the contamination.

The agreement to settle the class action lawsuit on July 3 would have provided property owners in an area bound by a plume of TCE a dollar figure equal to what their properties were devalued by Sebastian County Assessor Becky Yandell in 2013. Property owners living outside the area would have received $5,000 and possibly more in the future if TCE was detected above regulatory levels in groundwater beneath properties.

In an objection to the agreement filed Friday in the United States District Court Western District of Arkansas in Fort Smith, attorney Sam Ledbetter of the Little Rock firm McMath Woods said the deal was "great" for Whirlpool and leaves plaintiffs as the "losers in the proposal."

"The proposed settlement is a great deal for defendant in that it eliminates its exposure to additional types of damages, including punitive damages, avoids any expense associated with litigation, including having to engage in discovery, and allows it to encumber and access private property as if it were a government actor in a condemnation action, thereby avoiding significant expense associated with cleaning up the mess it has made," Ledbetter wrote.

He added, "In other words, for little or no effort, putative class counsel stands to reap a handsome fee."

Ledbetter said the one-time payment offered by Whirlpool as a part of the settlement agreement was "based on an arbitrary and flawed valuation methodology," further alleging that the properties will "likely never (be) cleaned up."

In a statement to The City Wire, Whirlpool's Senior Manager of Global Public Relations Krstine M. Vernier called Ledbetter's filed objections to the settlement were "self-serving."

"Mr. Ledbetter's 'objections' are a self-serving attempt to prevent affected property owners in Fort Smith from having the opportunity to decide for themselves if they want to accept Whirlpool's substantial financial offer through the class resolution," she said.

She also said the court had been able to review the terms of the offer made to residents in the affected area and said residents had not yet received information on the settlement for consideration.

"Ledbetter's objections are also a poor replacement for constructive solutions, which this particular set of plaintiff's attorneys (have) been unwilling to offer over many months of negotiations," Vernier said.

Attorney Ross Noland, another McMath Woods attorney representing clients affected by the plume, said in statement to The City Wire that 29 residents filed objections to the proposed settlement between Whirlpool and property owners.

"Instead of recognizing the flaws in its settlement proposal and treating everyone fairly, Whirlpool Corporation has decided to attack the residents and their attorneys," he said. "This is typical behavior one would expect from a corporation more interested in its bottom line than doing right."

He said if Whirlpool was concerned with being a good corporate citizen, it would "pay the property owners and residents adequate compensation for having ruined their property values instead of an arbitrary and unfair amount."

Vernier said the settlement off would "be reviewed by the federal court to ensure that the Judge agrees that it is fair," adding that residents choosing to not take part in the lawsuit are allowed to opt out.

"If property owners opt out of the class, they can continue the costly, time-consuming and uncertain path of protracted litigation," she added.

She said Whirlpool believes the court will approve the settlement and "enable us to move forward with payments to the class members as swiftly as the legal process will allow."

Turns out, there is an app for returning more than $2 million to Walmart shoppers.

Wal-Mart is proud of its Savings Catcher program that promises to scout competitor’s sales prices on groceries and selected general merchandise for its shoppers based on receipts scanned into the retailer's shopping app.

"So far since inception we have helped our customers capture more than $2 million by using Savings Catcher. Immediately after the August 4 rollout the app was the No. 1 downloaded lifestyle app from the iTunes App store," said Molly Blakeman, Wal-Mart spokeswoman.

Wal-Mart declined to say how it will report these savings at year-end as gift cards will be given to consumers for accrued and unused credits. Wal-Mart spokesman Randy Hargrove told The City Wire that the retailer has budgeted for Savings Catcher and has no plans to share the debits and credits involved on the company’s profit and loss ledger because they are not deemed financially material.

For instance, the retailer's U.S. sales totaled more than $279 billion last year so a few million in gift card expenses related to Savings Catcher won't likely move the needle that much. Then why might Wal-Mart be so bullish on this program?

SHOPPER INSIGHT
Matt Kistler, senior vice president of global consumer insights and analytics at Wal-Mart,  recently shared with suppliers that Wal-Mart is mining data from customers and Savings Catcher is a tool that can help the retailer monitor competitor prices and provide deeper shopper insights.

Analysts have said the Savings Catcher and soon-to-be-offered e-receipts will give the retailer more insight into individual shopper purchases that can be used to create shopping lists in the coming months.

“The best shopping lists are those you don’t have to create yourself,” said Gibu Thomas, senior vice president of mobile and global e-commerce.

Thomas said during the retailer’s June shareholder meeting that Wal-Mart will continue to use technology in exciting ways to get closer to the customer. 

Suppliers recently asked Kistler when and if Wal-Mart planned to share those deep consumer insights. 

“We are just now starting to get meaningful data on the Savings Catcher program. I suspect we will continue mining and analyzing it and at some point will share relevant data our supplier partners” he said.

SHOPPER REVIEW
Jamie Smith of Elkins likes using the program. The one drawback is that it takes three days to get the results. Smith, who has done freelance work for The City Wire, has saved $3 in her last three trips to Wal-Mart.

Jennifer Ragland, a school teacher in Waco, has received $8 from Savings Catcher and admits to being somewhat obsessed with scanning the receipt as soon as she gets it. Another shopper in Fayetteville said she has $10 in her Savings Catcher account, which she is saving to buy diapers.

Peggy Knight, a former executive with Sam’s Club, loves the program and has amassed $15 in savings. The drawback she sees is that many of cashiers have not been trained on redeeming the credits.

“I had to call a supervisor,” Knight said.

None of the shoppers interviewed by The City Wire said were concerned about the data Wal-Mart is collecting on their buying habits. Knight, now a retail consultant based in Rogers, said Sam’s Club and other retailers’ loyalty programs do the same thing in capturing shopping data which is most frequently used for marketing purposes.

She said the retail space is hyper competitive with nearly everyone trying new ways to woo shoppers.

“Target has a 5% discount card if you attach it to your debit card,” Knight said.

ANALYSTS WEIGH-IN
Jason Long, CEO of St. Louis-based Shift Marketing Group, said psychologically Savings Catcher is resonating with the customers because it takes the price comparison work off their plate. He said it hasn’t been that long ago when Wal-Mart was the clear leader in low prices in the minds of most consumers. But Dollar Stores, Aldi and aggressive pricing from Kroger, HEB and other grocers have nipped away at that image.

Others agree with Long.

“The genius of Wal-Mart’s Savings Catcher program is that it adds a new dimension to its price match guarantee while continuing to make it incumbent upon shoppers to take the initiative. Wal-Mart can satisfy shoppers who are truly price sensitive and message value and price transparency to everyone else without lowering prices across the board. It offers the best of both worlds,” said Carol Spieckerman, CEO of newmarketbuilders.

Analysts with Cleveland Research said of Savings Catcher: “It’s basically the same thing as the Ad Match Guarantee but it takes the work out of the hands of the consumer.”

The Sebastian County Quorum Court ran into problems Tuesday night (Sept. 16) due to a request by County Judge David Hudson to meet with individual justices of the peace individually to discuss budget priorities prior to the start of the annual budget hearings, with the prosecuting attorney saying the meetings could violate the Arkansas Freedom of Information Act.

In a separate meeting Tuesday, the Fort Smith Board of Directors approved the waiving of building permit fees for the Arkansas Colleges of Health Education, saving the institution more than $63,000 on the construction of a multi-million campus at Chaffee Crossing.

In Sebastian County, Justice of the Peace Linda Murry questioned a letter attached to individual meeting packets distributed to members of the Quorum Court in which Hudson requested individual meetings to discuss the 2015 budget.

"In order to have a focused discussion concerning 2015 budget planning, I would like to meet with each Quorum Court member individually at a mutually convenient time," Hudson wrote. "The purpose of this individual meeting is to receive your input and perspective on 2015 budget planning and further discuss the budget issues.”

Murry raised two points, the first being that she would like any meetings to be "committee of the whole" meetings so she and other justices could hear the input of the entire court regarding budget priorities. She also questioned whether an Attorney General's opinion was needed to determine if the meetings were within the letter of the law.

Sebastian County Prosecuting Attorney Dan Shue, who serves as legal counsel to the court, said he had not yet seen the letter Murry was referencing but advised against the individual meetings. Reviewing a copy of the letter following Tuesday's meeting, Shue said his advice would remain the same.

"I've done this in the past, but there have been a lot of FOI business and maybe it's not appropriate. I don't know," Hudson said in response to the issue being raised.

Shue said one of the issues with the individual meetings is whether the opinions of the individual Quorum Court members could be influenced through the meetings with Hudson even though he said the meetings are purely informational in nature. He said if opinions started being expressed or ascertained, it could constitute polling of the court which is a violation of the FOIA.

Justice of the Peace Danny Aldridge asked whether there was a legal definition of polling that Shue could provide the court.

"The problem is if you go too far, then it's a polling situation. It's one of those things that (information presented or discussed) convinces you, but (another justice) never gets to hear it. The thing that convinced you, she never gets to hear. So I think that's the point. Information should be just that, information, not exchange of ideas.”

The letter in question was not included in meeting packets provided to the media, but was provided upon request. Jeanne Wright, executive assistant to Hudson, said the letters were originally set to be mailed to justices, but were delivered taped to the packets instead to save on postage, explaining why the letter was not originally provided to the media.

Hudson withdrew his request for one-on-one meetings with individual justices following the discussion between the court and Shue.

In other business, the court tabled until next month the request of Treasurer/Collector Judith Miller to increase her pay and provide backpay for her years in office tied to the additional responsibilities of serving in two positions. A letter she said states salary minimums and maximums statewide for the positions was requested for distribution to the court, as well as a legal opinion from Shue on whether she is entitled to a raise of more than $3,400 starting with the 2015 fiscal year, was requested by October's regularly scheduled meeting.

It was also announced during Tuesday's meeting that the court would be going all electronic for meeting packets starting in October. For Tuesday's meeting, Hudson said only 20 packets were printed instead of the normal 60. At 158 pages each for Tuesday's meeting, the county would have saved 6,320 sheets of paper, as well as undisclosed costs for printing.

FORT SMITH ACTION
At the city of Fort Smith, the Board waved $63,500 in fees tied to the construction of the Arkansas Colleges of Health Education, which will house the Arkansas College of Osteopathic Medicine at Chaffee Crossing. According to a memo written by City Administrator Ray Gosack, the fees include $50,000 for building permits and inspections, $13,050 for sewer ties on fees, $350 for a planning/zoning application and $100 for a grading permit.

"In the past, the city has waived fees for similar developments which have significant job creation and investment," he wrote.

Thomas Webb, executive director of The Degen Foundation – the organization providing much of the funding for the new medical school – said in his letter to Gosack requesting the waiver that the school would employ 80 to 90 employees including several doctors of osteopathic medicine and Ph.D.'s with an average annual salary of $100,000. He also noted that the school's economic impact upon completion and once fully operational was expected to be $100 million annually.

"While this remains a mission driven plan, we continue to enlist the help and assistance of those who see this as a true game changer for our area," Webb wrote.

Construction of the first $31 million building to house the osteopathic school, administrative offices and possibly a future physicians assistant school was scheduled to let bids Monday (Sept. 15), with an expected construction completion by April 2016.

If accredited as expected, the school plans to begin its first classes in August 2016.

Voters in the Greenwood Public School district Tuesday (Sept. 16) approved a millage hike that will be used to construct a new freshman center adjacent to Greenwood High School. An unofficial tally reported by the Sebastian County Election Commission showed of 1,718 votes cast, the 1.9 mil increase passed by a vote of 933 (54.31%) to 785 (45.69%).

Speaking after the votes were counted, Superintendent John Ciesla said the new facility to be built as a result of the millage hike would be a benefit to the district for decades to come.

"We're so excited for our students," he said. "For the future of Greenwood, it will impact generations. That's what you build facilities for and that's what we're excited for and what it will mean for this community.”

With the rate hike approved Tuesday, Ciesla said the district would issue bonds to fund the new $10 million to $12 million freshman center. The millage increase is expected to bring revenues of about $590,000 per year to the district, which will be used to pay off the 30 year bonds, he said.

Bonds should be issued by January with construction scheduled to begin shortly thereafter on the 53,000 square foot facility that will be able to house 400 students, according to Ciesla, who noted that work could take place even earlier.

"We hope to (start construction) by the first of the year, but we do have preliminary site work we can do to get the plan moving along with some demo work and such. But as far as the process, January 1 is our target date.”

The facility, which will house 23 classrooms – 15 regular classrooms and seven labs for science and computer labs, as well as large groups – will relieve capacity issues at the district's lower level schools. Since the 2001-2002 school year, Ciesla said the district has seen enrollment growth of 568 students.

The new freshman center would remove freshman from Greenwood Junior High and allow the district to move fifth graders from the district's two elementary schools to a new fifth and sixth grade middle school, shifting seventh graders to a new seventh and eighth grade junior high.

The configuration of the sophomore through senior high school would remain the same, though the high school's amenities would be used by the freshman center, Ciesla said, indicating that the cafeteria, performing arts center and other facilities would be used by all four grades and would save the district money by not constructing those as part of the new campus.

Of the millions needed for the project, the state has already committed $2.3 million to the project through matching funds, Ciesla said, due to overcrowding issues in the district.

Ciesla said the Greenwood School Board approved a construction manager contract with Beshears Construction last week to construct the freshman center.

"They've done all of (our construction projects) since I've been here and this is the start of my ninth year," he added.

Before Beshears can begin and before ground can be broken, Ciesla said Tuesday that architecture and engineering work must still be completed.

"We've just had the renderings that you were able to see, so that'll take some time. But we'll immediately start work on that. It'll be (done) as quick as possible due to the fact that we're in a crunch.”

The approval of the millage hike goes against a previous millage increase requested by the district in March 2010. Voters rejected – 58% against to 42% for – a 2.8 mil increase that would have funded a third elementary building estimated then to cost $14.2 million.

Voters in Fort Smith also recently rejected a millage increase that would have funded expanded services at the city's public library. The request for a two mil increase was rejected by a vote of 64.02% against to 35.98% for.

Ciesla said he was thrilled to have the positive outcome on Tuesday night.

"We just appreciate the support and I know our students will benefit for many years to come and we just appreciate the support."

The rumble of motorcycles may soon be a more regular sound along Garrison Avenue in downtown Fort Smith. A motorcycle parade will take place in two weeks and a planned large-scale motorcycle rally benefitting local non-profits is planned for next year.

Dennis Snow, organizer of the motorcycle rally and the host of Thunder TV, said the events would introduce Fort Smith to a new group of tourists and locals who love to ride.

The first event, the Heroes Salute motorcycle parade, will take place Sept. 27, with staging at 9 a.m. at Fort Smith Park on Riverfront Drive, Snow said. The ride will start at 10 a.m. "with kickstands up" and follow a police escort to downtown, following A Street to Immaculate Conception Catholic Church and then down Garrison.

The ride will end at the Fort Smith National Cemetery, where an event will take place to welcome the cemetery's new director Adriene Benton and lay wreaths at the graves of veterans.

"We'll have a real quick ceremony there to lay wreaths on the graves of all Army, Air Force, Navy, Marines, and first responders," Snow said. "We'll have taps played and then bagpipes (will play) 'Amazing Grace.'"

Snow said the event is free to all who choose to participate and said he would expects "a conservative" estimate of 1,000 riders to attend the event, which will continue on to Bikes, Blues and Barbecue in Fayetteville following the ceremony at the National Cemetery.

STEEL HORSE RALLY
The Heroes Salute is the first of two planned events in the downtown area, he said. The second event is planned for May 1 and May 2 and will be known as the Steel Horse Rally.

"I've had it in my mind for 20 years," he said. "It's sort of like working your entire life to get to this moment."

Snow, who has previous experience organizing rallies in Hot Springs and has been involved with the Bikes, Blues and Barbecue rally in Fayetteville, said the Fort Smith area is primed for a motorcycle rally that would bring in people from not only the region but across the United States. The BBB rally in Northwest Arkansas has acclimated hundreds of thousands of motorcycle enthusiasts to much of Arkansas.

"People know the roads (leading to Bikes, Blues and Barbecue). Now people can stay down here, experience the Talimena Drive, go to Hot Springs. People know about the Pig Trail and Highway 23."

He said one of the primary draws from the perspective of potential rally attendees and participants is the width of Garrison Avenue, which he said is one of the widest main streets in a downtown area in America. With such width, more bikes and tourists can fit into the central business district for the event.

"People coming in already know about the inherent beauty of the area, but we have so much more room for bikers to be set up. And we have requested to close Garrison Avenue for two nights. We asked for it four months ago and they were positive about everything. Everyone I've talked to has been excited about this."

NON-PROFIT, TOURISM SUPPORT
To take part in the event, Snow – a former board member of the Riverfront Blues Festival – said a non-profit Steel Horse Rally Foundation has been formed that will organize the rally for an admission fee and then disseminate the funds to other area non-profit organizations.

With admission, guests will be able to enjoy the stream of motorcycles up and down Garrison, as well as enjoy concerts on both nights of the event.

"We will have a motorcycle demonstration team to come in and bring in family-based entertainment during the daytime for a family-friendly environment. When the sun goes down and bikers come back in (from riding), that's when we will launch the entertainment at other locations, including bars and restaurants. This is a win, win for everyone, including the city of Fort Smith."

He said the event does not compete with Bikes, Blues and Barbecue, but instead builds upon he Northwest Arkansas event in a way that should boost tourism in the Fort Smith area.

"It seems like people have forgotten about it, but there's history here and so much more than just western history," he said. "It's a great time to come in and explore and we will give them so much more than the Steel Horse Rally."

Admission, he said, would be tax deductible and while ticket prices have yet to be set, "it won't break people's banks or anything."

Snow said there will be volunteer opportunities, as well, which would come with free admission to the event and could include perks, such as event t-shirts, depending on the volunteer position.

For more information on the rally, visit ThunderTV.net.

Andy Murray is no stranger to innovation. Long before he began in the last year to manage creative marketing for Wal-Mart, this serial entrepreneur was finding ways to integrate technology and pioneering shopper marketing before smartphones were in vogue.

Having founded, ran and sold two successful startups — Saatchi & Saatchi X and Mercury 11 — as well as several years of work in the local supplier community, Murray is now focused on revamping Wal-Mart’s creative marketing agenda. He was the featured speaker at the WalStreet Breakfast event sponsored by the Bentonville-Bella Vista Chamber of Commerce on Wednesday (Sept. 17) at the John Q. Hammons Convention Center in Rogers.

Kenny Tomlin, founder of Rockfish, introduced Murray as one of only a handful of true pioneers in shopper marketing.

“I can’t think of anyone who has traced the evolution of the shopper more than Andy Murray has,” Tomlin said.”Wal-Mart wisely brought him into their business as a senior executive in the creative market division to continue gaining shopper insights.”

Tomlin said understanding shopper behaviors and the impact digital technologies are having is crucial today because 50 cents out of every dollar spent in retail stores by the end of this year will have been influenced by digital devices, according to a new report by Deloitte.

Murray made light of the fact that his schedule was double-booked as he was supposed to be in Los Angeles today which took some last minute maneuvering, which kept him from getting his presentation vetted by Wal-Mart legal.

“Today you’re getting me unplugged but since there’s just one person here from Wal-Mart and one from the media we’ll see how it goes. You will get your money’s worth, I am just not sure what will happen to me,” Murray joked.

Murray then turned to the serious business of how he and the creative team at Wal-Mart seek to bring more structure and increased expectations under the new leadership of Walmart U.S. CEO Greg Foran.

“In our weekly officer meetings under Greg Foran’s leadership all we focus on is what can be done to meet sales goals this weekend. It’s about being in the work, focusing on the work,” Murray said.

He admitted the expectations are high across the board but the benefits are worth it.

One of the first things Murray tackled when coming to Wal-Mart was trying to rebuild the creative engine inside the retail giant. Murray said he spent a lot time talking with merchants and agencies and the one common suggestion received was the need for one voice. So he set out to install a one-voice feedback model for ad agencies presenting proposals.

“This cut weeks out of the review process and puts that time back into the creative process,” Murray said, adding that agencies were given one shot to pitch a plan to Wal-Mart, and sometimes that was on the phone. “That forces you to be good, it’s a high bar no doubt.”

Being good is just part of the equation. Murray said it remains imperative that Wal-Mart add emotion back to the advertising to form real connections with its customer base. He said the U.S. manufacturing jobs campaign that featured “Dirty Jobs” star Mike Rowe was the launch. But there are other ads coming that tug at the heartstrings and help shoppers connect to Wal-Mart on an emotional level.

Murray said since Wal-Mart began to return emotion to the ads, their ratings are among the highest in the advertising industry.

IN-STORE HELP
While online sales are growing at warp speeds, Deloitte notes that 94% of retail sales are still conducted in brick and mortar stores. Murray said he spends a lot of time in Walmart stores surveying the messaging via signage and displays throughout each location.

He admits that many supercenters look like they were frozen in time in 2006. 

“I counted 27 standees in one store many of these displays cluttering the entrance. I am not sure that’s how we want to greet today’s shopper,” Murray said.

He expects to see more product demonstrations in stores saying they bring excitement and animation to the shopping climate as opposed to standing cardboard displays. Murray cautioned that there are limits to how creative displays should be so that Wal-Mart’s inventory system can properly account for the all product.

Overall, Murray said much work remains to better connect the retailer with the various points of possible customer intersection, but under Foran’s leadership the focus is speed.

Arkansas’ three largest metro areas showed either improvements or stability during the second quarter of 2014 compared to the same period in 2013, according to The Compass Report’s analysis of second quarter data.

The quarterly Compass Report is managed by The City Wire. The report is the only independent analysis of economic conditions in Arkansas’ three largest metro areas.

Compared to the second quarter of 2013, economic conditions in Northwest Arkansas and the Fort Smith metro area were stable (no change), and conditions in central Arkansas improved.

To underscore the impact of the three largest metro areas, for June of this year the unemployment rate for the rest of the state was 7.4%, down 1.7% from June 2013. The statewide unemployment rate with the three largest metros added back in was 6.3%, down 1.4% June-on-June.

New to The Compass Report is sponsorship of the Fort Smith analysis by Arvest Bank-Fort Smith and River Valley Region.

“Arvest is excited to partner with The City Wire, the Fort Smith Regional Chamber of Commerce and Cox Communications to provide the community leaders in the River Valley the most usable, up to date information on economic indicators that the Compass Report provides,” said Rodney Shepard, president and CEO of Arvest Bank of the Fort Smith and River Valley Region. “Arvest’s mission statement is ‘People helping people find financial solutions for life.’ When people are better informed, better decisions are made in our communities.”

NORTHWEST ARKANSAS
Continued employment gains and building activity continued from the first quarter inot the second quarter of 2014 for Northwest Arkansas. The second quarter 2014 grade of B was better than the B- in the first quarter of 2014 and unchanged compared to the second quarter of 2013.

The grade of B indicates an economy that is growing. Non-farm employment in the region was 216,900 in June, well ahead of the 213,700 in June 2013. Building permit values in the region totaled $181.395 million in the second quarter, up over the $138.505 million in the second quarter of 2013. Construction sector employment was 8,900 in June, up compared to 8,400 in June 2013.

Despite the growth, Collins said the pace of growth in Northwest Arkansas is slowing.

“The Northwest Arkansas regional economy slowed noticably in the first half of the year. In the last two years the local growth rate exceeded 2% in all but seven months. Five of the seven have occurred since January,” Collins said.

Collins also said the slowing pace of growth combined with continued growth in commercial and residential construction could prove problematic.

“Finally, at the risk of sounding alarmist, slowing job creation coupled and accelerating real estate development is not sustainable. Both markets bear close scrutiny,” Collins wrote.

FORT SMITH REGION
The Compass Report for the Fort Smith area posted a C grade for the second quarter, unchanged compared to the first quarter of 2014 and unchanged compared to the second quarter of 2013.

A key factor in preventing the region from posting gains is the continued decline in employment.

Non-farm employment in the metro area hit 115,800 in June, down from 116,000 in June 2013. Tthe metro jobless rate fell from 8.2% in June 2013 to 6.4% in June 2014, but the number of employed did not gain.

“The regional economy had added employment for six straight months prior to the start of the second quarter. The statistical evidence suggests that the local labor market has stabilized but is clearly not out of the woods,” Collins wrote.

Continuing, Collins said: “The improvement in the unemployment rate was based on the decline in the number of unemployed (-2,726) relative to the decline in the labor force.  The number of employed also declined (-2,775).  These data indicate the local labor market is improving primarily due to people either leaving the area or choosing not to look for work. Either way, it would be difficult to conclude the employment situation is improving in the Fort Smith area despite the declining unemployment rate.”

An emerging positive was in tax collections. Tax collections in Fort Smith totaled $10.389 million in the second quarter, better than the $9.956 million in the same quarter of 2013. Tax collection numbers, a sign of consumer confidence and spending, have not been positive in recent quarters.

Overall, Collins said the Fort Smith metro economy is stable, but possibly struggling.

“Given economic performance at the state and local levels, the data for the Fort Smith area economy imply the region has performed relatively well compared to most other metros and the state as a whole,” Collins said. “Data for the third quarter will be closely examined to determine if the soft second quarter was an anomaly or indicative of a regional economy struggling to regain its footing.”

CENTRAL ARKANSAS
Economic conditions in central Arkansas, the state’s largest metro area, received a grade of C, an improvement over the first quarter of 2014 and better than the C- in the second quarter of 2013.

Improvements in overall employment and a better showing in construction sector jobs helped push the better grade. Non-farm employment stood at 348,600 in June, better than the 344,400 in June 2013. There were an estimated 17,400 jobs in the region’s construction sector in June, up compared to 16,800 in June 2013.

“Given recent job creation data for the Central Arkansas metro, this was a modestly improved showing. By comparison, the Northwest Arkansas regional economy added 3,200 or 1.5 percent while the Fort Smith regional economy was essentially flat June-on-June (-200 jobs) during the same period,” Collins said.

However, building permit values declined in the quarter.

Overall, the recent growth in central Arkansas is not reflective of what is possible in the metro area, according to Collins.

“The Central Arkansas regional economy continues to mimic the national economy, growing but at a pace that fails to impress. This is likely due to continued weak national growth and the impact of reduced state and local government spending,” he said.

NATIONAL ECONOMY
Nationwide, overall economic indicators improved during the second quarter of the year.

“The economy was hard hit in the first quarter by the effects of severe winter weather. However, it rebounded substantially in the second quarter,” noted economist Jeff Collins, who conducts data collection and analysis for The Compass Report. “The outlook for the remainder of the year is for solid but unspectacular growth.”

Other national economic notes from Collins’ included:
• Business investment had been one of the bright spots for the national economy. The outlook is for business spending to continue to grow through the remainder of the year. Growth is expected to be especially strong in structures and equipment.

• Unemployment rates were lower in 359 of 372 metropolitan areas and higher in just 10 according to the most recent data available. The labor force had been growing consistently through the recovery until recently. The data suggests that the labor force has been essentially flat for the last two quarters.

• Employment growth has been and will continue to be relatively strong in the services sector, particularly in hospitality, retail trade, professional and business services, and education and health care services.

• With the exception of fluctuations in the highly volatile energy sector, prices have been stable for some time. The lack of inflationary pressure has allowed short and long-term interest rates to remain at or near historic lows. Short-term rates are expected to remain low until the unemployment rate improves substantially and/or inflation rises above 2%.

• Real disposable income grew roughly 3.3% compound annual growth quarter-on-quarter while retail sales data indicate a relatively good second quarter. The forecast for the remainder of the year is for retail sales to accelerate along with growth in disposable income.

REGIONAL GRADE HISTORY
FORT SMITH REGION– Fort Smith regional economy
2Q 2014: C
1Q 2014: C
4Q 2013: C+
3Q 2013: C+
2Q 2013: C
1Q 2013: C-
4Q 2012: C
3Q 2012: C-
2Q 2012: C-
1Q 2012: C-
4Q 2011: C-
3Q 2011: C
2Q 2011: C
1Q 2011: C-
4Q 2010: C-/D+
3Q 2010: C-
2Q 2010: C-
1Q 2010: C-
4Q 2009: D
3Q 2009: D
2Q 2009: D-
1Q 2009: D+

NORTHWEST ARKANSAS– Northwest Arkansas regional economy
2Q 2014: B
1Q 2014: B-
4Q 2013: B+
3Q 2013: B+
2Q 2013: B
1Q 2013: B
4Q 2012: C
3Q 2012: B+
2Q 2012: B-
1Q 2012: B-

CENTRAL ARKANSAS– Central Arkansas regional economy
2Q 2014: C
1Q 2014: C-
4Q 2013: C-
3Q 2013: C-
2Q 2013: C-
1Q 2013: C-
4Q 2012: B-
3Q 2012: C-
2Q 2012: C+
1Q 2012: C-

DATA AND REPORT DOCUMENTS
Link here for the raw data used to prepare The Compass Report for the three metro areas.

Link here for more narrative about regional and national economic conditions.

UNDERSTANDING THE COMPASS REPORT GRADES
A key factor in understanding The Compass is in understanding the “grading” approach used to measure the current and leading economic indicators.

The strategy is to place the most recent data in historical context. Average values for the percent change over the referenced time period were calculated, as were standard deviations for each measure.

The more similar current values are to historic averages the more likely the indicator grade is to be a “C.”

The farther away the observed value, as measured by the standard deviation of the data, the more divergent the grade from “C.” In other words, “C” reflects no change in economic activity. The grades “B” or “A” indicate improvement above the historical average, and “D” and “F” indicate a decline in economic activity compared to the historical average.

NanoMech announced Wednesday it has secured an additional $12 million in capital for its Series B Financing round to continue growth as a global nanoscale manufacturer. The latest round of investors include Meadow Lane Investments, Hendricks Investment Holdings, Advantage Capital Partners and Spring Creek Investments.

Building on continued momentum, NanoMech said it will use the financing to expand its global reach, invest in additional sales and marketing resources and increase investment in its market platforms – nGlide, TuffTek, and nGuard.

In order to take advantage of opportunities immediately available, the company also has approximately 60 days to consider additional private placements of its stock in this round. The proceeds will be used to increase its sales and marketing infrastructure and activities, continue to expand and protect its intellectual property, and for working capital.

“The additional capital proceeds are for accelerating awareness and demand for our industry transformative nGlide and TuffTek products and expanding our physical presence in the energy manufacturing and transportation markets,” said CEO Jim Phillips.

He add that over the past year NanoMech has reached a critical milestone in having its core patents issued by the USPTO and several key international patent offices. The issuance of these patents fortifies the company’s position as a leader in the lubricant additives industry, a market valued at $300 billion as it serves multiple industries that use machinery. Additionally, winning these patents increases the company’s intellectual property in providing the most wear resistant cutting tools and wear parts in the global $25 billion cutting tool industry, the release states.

NanoMech is shipping products globally to Fortune 100 companies as well as to emerging companies in a number of industries from manufacturing to Indy and NASCAR racing as well as agriculture, construction and military applications.

The company said it’s also finalizing the construction of a 25,000 square foot production expansion to triple the size of current operations which will serve as the its world headquarters. The construction is expected to be completed in October. While the new facility will connect to the existing building, NanoMech has purchased the adjacent 7.3-acre tract for future development providing the company with the ability to expand on a contiguous 9 acre campus.

Dr. Ajay Malshe, chief technology officer and founder, said, "Our new nanofactory and expanded headquarters will also allow us to meet current demand for our products while advancing ongoing research and development efforts. The state-of-the-art, smart manufacturing facility and laboratories will further position our products and scientists as some of the best and most innovative in the world. This advanced facility will allow us to accelerate the development and commercialization of innovative products that people have only dreamed of before.”

One of the most surprising statistics for many to digest about the booming Northwest Arkansas economy is the number of children and adolescents who are at risk for hunger — one in four locally, compared to one in six people across the nation, according to local hunger relief advocates.

Harps Foods, the Care Foundation and Bank of America have committed $160,000 to fund a new Mini Meal program for middle school children that is administered by the Samaritan Community Center. This non-profit already feeds more than 6,500 elementary school children each week in 95 different schools across the two county area through the “SnackPacks for Kids” program.

On Wednesday (Sept. 17) Debbie Rambo, founder of the SnackPacks for Kids program, said the demand for weekend food packs for middle school children is a need in the community going unmet.

“A few months ago Roger Collins, CEO of Harps Foods, contacted us about wanting to help with hunger relief. We mentioned this gap in the service that middle school children face when they age out of the SnackPack program. He then engaged the Care Foundation and together we have been able to extend weekend food mini meals to older children at Springdale’s middle schools,” Rambo said.

Harps committed $60,000 over three years. The Care Foundation, in which Collins is a board member, contributed $90,000 over three years, and Bank of America’s local foundation added $10,000, with $10,000 from a local family foundation which Rambo said helps this program with sustainability and opportunities to expand as more needs are accessed.

The Samaritan Community Center now projects its one year budget for the Mini Meal program will be $41,381.Total operating expense for the first five years of the program is estimated at $454,137.

The middle school Mini Meal program reaches roughly 400 adolescents in Springdale, but plans are to expand the program as needed with additional capital contributions.

“I found it hard to believe that so many children in this somewhat affluent area do not have enough food to eat. We at Harps wanted to help change that and fill the gap, that’s why we are involved in this Mini Meal program,” Collins said.

The cost per mini meal pack is $3.65 and it includes a six-meal rice and soy protein pack courtesy of the Pack Shack, two oatmeal packs, two Wow Butter packs, a large box of wheat pasta, a small can of tomato sauce and two bags of dried fruit in a kid-friendly package.

“We have worked really hard with a nutritionist and Brett Raymond of Pack Shack to provide more better-for-you snacks, more protein rich which stays in the belly longer,” said Bonnie Faitak, program director for SnackPacks and Mini Meals.

She said the weekend mini meal bags now cost the non-profit $2.40 each because the Pack Shack has donated the 6-meal rice and soy protein packs.

“We are ordering the Wow Butter from Canada directly from the distributor and it’s the first time we have had a peanut butter substitute. Even though peanut butter is an inexpensive form of protein we can’t use it because of allergies,” Faitak said.

The Mini Meal packs involve some cooking with added water, a process most middle schoolers can handle, especially with a microwave, Rambo added.

Danielle Henderson, a counselor at Helen Tyson Middle School, said the expansion of weekend food packs for middle school children is sorely needed. The first packs were handed out last weekend and Henderson said distribution went without hitch. However, she said the school is trying to identify all the kids in need, because it’s not always obvious on the surface.

Anita Scism president of the Care Foundation, issued a challenge to all who can help to do so, whether that’s volunteering to pack the Mini Meal bags, deliver them to schools or donate to their costs.

“We all need to do our part to bring awareness and investment to this local cause,” Scism said.

Larry Manry, market manager for Bank of America, said he’s been a believer and supporter of the SnackPacks for Kids program from the early years and has watched that program grow exponentially. He added that he was so blown away by Rambo’s determination that SnackPacks and Mini Meals are the local foundation’s largest grant recipient at $10,000.

“You can not discount passion,” Manry said.

At Risk for Hunger
Benton County – 14,550
Washington County – 14,030
Madison County - 1060
Source: Feeding America

Van Buren Public Schools' top administrator is calling accusations that students at a city elementary school participated in a faculty-lead prayer during the school day inaccurate.

The accusations were originally leveled in a letter from the Freedom From Religion Foundation to Interim Superintendent Kerry Schneider, in which the group alleges staff at Central Elementary School "announced, over the intercom, that there was an assembly for students where there would be games and snacks."

The letter went on to allege that the assembly was conducted by "school staff, who asked the children to raise their hands in response to various religious questions, such is if they believed in God, if they went to church, and if they had never been to church."

"They then reportedly told the students to ask other students 'if they had Jesus in their hearts,' and told the kids if they didn't know Jesus, the staff members could help them," the letter continued. (Link here for a PDF copy of the letter.)

The letter, signed by Freedom From Religion Staff Attorney Patrick Elliott, detailed a variety of U.S. Supreme Court cases in which prayer, Bible lessons and other religious activities have been ruled unconstitutional in public schools before requesting an investigation into the matter. Elliott also requested Van Buren administrators ensure staff members are aware of restrictions on religious activities per the Establishment Clause of the Constitution.

Schneider said in his investigation of what happened, he was able to determine that some of the actions alleged in Elliott's letter were "not accurate."

"It said it happened during the school day, but the meeting they are talking about was at 7:30 in the morning. Our school day is from 8 (a.m.) to 3 (p.m.)," he said.

The assembly, he said, was actually a meeting of a student organization called Students With A Testimony (SWAT), which he said was similar to Fellowship of Christian Athletes for middle school and high school students.

"It's not compulsory, it's all voluntary and before school," he added.

Even though he said the meeting in question was a student organization and not an assembly, he said faculty members do sponsor student groups, including SWAT and said students were notified of the meeting during a once-weekly "Rise and Shine" assembly.

"The answer is yes (there are faculty sponsors). We don't have any organizations in our district that don't have an employee sponsor. As far as how kids know about the meeting, it was announced at 'Rise and Shine' that the meeting would be the following week," he said.

Asked whether other student groups were also announced at the "Rise and Shine" event, Schneider said he was not certain.

"'Rise and Shine' is generally an activity to get the kids more involved in school. I'm sure there's a segment of the program where they do announcements for what's coming up. But I'm not sure that this (announcement was) just for this meeting, or if all organizations (are announced) over the course of time."

Schneider said training does occur each year with district faculty and staff regarding "what is and isn't allowed" with regard to organized religion within the public public school setting.

He said a meeting of school administrators was also convened following the accusations by the Freedom From Religion Foundation.

"We've already addressed it with district-level administrators and addressed it in a meeting on Sept. 10. Our administrative council, they meet once a month and we addressed it in that meeting and (administrators were instructed) to go back to their buildings to address it again with faculty and staff. It was just a reminder of what is and is not allowed."

Shannon Newton’s career in the trucking industry happened purely by accident and being selected as the president of the Arkansas Trucking Association wasn’t on her road map either.

The appointment happened on the heels of welcoming a new son into her family. Shannon and her husband, Josh, recently adopted a teenage boy out of foster care, making her a mom of three.

Newton, a Saline County native, graduated from the University of Central Arkansas with a double major in accounting and computer information systems.

“Trucking was not an obvious choice or field of industry that was even on my radar,” Newton said. “However, I met a recruiter from Maverick Transportation that was on campus promoting some openings in the corporate office, and the story becomes somewhat predictable after that.”

ASSOCIATION EMPLOYMENT
Just out of college, she was hired by Maverick to work in the payroll department, where she stayed for about a year before she was offered a position at the ATA. She’s been with the association since 2003, and she was appointed president in June, replacing Lane Kidd, who stepped down after serving 22 years as president. She said her No. 1 goal in leading the association is to meet the needs of its membership.

“There are general ideas and themes that I personally believe will help the association serve as a vehicle for its members,” she said. “But essentially, if the industry’s interests are being served, issues like membership and engagement and morale tend to take care of themselves.”

The ATA works with more than 300 trucking companies, and members range from self-employed owner operators to some of the country’s largest freight and logistics companies.

ATA board member Al Heringer IV said he is looking forward to working with Newton.

“She was the only choice as far as I am concerned,” said Heringer, who is vice president of sales at Star Transportation, Inc., in Jonesboro. “I am looking forward to working with her for years to come. She understands what we do in the trucking industry and works hard to make sure we are successful in this industry.”

“All the years that I have been a member of the board of directors, she has always had the answers to any questions that I needed to make a decision,” he said.

THE TRUCKING INDUSTRY
Newton also believes in educating the public and making people aware of the economic impact of the trucking industry in Arkansas. The industry employs 86,000 people in Arkansas, that’s one in every 13 working people; it pays $2.5 billion in wages to support Arkansas families; 90% of the state’s towns depend exclusively on the trucking industry to deliver necessary items; and the demand for trucking will likely increase by 20% over the next 10 years, according to the ATA.

“[The public] is grossly unaware of the exorbitant taxes that we pay to support Arkansas government and infrastructure,” she said. “As an industry, we haven’t done a good enough job convincing the public that our industry places a huge amount of effort and expenditures to ensure that we are operating as safely as possible on our roads and highways. And that we are doing all of these things in an environment calling for increasingly high capital expenditures and an incredible amount of regulation.”

According to the American Transportation Research Institute, the top four issues for the trucking industry are hours of service; compliance, safety and accountability (CSA); a shortage of drivers; and the economy. Newton said those issues haven’t changed much in the past few years; however, other items on that list are fuel supply and prices and the lack of spending for infrastructure and the cost of congestion.

“When the economy is steady or improving, workforce – specifically the driver shortage – is the number one economic issue,” she said. “When the economy is not good or declining, a lackluster economy is the number one issue. It’s a very, very slow revolving door. Currently, the industry is facing a huge driver shortage that is only expected to get worse.”

With an aging workforce, Newton said the industry isn’t attracting young drivers at the same rate that current drivers are retiring or leaving the trucking business.

“All of this is overlaid on the fact the bar is being raised with regard to the requirements and qualifications for individuals to qualify to become drivers,” she said.

Fascination with 3D printing continues to brew in the retail industry and toymaker Hasbro is taking a 3D event on the road to 10 Walmart Supercenters, including the store at Pleasant Grove Road in Rogers.

The Pleasant Grove Road supercenter will feature personalized 3D printing experiences for children and children at heart on Saturday (Sept. 20), according to the Hasbro news release.

The Rogers store is the only Arkansas location among 10 Walmart stores for the 3D events. A Sam’s Club store in Los Angeles and Atlanta will also be on the 3D tour.

Such events may become more common base on the goals of Wal-Mart execs to boost traffic in stores. Wal-Mart CEO Doug McMillon has said the retailer is looking at ways to integrate 3D printing into its operations around special events that help to create “retailtainment” in its stores and clubs.

Dianna Gee, spokeswoman with Sam’s Club, said the retailer recently worked with 3DMe in some of its grand openings through a partnership formed with the Sam’s Club Road Show Events team. She said a recent opening of Sam’s Club in Moline, Ill., provided shoppers with the opportunity to impose their face on their favorite Major League Baseball player figurine. (See the video below.)

“The figurine has bendable joints and offers shoppers an incredible way to become their hero,” Gee noted.

In the Northwest Arkansas stores, Hasbro said shoppers can have their face scanned into the printer and imposed on their favorite Marvel Super Hero action figure as part of their super hero September celebration and release of “Captain America: The Winter Soldier's” DVD and Blu-ray earlier this month and for the holiday season.

“With 3D printing, we’re now able to provide fans of Marvel Super Heroes for the first time ever with this very unique opportunity to create a one-of-a-kind action figure featuring their own likeness,” said John Frascotti, chief marketing officer, Hasbro. “By partnering with Walmart, Disney, and 3DPlusMe, we’re delivering to consumers a totally personalized product experience.”

The local store event gives shoppers the choice of Captain America or Iron Man action figures which are 12 inches tall and bear the likeness of the fan. These specialized items cost $45 and will be shipped to local store within four weeks, according to release. 

“We are thrilled to team with Hasbro along with 3DPlusMe to offer this cutting edge opportunity to fans of all ages,” said Isabella Lahoud, vice president of licensing for Marvel at Disney Consumer Products.

Cydni Tetro, CEO of 3DPlusMe, said the 3D printing mobile personalization platform is a unique way that allows consumers to become popular characters and is a powerful retail opportunity.

Large, expansive liquor stores being built along Interstate 540 on Grand and Phoenix Avenues in Fort Smith may make it appear as though more liquor stores are coming to the city, but that is not the case according to the state official who oversees the alcohol permitting agency in Arkansas.

According to Michael Langley, director of the Alcohol Beverage Control Division, the city of Fort Smith has had and continues to have permits for only 20 retail liquor stores.

Langley said when new stores come up like the ones at I-540 and Grand and I-540 and Phoenix, the permits are either sold with an existing business or an owner may give up a permit making it available to others who could make an application to the ABC for the permit.

"But most of the time, you're finding an existing business that you're purchasing has a permit and you may wish to move it or stay with it. But that's generally the way it works is someone is buying an existing business."

As an example, Doug Pinkerton is moving his Point Liquor store from Grand Avenue and 11th Street closer to I-540.

The laws and rules, Langley said, date back to the end of Prohibition in the 1930s and dictate the number of permits in each county based on population which essentially limits the number of permits available in a city.

"We raised the population limit during the last (legislative) session. It used to be one (permit) per 4,000 (residents) in wet areas of the county and we only count in each census. The problem is it was so hard to determine dry areas (for counting populations). What was voted dry in the 1940s wasn't the same as it was then. So now we just made it (one permit per) 5,000 (people) for the entire county because it was basically a wash."

Lance Beaty, a partner in Fort Smith-based FSM Redevelopment Partners and the owner of 71 South Liquor in Fort Smith until he sold the business in 2011, said while the number of permits is not increasing with the addition of the two new stores along the interstate, it would be still be good for customers in the Fort Smith region.

He said it could be a benefit for customers as the two retailers open the new locations and the retailers bring "margin compression" to the Fort Smith liquor market.

"You have three or four large retailers – the stores coming to Phoenix and Grand, 71 South and In Good Spirits – and there will be margin compressions as a result of (the two new stores coming in)," Beaty explained. "The winner in that market will be the store location that drives the greatest volume. That volume will allow that operator to negotiate substantial or as aggressive discounts from their distributor as possible. The difference between 50 cases or 300 cases is a big number," he said.

The margin compression, Beaty, said, would be nearly immediate in the market as the "new stores have grand openings and compete for that volume."

And even though the new stores could start a price war among the city's largest liquor retailers, he said in time much of the city's competition and pricing with alcohol and hard spirits will likely return to normal.

"Just like a restaurant around the holidays and grand openings, (these stores) will be new and different. And then after a few months people have to decide if they will drive across town to save 50 cents or $1 for a bottle of liquor. People settle back in over time."

The big difference, of course, between many Fort Smith stores and the two stores coming to Phoenix (owned by Leigh Ridge LLC) and Grand Avenue (owned by Jeff Frost) is each store's proximity to the interstate.

"There will be some difference based on the interstate and the shootout that will take place between those two stores, in my view," Beaty said, adding that the advantage could go to the Grand Avenue location which sits closer to the dry Crawford County and has easier access to I-540.

Langley added that for the time being, the reallocation or sale of permits is all that is likely to occur within the Fort Smith liquor market, adding that new permits could only come about based on population.

"You're at a number (in Fort Smith) close to where you should be. But if the population grows and demand grows, we'll issue more permits. … Economy and demand sets the market."

Nine lawyers carrying large files met with Benton County Circuit Judge John Scott on Wednesday afternoon (Sept. 18) to sort out the complex legal proceedings facing former Arvest banker Dennis Smiley, his wife and father Henry Dennis Smiley Sr.

Smiley was forced to retire as president of Arvest Bank-Benton County in March when possible loan fraud was discovered. Smiley reportedly borrowed an estimated $4.5 million from more than a dozen Arkansas banks dating back to 2009, according to Uniform Commercial Code filings with Arkansas Security of State.

Smiley Sr. has his retained his own legal counsel for the upcoming proceedings. His name was used in connection with loans made to his son without his knowledge or consent, according to statements made in previous court filings.

The combined repayment of loans sought in the open civil cases against Dennis Smiley and his business interests exceed $1.063 million.

No one from the Smiley family was present at the proceedings.

Judge Scott heard from each of the lawyers in the six pending complaints against Smiley and his business interests with another lawsuit being added after Community First Bank of Harrison filed Wednesday against Smiley for thee delinquent unsecured loans totaling more than $118,200.

Judge Scott asked the counsel present at Wednesday’s hearing if there were any other outstanding civil claims against Smiley to which counsel said there’s still the pending case by Signature Bank in Washington County over $448,997 owed on three loans in default.

“We’ll let them handle that one,” Scott answered.

He polled each of lawyers there representing the open cases against Smiley and his business interests sharing with them the possible open dates on his docket for trials to resolve these matters. He said given the time needed for adequate discovery the earliest any of the cases would likely be heard will be the spring of 2015. Exact trial dates will be set in the next two weeks, he said.

Following are cases related to the Smiley issue.

Case No. 2014-454
Arvest interpleading with 21 banks over Smiley’s retirement funds pledged as collateral. Judge Scott ordered the dismissal of this case on Monday (Sept. 16) as all but two of the banks named reached an out-of-court settlement. Signature Bank and First State Bank of DeQueen did not settle.

Case No. 2014-415
Delta Trust Bank versus HDS Holdings, Smiley Jr. and Smiley Sr. over unpaid loans of $245,126. Counsel for Smiley Sr., told the court they had requested a handwriting expert and issued hundreds of subpoenas in preparation of a jury trial which could be wrapped in two days.

Case No. 2014-524
Simmons First Bank is suing Henry Smiley Sr. for loans made HDS Holdings. The bank’s claim is $84,816 and accruing. Simmons and the plaintiffs counsel have requested a jury trial with a handwriting expert. They believe the trial can be completed in two days.

Case No. 2014-573
First Federal Bank is suing HDH Holdings, H. Dennis Smiley Jr. and Henry Dennis Smiley Sr. and the family revocable trust. The amounts outstanding on two loans exceed $70,000. The bank requested a two-day jury trial to resolve this matter.

Case No. 2014-522
First State Bank (Lonoke) is suing Henry Dennis Smiley Jr., Cynthia Smiley and Design for the Home. The bank’s complaint shows the defendants are delinquent on three loans totaling more than $159,000. The bank’s lawyer did not request a jury trial and said the case would could likely be wrapped up in one day.

Case No. 2014-1177
Arvest Bank is suing HDS Holdings, Henry Dennis Smiley Sr., Dennis Smiley Jr. as trustee of the family trust. The bank asked the court for judgments against Smiley Sr., HDS Holdings and the Henry Dennis Smiley Revocable Trust totaling $386,254.27 from unpaid loans made between December 2009 and February 2014, less than a month before Smiley Jr.‘s resignation. Arvest’s counsel did not request a jury trial.

The bank made or extended eight loans totaling nearly $500,000 to the plaintiffs over a four year period as follows:

Case No. 2014-1288
Community First Bank is suing Design for the Home, Dennis Smith Jr. and wife Cynthia. The bank’s complaint shows the defendants owing on three loans totaling $118,200 with interest accruing. The suit was filed Wednesday and Judge Scott said he will review it and contact the defendant for a trial date in the next two weeks.

The pending foreclosure compliant filed by First Security Bank, with Arvest and Benefit Bank as co-defendants was resolved prior to Wednesday’s hearing. A filing on Sept. 9 indicated Smiley had resolved the foreclosure action. The court dismissed the foreclosure order on Sept 10.

FCRA Executive Director Ivy Owen is pushing a commercial property plan for land in the area between the planned $30 million ArcBest corporate headquarters and the planned $31 million osteopathic medical school.

According to Owen, the proposal to develop plats of land provides more control over the type of developments that could ultimately make a home in the area between the two large campuses. Owen presented his plan during Thursday's (Sept. 18) Fort Chaffee Redevelopment Authority Board of Trustees meeting.

The plan, at this point, is to focus plat development on commercial and retail spaces, he said, adding that some mixed use development could also be included.

Beyond being able to guide the type of development that would ultimately take place in the area, Fort Smith Mayor Sandy Sanders noted that it would also allow the city to better plan infrastructure investment in the as of yet undeveloped land between the school and corporate headquarters.

"If we can establish what is going to be in different areas, we don't wind up with changes at the last minute. We may build a 36-inch water line with the land use, where it normally needs a smaller one. Then we've embedded a lot of investment that isn't going to be used. So if we can really pretty much tie down what the developmental areas are going to contain, then as we continue to invest infrastructure we have a better idea of what (infrastructure investment the city should make)."

The move to designated plats for development comes nearly three months to the day after Owen said FCRA was transitioning to 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," Owen said in June. "We've sold a lot of large tracts and because of that, we now have a lot of smaller, specialized pieces of property."

In other business, the board was told that a "gustnado" that made its way through Chaffee Crossing in July was responsible for more than $2 million in insurable reimbursements.

According to FCRA Director of Operations Larry Evans, final figures from First Western Insurance showed that 51 buildings at Chaffee received some sort of damage during the storm. The damage to the 51 buildings totaled $1.5 million, while costs for cleanup and other items brought the total insurance payout for FCRA to $2.085 million.

Evans said a total of five buildings were destroyed in the storm and damage to other buildings is in the process of being repaired. Repairs will first take place on occupied buildings, he said, adding that unoccupied buildings would be repaired last.

The buildings damaged in the storm were former military buildings originally functioning as warehouses and other uses, but have since been leased by the FCRA to tenants for a variety of business purposes, including a tent repair business. Tenants of the five destroyed buildings have relocated to other available structures at Chaffee with the exception of one company that relocated away from the former U.S. Army base.

Cleanup from the storm is 99% complete, Evans said, meaning the Redevelopment Authority can move forward with repairs. A check for $750,000 to help get repairs moving was scheduled to arrive this week, though Evans noted with one day left in the week the check from First Western Insurance had not yet arrived at the FCRA offices.

The FCRA board also heard from Richard Meers, outside design coordinator for the Vietnam Veterans Chapter 467 group which is in the planning stages of a museum about the Vietnam War in the Chaffee Crossing historic district. Meers' presentation provided design concepts of what the group would like to see included in its museum, though cost estimates are not yet known.

CVS Health will open the first two of four planned western Arkansas pharmacies on Sept. 21 in Van Buren and Oct. 12 in Bella Vista, according to Michael DeAngelis, spokesman for the Rhode Island-based retailer.

He said the stores under construction in Fayetteville and Springdale are slated for completion in mid-November and mid-2015, respectively.

“Our stores employ approximately 20 people each. These stores will not have walk-in clinics,” DeAngelis said.

He said the chain typically works with local non-profits throughout the year to help fund certain projects. DeAnglelis had no details of any charitable donations being made locally at this time. 

The local store sites were chosen by CVS to be on major traffic thoroughfares, often only a short distance from their largest competitor, Walgreens. City permits show the local CVS stores to average 13,225 square feet at a cost of roughly $2 million per location, excluding land costs. In each of the locations property was purchased and structures torn down before the new store construction could begin.

SHOPPER OPINIONS
Kathleen Campanirio, a loyal CVS shopper in Massachusetts and Florida, told The City Wire that she’s a fan and has used virtually all of their services at one time or another.

“I am a big shopper of CVS using rewards and saving loads of money. I also buy their vitamins and other products and use the MinuteClinic for flu shots,” said Campanirio, a retired nurse.

David Reese, a retired real estate executive in East Texas, said CVS is a lot like Walgreens and in the Dallas Metroplex the two chains are most often side-by-side. Karen Hart, a banking professional in the Dallas area, said the CVS store is the same as Walgreens but she has not had good luck with the pharmacy, ranking it among the worst she has used.

None of those interviewed by The City Wire were concerned about CVS no longer selling tobacco.

TOBACCO FREE
Over the last five years, CVS claims to have gained significant share over its competitors in the overall retail market. It accounts for more than one in every five prescriptions filled in the U.S., according to company reports.

Analysts said CVS has been able to retain a high percentage of Walgreen customers it captured during the Walgreen-Express Scripts dispute in 2012. Wall Street analysts praised the chain’s MinuteClinic expansion earlier this year.

CVS, the second largest pharmacy chain behind Walgreens, recently made headlines when it announced it would no longer sell tobacco products because such sales sent a conflicting message to consumers given the retailer’s mission to promote health. As of Sept. 3 the chain has been tobacco free, clearing all of its shelves and no longer selling tobacco products. 

“When we first shared our decision to remove cigarettes and tobacco from the shelves of our 7,700 CVS/pharmacy locations, some called it a bold decision. We called it the right decision then and we call it the right decision now,” CVS CEO Larry Merlo said in a Sept. 3 announcement.

The company forecast the loss in tobacco-related revenue at $2 billion for the year, but it did not reduce its earnings forecast.

FINANCIAL PERFORMANCE
CVS has posted strong sales growth through the first half of this year. The retailer reported second quarter sales ending June 30 of $34.6 billion, up 10.7% from the year-ago period. For the first half of this year CVS sales revenue was $67.29 billion, up 11.7% from the same period in 2013.

In the retail front-of-the-store, the comp sales decreased by 0.4% and 2.1% for the three and six months ended June 30, 2014, respectively, compared to the prior year. Like most other retailers CVS blamed the decrease in store traffic to inclement weather throughout the long winter.

The company said back-of-the-store pharmacy sales for the six months ended June 30 were negatively impacted by a lower incidence of flu compared to last year's strong flu season and extreme weather conditions across much of the United States in the first quarter, which led to fewer physician visits and prescriptions written. 

As of June 30  CVS operated 7,705 retail drugstores. Store counts rose by 2% or 152 stores year-over-year.

Severance tax collections in Arkansas reached an all-time high of $77.3 million in fiscal 2014, pushed upward by stronger natural gas prices and better drilling techniques and production at the wellhead, industry experts say.

For the fiscal year ended June 30, 2014, gross natural gas severance tax revenue were up more than 50% from $50.6 million for fiscal 2013, according to tax data compiled by the Revenue Division of the Arkansas Department of Finance & Administration.

At the same time, collections of $8.44 million in July, the beginning of fiscal 2015, put the state on track to top $100 million for the first time since the state began keeping such records.

J. Kelly Robbins, executive vice president of the Arkansas Independent Productions and Royalty Owners (AIPRO), said he was excited to see record collections in fiscal 2014 after “several flat years.”

“There are a number of variables and reasons that we are seeing severance tax collection at an all-time high, but things started to turn around after the price of natural gas stopped bleeding,” Robbins said.

Officially, the fiscal year for the state of Arkansas begins on July 1 and ends on June 30. In fiscal 2014, the highest monthly severance tax collection occurred in April, when state severance tax coffers brought in $9.1 million.

According to Tom Atchley, DF&A’s excise tax administrator, severance tax amounts reported by the state’s Revenue Office are based on the “revenue month, not the report month.” For example, tax payments received in July may not be due until August.

In 2009, the Arkansas Legislature raised the levy on natural gas production, applying tax rates of 1.25%, 1.5%, and 5.0% depending on the well classification by the Arkansas Oil and Gas Commission. That means wells drilled when the Fayetteville Shale was booming are no longer “new,” Robbins said, and are now being taxed at the maximum five percent rate. Once extracted from the well, tax is collected from producers based on the current market value of gas sold. 

The record tax bounty for fiscal 2014 halts a three-year decline that began in fiscal 2011, when natural gas futures began a long slide and bottomed out in April 2012 as prices fell below $2 per million British thermal units (MMBtu). On Thursday, the contract prices for natural gas closed on the New York Mercantile Exchange at $4.013 per MMBtu.

‘SPACE-AGE’ DRILLING
Besides higher and more stable prices, the severance tax bounty in Arkansas and other energy-producing states like Pennsylvania, Texas and Colorado is also largely driven by so-called “fracking” and other advanced horizontal drilling techniques now widely available in most U.S. oil and gas shale plays, industry experts say.

For instance, Fayetteville Shale leader Southwestern Energy placed 147 new wells into production in the Arkansas play in the second quarter, resulting in net gas production of 124 billion cubic feet (Bcf) in the second quarter of 2014, compared to 121 Bcf a year ago. Gross operated gas production in the Fayetteville Shale was nearly 2,073 million cubic feet (MMcf ) per day at June 30, 2014.

“Our results this quarter are helping to pave the way for another record year in 2014,” Southwestern CEO Steve Mueller said after the Houston-based oil and gas giant released its second quarter earnings on July 31. “Our production grew 18% and our wells in both the Fayetteville and Marcellus projects continue to perform better than expected.” 

Today, Robbins said, the oil and gas industry’s capital-intensive upstream sector is built on improved science and futuristic exploration and production techniques that have lessened the country’s dependence on foreign energy sources from places like Iran, Saudi Arabia and Venezuela.

“It is literally almost space-age, NASA-type of exploration,” Robbin’s said of the industry’s multi-well drilling pads. “With every well that is drilled, the producers gain more knowledge on how to extract these valuable resources that fuel our economy.  And as they drill more in a particular area or play, they are able to do it quicker and more efficiently.”

For instance, Southwestern placed 26 operated wells into production with an average drilling time of five days or less in the second quarter, something almost unheard only a few years ago when average well drilling times often exceeded 20 or more days, Robbins said.

ARKANSAS RIG COUNT DECLINES
Consequently, the industry’s sophisticated drilling expertise has also led to the decline in the number of drilling rigs needed to extract natural gas from the shale rock and ship it to market. For instance, there were 338 rotary rigs drilling for natural gas in the U.S. this week, down from 401 rigs operating during the same period a year ago, according to Baker Hughes’ weekly rig count.

According to a recent report by the U.S. Energy Information Administration, the number of gas-oriented drilling rigs in a particular region has long been a common predictor of natural gas production in the past. 

Not anymore.

“Technological advances have led the way to the widespread use of new oil and natural gas extraction techniques that have opened up a hydrocarbon resource base dramatically larger than previous estimates,” the EIA report concluded. “Because of these new methods of extraction, generally in wide use since 2007, natural gas production has steadily risen, while the number of active rigs characterized as targeting natural gas has fallen dramatically.”

In Arkansas, there are currently only a dozen drilling rigs exploring for natural gas, down from 13 operating rigs a year ago, Baker Hughes data shows. In the fall of 2011, when gas prices were nearing $3 per MMBtu, there were 33 rigs operating across the state of Arkansas, mainly in the Fayetteville Shale play.

Today, despite fewer drilling rigs, Arkansas is the nation’s ninth largest marketers of natural gas in the U.S. In 2012, Arkansas topped a trillion cubic feet (Tcf) of marketed natural gas production for the first time, joining powerhouse energy producing states like Texas, Wyoming, Oklahoma and Louisiana in the exclusive club.

Meanwhile, one of the unintended consequences of the improved techniques in the state’s now-mature Fayetteville Shale play is that fewer roustabouts, roughnecks and other blue collar rig hands are needed to man drilling pads. According to the most recent employment report from the state Department of Workforce Services (DWS), Arkansas’ natural gas and mining sector lost 1,000 jobs in 2013.

In 2011, there were 11,100 workers in the natural resources and mining sector. That number is now down to 9,700, the lowest level since 2007.

There an estimated 28,614 fewer Arkansans in the workforce and 8,434 fewer Arkansans employed in August compared to August 2013. The August jobless rate was 6.3%, up from 6.2% in July and lower than the 7.7% in August 2013.

The August numbers, released Friday (Sept. 19) by the U.S. Bureau of Labor Statistics, continue the trend of a declining workforce and a fewer employed Arkansans. The August report is subject to revision.

Arkansas’ labor force was an estimated 1.296 million in August, below the 1.298 million in July, and down 2.15% compared to 1.324 million in August 2013. There are 71,268 fewer Arkansans in the labor force compared to the peak (1.367 million) in May 2008, a decline of 5.2%.

The number of employed in Arkansas during August was 1.214 million, below July employment of 1.217 million, and down an estimated 8,434 jobs compared to August 2013.

The number of unemployed was an estimated 81,827 during August, up from the 81,094 in July, and well below the 102,007 in August 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%.

Despite the decline in the key labor figures, Arkansas’ tourism sector reached a new record for employment. Arkansas’ tourism sector (leisure & hospitality) employed 109,200 during August, up from 108,800 during July, and above the 105,000 during August 2013. Employment in this sector previously reached a high of 109,100 in March.

ARKANSAS SECTOR NUMBERS
In the Trade, Transportation and Utilities sector — Arkansas’ largest job sector — employment during August was an estimated 243,500, up from 242,300 in July and ahead of the 241,200 during August 2013. Employment in the sector hit a high of 251,800 in March 2007.

Manufacturing jobs in Arkansas during August totaled 155,600, unchanged compared to July and above the 151,900 in August 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 August was 214,800, down from 215,900 in July and below the 215,600 during August 2013.

The state’s Education and Health Services sector during August had 174,600 jobs, up from 174,200 during July and up from 171,600 during August 2013. Employment in the sector is up 22.2% compared to August 2004.

The construction sector employed an estimated 47,600 in August, up from 47,400 in July and above the 44,700 in August 2013. The sector is off the employment high of 57,600 reached in March 2007.

NATIONAL, REGIONAL DATA

The BLS report also noted that 45 states had unemployment rate decreases from a year earlier, three states had increases and two states had no change. The national jobless rate during August was 6.2%, and was down from the 7.3% in August 2013.

Georgia had the highest unemployment rate among the states in August at 8.1%. North Dakota again had the lowest jobless rate at 2.8%.

The August jobless rate in Oklahoma was 4.7%, up from 4.6% in July and down from 5.6% in August 2013.

Missouri’s jobless rate during August was 6.3%, down from 6.5% in July and down from 6.6% in August 2013.

He had not yet even spoke and already, the crowd was on their feet Friday night (Sept. 19) with a sustained applause that last so long, Bill Nye "The Science Guy" took out his smart phone and started to record the moment at Barnhill Arena.

Based on the crowd reaction to Nye and several interruptions of his speech for applause, it could be a safe to say that the University of Arkansas is in love with the man who brought science to life for a generation of children in the 1990s.

Nye, an Ivy League-educated mechanical engineer by trade and the current chief executive officer of the Planetary Society, brought a message that pushed the ideals of innovation, exploration and prevention in the rapidly changing world of science.

The former PBS host's speech as part of the university's Distinguished Lecture Series was wide ranging, but touched on the issues he said could make today's generation of students from primary to secondary levels is one that could "change the world.”

According to Nye, for American students to have a chance to change the world, the United States must be the leader in innovation.

"I think if the U.S. were taking actions, if the U.S. were more engaged and involved in making changes, then everybody in the world would be too," he said. "And I further claim that if we address climate change with public policies, that's one thing. But if we address it with innovation and conventions, techniques, doing more with less as I like to say, everyone else will want to follow the United States as people around the world have done the last couple hundred years.”

Nye pointed out that innovation keeps America "in the game" in an increasingly global economy, where the U.S. depends largely upon imports of clothes, household and manufactured goods.

A large part of Nye's program focused on exploration through the space program and spoke of how exploration can lead to innovation. He pointed to Mars rovers, which were not expected to be exploring for more than three months before losing battery life. Years later, he said some of the machines like the Curiosity Rover are still exploring the far-away planet more than a decade later and literally providing a view of the Martian landscape that at one time was inconceivable.

"Can you imagine buying a car with a three year warrantee and no oil changes, no brake pad changes, no greasing the door hinges and still running 120 years later? That's pretty good, right?”

Nye quoted the Copyright Clause in the Constitution that promotes the "progress of science and useful arts" when discussing what can truly set today's generation of students apart and how funding from Congress could impact the future of the human race in ways that private funding could not.

The engineer also touched on prevention, noting numerous incidents in which astroids have either hit the earth or come dangerously close, even within the last year in Russia. He cited the widely accepted theory that dinosaurs were made extinct due to a hit from an astroid off Mexico and said such an event could wipe out much of the world's population. Even without a mass killing of the human race, he said it would at the very least cause severe economic disruption.

"So I want you guys to deflect an astroid. You are the first generation of people who can do something about this. This is the only preventable natural disaster. And I'm not kidding," he said.

The way to do this, Nye said, could be either sending a rocket to space to push astroids nearing earth off track or creating a space exploration machine large enough to have its own gravitational pull to nudge the astroid onto a different path. The most logical solution, he said, was a series of lasers on small crafts that could be solar powered and used to push an astroid onto a different path. It is a plan being seriously explored by the Planetary Society lead by Nye.

And while he said this generation of humans is the first able to prevent at least one type of natural disaster, he noted with humor that the "Armageddon" plot that saw Bruce Willis' character traveling to an astroid to blow it up was not realistic.

"You don't want to just send Bruce Willis. He's an actor, for one. The other thing is you don't want to just blow it up because you may mess up and some pieces may come down even faster and make it worse. What you want to do it just give it a little nudge.”

Nye dove into the climate change debate and told the enthusiastic crowd that climate change is real and is happening at an escalating rate due to a thin atmosphere coupled with a world population approaching 7.2 billion people, more than doubling in Nye's lifetime.

He said the second big area where prevention could come into play is by addressing climate change in a meaningful way, noting that renewable energy is already a reality and available in areas like the four corners region, where a year's worth of sunlight over could produce enough electricity for the entire U.S. three times over or North Dakota, where wind energy in the state could provide the country a year's worth of electricity five times over.

Nye said the key in today's generation is finding a way to get the grid to be "smart," moving electricity to areas in a responsible manner.

"All of these technologies are just out of our reach, but the stuff that we have now is a huge start. We have the ability to do so much more with less.”

And that, he said, was "key" for a generation that has the ability to "change the world.”

Democrat Mike Ross and Republican Asa Hutchinson sat face to face across a table during a sometimes testy, occasionally snippy gubernatorial debate Friday night on KARK-TV that featured confrontations over policy issues, political ads and alleged personal attacks.

Hutchinson challenged Ross to definitively state his position on tax cuts. Hutchinson has proposed an immediate $100 million income tax cut for middle class Arkansans and challenged Ross to state when his tax cut would take effect. Ross said his larger tax cut would kick in as revenues became available.

Ross, who has expressed support for Arkansas’ Medicaid private option, challenged Hutchinson to definitively state his position on the issue. Hutchinson said the program’s costs required further study and that he would be in the better position among the two to negotiate with the Legislature on improving the program. He said Ross would have supported simply expanding Medicaid had he been governor.

The debate at times grew personal, and there was little amiable chatter before and after the debate and during the awkward commercial breaks.

Sparks flew when Ross complained about an ad produced by the Republican Governors Association criticizing him for profiting off the sale of a pharmacy. Ross said this was an attack on his wife, Holly, who managed the pharmacy and demanded an apology.

Hutchinson said he couldn’t control what the RGA does and denied making a personal attack.

Ross also criticized Hutchinson for voting against expanding pre-kindergarten classes while in Congress but proposing to fully fund the Arkansas Better Chance program for pre-K students from families making up to 200% of the federal poverty level. Ross wants to expand it over time to families making up to 400% of the level.

“I wish the real Asa Hutchinson would stand up,” Ross said.

The two also clashed when Hutchinson mentioned Ross’ votes for and against Nancy Pelosi as House speaker during Ross’ tenure in Congress. When Ross said he had made a speech for the Democratic candidate opposing Pelosi, Hutchinson replied, “Don’t get so defensive about your flip-flopping on Nancy Pelosi.”

Both men started the debate by sharing personal biographies – Ross being the son of two educators, Hutchinson hitchhiking to visit his girlfriend because he couldn’t afford both law school tuition and gas. These introductions did not include their years of service in Congress, though that did come up later.

Ross said he wanted to be the “education governor” and Hutchinson said he wanted to be the “jobs governor.” Hutchinson talked about his plan to provide computer science courses in high schools.

The candidates both expressed support for keeping the Quick Action Closing Fund used by the governor as a carrot to attract industry. Ross criticized Hutchinson for originally opposing it when he ran against Gov. Mike Beebe in 2006. Hutchinson said the fund needs to be more transparent.

Asked about Common Core, Hutchinson said his education commissioner would review the standards. Ross said he supported the concept of Common Core. Other issues discussed included the minimum wage increase (both of them said they support it) and the need for a new prison (both are looking for alternatives).

POST DEBATE RESPONSES
The two campaigns and a third party candidate for Governor, Libertarian Frank Gilbert, weighed in after the debate ended. Both Ross and Hutchinson claimed victories.

“Asa spent his allotted time sharing his 6-point plan to create jobs, to lower income taxes for middle class families and to grow the state’s economy. He also emphasized his plan to make computer science and coding classes available to every student in every Arkansas high school, which has the potential to create even more jobs in one of the fastest growing industries in the country,” a Hutchinson press release said. “Mr. Ross spent the majority of his time attacking Asa, not the issues.”

“Tonight, Arkansas voters saw two very different candidates. With Asa Hutchinson, voters saw a clear vision for our state’s future, and they heard a real plan that will actually work for all Arkansans. In Mike Ross, voters saw a candidate with no real plan, who continues to offer up the same empty promises we’ve seen throughout his campaign,” said Hutchinson campaign manager Jon Gilmore.

“Simply put, Arkansans were presented with a clear contrast in candidates this evening: Asa Hutchinson attacks the issues, while Mike Ross just attacks,” he added.

The Ross campaign countered.

“In the first live, televised debate between gubernatorial nominees Mike Ross and Asa Hutchinson, Mike Ross’s small-town Arkansas values stood in sharp contrast to Congressman Hutchinson’s career as a Washington bureaucrat and lobbyist that put him squarely out of touch with Arkansas. Ross pledged to continue and build on the jobs and economic progress of Governor Mike Beebe that Hutchinson has repeatedly criticized,” the Ross campaign said in a statement.

“Congressman Hutchinson continued his out of touch Washington double-speak, even refusing to take a firm position on whether he would continue the health care ‘private option’ in Arkansas, despite having previously opposed it. And, despite voting against raising the minimum wage multiple times in Congress, he flip-flopped on his previous opposition to the effort to raise the state’s minimum wage,” the Ross release asserted.

Libertarian Frank Gilbert criticized being left out of the televised debate.

“The so-called news media that did this should be ashamed. Presenting only views you prefer or believe are more popular, is not appropriate,” said Gilbert.

He criticized Hutchinson’s tax cut plan saying he wanted to go further in eliminating the state income tax. Gilbert called Ross’ education goals “laughable” and said more competition was need in public education.

“Unfortunately, much of the debate time was spent bickering over silly personal attacks,” Gilbert said. “The voters of Arkansas deserve better. Unfortunately neither the old parties nor the television community are providing it.”