The Illinois River Watershed Partnership will plant native trees along creeks and streams in the Illinois River Watershed of Northwest Arkansas as part of its annual riparian project slated for 9 a.m. on Saturday, March 7. Volunteers are needed to help plant trees and pick up litter at seven trailhead locations in Benton and Washington counties.

The Arkansas and Oklahoma forestry commissions are providing the trees, which create natural riparian buffers protecting the Illinois River and its tributaries against stormwater runoff and other land-use impacts. Volunteers may help at any of these trailhead locations:
• Enfield Trail, Bentonville, Parking at Tiger Boulevard/Northeast “A” Street
• Turtle Creek, Rogers, Parking at Oakdale Middle School
• Brush Creek, Springdale, Parking at Brush Creek Golf Pro Shop
• Spring Creek, Springdale, Parking at AQ Outback
• Sager Creek, Siloam Springs, Parking at Siloam Springs High School
• Mud/Scull Creek, Fayetteville, Parking at Academy Sports
• Illinois River, Prairie Grove, Joe Hall’s Farm at Bethel Blacktop Road

For a map of the locations click here.

Snacks and drinks will be provided during the event. For more information, contact Becky Roark, Illinois River Watershed Partnership resource specialist, at (479) 215-6623.

It’s been 10 years in the making but the University of Arkansas Division of Agriculture announced plans for a new $16.3 million research center made possible by a $5 million donation from the Tyson Family and Tyson Foods. The building will be named after poultry pioneer Don Tyson who ran Tyson Foods for more nearly five decades prior to his death in January 2011.

The formal announcement was made Monday (March 2) at the site where the new 60,000-square-foot building will soon be built. The site is adjacent  the Pauline Whitaker Equine Center on Garland Avenue on the UA campus in Fayetteville. The building will feature high-tech agriculture research laboratories that will advance plant and animal studies as well as the water quality and watershed sustainability, said Mark Cochran, vice president for agriculture at the UA Division of Agriculture. The new research center will better help researchers create healthier, better and more efficient ways for growing crops, raising animals, producing food and protecting the state’s natural resources, he added.

The division has been part of the university for 125 years.

The rest of the funds are to come from a decade of saving by the Division of Agriculture,  according to Mark Scott, chief communications officer for the UA System Division of Agriculture.

“Having this new Agricultural Research Center named after dad (Don Tyson) is pretty special for our family. He loved the university and Arkansas agriculture,” John Tyson, chairman of Tyson Foods, told The City Wire after the event. “Dad’s involvement and commitment to agriculture in Arkansas is legendary. It’s an honor for our family and company to partner with the UA System Division of Agriculture on this project. The research and other work that will take place in this building and on the surrounding farm will be vitally important in helping secure the future of agriculture and agri-business in our state for generations to come.”

UA System President Donald Bobbitt said the gift will solidify the UA Division’s efforts for future generation and will allow for the further enhancement of agriculture in the state.  Bobbitt said the UA System Board of Trustees approved the Division of Agriculture’s request for a new facility in September. The board hired WER Architects and Nabholz Construction for design and construction.

Former U.S. Sen. David Pryor, board trustee for the UA System, was among the board members attending Monday’s announcement. Pryor spoke about giving nature of Don Tyson and the entire Tyson family toward the University over the years. He also credited Mark Simmons and others in the room who continue to work with the University Division of Agriculture in areas like poultry genetics, feed enhancements and animal welfare issues.

“Don Tyson never forgot his roots and though he could have built his company and lived anywhere in the world, he did so here, and Springdale, Northwest Arkansas and Arkansas are all better for it,”  Pryor said.

This particular gift was to the UA System, not the University of Arkansas. But you don’t have to look far on the UA campus to see the influence of the Tyson Family. The Randall Tyson Track Center was named after Don Tyson’s brother Randall, whose widow Barbara Tyson attended Monday’s press conference. Barbara Tyson is a long-time board member at Tyson Foods.

The John W. Tyson Building dedicated in 1995 as the Center of Excellence for Poultry Sciences was named after Tyson Foods founder. Then in 2011, the Tyson Family Foundation gave $2.5 million toward the Jean Tyson Child Development Study Center on the UA campus.

“The Jean Tyson Child Development Study Center was another special and fitting way for us to give back. We know how important child development is for all future generations,” John Tyson told The City Wire following announcement presentation.

Ironically, Don Tyson never completed his degree from the University of Arkansas. He was called away from his studies at UA in 1952 during his senior year to help run the company with his dad. He was eager to jump into the business with his dad who had just added a hatchery and feed mill so he could integrate the business, which has become standard practice in the industry today.

There’s no shortage of work for construction crews in Northwest Arkansas as local residential and commercial construction projects continue to pop up in the region.

New construction permits issued in January among the four largest cities totaled $36.235 million which consisted of 60% new home starts and the balance in commercial projects. However, the overall tally in January 2014 was $46.078 million, thanks to a unique $20.3 million project permitted in downtown Bentonville during 2014.

Residential permits rose to 87 new starts, up from 70 a year ago. Permit values also increased by 80% from the $20.119 million reported in January 2014. The residential permit values were also up significantly from the $20.888 million reported in January 2014 for the combined cities of Fayetteville, Springdale, Bentonville and Rogers.

Bentonville’s housing market shows the most activity last month as the city issued 36 new permits with a value of $10.337 million, up compared to 28 permits worth $8.914 million a year ago. The average permit value for the homes was $288,273 in January, the highest average among the four cities in this report.

Residential building in Rogers rose sharply from a year ago as the city issued 28 permits worth $5.245 million. This increased more than three-fold from the $1.056 million value and five permits issued a year ago. The average new home permit valuation in Rogers was $187,357, 53% less than in neighboring Bentonville.

Residential construction in Washington County slowed against last year with most of the gap being in Fayetteville. The city issued 10 permits in January that were valued at $2.401 million, down 53% from a year ago. The city of Fayetteville saw a 4% dip in new residential building permits for last year. City officials recently told The City Wire that there are three new residential developments in the planning process which will make more lots available later this year and in early 2016. 

In Springdale, builders got 13 permits for new home starts in January, down compared to 19 permits issued a year ago. The permits valuations slid 25% to $3.722 million in January. The average price of new home construction was $286,307 in January, this was 20% more expensive that neighboring Fayetteville and 52% higher than in Rogers.

Commercial building from medical clinics to retail sites with a smattering of public building projects were begun in January among the four cities. New commercial permits totaled $14.488 million in January.

Permit values were down from the $25.968 million reported a year ago which were lifted higher by the $20.356 million Midtown Center just off the Bentonville Square that was permitted last year. The Midtown Center Multi-Use project is still under construction and slated to open later this year. The Walton family project will feature a Neighborhood Market, which will anchor the center.

NEW COMMERCIAL VALUES
• Bentonville: $7.316 million
• Fayetteville: $900,000
• Rogers: $3.629 million
• Springdale: $2.643 million

In January, the largest permit $7.251 million was issued to the Benton County Sunshine School in Bentonville. Other sizable commercial permits were issued for the following:
• Fayetteville: $900,000 mixed use space — 525 W. Willoughby Road
• Rogers: $1.591 million — JoAnn Fabrics — 206 Promenade Blvd.
• Rogers: $800,000 — Med Express — 1900 W. Walnut
• Rogers: $543,000 — Aspen Dental — 3920 W. Walnut
• Springdale: $1.3 million — Cassady Clinic — 956 Mathias Dr.
• Springdale: $962,236 — Springdale Schools — 110 N. Pleasant St.

Sparks’ Central Mall clinic has moved to 5428 Ellsworth Road, which is just across Waldron Road from Central Mall. The clinic opened Monday (March 2).

Drs. Lamar Kyle, Karen Merle, Von Phomakay, and Roy Russell, will continue to provide care for walk-in patients and those seeking medical attention for non-emergency illnesses and injuries. The clinic will also offer flu shots, influenza testing, X-ray and lab services.

The clinic will have the same extended hours of 8 a.m. to 7 p.m. Monday through Friday, 9 a.m. to 5 p.m. on Saturday and 1 to 6 p.m. on Sunday.

Sparks Health System includes Sparks Regional Medical Center, Sparks Medical Center – Van Buren, Sparks Clinic, Sparks PremierCare and the fully hospital-integrated Marvin Altman Fitness Center.

Even with a 3% decline in tonnage shipped on the Arkansas River in 2014, the 445-mile system has been upgraded by the U.S. Corps of Engineers from a moderate use to a high-use system. River port operator Marty Shell says the upgrade should bolster the argument for more federal investment in the navigable waterway.

The upgrade was made public Monday (March 2) by the Arkansas Waterways Commission. The Commission statement said the Corps upgrades a waterway to high-use when it carries more than 10 million tons and more than $3 billion “ton-miles” of commodities in a year. The Commission said the waterway has a $1.3 billion annual economic impact on Arkansas’ economy. The river system is 445 miles long and stretches from the confluence of the Mississippi River to the Port of Catoosa near Tulsa, Okla. The controlled waterway has 18 locks and dams, with 13 in Arkansas and five in Oklahoma.

The U.S. Corps of Engineers reported in early January that 11.719 million tons floated up and down the McClellan-Kerr Arkansas River Navigation System in 2014, down from the 12.139 million in 2013 but better than the 11.687 million in 2012 and the 10.6 million in 2011.

However, three sectors often connected to economic growth saw gains. There were 3.094 million tons of sand, gravel and rock shipped on the river, up 12%; 1.659 million tons of iron and steel products, up 15%; and 461,980 tons of minerals and building materials, up 7%. The iron and steel products are inbound shipments that typically go to manufacturing operations. Iron, sand, gravel, and minerals are classified as inbound shipments. Such shipments totaled 4.676 million tons in 2014, up 11%.

Marty Shell, owner of Van Buren-based Five Rivers Distribution which operates port facilities in Van Buren and Fort Smith, said years of investments and lobbying by port operators has helped improve activity on the river. That activity, he said, helped contribute to the upgrade.

“I think it’s due to the investment and hard work from the operators up and down the system. We go to D.C. and Little Rock several times every year to let the Corps and our Legislators understand that this river is an economic tool and has an economic impact for Arkansas and the state of Oklahoma,” Shell told The City Wire.

Shell said the upgrade could have two positive outcomes.
‘
“The Corps budget is continually being reduced ... and they are under pressure to close locks or cut back operations. So for us to be a high use system, that means we have safeguarded ourselves, I would think, against some of those future cuts,” Shell said.

The other outcome is that higher use should result in higher funding priorities for projects to “keep our infrastructure at its best performance,” Shell said.

He also praised Arkansas’ Congressional delegation and local legislators for constant support, citing specifically U.S. Sen. John Boozman, R-Ark., and state Sen. Jake Files, R-Fort Smith.

Gene Higginbotham, executive director of the Arkansas Waterways Commission, said the Arkansas River system still has room for growth.

“Currently, Arkansas has the distinction of being 3rd in the nation in the number of river miles, but 32nd in tonnage transported,” Higginbotham noted in the statement. “Our state has tremendous economic development opportunities in using the MKARNS to its capacity.”

Higginbotham said the upgrade follows approval to fund the “Three Rivers Study.” That $3 million study is needed to determine how best to protect the waterway where the system connects with the Mississippi River.

"There’s an issue where the White River is trying to cut through to the lower Arkansas River," which is an area that is not navigable, Higginbotham said in this report with the University of Arkansas at Little Rock public radio. "The (U.S. Army) Corps of Engineers has basically been putting band aids on it every year and we’re looking for a permanent solution. If the White River ever manages to cut through, we would lose navigation on the Arkansas River system for probably close to a year."

Early indications from inside Cuba show Amazon could beat other retailers like Wal-Mart into this untapped market.

While there is plenty of speculation that Wal-Mart executives in Bentonville are angling for a Cuban retail connection, Reuters reports Amazon.com has laid the groundwork to ship packages there.

A "ship to Cuba" button was seen on Monday (March 2) on Amazon's website by Reuters correspondents in Havana. But the option does not appear to work and reporters got an error message when they tried to order an item and ship it to Cuba, Reuters reports.

"Due to export controls and economic sanctions laws and regulations, we are unable to process transactions from your current location," Amazon said in the message.

It’s been just three months since President Barrack Obama vowed to restore diplomatic ties with Cuba and officials from the countries have held two rounds of talks since that Dec. 17 announcement.

Amazon.com has not publicly acknowledged its plans to enter Cuba, but CEO Jeff Bezos does have family ties to Cuba as his adoptive father Miguel Bezos immigrated to the U.S. from Cuba at age 15 working his way through college to become an engineer for Exxon, according to Wikipedia.com.

While Cuba is enticing for retailers, experts said it won’t be an easy row to hoe.

“Cuba is a complicated and volatile market, yet (President) Obama’s recent decision to open diplomatic relations might pave the way for opportunity,” said Carol Spieckerman, CEO of newmarketbuilders in Bentonville.

She sees plenty of opportunity in Cuba for retailers given the native population and the one million plus Canadian tourists who visit there annually. But Spieckerman doesn’t think retailers will initially win Cuba with digital sales given that internet connectivity is spare and expensive.

“Cuba would not qualify as a market that Wal-Mart (and retailers) could effectively address digitally, at least for the short term, so (physical) stores would be the answer,” Spieckerman said.

A crowd of about 250 gathered on a cold, damp and muddy Tuesday morning (March 3) to attend a groundbreaking ceremony for $31 million Arkansas College of Osteopathic Medicine. The event morphed into a quasi-pep rally with a hint of a tent revival.

The new college, first announced in December 2013. is part of the Arkansas Colleges of Health Education to be based at Chaffee Crossing (Fort Smith).

The osteopathic school will be housed in a three story, 102,000-square-foot building valued at more than $31 million. A fully operational osteopathic college is expected to serve about 600 students, and employ around 65 (full-time equivalent jobs) with an average salary of $103,000. That impact does not include adjunct professors that will be needed for the school. The school is located on Chaffee Crossing land (200 acres) donated by the Fort Chaffee Redevelopment Authority.

Construction pads are finished on 27 acres in preparation for present and future construction, and the college has hired 13 employees, including senior staff.

Revenue from the 2009 purchase of Fort Smith-based Sparks Health System is being used to build and operate the planned college. When Naples, Fla.-based Health Management Associates (HMA) acquired Sparks in a deal valued at $138 million, part of the money was used to create the Fort Smith Regional Healthcare Foundation, which became The Degen Foundation.

MOVING THE ECONOMIC NEEDLE
John Taylor, board chairman of the Arkansas Colleges of Health Education and a former board member of Sparks Health System before it was acquired by HMA, said at the groundbreaking that the new college and its potential emerged from what was once dire financial circumstances at Sparks. He told the crowd that the hospital in 2008 and 2009 was “starting straight into the face of insolvency,” and struggling to recover in a regional economy that had suffered “devastating blows” from jobs losses in the manufacturing sector and other areas.

Indeed, the number of employed in the metro area in December (118,635) is down 10.8% compared to the high of 133,061 in June 2006 – or 14,426 fewer jobs than the peak metro employment.

Continuing, Taylor said many people gave up on Fort Smith and he admitted a resentment for those who did so – specifically citing the television stations who moved their news operations to Northwest Arkansas. Taylor’s admonition drew laughter and applause from the crowd.

But he said the Sparks board pushed through and was able to secure a deal that, while resulting in the loss of local control of a hospital, saved the hospital system, saved jobs and resulted in the $60 million pool of funds that has helped birth the osteopathic college.

As he and many others have in the previous remarks, Taylor again credited former Sparks board member Jim Walcott for challenging the board to do something big with the $60 million. Taylor reminded the crowd that Walcott did not want to “nibble around the edges,” argued that the board “move the needle.”

“And now things look a lot different than they did five-and-a-half years ago,” Taylor said, adding that the new school and future additions will “change the diversity of our economic portfolio” in the Fort Smith region.

Pressing that point, Taylor said the osteopathic college completion is not the end of the vision. With a nod in advance to his bad grammar, he said the community should know that “It ain’t done yet,” when the osteopathic college is up and open.

HELPING WITH A ‘MEDICAL CRISIS’
Kyle Parker, president and CEO of the Arkansas Colleges of Health Education, praised a long list of individuals and organizations who made the college possible. He read a quote from the Degen Foundation website: “We have all drunk from wells we did not dig; we have been warmed by fires we did not build; we have sat in the shade of trees we did not plant; we are where we are because of what someone else did.”

In his remarks after Parker spoke, Taylor continued this theme, saying the college is “the effort of many” and not just a few people or a few boards. And in citing all the things that had to happen for the college to be a reality, Taylor also claimed the hand of Providence rather than believe in coincidence.

Parker has also said new college will help alleviate the U.S. physician shortage. He said there are about 3,000 applications for every opening in U.S. medical schools. He also said the country will have to produce more doctors to push back against a possible shortage of 140,000 doctors by 2030. That number could rise to 250,000 if the federal Affordable Health Care Act if fully implemented.

“We have a medical crisis on our hands,” Parker told the crowd, adding that the 150 students who will soon graduate each year will make a “small dent” in the problem, and that he hopes to “keep them all in the state of Arkansas.”

In addition to hospitals and clinics in the Fort Smith and Northwest Arkansas areas agreeing to support the college with residency programs, Parker said Tuesday that other hospitals in Arkansas signing on include Baptist Hospital in Little Rock, St. Vincent in Little Rock, and the White River Health System based in Batesville.

Taylor also said the osteopathic college will improve the quality of life in the region. He said more than 40 years ago when he first moved to Fort Smith the region was a “medical mecca,” but has lost its leadership in the area. The new college, he said, will help rebuild the regional medical sector.

The “Vendorville” ecosystem that has cropped up around Wal-Mart Stores Inc. continues to add jobs and positive contributions to the region and state’s economy. But, anywhere from 80 to 100 jobs remain unfilled at any given time, according to Cameron Smith, CEO of Cameron Smith & Associates of Rogers.

Corporate recruiters on Cameron Smith’s team describe the talent pool as “tight” despite consolidation of teams resulting from mergers taking place in the consumer packaged goods (CPG) sector such as Tyson Foods and Hillshire, and Heinz and 3G. 

The Tyson Foods and Hillshire merger likely had the biggest impact but General Mills had a significant restructure last year that cost between 5 to 10 local jobs, which was about 13% of their local team, according to Scott Crossett, partner and senior recruiter with Cameron Smith & Associates. He said the Heinz acquisition by 3G caused job displacement and Coca-Cola is going through a restructuring in the next couple of months. On the flip side, restructuring at Kimberly Clark brought a small team back to Northwest Arkansas.

KEEPING PACE 
The recruitment experts said these shifts in local numbers are nothing new, but overall the number of jobs in the local sector continue to increase as many of the teams are adding positions to keep up with changes at Wal-Mart.

“Some supplier teams have expanded their local organizational structures in the past year bringing shopper marketing in-house and adding small format specialists to their teams,” said Denise Natishan, senior partner at Cameron Smith & Associates. “The small format is brilliant on Wal-Mart’s part and suppliers are taking it very seriously because it affects shelf space and inventory replenishment changes.”

The recruitment experts estimate the local supplier jobs increased by 4% to 5% annually with the bulk of that being the growth in third-party service providers such as technology and data analytics firms. Atlas Technology Group for instance, expanded its staff from six to 42 employees over the past two years keeping pace with demand for analytical data and weather-related content desired by suppliers and retailers.

“This type of third party supplier growth is happening across the area and I expect it to continue throughout the next few years as real-time data collection for consumer marketing becomes more mainstream,” Smith said.

By some estimates the supplier, marketing, third-party service and packaging jobs account for as many of 15,000 jobs in Benton and Washington counties. The annual payrolls of these firms exceeds an estimated $1 billion, given the starting pay for college graduates is around $47,000 and top managers pull down a minimum six figure income, the recruiters said.

Smith said the growth in this sector prompted him to increase his staff by 5% over the past two years to 25 employees. His company revenues are also up 18% from a year ago.

CAPACITY CONSTRAINTS
Natishan said suppliers value professionals with astute Wal-Mart knowledge and there are opportunities to move up the ladder regardless of age as long as the employee brings knowledge and experience to the table. That said, Natishan said the team structures of many companies are somewhat siloed which means professionals may have to change companies if they want to move up to other roles.

For instance a small food company has a lean team of just six professionals, ranging from one director, two business managers, two customer service managers and one business analyst. 

Smith said when teams first locate to the region to do business with Wal-Mart they may only send one or two sales executives to lay the groundwork. Over time the new teams that do business with Wal-Mart will ramp up to at least six people, maybe more. The organizational chart for a typical CPG supplier of cleaning products or frozen foods is likely to have added at least one national account manager who works below the director, a supply chain manager and two shopper marketing managers in addition to the business analyst.

“There are plenty of one person teams calling on Wal-Mart. The account manager does all their own analytical work,” said Mike Whittington, senior partner at Cameron Smith & Associates. “Teams can range from one to 200 members.”

The smaller teams outsource some of their service needs to third party firms which also has helped fuel the demand for indirect suppliers.

Natishan said it’s easy to see that there are relatively few places to move up the chain within these tight organization structures, which is why there is frequent movement between suppliers for the average professional. It’s not uncommon to see recruits who locate to Northwest Arkansas with one company, jump ship two or three times to move up the ladder or sometimes just to remain in the region. Tim Marrin, associate director at Proctor & Gamble, has said getting people to relocate to Northwest Arkansas from Cincinnati used to be challenging but not nearly as hard as it was lure them back to the home office once they got acclimated to Fayetteville and the rest of Northwest Arkansas.

The medium to large teams working in the region typically have a minimum of four at the vice president level. There are an average of six senior directors ranging from insights to sales managers and sales directors. Teams also have at least two category managers and two category analysts in addition to six replenishment experts and six junior sales managers over specific geographic regions.

JOB CHURN
Crossett said there is a lot of churn in the category manager positions because because it's a growing discipline and there are less qualified candidates than other disciplines.

“There is a high burnout rate of job candidates in category managers who are wanting to get out and move into sales, Crossett said. 

He said the highest turnover position is in replenishment jobs – people who work with Wal-Mart to keep the shelves stocked. Crossett cites heightened expectations at Wal-Mart for “Must Arrive By Date” fines as the retailer is slowly rolling out its new “Global Replenishment System” program known as Retail Link 2.0. He said GRS has caused companies to become more demanding of their supply chain and replenishment employees.

Natishan said there has been more movement from Wal-Mart employees into supplier jobs in recent years, something once considered taboo. She said the larger teams are sensitive to recruiting from Wal-Mart’s talent pool but that’s usually not the case with smaller vendors. 

“The need is to hire the best for your best customer. It remains a candidate driven market. Having experience and understanding of knowledge gives a credibility that many younger candidates do not have,” Natishan said.

She said most of the candidates she places are sourced locally from the available talent pool. On occasion Natishan said she finds recruits elsewhere that have former Wal-Mart expertise, which is crucial to most every placement.

“There is some poaching by the request of the suppliers looking for talented candidates who are local,” senior recruiter Jim Mikula added.

The experts also said some companies steer away from hiring from the unemployed pool of applicants, which also keeps the talent pool tight. And that pool remains tight even with the NorthWest Arkansas Community College graduating about 50 each year through its Certified Retail Analysts program. The college said over the past 15 years it handed out 630 certificates to students who had an 87% job placement rate in the local supplier community.

UNIQUE MARKET
Smith said the local supplier community is unlike any other vender ecosystem in the world. Even though Wal-Mart does not require its suppliers to have an office in Bentonville all the major vendors do so because a significant amount of their business is with Wal-Mart.

Greg Foran CEO of Walmart U.S., told suppliers at the retailer’s Year Beginning Meetings in February that they needed to have their “best and brightest” talent calling on Wal-Mart. He said the retailer is looking to suppliers for shared innovations and insight and that will require the most talented professionals be seated at the table.

Smith said even though Wal-Mart has never demanded a local presence, the retailer’s buyers encourage it which has been enough motivation for many.

“Even though we have hundreds of teams represented in the region, we are not close to scratching the surface of Wal-Mart’s expansive global supplier network,” Smith said. 

He said suppliers tend to move to meet Wal-Mart’s latest initiative whatever it is, from selling more beer and wine to focusing on smaller formats. In 2013 when Wal-Mart made a conscious effort to sell more adult beverages, at least three liquor companies brought in local sales teams, creating more jobs in this region.

Whittington said even if no more new suppliers opt to move into Northwest Arkansas  the future for the supplier jobs market remains bright. With Wal-Mart developing more store formats, incorporating more e-commerce and digital services, revamping its replenishment system and wooing Millennials and Hispanics, the opportunities will continue to grow for suppliers and those who service the suppliers.

“It is a win-win for all of Northwest Arkansas,” he added.

Leaders from a recognition program saluting achievement in career and technical education presented honors to several Northwest Arkansas high school students on Feb. 26.

Five students were honored as the winners and honorable mention recipients of the Regional Student Career and Technical Leadership Award.

Mike Harvey of the Northwest Arkansas Council; Dr. Ricky Tompkins, vice president for learning at NorthWest Arkansas Community College; Cheryl Pickering of the Northwest Arkansas Education Service Cooperative; and Stephanie Trolinger, Northwest Technical Institute’s Secondary Career Center director, presented the program.

The top three students will receive $1,000 scholarships to NWACC or NTI to continue to advance their career and technical education skills. The award recipients were:

• Cody Casebeer, Siloam Springs High School, Computer Information Systems
• Kristien Nelson, Siloam Springs High School, Business
• Riley McGill, Rogers High School, Business

Honorable mention recipients were:
• Baylea Birchfield, Bentonville High School, Business
• Brianna Cazer, Elkins High School, Business.

Fayetteville-based BlueInGreen announced two signed agreements with partners to strengthen its representation in two states— HRM Environmental in Texas and Kappe Associates Inc. in Virginia.

Texas and Virginia have large economies and lots of business potential, according to the company. The United States Bureau of Economic Analysis ranks states by gross state product and Texas comes in number two and Virginia at number eleven.

“Our goal is to get our innovative technology to become the standard in water and wastewater treatment in the United States. In order to accomplish that goal, we need to be successful in Texas and Virginia. We believe aligning ourselves with HRM and Kappe places us in an excellent position in these two markets,” said BlueInGreen CEO Clete Brewer.

BlueInGreen has been represented in these states in the past with moderate success in both areas.

“HRM Environmental has represented BlueInGreen in the northern half of Texas since 2012. Their territory has been enlarged so that it encompasses the entire state of Texas. HRM has offices and manufacturer’s sales representatives in Austin, Dallas, Fort Worth, Houston and San Antonio,” said Vance Clement, vice president of sales and marketing at BlueInGreen.

Clement said HRM has been a source of many leads since the inception of their relationship, with several active projects in the bidding process with them in the northern half of Texas. Kappe was established in 1946 with corporate headquarters in Frederick, MD. The company maintains sales personnel in Delaware, Maryland, New Jersey, Pennsylvania, Virginia, and West Virginia, but will represent BlueInGreen only in the state of Virginia with three manufacturer’s sales representatives.

“When we first saw the BlueInGreen technology, we immediately liked it, saw its potential and know that there are many applications for it in Virginia,” said Chad Fenstemaker, president of Kappe,

The $23 million expansion of the Walton Arts Center in downtown Fayetteville got a booster shot from the Walton Family Foundation who pledged a $5 million challenge grant in support of the project.

The $23 million campaign will add 30,000 square feet of space, including a new and expanded atrium lobby that connects to Dickson Street, significant renovations and expansion of Starr Theater, expanded space for back of house technical and theatrical equipment, and new administrative offices. These enhancements will modernize the facility and create a destination for more arts, special events, community gatherings and educational programming in the Fayetteville facility.
 
The Dickson Street renovation is slated for completion by the fall of 2016. Heavy construction of the main lobby and Starr Theater will occur during the off-peak summer months of 2015 and 2016 to minimize the impact on regular programming and ensure the arts center has a full season.
 
"We are honored to receive a $5 million challenge grant from the Walton Family Foundation,” said Peter B. Lane, president and CEO of Walton Arts Center.” The Foundation’s participation in this capital campaign represents a strong vote of confidence in our future in Fayetteville, and the future of the arts in Northwest Arkansas.”

Funds from the challenge gift will be matched by contributions from other donors in order to reach the $23 million goal.

"With lead gifts such as this from the Walton Family Foundation, the Walton Arts Center's campaign is off to a very strong start," said Lane. "We are now expanding and intensifying our fundraising efforts to build on this generosity. We hope that this campaign will not only succeed in increasing support for the Walton Arts Center, but with increased programming, we will serve even more members of our community.” 
 

All that it took to change the direction of pump prices and tighten the gasoline market across the U.S. was an earthquake-like explosion and fire at ExxonMobil’s sprawling refinery complex in southern California, the U.S. Energy Department said in its monthly refinery outage report on Feb. 27.

The report, produced by the Energy Information Administration, noted that unplanned refinery outages have noticeable effects on the nation’s fuel market, disrupting the supplies of gasoline and other distillates like diesel fuel, heating oil, kerosene and jet fuel.

On. Feb. 18, oil and gas giant ExxonMobil Corp. reported a huge fire and blast at its 750-acre refinery in Torrance Calif., that covers some 750 acres, taking the West Coast’s third-largest refinery offline and creating a backlash on the nation’s fuel market that will likely be felt for several weeks.

“The sudden loss of production during unplanned outages can sometimes take days or weeks for markets to adjust. As a result, unplanned outages often result in a reduction in supply that causes prices to increase, sometimes dramatically,” said the EIA report. “The severity and duration of these price spikes depend on how quickly the refinery problem can be resolved and how soon supply from alternative sources can reach the affected market.”

According to Exxon Mobil, the nation’s largest oil refiner behind ConocoPhillips, the Torrance refinery processes 155,000 barrels of crude oil a day and about 117,000 gallons of gasoline per day, about 15% to 20% of the southern California supply. Once the refinery went offline, the West Coast product market reacted immediately as regular and smog-reducing, specially reformulated gasoline prices jumped nearly 40 cents in the Los Angeles area.

And although the isolated California retail gasoline price is typically 30 cents to 40 cents higher than the national retail pump prices, other markets across the U.S. have immediately reacted to the rising prices on the West Coast and siphoned off profits by raising prices nationally to $2.44 per gallon, according to AAA’s Daily Fuel Gauge.

At the same time, volatile U.S. crude oil prices have remained near or below $50 per barrel (bbl) as light sweet crude oil futures for April delivery on the New York Mercantile Exchange fell 17 cents to $29.49 per barrel in Monday’s sessions.

35-DAY STREAK
In the Gulf Coast region, which includes Arkansas and other states, pump prices for regular unleaded have risen 28 cents in the past two weeks after bottoming out at 1.98 per gallon in mid-January, according to AAA’s fuel gauge.

In, Arkansas, motorists today are paying an average of $2.26 per gallon to fill up their tank across the state, according to AAA. Pump prices in the state’s metropolitan areas range from a low of $2.20 per gallon in the Fayetteville-Springdale-Rogers area to a high of $2.30 in the Pine Bluff area.

Motorists in the Fort Smith area are seeing prices at an average of $2.26 per gallon, and travelers and residents at the Texarkana state line are paying about $2.23 per gallon. Residents in the Little Rock-North Little Rock area are paying an average of $2.28 a gallon to fill up their tanks.

Drivers choosing to fill up the tanks with a higher-grade of gasoline should expect to pay an average premium of $2.62 a gallon across the state. Big rig drivers and other diesel fuel users will see pump prices at about $2.69 a gallon, down eight cents from only a week ago.

AAA officials said average U.S. gas prices have increased 35 days in a row for a total of 39 cents per gallon, which is the longest consecutive streak of rising prices since February 2013. U.S. retail gasoline prices reached a low of $2.03 per gallon on January 26 after dropping for a record 123 consecutive days. Gas prices have increased every day since reaching that low.

“Paying $2 for gas will seem like a distant memory for most drivers in the coming weeks,” said AAA spokesman Avery Ash. “Gasoline remains much cheaper than in recent years, but drivers may not appreciate that fact given the steep increase in price over the past month.”

EIA FORECASTS CRUDE OIL TO STAY BELOW $60 A BARREL
In other energy news, the EIA forecasts that international Brent crude oil prices will average $58 per barrel in 2015 and $75 per barrel in 2016, with 2015 and 2016 annual average U.S. West Texas Intermediate (WTI) prices expected to be $3- and $4 per barrel, respectively, below Brent.

The EIA now expects U.S. regular gasoline retail prices, which averaged $3.36 per gallon in 2014, to average $2.33 per gallon in 2015. Most U.S. households are now expected to spend about $750 less for gasoline in 2015 compared with last year because of lower prices. The projected regular gasoline retail price increases to an average of $2.73 per gallon in 2016.

The Energy Department expects the Henry Hub natural gas spot price to average $3.34 per million British thermal units (MMBtu) this winter (2014-15) compared with $4.53 per MMBtu last winter (2013-14), reflecting both lower-than-expected space heating demand and higher natural gas production this winter.

The EIA forecasts Henry Hub natural gas spot price, which averaged $4.39 per MMBtu in 2014, to average $3.05 per MMBtu in 2015 and $3.47 per MMBtu in 2016.

Kathleen McLaughlin, president of the Walmart Foundation, told students at the University of Arkansas that the role of big business is to serve society by using its own strengths and working with other companies to improve the worldwide community.

She was the featured speaker Tuesday (March 3) at the Dale Bumpers College of Agricultural, Food and Life Sciences and the Honors Student Board in Hembree Auditorium at the University of Arkansas. 

McLaughlin was recruited by Wal-Mart in October 2013 from McKinsey & Company where she spent 20 years rising to senior partner working on sustainability and global social challenges. She joined the nation’s largest retailer after visiting Bentonville and meeting the company leadership, saying she was impressed that Wal-Mart was a “mission driven company.”

“You now see the leading companies go beyond to collaborate with others to replenish and sustain the different systems,” she said. “That’s the reason I joined Wal-Mart.”

In addition to role in the WalMart Foundation, McLaughlin is also senior vice president for Wal-Mart Global Sustainability.

Her nearly 75-minute talk to about 150 students and faculty focused on six key success factors for how a business can work toward strengthening the private sector:
• The program has to be relevant to the company’s business. 
• It has to draw on the particular elements of the company.
• The company must be innovative to drive a double bottom line. 
• It has to reshape the system for lasting improvement.
• Work with other companies to accelerate the transformation.
• Embed into the organization the double bottom line.

As she discussed the success factors, she pointed to strategies at Wal-Mart where the company is focusing its efforts to strengthen its responsibility to the world. McLaughlin noted Wal-Mart’s increasing employee wages and developing programs to encourage frontline employees to move up to the middle level. This investment will cost Wal-Mart about $1 billion this year and includes a plan to raise the hourly wage of all full-time employees to $10 an hour by February 2016. That said, the recent announcement resonated with analysts and retail trade groups. TJX Companies, the parent of T.J. Maxx, has followed suit announcing higher minimum wages on the heels of Wal-Mart’s move.

Wal-Mart critics say the wage plan falls short, and doesn’t do enough to provide workers more hours. Emily Wells, an organizational leader with OUR Walmart, says the group will still push for its $15 an hour goal.

“With $16 billion in profits and $150 billion in wealth for the owners, Walmart can afford to provide the good jobs that Americans need – and that means $15 an hour, full-time, consistent hours and respect for our hard work,” Wells said.

McLaughlin also cited promoting women entrepreneurship and revamping an internal workforce program to assist employees to move up the ladder of success as strategies underway at Wal-Mart.

The broad areas McLaughlin discussed are relevant to Wal-Mart where the retailer’s focused efforts of sustainability, opportunity and community, she said. In the sustainability arena, Wal-Mart is working toward improving the food chain to make food more affordable and healthy by monitoring ingredients, working toward the use of 100% renewable energy and eliminating the waste stream produced in its stores, she said.

The food chain is an example of the role a business like Wal-Mart can play in society with strategies to be sustainable, reduce waste, improve access, make healthy choices easy to achieve, she added.

McLaughlin said the goal is go beyond writing a check, such as the creation of a $40 million fund to provide nutrition education to help people learn to cook on a budget and with healthier foods. 

Another example is what she called the closed loop fund, developed after the chief executive officers from some the largest food producing companies in the country met in Bentonville. The group created a $100 million fund to promote recycling nationwide. Cities can borrow money from the fund to develop recycling facilities.

As with wages, Wal-Mart draws critics on the sustainability front.

“Wal-Mart has made remarkably little progress in moving to renewable energy, while other national retailers and many small businesses are now generating a sizable share of their power from clean sources,” said Stacy Mitchell, a senior researcher at the Institute for Local Self Reliance and co-author of a November 2014 report on energy and carbon pollution. “Despite making a public commitment to sustainability nine years ago, Wal-Mart still favors dirty coal-generated electricity over solar and wind, because the company insists on using the cheapest power it can find.”

Arkansas’ average jobless rate for 2014 was 6.1%, down 1.3% percentage points from the 7.4% average in 2013. It is the first time the annual average dropped below 7% since 2008, according to a report posted Wednesday (March 4) by the U.S. Bureau of Labor Statistics.

The report also showed that Arkansas’ labor force average fell but the number of employed rose in 2014. The average civilian labor force in Arkansas during 2014 was 1.301 million, down from 1.307 million in 2013. The peak for Arkansas’ labor force was 1.376 million in August 2008.

The average number of employed in Arkansas in 2014 was 1.221 million, up from 1.211 million in 2013. The peak for employment in Arkansas was 1.304 million in May 2008.

Following are Arkansas’ average annual jobless rates between 2014 and 2004.
2014: 6.1%
2013: 7.4%
2012: 7.3%
2011: 7.9%
2010: 7.9%
2009: 7.4%
2008: 5.1%
2007: 5.1%
2006: 5.3%
2005: 5.1%
2004: 5.6%

Average annual jobless rates fell in all 50 states in 2014, the first time all states had a decline since 1984, noted the BLS report. The largest average jobless rate decline was in Illinois with 2%, noted the BLS report. Colorado, North Carolina and Ohio were next with a 1.8% dip, and 20 states had average jobless rate declines of at least 1%.

North Dakota had the lowest annual average unemployment rate (2.8%) in 2014. Nebraska (3.3%) and South Dakota (3.4%) had the next lowest jobless rates. Rounding out the top five were Minnesota and Vermont, each with an average of 4.1% in 2014.

Mississippi and Nevada had the highest jobless rates (7.8%) among the states. Rhode Island (7.7%), California (7.5%) and Georgia (7.2) were also part of the bottom five states.

The BLS report also provides an employment-population ratio that provides context to the jobless rates. The ratio compares the number of employed with the “civilian noninstitutional population 16 years of age” or older. The range among the states was wide, with North Dakota having highest proportion of employed persons (70.8%) in 2014. West Virginia had the lowest employment-population ratio among the states at 49.7%. West Virginia has had the lowest employment-population ratio each year since the series began in 1976, noted the BLS report.

Arkansas’ ratio improved slightly from 53.2% to 53.4%, but was among the bottom five states on the ratio comparison.
• West Virginia – 49.7%
• Mississippi – 50.1%
• Alabama – 52.9%
• Arkansas – 53.4%
• New Mexico – 53.6%

Oklahoma’s ratio was 57.8%, and Missouri was at 60.8%

Arkansas’ average number of unemployed in 2014 fell to 80,000 from 96,000 in 2013. Coincidentally, the Oklahoma unemployment average fell by the same amounts in each year. The average number of unemployed in Missouri during 2014 was 187,000, down from the 202,000 average in 2013. U.S. ended the year with an average of 9.617 million unemployed, better than the 11.46 million average in 2013.

Arkansas ended the year with a December jobless rate of 5.7% compared to 7.4% in December 2013. The size of the Arkansas workforce in December – 1.324 million – fell by 0.2% compared to December 2013.

The number of employed in Arkansas during December was 1.248 million, up an estimated 19,586 jobs compared to December 2013. The number of unemployed was an estimated 75,757 during December, more than 23% below the 98,484 in December 2013.

Mary Mann is one of a growing number of workers in the U.S. who finds telecommuting convenient, productive and beneficial in terms of saving time and money.

Mann is a public relations and marketing professional for Samaritan House, a nonprofit assistance agency, in Rogers. She lives in Fayetteville. Her boss gave her permission to work from home on Friday mornings since the office in Rogers closes at noon. The upside is she only has to make the 30-mile commute on a congested Interstate 49, four days a week instead of five.

WalletHub, an online social network to help users make sound financial decisions, recently developed a Telework Saving Calculator, designed to calculate the savings from working at home. WalletHub estimates workers could annually save more than $900 billion and prevent 3.6 million tons of greenhouse gas emissions by allowing more people to work from home.

A 2010 survey of 50,000 households by the U.S. Census Bureau found that the percentage of workers who worked at least one day a year at home increased from 7% in 1990 to 9.5% in 2010. Other findings from the survey include:
• Percentage of workers who work the majority of the week at home rose from 3.6% in 2005 to 4.3% in 2010;
• Home-based work in computer, engineering and science occupations rose by 69% between 2000 and 2010;
• The Boulder, Colo., metro area had the highest percentage of workers (10.9%) who worked a majority of time at home; and
• Almost half of home-based workers were self-employed.

But there are benefits other than savings and pollution reduction, said Curtis Feimster of Fayetteville and Robert Freeman of rural Fort Smith. Feimster makes sales calls worldwide from his Fayetteville home for a company in New York. He sells loyalty reward programs for mobile users. Feimster said he concentrates better at home, saves money by not flying to make calls on potential customers and still gets plenty of daily interaction with other people with phone calls and emails.

For Freeman, working from home means he spends more time with his family and he has time during the day to attend to the needs on the farm where he lives. He works as a cultural health care consultant for a Tennessee based health system.

Both men are quick to note benefits from their arrangements with employers but agree on the downside: Neither knows when to quit.

“I don’t know when to turn it off, because I don’t even know I’m working,” Feimster said. 

Many of Feimster’s prospective clients are in India, Israel, Denmark and Canada or other countries in different time zones. That lends itself to working all hours.

Freeman said he converted his dining room to a home office, complete with French doors he closes at the end of his workday. The closed doors are a reminder that his office is closed for the evening.

'A DIFFERENT WORLD'
On the employer side, even the country’s largest employer, weighed in on telecommuting. Wal-Mart Stores, with 1.2 million workers, said it uses an informal, flexible work arrangement at times for positions within its corporate ranks. There are times when a manager can allow flexible work arrangements for an employee whether that is working remote on occasion or opting for flexible hours, said Wal-Mart corporate spokesman Randy Hargrove.

"It's not a one-size fits all with our home office teams," Hargrove said.

Chip Souza, sports editor at the Northwest Arkansas Democrat Gazette, has for the previous seven years supervised a staff of six sports writers who all work outside the office. The days when his employees spent their time in the office are gone, with the advent of laptop computers, cell phones and Hotspots – which allow the writers Internet access wherever they are.

“It’s a different world than 15 years ago,” Souza said. (Souza also is the husband of Kim Souza, who works for The City Wire from her home.)

He stays in contact with his staff by telephone and weekly staff meetings (in the office) when the group sets the budget and plans for the upcoming two weeks. For Souza, the downside is missing out on the one on one time with his staff or getting instant feedback on a story from a reporter sitting next to you. 

Kelly Services, a worldwide temporary employment agency, has a contract for hiring workers for Kraft Foods, including the Planter’s Peanuts in Fort Smith.  The recruiter for Planter’s lives near St. Joseph, Mo., said Scott Loveday, Kelly’s district manager in Fort Smith.

“In the role of the recruiter, you can get the same information by phone that you can get on an application. And, there are a lot of different ways to get face time with the applicant,” he said. “It works out well for us.”

TELEWORK CONCERNS, RULES
Global Workplace Analytics reports that telework began to grow in 2006 when the number of people working from home grew 26.2%. The pace has slowed, with the number of people working from home growing just 3.8% in 2012, the most recent year the company reports data.

One of the common reasons companies do not allow telework is trust. According to Global Workplace, 75% of managers say they trust their employees, but a third of those surveyed want the employees to be productive in a managed worksite.

Also, some employees may want to telecommute, but fear it will hamper their career rise with the company. Companies that allow telework must have clear rules and expectations in place. Also, telework should not be a solution for childcare needs, according to Global Workplace.

“Home-based employees need to understand that telecommuting is not a suitable replacement for daycare unless they can schedule work hours around their children’s needs,” the analytics company noted.

Little Rock-based CJRW announced Wednesday (March 4) that Brian Kratkiewicz has been named senior vice president and director of account services, and Zack Hill has been named vice president and director of digital services.

Kratkiewicz is an advertising agency and industry veteran who has been senior vice president and director of CJRW’s media and digital divisions. Hill was previously the firm’s director of digital services. In addition, CJRW announced that Karen Mullikin, who joined CJRW in 1994, has been named corporate project officer. In her role, Mullikin will focus on strategic initiatives in support of the firm’s business plan.

Ike Peters, a copywriter who joined CJRW in 2013, has joined the digital services division of the agency where he will focus on social media services to clients.

“In recent months, we have seen a significant and sustained growth in our digital services division,” CJRW President Darin Gray said in the statement. “This realignment of our professional resources is in response not only to that growth, but is part of
a long-term growth strategy we have initiated and implemented over the last 12 to 18 months.”

It was announced in January that another firm in the state’s communications industry, Heathcott Associates, would merge with CJRW. That merger became effective March 1. Later this year, CJRW will move its Little Rock operations to Third and Main in the city’s developing “creative corridor.” The agency’s wholly owned subsidiary, Jones Film Video, will also move to Third and Main across the street from CJRW’s new headquarters building.

Community Bankers across the Natural State enjoyed a profitable 2014 accruing net income of $810 million among the 109 institutions. Profits rose from $707 million a year ago, according the Federal Deposit Insurance Corporation. 

The FDIC splits the banks into two categories — those with less than $100 million in assets and those above $100 million. There were 28 banks in the state in the small bank category and together their net income totaled $18 million as of Dec. 31, 2014, up from $15 million in the year-ago period.

Small banks saw their deposits shrink to $1.551 billion, down from $1.803 billion. Assets also decreased 12% to $1.677 billion among the 28 small banks last year. Analysts have said the small banking segment is having the toughest time handing the increased costs associated with burdensome Dodd-Frank regulation. 

Most of the smallest banks are the last of dying breed, with family-owned and mostly rural banks having toughest times covering regulatory costs, according to Gaines Dittrich, a banking analyst and founder of Joplin, Mo.-based Dittrich & Associates. He told The City Wire in 2014 that there would be more consolidations fueled by the higher compliance costs related to Dodd-Frank.

SMALL SURVIVORS
Smaller banks in Northwest Arkansas appear to be carving out a niche market amid an onslaught of competition from larger banks and non-banks entities introducing financial products.

Just barely over the $100 million level, Today’s Bank is one of the more profitable institutions in the region and state. With $102.66 million in assets the bank reported net income of $2.63 million last year, producing a return on asset ratio of 2.56%. The bank’s performance improved from $1.109 million in profits in 2013 with a ROA of 1.15%. Today’s Bank President Larry Olson said 2014 was a strong year, but he doesn’t expect to repeat performance in 2015.

“While we expect to have a decent 2015, it probably will not be as strong as last year. Reason being, we are expanding into the Springdale market this year, and will have additional fixed asset and staffing costs associated with that,” he told The City Wire.

Based in rural Huntsville, Today’s Bank had it’s largest branch in Fayetteville but broke ground on a new branch in Springdale this week that will be the fifth location for the bank that operates two branches in Huntsville and two in Fayetteville.

“The general business market continues to pick up speed. We are experiencing solid deposit and loan growth opportunities. It seems small businesses are now more willing to expand and/or make capital expenditures, which create financing demand,” Olson said. “I believe the small businessmen/women have been waiting on the sidelines for the last few years trying to get a sense of where the economy is going; but now feel better about the economy and think it is a safer time to make some strategic moves  — notwithstanding the seemingly continued gridlock coming out of Washington.”

Parkway Bank of Rogers is happy with its profits. President Bob Taylor told The City Wire that profits are improving along with the overall economy. The bank reported net income of $718,000 for 2014. In 2013, the bank showed net income of $1.476 million. Taylor said tax liabilities from previous years hurt the bottom line in 2014, but the good thing is that profits are already stronger year-over-year in the first two months of 2015.

Credit losses for the bank decreased to 61,000 last year, which was down from $465,000 in 2013. Non-performing loans were reduced to $578,000, down from $1.370 million in 2013. Taylor said loan demand is decent and deposits are up. The bank has grown its assets to $123.537 million, the largest it’s been in five years.

“We are forecasting growth this year building gradually on the momentum that began a couple of years back. The major reason profits are improving for the banking sector is that less money is being set aside for loan loss reserves. The lending climate is very competitive. We are boutique bank offering 4 to 5 products and we don’t try and compete with the larger banks. We are finishing up on a couple of vendor-related projects in Bentonville and are finding the construction lending market pretty good right now,” Taylor said.

Parkway Bank has one branch in Bentonville and two branches in Southern Arkansas in Monticello and Portland. Taylor said deposit growth is strong in southern Arkansas and loan demand is better in Northwest Arkansas. About 70% of the bank’s deposits are in the southern branches and about 65% to 70% of the loans made by the bank are for projects in Northwest Arkansas, Taylor said.

LARGER BANKS
The majority of banks in Arkansas (81) are larger than $100 million in assets. This group had net income of $792 million as of Dec. 31, 2014, rising 14.6% from the $691 million reported in the year-ago period.

"The banking industry continued to improve at the end of the year," FDIC Chairman Martin Gruenberg said in a statement. "Community banks across the country performed especially well during the fourth quarter. Their earnings were up 28% from the previous year, their net interest margin and rate of loan growth were appreciably higher than the industry, and they increased their small loans to businesses."

The largest bank based in Arkansas is Arvest, though the bank also does business in neighboring states. Arvest reported net income of $108.982 million for 2014. Profits declined 14% from $126.873 million reported in 2013. The bank’s return on assets was 0.74% to end 2014, down from 0.92% in 2013. That said, credit losses were trimmed to $15.28 million, down from $28.22 million in the prior year. Non-performing loans were also reduced to $125.85 million, down from $214.215 million in 2013. Arvest had assets of $14.75 billion at the end of 2014, up from $13.8 billion to end 2013.

Mike Jacimore, sales manager for Arvest Bank’s Fort Smith and River Valley market which runs from Russellville to Sallisaw, Okla., told The City Wire that loan growth in that large region is up from a year ago.

“Mortgage loans and business loans are growing in this market as our deposits are also picking up thanks to a better economy,” he said.

He said there has been compressed margins for some time given the low interest rate environment and he expects more of the same this year as long as rates stay down. 

“Consumers savings are picking up some and at the same time we are saw personal consumer loan demand higher in January and February to start this year compared to the prior year.” Jacimore said. “The lower fuel prices have been a positive for consumer attitudes so far this year.”

Fort Smith-based First National Bank Corp. operates in Fort Smith and Northwest Arkansas. This large bank grew its assets to $1.182 billion, up from $1.052 billion to end 2013. The bank reported net income of $15.665 million, down slightly from $16.786 million reported in 2013. Credit losses rose to $586,000 in 2014, which rose more than 100% from 2013. 

The bank still commands a respectable return on assets of 1.32%, as 1% is the benchmark for banks in normal economic climates. First National Fort Smith President Sam Sicard said loan demand is improving, but he still believes the bank’s customers are somewhat cautious.  

“It does appear that savings have improved due to the drop in gas prices. The latest national reports indicate the savings rate has improved over the last few months. Total deposits at First National Bank of Fort Smith have also increased over the last few months,” Sicard said.

He said banks have become more profitable over the past couple of years thanks to a stronger economy and the reduction in loan loss provisions. However, margins remain tough to expand, and that will likely be the story in 2015.

“I believe margins will continue to be compressed in 2015 due to the large number of willing lenders and with borrowers being more cautious than they were before the Great Recession,” Sicard said.
 
IN THE MIDDLE
Community banks with assets between roughly $300 million and $500 million fared well last year and those bankers in Northwest Arkansas are optimistic that 2015 will be better. Signature Bank and Legacy Bank formed ahead of the Great Recession, with each heavily investing in commercial real estate before the bust in 2008. Each bank has returned to profitability and shook off enforcement actions from their regulators. Signature Bank remains under a “memorandum of understanding” after having the stricter Consent Order removed by the FDIC in December.

Springdale-based Legacy National Bank reported net income of $2.087 million for 2014, up slightly from $2.028 million in 2013. The bank grew assets to $296 million, a gain of 11.3% from the prior year. The bank reduced its credit losses by 81% year-over-year and its real estate owned amounted to $5.239 million at the end of 2014, down from $7.395 million at the end of 2013.

Legacy CEO Don Gibson said the bank budgeted higher profits for 2015 and they are off to a good start being slightly ahead of budget for January and February. He also mentioned tighter margins from low interests, something he expects will continue through most, if not all of 2015. Gibson said the bank has seen its compliance costs more than double in the past year to comply with Dodd-Frank regulations.

“Increased capital requirements will be an issue if (Dodd-Frank is) not backed off which is a negative for the consumer because available monies for lending will be pulled back into capital,” Gibson said.

Fayetteville-based Signature reported $2.306 million in net profits for 2014, a 120% improvement over the $1.044 million reported in 2013. The bank showed assets of $488.9 million at the end of 2014, down slightly from the $490 million reported at the end of 2013. This bank continues to work through its troubled loan portfolio from a few years ago. Credit losses were $3.4 million, down slightly from the $3.7 million reported in 2013. 

Signature still holds $17.927 million in real estate, a large amount for the bank, and it’s an amount that is relatively flat with a year ago. Signature Bank President Gary Head told The City Wire that an improving Northwest Arkansas will help reduce the real estate holdings. He said since the December financial reports the bank has moved more of that property off the books.

“We had several lots in West Fork on our books for five years with no offers, but now they are selling,” Head said.

He expects 2015 to be better than 2014 for Signature Bank as loan losses are reduced. 

“Our 109-year-old bank in Brinkley had a tough time last year with farm losses. It was the worst year in some 45 years of farming according to one customer,” Head shared. “We are standing by those farmers as they work to restore their profits in 2015.”

He likes the prospects in Northwest Arkansas as all the major employers are doing well. Head said the fierce banking competition in Northwest Arkansas is good for businesses and consumers in this market.

“Homebuilding, single and multifamily still have some room to run in this market because there is hardly a house to rent and apartment occupancies remain low as the University of Arkansas continues to grow,” Head said.

Antibiotic use in animal production has long been an issue of debate among health officials and agricultural groups. But under consumer pressure, restaurant giant McDonald’s announced its commitment to end reliance on medially important antibiotics in its U.S. chicken supply.

Ironically both sides of the debate are claiming victory. McDonald’s move is a win for the consumer who might someday need an effective antibiotic, said Jonathan Kaplan of the Natural Resources Defense Council.

“Our customers want food that they feel great about eating – all the way from the farm to the restaurant – and these moves take a step toward better delivering on those expectations,” McDonald’s U.S President Mike Andres said Wednesday (March 4) in the release.

He said McDonald’s has worked with farmers for years to reduce use of antibiotics in its poultry supply and within the next two years all of the chicken supplied to the company for its 14,000 U.S. restaurants must adhere to the new antibiotics policy.

Springdale-based Tyson Foods is a large supplier of chicken to McDonald’s for its food service needs and company respects this move. Gary Mickelson, corporate spokesman for Tyson Foods, told The City Wire that Tyson’s chicken operations have reduced the use of antibiotics that are effective in humans by more than 84% since 2011. In addition, Tyson said it stopped using antibiotics at all of its 35 hatcheries last fall.

“We support McDonald’s decision and look forward to working with the company to meet its new standard. We believe in responsible chicken production and already limit the use of antibiotics in our chicken business,” Mickelson said.
 
The poultry industry has long claimed antibiotic use is necessary at times to treat and prevent disease within flocks. The debate emerged in recent years as health advocate groups became concerned that prolonged use of antibiotics in animal production could promote antibiotic resistance in humans. 

Siloam Springs-based Simmons Foods is revamping its use of antibiotics effective April 1. Simmons also provides chicken to restaurants and food service customers like Olive Garden.

“Simmons is committed to responsibly raising chickens as the foundation for safe, quality food. We’re concerned about the use of antibiotics and desire to do everything possible to preserve the effectiveness of antibiotics for humans and animals. In fact, we’re already reducing the use of antibiotics in our operations,” said Todd Simmons, CEO of Simmons Food.

He said the company will discontinue the use of antibiotics in all Simmons hatcheries by April 1. Since antibiotics used in hatcheries are often classified as important to human health, this is significant step in reducing overall usage of such antibiotics.

“We are supportive of recent announcements aimed at curbing the use of antibiotics that are important to human medicine. We also take our responsibility for animal welfare very seriously and are being careful to understand how these changes affect the health of our flocks,” Simmons told The City Wire.

NRDC reports that 80% of all antibiotics sold in the U.S. are used on cattle, pigs, poultry and other livestock, the vast majority to speed up growth and compensate for crowded, and often unsanitary conditions.

The Center for Disease Control brought more focus to antibiotic resistance risks in its 2013 “Antibiotic Resistance Threats” report.

“Up to half of antibiotic use in humans and much of antibiotic use in animals is unnecessary and inappropriate and makes everyone less safe,” the CDC noted.

Kaplan saod the poultry industry has relied on a loophole in the Food and Drug Administration guidelines that allows for medically important antibiotics to prevent disease with no real limit on how much or how often these drugs can be administered. He said McDonald’s seeks to do better for its U.S. stores with this commitment to phase out the use of medically important antibiotics over the next two years. 

“That’s a big deal,” Kaplan said. “Sick birds will be treated with antibiotics but not sold in company restaurants. Ionophores, which are technically antibiotics, will continue to be used to raise the McDonald’s chicken supply. However because ionophores are not used for treating people and there's little evidence that they contribute to the problem of antibiotic resistance in human medicine.” 

Mickelson said animal welfare is very important to Tyson Foods which is why the company sometimes use FDA-approved antibiotics in a small percent of its flocks to treat or prevent disease, but only when prescribed by a veterinarian. 

“We expect to continue reductions in our use of antibiotics that are effective in humans and encourage the industry to research alternatives,” Mickelson added.

The National Chicken Council also is supportive of McDonald’s move toward fewer antibiotics usage overall and none that are associated with human use. Ashley Peterson, vice president of scientific and regulatory affairs with the National Chicken Council, said chicken producers have a vested interest in protecting the effectiveness of antibiotics for the welfare of their animals. She said during the previous two years the companies have voluntarily worked to phase out the use of antibiotics that are important in human medicine.

The days of consumer product goods (CPG) companies relying on retailers like Wal-Mart for co-marketing help are fading. The retail giant reportedly has all but abandoned co-marketing trade promotions program it has used for the past few years.

CPG companies have responded by working to build direct and personal contact with consumers via membership loyalty programs, e-mails and newsletters that tout their product, provide consumer tips and product expertise on a regular basis.

Cereal king Kellogg’s continues to try and redefine itself and come out from under declining market share. Its iconic brands Frosted Flakes and Frosted Mini Wheats saw sales erode last year by 4.5% and 5%, respectively. While the company still spends a hefty $1 billion annually on advertising it’s also now more focused on connecting with families in a direct manner through a loyalty rewards program and coupon offers on its wide variety of products from cookies to Special K protein bars.

Like traditional loyalty programs, consumers earn bonus points from purchasing Kellogg products which can used to purchase items in the online store which include everything from branded items to retail gift card and donations made to charities and schools.

PRODUCT INSIGHT
S.C. Johnson launched its Right@Home site last year that provides consumers with direct dialogue about cleaning solutions and other other topics relating to the home. The CPG site sends regular emails to subscribers that feature S.C. Johnson products being used in certain household applications. The topic areas routinely discussed on the site include cleaning and organization, food and cooking, home design and family time.

The site also has a tool that allow consumers to create a shopping list for S.C.Johnson products. Right@Home also allows S.C. Johnson to provided targeted coupon offers to those consumers who are most likely to buy the product. The company also sends email alerts when certain products are on sale or being specially promoted at Wal-Mart and Target. S.C. Johnson sends an average of six emails per month to subscribers to its Right@Home subscriber base.

SUBSCRIPTION SALES
Neither Kellogg nor S.C. Johnson are offering consumers a direct purchase opportunity from their sites at this time, unlike Procter & Gamble who continues to grow its subscription direct to consumer service through its e-store which was launched five years ago. When P&G launched its e-store in March 2010, it was seen as bold move on the part of a supplier to cross into the retail space.

The Financial Times reported in 2010 that the e-store site was part of the company’s drive to increase its total online sales which at that time accounted for less than 1% of its $79 billion in revenue. P&G’s e-store business has grown to the point late last year that the CPG announced an $89 million distribution center of its own in Dayton, Ohio.

With Amazon.com and other pure online retailers offering discounted subscription and automatic shipment of staples like Tide laundry detergent to diapers, CPGs are seeing reduced margins from their iconic retail brands. One way CPGs can help bridge some of that loss is to offer direct-to-consumer, which takes time and substantial investment, according to Annibal Sodero, supply chain expert at the University of Arkansas.

“Win wherever people shop,” that's what Alex Tosolini, P&G's senior VP of global eBusiness, told eMarketer recently. "Our job is not to change consumer behavior. Our job is to follow consumers' behavior and be present with our brands."

ANALYST INSIGHT
Carol Spieckerman, CEO of newmarketbuilders, said there are several dynamics  converging that make it quite attractive for brand marketers to dial up their direct-to-consumer outreach.

“Although many retailers have played a great game of catch-up in the digital space, brand marketers can’t afford to cede all of their content marketing and consumer outreach to retailers. Retailers may still own the shelf but the dizzying number of digital outlets available to brand marketers is quite another proposition,” Spieckerman told The City Wire.

Dr. Stephen Needel, managing partner at Advanced Simulations, recently noted on RetailWire that the last forecast seen (from Steve Bishop) is that online for CPG might represent 11% to 17% in the year 2025. With that, he said CPGs still need retailers.

Spieckerman said the opportunity for CPGs to forge direct relationships with consumers, and to collect valuable data on their habits in the process, is too compelling to pass up. She said retailers have become more tolerant of suppliers’ direct-to-consumer efforts because it amps up brand equity and increases brand awareness which benefits retailers.

Three key measurements of Arkansas’ leisure and hospitality sector ended 2014 in positive territory, with 16 of the 18 Arkansas cities reviewed showing year-over-year hospitality tax gains, according to the inaugural report of the Arkansas Tourism Ticker.

The ticker is managed by The City Wire, and uses the following three measurements to review the health of the state’s tourism industry. The ticker is using 2010 as the baseline of comparison.
• Hospitality tax collections – prepared food tax and lodging tax – of 18 Arkansas cities (cities listed below and in included image);
• Tourism sector employment numbers as reported by the U.S. Bureau of Labor Statistics; and
• Collections of Arkansas’ 2% statewide tourism tax.

Topline results for the December ticker report are:
• +3.7%
Gain in combined 2014 hospitality tax collections in 18 Arkansas cities compared to 2013

• +7.48%
2014 gain in Arkansas’ 2% tourism tax compared to 2013

• +6.5%
Increase in Arkansas’ tourism industry jobs from December 2013 to December 2014

The Arkansas Tourism Ticker will be produced every two months, or six times a year.

HOSPITALITY TAXES
The combined hospitality tax collections in the 18 cities totaled $41.415 million in 2014, up 3.7% compared to 2013. Collections in the 18 cities were up 15.78%, or $4.206 million, compared to 2010.

Restaurant (prepared food tax) tax collections among the 18 cities rose a combined 15.78%, or $4.206 million, between 2014 and 2010. Collections in the cities were up 2.97%, or $892,000, in 2014 compared to 2013.

Hotel tax collections among the 18 cities rose a combined 11.46%, or $1.087 million, between 2014 and 2010. Collections in the cities were up 5.91%, or $590,000, in 2014 compared to 2013.

STATEWIDE TOURISM TAX
Collections of Arkansas’ 2% tourism tax in 2014 totaled $13.677 million, up 7.48% compared to the $12.716 million collected in 2013. The 2014 tally sets a new record for the tax. Following are the past five years of 2% tax collections.
2014: $13.677 million
2013: $12.716 million
2012: $12.404 million
2011: $12.025 million
2010: $11.492 million

TOURISM JOB NUMBERS
Arkansas’ tourism sector (leisure & hospitality) employed 113,900 during December, up from 110,400 during November, and above the 106,900 during December 2013. The December number, if it stands, marks a new record for employment in the sector. Employment in the sector is up 23% in the past 10 years.

Of the eight metro areas in or connected to Arkansas, the Bureau of Labor Statistics provides tourism employment data on five. All five of the areas show employment gains in 2014 over 2013 and 2010. Following are the December tourism labor numbers for the five metro areas.
Northwest Arkansas
Dec. 2014: 22,300
Dec. 2013: 21,100
Dec. 2010: 17,800

Fort Smith
Dec. 2014: 9,500
Dec. 2013: 9,200
Dec. 2010: 8,600

Central Arkansas (Little Rock-North Little Rock-Conway)
Dec. 2014: 32,600
Dec. 2013: 31,000
Dec. 2010: 29,300

Memphis-West Memphis
Dec. 2014: 64,800
Dec. 2013: 63,300
Dec. 2010: 63,400

Texarkana (Arkansas-Texas)
Dec. 2014: 6,200
Dec. 2013: 6,000
Dec. 2010: 5,700

WHY THE TICKER?
Arkansas’ tourism industry is an important economic engine for the state, and is often cited as Arkansas’ second largest industry – behind agriculture.

There are many reports and economic indices to measure several areas of the the state’s economy. The City Wire issues a monthly housing report (The Arkansas Home Sales Report). The University of Arkansas issues a quarterly report on economic activity, and has published reports on the economic impact of the Fayetteville Shale Play. There are reports to measure public opinion on various social issues.

“Unfortunately, there is not a broad measure of the health of Arkansas’ tourism industry. Our goal with the Arkansas Tourism Ticker is to correct that oversight. We are confident that leaders in the tourism and travel industry will help us in that correction,” said Michael Tilley, editor and co-owner of The City Wire.

Richard Davies, executive director of the Arkansas Department of Parks and Tourism, said the three measurements used for the ticker are “probably the best barometers of tourism.”

“I think it’s a good idea,” Davies said of the ticker. “As we’ve talked about before, tourism seems to be forgotten about because it’s not in one place with a bunch of smokestacks. It’s urban and rural as well.”

Kalene Griffith, head of the Bentonville Convention & Visitors Bureau, said Bentonville uses its tax money to not only advertise the city, but to invest in “the city’s tourism infrastructure.” Such investments include soccer fields, renovations to the downtown square, the “Wayfinding Signage” project, and Lawrence Plaza Ice Rink and Splash Park.

“In the past 15 years, the Bentonville Advertising and Promotion Commission has invested over $7 million  into the city’s tourism infrastructure,” Griffith said.

Maryl Koeth, executive director of the Van Buren Advertising & Promotion Commission, appreciated that the ticker looked at collections from restaurants and hotels.

“As you know, prepared food is heavy on local customer revenue flow, whereas hotel receipts are exclusively new money from customers outside the area. The prepared food receipts speak more to the health of the overall economy,” Koeth said.

THE NEW GOVERNOR
The 41st annual Arkansas Governor’s Conference on Tourism is set for the upcoming weekend (March 8-10) in Texarkana, and will be the first conference for Gov. Asa Hutchinson (R).

Davies, Griffith and Koeth expressed confidence that Hutchinson will be, as have past governors, supportive of the industry. In a Jan. 23 letter addressed to state tourism industry supporters, Hutchinson said he looked forward to helping continue the “dynamic growth” of the sector.

“From the hills of my northwest Arkansas hometown to the rich cultural heritage of southeast Arkansas, we’ve been blessed with an unbelievable array of parks, museums, historic districts, festivals, lakes, rivers and forests,” Hutchinson said in the letter.

Davies said Hutchinson will be willing to try new things within the industry.

“From the conversations I’ve had with Governor Hutchinson, I think he is very supportive of tourism, and his general way of doing business seems to mesh with what it will take to stay ahead in the market – technology, trying new things, efficiency with dollars, research and working together as an industry,” Davies told The City Wire.