Businesses across the four largest cities in Northwest Arkansas collected 10.7% more sales tax in January, which is reflected in a nice revenue boost for three of the four cities in March.

The entire metro area also boasted its best January employment rate since January 2008 with an unemployment rate of 5.9%, down from 6.3% a year ago, the Bureau of Labor Statistics reported on Friday (March 22).

“It’s no surprise sales tax collections in January were up, given that more folks were employed. I know there had been some concern about higher payroll taxes and the possibility consumers would spend less in January. That wasn’t the case,” said Kathy Deck, director for the Center for Business and Economic Research at the University of Arkansas.

The cities of Fayetteville, Springdale, Rogers and Bentonville together reported March collections of $4.357 million, up from $3.936 million a year earlier. The collections are for good and services sold in January.

Each of these cities collect a 2% tax, which is split equally between the general operating fund and debt repayment. This reporting reflects the 1% of collections that are dedicated to city budgets.

Bentonville posted the highest gain in March collections, thought it’s the only city of the four to track overall lower collections year-to-date in 2013. The city reported tax revenue of $1.078 million during March, up 20.7% from the year-ago period, which was $353,000 more than budgeted, according to city officials.

Denise Land, finance director for the city, said collections are up and down through the year but she remains confident the budget will remain in good shape. City officials agree the local economy is showing modest signs of improvement but still keeping one watchful eye on the jobs numbers.

Deck said it’s wise for city officials to remain cautious with their budgets, but she is encouraged by the growth in jobs over the past four months.

“All of the employment sectors with the exception of the information sector, posted at least a 2% gain in jobs year-over-year. The largest sector (trade and transportation) was up more than 4%. One in five jobs in this market are in the trade and transport sector. It’s a big deal when this sector is moving in the right direction,” Deck said.

The broad-based job recovery is a positive sign and Deck says the local market is performing better than the nation as a whole with respect to its diversity in job creation. She said working consumers spend more money and the cities benefited nicely in March collections.

Springdale was the only city in the four reporting to report softer collections in March. The city had $784,253 in revenue collections, down 3.4% from March 2012. Springdale city officials remain optimistic their budget is solid with collections up 1.11% through the first three months of this year.

Rogers reported March sales tax collections of $1.07 million, up 15.5% from a year ago. The city’s total collections this year are $ 3.629 million, up 10.94% from the previous year period.

In Fayetteville, city officials reported March revenue of $1.424 million, up 9.2% from the prior year. Finance Director Paul Becker is happy to see the strong numbers.

“We didn’t forecast it but we will take it,” he said.

For the first three months of 2013, Fayetteville collections total $4.633 million, up 6.9% from the prior-year period.

The combined four cities in this report showed tax collections are up 2.11% through the first three months of this year, when compared to 2012.
 
Sale Tax Collections (year-to-date)
Bentonville
2013: $2.090 million
2012: $2.509 million
-16.6%

Fayetteville
2013: $4.633 million
2012: $4.333 million
6.9%

Rogers
2013: $3.629 million
2012: $3.271 million
10.94%

Springdale
2013: $2.540 million
2012: $2.512 million
1.11%

An increase of almost 1,300 in the number of unemployed in the Fort Smith metro countered sizeable increases in the workforce and number of employed to push the region’s jobless rate up to 8.7% in January.

January’s 8.7% estimate was well above the 8.1% in December, but just below the 8.9%  in January 2012.

Six of the eight metro areas in or connected to Arkansas had jobless rate increases in January compared to December, and had jobless rate declines compared to January 2012. The Memphis-West Memphis area and the Pine Bluff area had jobless rate increases in January compared to December and January 2012.

During January, the lowest metro jobless rate in the state was in Northwest Arkansas with 5.9% and the highest rate was 10.5% in the Pine Bluff area.

According to figures released by the U.S. Bureau of Labor Statistics, the size of the Fort Smith regional workforce during January was 131,538, up from the 125,975 during December, and above the 127,459 during January 2012.

January was the 48th consecutive month the Fort Smith metro jobless rate has been at or above 7%, and was the second consecutive month the rate has been above 8%.

The regional labor force consistently remained above 130,000 beginning in December 2004, but fell below 130,000 in January. The labor force reached a high of 139,544 in June 2008.

The number of employed during January rose to 120,058 from a revised 115,793 in December. The January employment was also above the 116,098 in January 2012.

FORT SMITH METRO NUMBERS
• Unemployed persons in the region totaled an estimated 11,480 during January, above the 10,182 during December and above the 11,361 during January 2012.

• The Fort Smith area manufacturing sector employed an estimated 18,600 in January, just below the 18,900 in December, and below the 19,600 during January 2012. Employment in the sector is down more than 35% from more than a decade ago when January 2001 manufacturing employment in the metro area stood at 30,700. Also, the annual average monthly employment in manufacturing has fallen from 28,900 in 2005 to 19,200 in 2012 – the first year the average has dropped below 20,000 since surpassing that level.

• Jobs in the Trade, Transportation and Utilities sector — the region’s largest job sector —  totaled 24,800 in January, down from 25,100 in December, and above the 24,100 during January 2012. Employment in the sector is off from the high of 25,700 posted in December 2007.

• Employment in the region’s tourism industry was 8,600 during January, down from 8,700 in December and unchanged compared to January 2012. The sector reached an employment high of 9,800 in August 2008.

• In Education & Health Services, employment was 17,400 during January, up from 17,300 in December and above the 16,800 during January 2012.

• In the Government sector, employment was 19,200 during January, down from 19,600 in December and above the 19,000 January 2012.

NATIONAL NUMBERS
Unemployment rates were lower in January than a year earlier in 227 of the 372 metropolitan areas, higher in 124 areas, and unchanged in 21 areas, noted the broad BLS report.

The U.S. unemployment rate in January was 7.9%, down from 8.3% from a year earlier. Arkansas’ jobless rate was 7.2% in January, up from 7.1% in December and below the 7.4% rate in January 2012.

Oklahoma’s jobless rate during January was 5.1%, unchanged from December, and below the 5.4% during January 2012. The Missouri jobless rate during January was 6.5%, compared to 6.6% in December and 7.3% during January 2012.

ARKANSAS METRO AREAS
Fayetteville-Springdale-Rogers
Jan. 2013: 5.9%
Dec. 2012: 5.1%
Jan. 2012: 6.3%

Fort Smith
Jan. 2013: 8.7%
Dec. 2012: 8.1%
Jan. 2012: 8.9%

Hot Springs
Jan. 2013: 8.4%
Dec. 2012: 7.5%
Jan. 2012: 8.5%

Jonesboro
Jan. 2013: 7.8%
Dec. 2012: 6.8%
Jan. 2012: 8.1%

Little Rock-North Little Rock-Conway
Jan. 2013: 7.1%
Dec. 2012: 6.3%
Jan. 2012: 7.2%

Memphis-West Memphis
Jan. 2013: 9.7%
Dec. 2012: 8.6%
Jan. 2012: 9.4%

Pine Bluff
Jan. 2013: 10.5%
Dec. 2012: 9%
Jan. 2012: 10.4%

Texarkana
Jan. 2013: 7.2%
Dec. 2012: 5.7%
Jan. 2012: 7.5%

FORT SMITH METRO AREA HISTORY
Past annual average unemployment rates
2011: 8.6%
2010: 8.2%
2009: 7.9%
2008: 4.8%
2007: 5.3%
2006: 4.9%
2005: 4.5%
2004: 5.2%
2003: 5.5%
2002: 5%
2001: 4.2%
2000: 3.7%

Banks across Northwest Arkansas and their improving balance sheets are another indication of local economic recovery. A report released by the Federal Deposit Insurance Corp. on Monday (March 25) shows the state banking sector is mending well.

The state’s banking sector grew total assets by 4.75% in the fourth quarter of 2012 from the prior-year period, amid a tepid lending climate as consumers who can borrow remain on the sidelines in many cases.

The report found total average assets in Arkansas for the quarter to be $61.282 billion held by 126 federally insured banking institutions. This is up from $58.499 billion in the prior-year period.

Asset quality also improved in the year-over-year period with problem loans shrinking to 2.93% of total loans in the fourth quarter. Distressed loans totaled 3.19% of total loans a year earlier, according to the FDIC report.

The community banking sector across Northwest Arkansas held on to 14.5% more profits in 2012 than in the prior year. The group surveyed by The City Wire includes 17 banks either locally-based or those having a large presence in Benton and Washington counties.

The banking group posted cumulative net income of $328.274 million last year, a $41.78 million improvement over 2011, according to the call reports filed with the Federal Deposit Insurance Corp at year-end.

Local bankers said profits continued to improve as 2012 went and several of the local banks posted their best fourth quarter in several years.

As a group the NWA bank earnings improved as loan losses subsided among the vast majority of the banks reporting. Just two banks out the 17 surveyed posted net losses for the year as a result of provisions set aside to offset rising loan delinquencies.

“Banks turned the corner a few quarters ago for the most part and are starting to see higher profits on the bottom line. As real estate losses shrink, banks are seeing higher quality credit on their balance sheets which means there are fewer loan loss provisions needed and that’s having a positive impact on the net income,” said Tim Yeager, Arkansas Bankers Chair at the University of Arkansas.

Yeager said local banks are also benefiting from modest loan growth as the economy shows glimpses of strength.

He expects growth in 2013 to remain slow but said bankers can still make money in this climate if they aren’t having to write down real estate values.

As the local real estate market has improved, Yeager said bankers have been able to sell some off properties at higher prices and help the quality of the balance sheets. Real estate loans still comprise a lion’s share of the credit market for banks across the state though total lending actually decreased in the forth quarter from a year ago.

The FDIC reports commercial real estate loans were by far the most active lending sector in the fourth quarter. Those total loans declined slightly from the prior year. Residential loan activity was the only area showing gains in the fourth quarter, while agricultural and industrial lending held steady with the prior-year levels.

One overhang presenting a slight drag on bank earnings is the growing level of real estate owned (REO) sitting on bank balance sheets.

Several Northwest Arkansas bankers said 2012 was better for total earnings, but no one was ready to gloat saying there is still ample work to be done in moving non-performing real estate off bank books.

Toward the end of 2012 state-chartered banks had $548 million in real estate holdings on their books. Since 2006 real estate owned by state banks rose from $46 million, according to the Arkansas State Bankers Association newsletter.

Adding to the concern was $805 million in non-accrual real estate loans likely to feed the REO pipeline through 2013.

Northwest Arkansas banks large and small held a total of more than $300 million in REO on their balance sheets at the end of 2012, but most say they are making some progress of reducing the once toxic levels.

Bob Taylor, president of Parkway Bank in Rogers, said while his bank was able to cut its REO almost in half from 2011, the $3 million still on the balance sheet is a drain on earnings.

“We continue to work hard to move these non-performing assets off the books, because that is $3 million that can’t be loaned out or put to work generating future profits,” Taylor said. “We are seeing higher real estate appraisals and that is definitely helping curb write-downs.”

The Bank of Gravett also reduced its REO properties during 2012. The bank reported real estate owned of $546,000, down from $1.829 million a year earlier.

David Bordovsky, president of Pinnacle Bank, said he is focused on reducing REO holdings this year as there are more interested buyers in the local marketplace than in recent years. According to FDIC reports, Pinnacle Bank had assets of $87.45 million at the end of 2012, the bank also held roughly $20.9 million in other real estate owned.

Don Gibson, CEO of Legacy Bank, said the bank was able to move a little of its real estate holdings off the books in 2012, incurring about $900,000 in additional write downs to get the property sold.

“For the longest time the REO bucket was filling up faster than banks could find buyers. But some of the property is starting to move now and flow into the bucket has slowed to a trickle,” Gibson said.

In the past year Legacy reduced its REO from $9.195 million to $7.686 million but it will take more time sell off two developments and some raw land still on the bank’s books.

The FDIC reported margin compression in the year-over-year period with the median yield on average assets of 4.6% for the fourth quarter of 2012. This slid from 4.86% in the third quarter and declined from 5.02% in the year-ago period.

Local bankers report more competition for loans which is driving down overall yields.

Northwest Arkansas is the largest of the state’s four regional banking centers in terms of number of institutions at 38. The Little Rock metro area has 36 institutions and the Fort Smith market has 23 institutions. Jonesboro is the smallest with 19.

Little Rock reports the most deposits at $14.034 billion, and Northwest Arkansas banks hold $8.869 billion for depositors. The regions of Fort Smith and Jonesboro reported deposits of $4.327 billion and $2.731 billion, respectively.

Since Interstate 540 through Van Buren and the north side of Fort Smith was reduced to one lane in both directions, many drivers will tell you traffic has often slowed to a crawl.

In addition to slowing traffic, figures from the Arkansas State Police and an increase in estimates at a local auto body shop suggest an increase in accidents, as well.

According to Lt. Bryan Davis, assistant troop commander at ASP Troop H in Fort Smith, there have been 76 accidents between I-40 and the Rogers Avenue exit since construction began Jan. 28. Of those, 15 accidents involved personal injury and one accident resulted in a fatality. (Link here for detail on the more than $78 million interstate renovation project.)

Davis said while the state police did not track the number of accidents prior to the start of construction, the number appears to be abnormal.

"It would be safe to say we've had an increase," he said, adding that the department works 1.35 accidents per day. Even though the number is an increase, Davis said the peak of accidents was 1.8 per day.

The increase is being felt at Medley & Sons Autobody in Fort Smith.

Co-owner Helen Medley said while she was unsure how many of her clients were involved in incidents related to I-540, she had definitely seen an uptick in the number of estimates requested at her shop.

"I think we've had about 50% more (estimates)," she said.

Medley said the largest increase at her business had occurred recently.

"Really, it's been the last couple of weeks," she said.

The time period coincides with the lane shifts that have occurred on the interstate.

District engineer Joe Shipman of the Arkansas Highway and Transportation Department said the recent lane shift was intended to allow construction crews to work with less chance of interaction with drivers.

"Our goal is to make it safest for motorists," he said. "We look at various things from the standpoint of our crews, we work with the contractor to make it safer for their crews and our crews. The biggest thing is trying to keep our work separated from the motorists. If we can do that, that's a benefit for everyone."

Due to safety measures, such as shifting north and southbound traffic to the same side of the interstate, Shipman said none of the reported 76 accidents have involved construction crews.

While there may have been an increase in the number of accidents and auto body estimates since the start of construction, it has not necessarily translated into an increased number of insurance claims.

Don Gill, an Allstate Insurance agent in Fort Smith, said his company had only had one claim directly related to I-540 construction.

"It was someone who was rear-ended and that could happen anywhere," he said.

Ken Nichols, an agent with Farmers Insurance in Fort Smith, said his agency had not seen a single claim from the construction.

"Now that you bring it up, no, not really," he said, adding that his agency's greatest number of claims comes from stray rocks or debris hitting windshields. But he said even those numbers had not gone up greatly.

"My biggest thing is glass claims, but it's nothing more than usual. And nothing has been reported from 540," Nichols said.

Shipman said in order for Nichols and Gill to continue to see a low number of claims and for Medley to provide fewer I-540-related estimates, drivers need to focus on two key areas while driving — maintaining a steady speed and keeping a safe distance from other drivers.

By keeping a distance from other drivers, Shipman said drivers will be able to reduce the amount of stop-and-go traffic, especially during morning and evening rush hours.

"Right now we have people stopping on the interstate to let people in," he said. "By keeping a good distance, cars will be able to merge without stopping."

Drivers using alternate routes has reduced the number of accidents, something Shipman hopes will continue.

"One thing that is helping is that motorists are looking to other routes," he said. "We see that the traffic counts on 540 are down as much as 15,000 (cars per day) on 540. In the last couple of weeks, we've actually seen a continued drop."

Davis said taking an alternate route at the busiest travel times will continue to be beneficial and safe for drivers and construction crews. Alternate routes from Van Buren into Fort Smith include the Midland Avenue bridge, the Garrison Avenue bridge and Highway 59 through Barling.

"In and out of Fort Smith gets pretty congested," he said. "Alternate routes are encouraged if they can find a better way."

The relationship between a flagship university and its host city is always going to have its ups and downs and the relationship between the City of Fayetteville and the University of Arkansas is no different.

An advisory committee formed in July 2012 is working to discuss mutual issues between the two entities. The Town and Gown Advisory Committee is a 21-member committee with representatives on the committee coming from University of Arkansas staff as appointed by Chancellor David Gearhart; City of Fayetteville staff appointed by Mayor Lioneld Jordan; a member of the Fayetteville City Council appointed by the Mayor; and members of the community who were appointed by the City Council after filing applications for service and going through the City Council  interview, nominating, and City Council selection process.

The group started meeting in October 2012 and has met several times since then. As the relationship is new, much of the work has been deciding how the committee will function, what it needs to discuss and how those needs will be prioritized.

“It’s our job to identify the problems, communicate the problems and offer potential solutions for solving the problems,” said Tommy Deweese, committee chairman.

Deweese emphasized that the committee is advisory only and the votes are to agree to recommend solutions to entities that have the authority to make the recommended changes.

One such change was the recent closing of parts of Dickson Street near the University during certain hours to reduce vehicle traffic in the high pedestrian area. Vice-chairman Diane Warren agreed about the committee’s mission and said that the committee so far has focused on communicating on the issues and prioritizing how they should be managed.

One task was to make the issues more manageable to research. The committee is divided into four committees, each with a specific area of focus. A few months ago, the committee as a whole discussed its top 10 concerns that face both the City of Fayetteville and the University of Arkansas. The four committees focus on:
• Master street plan and coordination
• Campus vicinity safety
• Enhancing communications among off-campus students, neighborhood residents and property owners
• University overlay district.

Divided within those committees is the top 10 priorities that the committee wants to handle first including:
• Master street planning and coordination including how to maximize Capital Improvement Projects and budgets, developing a process for designating and coordinating one-way streets, street parking, and other infrastructure elements.

• Enhancing communication with off-campus students, neighborhood residents and property owners regarding issues such as code education, property upkeep, off-campus landlord and tenant issues, and the issue of having too many unrelated people living in the same residence. A City of Fayetteville ordinance doesn’t allow more than three unrelated people to live in the same residence.

• Master street construction projects including Martin Luther King Road Enhancement, State Route 112 widening project, and core campus street enhancement projects.

• Campus vicinity safety including crosswalk installation and improvement, lighting and calming traffic in nearby neighborhoods.

• Communication and follow up regarding off-campus student incidents such as parties and altercations.

• Emergency services preparedness, coordination and planning.

• University Overlay District (the University’s master plan and how it interacts with the city’s master plan, especially focusing on transitions from established neighborhoods to campus).

• Additional fire company and fire station for replacing Station 2 at the UA.

• Signage and way-finding coordination between the city, University and all of Northwest Arkansas.

• Noise ordinance discussion including education and enforcement clarification.

Through the discussion at the committee’s March 25 meeting, members agreed that while they realize these issues will not be solved immediately, they are hopeful that the new committee will be able to make a difference. 

Following in the steps of e-commerce giant Amazon, Wal-Mart officials on Tuesday (March 26) announced plans to begin testing the use of self-service storage lockers in a limited number of the stores this summer.

Neil Ashe, CEO of Wal-Mart’s e-commerce unit, made the announcement to a group of reporters at an e-commerce media day in San Bruno, Calif., on Tuesday. Wal-Mart spokeswoman Ashley Hardie confirmed the lockers will be available in roughly a dozen stores by early summer.

“We are still finalizing the details, but customers will be able to order online and have products shipped to a storage locker at a local store for free. They will receive a passcode and can pick up the items at their leisure. Locker sizes will vary from store to store,” Hardie said.

With more than 4,000 U.S. locations, Wal-Mart has a clear advantage for rapid order fulfillment if details are worked out and the entire store network is involved in the locker model. Many of those stores are also open 24 hours a day, which provides more convenience for shoppers.

Analysts agree the potential saturation is huge as two-thirds of the U.S. population live within five miles of a Wal-Mart. But the question remains as to how much it would be utilized.

Chief online rival Amazon has utilized storage lockers within Staples, Rite Aid, RadioShack, 7 Eleven stores and other regional drug and grocers since last year. Amazon has not rolled out the locker program in Arkansas, but has chosen to do so in more populated regions such as New York and California.

Wal-Mart does not break out its online sales, but Ashe revealed to Reuters Tuesday that the retailer is poised to surpass $9 billion in online sales this year. This pales in comparison to Amazon’s reported $61 billion, but Wal-Mart continues to dominate the overall retail market with $466 billion in annual sales last year.

According to Reuters, Ashe told the media, "We can build e-commerce equivalent to anyone in the world.” Mixing the company's expanding online capabilities with its knowledge from running stores for 50 years "creates a commerce experience that no one else can do."

Hardie said Wal-Mart has tested the shipping of online orders from a small number of its physical stores and distribution centers for about two years. She said this program offers faster delivery to store and to homes for reduced costs.

Wal-Mart will expand this program to include about 50 stores this year.

Analysts continue to say delivery is key to winning favor with online customers.

Wal-Mart says using stores as delivery centers that are closer to customers help the retailer to provide same-day and next-day delivery are a low cost.

Matt Kistler, senior vice president of dry grocery for Wal-Mart US, told a room full of suppliers on Tuesday in Rogers that 80% of Walmart.com customers frequent a Walmart store at least once a month. He said 35% of Walmart.com visitors access the site from smartphones. And Walmart.com reached 3.7 million consumers who searched online for information on groceries in the last month.

Product assortment on Walmart.com includes more than two million items and the company said it plans to double that this year,

Bob Bowcock suggested that research identifying pollution near Whirlpool’s Fort Smith manufacturing plant used “creative math” to downplay the extent of the pollution.

More than 350 residents and former Whirlpool employees gathered Tuesday night (March 26) to hear from the Erin Brockovich and Bowcock, an investigator for the Brockovich Firm, about what they say are the real risks from trichloroethylene (TCE) contamination caused in the 1980s in the area surrounding Whirlpool's former manufacturing facility in south Fort Smith and what the next steps are for residents seeking a solution to potential pollution of their property.

Bowcock spoke during most of the town hall meeting. He started off by saying he was perplexed by the lack of a written record detailing both the contamination and attempts to remedy the situation.

"There's a lot of documents, but they don't really say a lot about what's happened and what's going on," he said.

Attendees in the standing room-only crowd were told that the Brockovich Firm had been in Fort Smith the last two days investigating the pollution in the area by possibly-carcinogenic TCE and how far it had spread.

"We walked around the facility, we looked at the drainage system coming off the property. We understand a little bit about what they were making there and the chemicals they were using. We walked the rail spurs and kind of looked at the topography, you know? What does the Earth look like just from the surface because that's going to tell you a lot about where these chemicals are going to go and everybody knows, who lives here, that Whirlpool's kind of in a high spot and it's headed in a northeasterly direction down to the creek."

According to Bowcock, the TCE is about seven to 10 feet deep.

‘CREATIVE MATH’
Addressing the area where Whirlpool has said the TCE "plume" is located, Bowcock told the audience that the oddly-shaped area that wraps up and around was likely not the only place where TCE contamination could be located.

"For those of you who have received the document out of the record, they draw these amoeba shapes and expect you to believe after 25 years of dumping lots and lots of TCE and other chemicals, that's the other thing we want to talk about, other chemicals, that it somehow makes this miraculous ameba shape, OK? It's creative math when you come up with a shape like this. I will tell you that the area of impact is going to be greater than this. We're quite confident of that just looking at the data set."

One area where Bowcock expects the Brockovich Firm to find TCE, as well as other chemicals, is south of the manufacturing facility.

A former resident of the area south of the facility was Susan Johnson of Pocola, Okla.

Prior to the meeting, she told how not only she, but her father and mother, had experienced health problems ranging from tumors to neurological disorders after living on the north end of Holly Avenue for nearly 50 years.

"My dad suffered from a nerve disorder called trigeminal neuralgia that he was diagnosed with back in the 80s. It was excruciating. They literally had to paralyze off half of his face. It blinded him in one eye. He lost control of that side of his face," she explained.

She added that her mother also suffered conditions such as non-diabetic peripheral neuropathy, a neuropathy condition that she says is a rare disorder for non-diabetic sufferers.

"My mother has it, the man who lives behind my mother has it, the man who lives catacorner my mother's house died from complications from it several years back, and the man that lived across the street from him was the exact same way. That's four people with neuropathy within about 100 yards of each other."

Johnson said she has had three different tumors removed from her body. Had she known the danger Bowcock said her family was in, Johnson was certain that her mother would not still be living in her long-time home.

"We would have lived somewhere else if someone had just bothered to tell us," Johnson said.

EARLY KNOWLEDGE OF TCE DANGER
Bowcock told the sometimes raucous crowd that there was knowledge of the dangers of TCE dating back to before WWII.

Some of the disorders he said could be directly attributed to TCE exposure include birth defects and parkinson's disease.

When asked how many people in the room were directly affected or knew someone affected by diseases and disorders who had either lived in the neighborhood around Whirlpool or who had worked at the factory, nearly half of the hands in the room went up.

The issue of instituting a groundwater well ban was also addressed by Bowcock, who explained that even if the city directors pass an ordinance instituting a ban at tomorrow's  (March 27) Fort Smith Board of Directors meeting, it does not address health concerns, the larger issue of cleanup or a decline in property values.

"By instituting the no-pump zone, it does not fix the problem. It does not fix the problem. It calls out more the attention to the fact that this particular neighborhood has now been delineated and deed-restricted and if you go to transfer your property you are now, you are actually, regardless of what they do, if you're in the area where they've requested it, they've already affected your property values. That's just a straight fact. No question about it. You have to now disclose that you are over an impacted area."

CLEAN-UP COST ESTIMATE
He went on to say several minutes later that there was a way for the pollution to be cleaned up if only Whirlpool would consent to such a clean up.

"But they know it's out there, they know what it does and they know how to fix it and they have to stop hiding behind the regulatory community that allows them to perpetuate their problem.

When asked by a man in the crowd what the cost of cleaning up the contamination would be, Bowcock said it would have probably been only $2 million or $3 million if it had been done when the contamination was found and reported to the Arkansas Department of Environmental Quality (ADEQ).

But since so many years have passed since the contamination, he said the costs have skyrocketed.

"That (cost) has probably gone up, oh more than 10 fold, probably 25 or 30 times. So yeah, they're probably looking at if they did it today because it's gone so far…so they're going to double their cost there plus the operating expense."

‘BIGGER CONTAMINATION’
During a press conference prior to the town hall meeting, Brockovich, whose grandfather was a Fort Smith native, said the investigation being conducted by her team would start yielding results as early as the next two weeks.

"We did some sampling today. We did a walk around, we did the railroad tracks in the back and you can kind of see where the low spots are and we can probably get a good idea where they dumped," she said.

Brockovich said she did not want to appear jaded and skeptical about what the results of her firm's investigation will show, but it was hard not to be skeptical.

"For 22 years, every time I see reports that are done, they're done by the company and they're not independent and more often than not we find out we have a bigger contamination than they led us to know that there is."

INVESTIGATION AND SUPPORT
Residents and former Whirlpool employees were asked to provide contact information so that the Brockovich Firm could continue following up with residents, including those who are having health problems, on next steps with the investigation.

Bowcock also said the firm would also be setting up a Facebook page where residents and former employees could contact himself and Brockovich directly and with anonymity regarding concerns about the Whirlpool site.

He said tonight's meeting and the last few days of investigation are just the start of a very long process to get Whirlpool to clean up TCE and other pollutants it may have leaked into environment surrounding the former plant.

Brockovich continued, saying finding a conclusion to this problem started tonight.

"We're here to help you. We're going to start the process of an investigation. We've already started sampling. We're going to be back to get more samples. We're going to be in touch with you. We're going to tell you what we find out. We're going to tell you what documents we uncover. We're going to work with the employees and we will start the process of isolating where the plume is, where it isn't, who's impacted and then one of the decisions you will have to make is you will be entitled and you have the right to have your property bought, taken care of or any future damages for your health as we move forward."

FORT SMITH BOARD REACTION
Following the meeting, Vice Mayor Kevin Settle said information he and other Directors heard at the meeting was important to their decision on whether to vote for the groundwater well ban at tomorrow night's Board of Directors meeting.

"There's a lot of information we just got here. What we have to decide is how to move forward as a community, as both Bob (Bowcock) and Erin (Brockovich) talked about. It's one of those things I'm going to have to think about tonight…(to) make a decision that's best for the city of Fort Smith."

Director Pam Weber said after the meeting that she was concerned about the possibility that the contamination issue was larger than initially presented to the Board by Whirlpool's attorney and environmental consultants at a Feb. 12 Board meeting.

"As a community, our environment is one of our biggest assets," she said. "We need corporations to feel the same."

Weber also said that she would not be voting for the ordinance imposing a groundwater well ban north of the former Whirlpool factory.

"I feel that it weakens the possibility of Whirlpool coming in immediately for a clean up."

WHIRLPOOL REACTION
City Administrator Ray Gosack said he was alarmed at the number of former Whirlpool employees who had concerns about their health after working at the facility.

"I didn't realize there were that many concerns from former employees. I was aware of people that lived in the affected area were concerned about health, but we learned tonight that many former employees are concerned about their exposure to chemicals in the plant," Gosack said.

He also said Whirlpool is starting to understand that the groundwater well ban may not fully address the issue of contamination in the neighborhood, just as Bowcock had said, which was why the company requested that the Board withdraw consideration for the ban at tomorrow's meeting.

"I think what Whirlpool realizes is they need to put together a more comprehensive plan for dealing with the problem and that the ordinance may or may not be part of the comprehensive plan and they want some time to put that plan together, hold community meetings, review the plan with the public and also work with the Arkansas Department of Environmental Quality. So I think what they're asking the city to do is take a time out while they prepare that information and review it with the community before the city takes any action."

A call seeking comment from Whirlpool following the town hall meeting was not returned.

In an e-mail earlier today, Kristine Vernier, senior global and media relations manager for Whirlpool, said the company would not cooperate with The City Wire's requests for comment, which have gone unanswered for months. Vernier's response noted: "Unfortunately we do not respond to requests from The City Wire due to a past, consistent pattern of behavior from this blog which we found to be contrary to common journalistic standards."

The Board of Directors meeting will take place tomorrow (March 27) at 6 p.m. at the Fort Smith Public School Service Center at 3205 Jenny Lind - Building B.

Gosack said representatives from Whirlpool, including their attorney and environmental consultants, will be in attendance as well as a representative from ADEQ.

Wal-Mart Stores Inc. said it incurred $157 million in expenses during fiscal 2013 relating to the ongoing investigations linked to alleged violations of the Foreign Corrupt Practices Act in several of its international markets.

The retailer expects those costs will escalate as the investigation has expanded from Mexico and now includes probes in Brazil, India and China. The assessment from Wal-Mart was noted in its annual 10K filing with the Securities and Exchange Commission that was released Tuesday (March 26).

Costs associated with the ongoing investigation totaled $99 million in the company’s third quarter. Despite a 58% increase in expenses in the recent quarter, Wal-Mart noted in the filing that it does not believe the total will have a material impact on the company’s financial soundness.

The retailer did say it expects a variety of negative consequences as a result of the investigation.

“One or more enforcement actions could be instituted in respect of the matters that are the subject of some or all of the on-going government investigations, and such actions, if brought, may result in judgments, settlements, fines, penalties, injunctions, cease and desist orders, debarment or other relief, criminal convictions and/or penalties,” the filing notes.

“The existing and any additional shareholder lawsuits may result in judgments against us and our current and former directors and officers named in those proceedings. We cannot predict at this time the outcome or impact of the government investigations, the shareholder lawsuits, or our own internal investigations and review.”

The retail titan says it voluntarily disclosed internal investigative findings to the U.S. Department of Justice in November 2011. But the entire world became aware of the allegations in April 2012 when the New York Times made the bribery investigation public.

In August 2012,  the SEC began requiring Wal-Mart to give more details and better transparency to its shareholders in regulatory filings. Several shareholder lawsuits were filed last year and remain in litigation.

The SEC requires Wal-Mart to state the possible loss estimates or give reasons justifying why not, given the magnitude of the investigation.

In addition to full cooperation with national and foreign regulatory agencies, Wal-Mart’s own audit committee in conducting a voluntary global review of all policies, practices and internal controls for FCPA compliance in an effort to strengthening its global anti-corruption compliance programs.

Wal-Mart profits totaled $17 billion on sales of $469 billion last year.

While corporate governance experts say the fines and total fallout could be hefty in terms of implicated personnel and fines levied, the stock has continued to show resilience trading at $74.73, down 4 cents at the noon hour Wednesday.

Over the past 52 weeks Wal-Mart stock has risen from a low of $57.18 which was set April 25 to a new high of $77.60 set in October 2012.

The American Express and Wal-Mart debit card venture – Bluebird – is looking more and more like a bank product with the potential woo more consumers away from traditional checking accounts.

Wal-Mart announced yesterday (March 26) that Bluebird accounts will now be eligible for deposit insurance provided by the Federal Deposit Insurance Corp. – one of the few perks banks had over Bluebird accounts. A new check writing option is also available for some account holders, Wal-Mart said.

The retail giant is attempting to take market share in a growing unbanked or underbanker sector totaling some 24 million U.S. consumers.

The expected overall market for prepaid debit cards is between $75 and $80 billion loaded in 2012. This market totaled $57.2 billion in 2011, according to the Mercator Advisory Group.

The FDIC insurance hinges on a depositor having a government issued payment such as tax refund, military payments or social security payments directly deposited to the card.

Customers can also balance their Bluebird checkbook in real-time with pre-authorized check writing, add checks to their Bluebird Account by mail and add funds up to $100,000 annually.

“When we launched Bluebird last October, we were focused on serving the tens of millions of Americans who are not well served by the traditional financial services industry. The unbanked, underbanked, and the unhappily banked are beset by onerous fees and numerous inconveniences,” said Dan Schulman, group president, Enterprise Growth at American Express. 

He said Bluebird is designed to help make consumers’ financial lives easier, more convenient and less expensive.

“This announcement, which reflects feedback from consumers, advocacy groups and government officials, represents the next set of enhancements that further distinguish Bluebird from other financial services options.”

The product received some mixed reviews after the initial launch in last fall. The biggest complaints were related to customer service and lag time in getting deposits credited, especially when using the remote deposit capture now a routine offering by most traditional banks.

“Since launching Bluebird, we have been listening to our customers’ feedback and working hard to expand its features and services,” said Daniel Eckert, vice president of financial services for Walmart U.S.”

Bluebird will make check writing an option for account holders who obtain a pre-authorization code online or via a mobile application. Once a check is pre-authorized the funds are deducted immediately and held until the check is presented for payment. Bluebird members have access to one free checkbook (50 checks) until August. After then, the cost to reorder is $26 per book.

Critics say the check option is expensive with each check costing roughly 50 cents after the initial free book. Consumers can typically order 200 checks for less than $10 from several companies, but reordering through the bank is generally double to cost of ordering direct.

Bluebird is available online at www.bluebird.com and at more than 4,000 Walmart stores.

Ben Jackson, senior analyst with the Mercator Advisory Group, said the jury is still out on how many new customers will come onboard because of the FDIC insurance and checking options.

“If American Express and Wal-Mart are truly responding to customer requests then perhaps they will draw military or others who need the direct deposit feature other debit cards already offer. But if it’s just a strategy to be more competitive to the current user pool then the uptick in card usage will likely be minimal,” Jackson said.

American Expess CEO Kenneth Chenault said in February that customers loaded $275 million in funds on more than 575,000 Bluebird accounts. About 85% of Bluebird enrollees are new to American Express, and about 45% are under the age of 35.

Jackson said the FDIC insurance feature is made possible through a pass-through program American Express is allowed since it struck a deal with Wells Fargo under which it will transfer Bluebird deposits to the San Francisco bank.

Given that funds are held in an insured institution this allows the accounts to be covered by what is known as FDIC "pass through" insurance, Jackson said.

American Express did not say how much they were paying for the insurance coverage, as the FDIC does charge a premium to the banks who are covered by insurance.

Customer funds will be protected against losses of up to $100,000  per the account limit imposed by American Express.

Despite the unseasonable cold temperatures, officials with the city of Rogers are looking forward to warmer temperatures with its new aquatic center.

The water park, located on South 26th street, formerly Doc Wheeler Park, is set to open May 25. The $12.9 million project was funded by the 2011 bond issue where more than $25 million went towards parks and recreation.

It’s the first time in more than 50 years, the city of Rogers will have a new public pool surrounded by a state-of-the-art water park.

Aquatics Center Manager Suzy Turek is surprised this type of facility didn’t already exist in the area.

“With the size of Northwest Arkansas, it’s surprising. (The City of) Rogers had the foresight and knew it would be good for residents and it’s tax base,” she said, “It’s an investment in the city and those who agreed with the bond election, invested.”

The pricing to enter the water park has different levels based on residency and height. (Link here for pricing details.)

“We are trying to be fiscally responsible,” she said, “We aren’t going to pay for the park. The revenue from admission is solely to make sure we can run this park without being a burden to the city.”

Turek has more than 25 years in aquatics operations but admits this project is unique.

“Every decision or anticipation is our best educated guess. We really don’t know what to expect,” she said. “What we are hoping is that we will see residents of Rogers and people within a 75-mile radius. It’s a unique park. I’ve worked at private and municipal parks and this is a hybrid.”

Nearly two months away from opening and the park is going through a hiring frenzy. More than 90 people will be employed by the park with more than 60 of them being lifeguards. Turek estimates her budget will near $500,000 with more than $300,000 in salary, $60,000 in pool chemicals and the remainder for liability insurance, water and electricity.

“We want to be a self-sustaining entity and be “in-the-red” and not pull from the general fund,” she said.

With the cost of admission ranging from $8-$15 for the day, water-goers can come and go throughout the day.

Turek hopes residents will flock to the Rogers facility without driving to Tulsa or Springfield.

“We hope they know it’s a cost effective family experience without having to drive two hours,” she said, “I love the size of it. It’s not too big that you get lost and it’s well laid-out and functional.”

The park also has a competition pool with springboards, family leisure pool, a pool with a net where people may walk across, an area for little ones, spray pad and two family pools where small children age 3 and under can splash as well as a lazy river for families.

“It’s a top-notch facility. When people come in they are going to see I think their jaws are going to drop,” Turek said, “It’s great to see other people excited.”

The park could have some competition from two cities south of Northwest Arkansas.

Clarksville, the county seat of Johnson County, will soon open a more than $9 million aquatics center. The new center will include an eight-lane lap indoor swimming pool, water therapy pool and outdoor water park including a pool, slides, lazy river and children’s area.

Fort Smith voters approved in 2012 a $4 million bond that is part of a deal with Sebastian County to build an $8 million aquatics park at Ben Geren Regional Park.  However, a debate about the cost of the project and potential financial shortfalls for the Sebastian County government are threatening to delay the proposed Memorial Day 2014 opening of the facility.

There is also a small water park in Alma.

If all goes according to plan, the U.S. Marshals Museum may break ground on its riverfront location in downtown Fort Smith on Sept. 24, 2014, the 225th anniversary of the Marshal Service.

Museum President and CEO Jim Dunn told the museum's executive committee Wednesday (March 27) that the groundbreaking would be part of a larger, year-long celebration of the Marshal Service's anniversary.

"In addition to the possible ground breaking for the museum, other activities being planned for the 2014 celebration include the U.S. Mint's issuing of commemorative coins authorized by President Obama in April 2012; a series of nationwide educational and public programs that may include traveling exhibitions at sites around the country; production of a documentary film; and special events in Washington, Fort Smith, Dallas, new York City, et al.," Dunn wrote in a document presented to the committee.

The year-long celebration, Dunn explained, is intended to raise the profile of the museum to an audience not only locally, but across the nation.

"It's a very aggressive program on our part (with) the purpose of celebrating the 225th anniversary. (The purpose) is to bring greater visibility to the project, greater credibility to the efforts that we are making to celebrate the history of the Marshals and what it has meant to the rule of law and the Constitution of the United States."

In order for the planned 50,000-square-foot museum to be built, funding for the project must be in place. Documents presented at the meeting show a funding goal of $53.2 million.

Of "funds received, pledged and projected," the museum projects receiving $4 million in proceeds from the sale of commemorative coins. Another $10 million has been received through either pledges or contributions.

Richard Dressner, a fundraising consultant who was at the meeting, discussed challenges the museum has faced and will continue to face as fundraising efforts begin to expand across the state and nation.

The biggest challenge, he said, is that unlike a university or another established non-profit, the Marshals Museum does not yet have a core group of supporters.

"At a regional art museum or a university, you at least have an identifiable group that will likely support us. They are unlikely to get support from people who are not connected to the institution," he said. "We're doing something very different. On the strength on the case we can make, we've got to find our audience. We've got to find out supporters."

The museum is working hard to spread its message, Dressner said, but he said identifying donors and getting money secured is the most important step in moving toward a groundbreaking next year.

"What we need to do now is identify our prospects and we've started doing it, tell our story, present our case and make the ask."

Dunn is also banking on new market tax credits for partial funding of the museum, which he said should bring in nearly $10 million.

As explained by Dunn, new market tax credits are not simple or easy to understand. But he says they can be beneficial to the museum.

"Well, new market tax credit is a plan of the Department of Treasury of the United States to encourage investment by private entities in low-income census tracts and it would allow investors to purchase tax credits and use the proceeds from the purchase of those tax credits would ultimately flow to the U.S. Marshals Museum. it's a very complex process," Dunn said. "I'm a lawyer and I went to a 3-day seminar on it and I came out not fully understanding it. I have some concept of what it is. But the purpose of the program is to spur private investment in low-income census tracts the site of the museum is one."

Dunn told the committee that to apply for and be approved for the tax credits would be time consuming, but he said it was worth trying for since he expects the museum would have a good chance of being approved for the credits.

While he is hopeful for a Sept. 24, 2014 groundbreaking, Dunn acknowledges the challenges of meeting such an ambitious goal while an additional $29.2 million is still needed to fully fund the museum.

"We would love to break ground on the 225th anniversary of the Marshal service, but that is a wish, or a hope, as opposed to a firm expectation. A lot of things have to fall into place for us to be able to do that."

Bank of Fayetteville shareholders will get paid a cash dividend for the first time in four years as the bank’s profits have strengthened, according to president and CEO Mary Beth Brooks.

Brooks said the 40 cent per share dividend is a way to give back to loyal shareholders, and she’s pleased the bank is in a position to do so.

The shares are thinly traded, but were priced today (March 28) at $20.60, up 15 cents. The share price has risen from $7.20 in the past 52-weeks.

The Bank of Fayetteville profits rose 91.3% in 2012, from the prior year. The bank reported 2012 net income of $2.032 million, up from $1.062 million in 2011. Since 2010 bank profitability has recovered from total profits of $157,000, according to regulatory filings with the Federal Deposit Insurance Corp.
 

For years Wal-Mart Stores has followed a somewhat conservative track with respect to its overall operations. But times are changing for the retail behemoth, with company execs potentially embracing a more nimble outside-the-box approach to diversifying customer reach.

News this week that the retailer is expanding its “scan & go” test markets and has plans to try storage lockers in roughly a dozen stores this summer was echoed around the world as Wal-Mart’s strategic move toward Amazon’s model.

But retail expert Carol Spieckerman, CEO of New Market Builders, thinks it’s not so much about trailing Amazon as it is about the big box giant assessing ways to leverage all of its physical assets and surrounding ecosystems.

“Wal-Mart’s single obsession is leveraging its scale and I see them doing this throughout their entire operations,” Spieckerman said.

News that Wal-Mart is now considering a program that would use customers to help deliver online orders is yet a more radical leap from the retailer’s traditional mindset. While the announcement was made during an e-commerce conference in San Bruno, Calif., on Thursday (March 28), the media was told the program is only in the “very early stages of discussion.”

Other online retailers are using “crowd source” deliveries through start-up ventures such as Zipments and TaskRabbit who have tried for about two years to perfect the business model.

“I like the way Wal-Mart is running along side several start-up ventures such as Zipments to test the waters. This perhaps validates the business model idea and also allows Wal-Mart to do it’s own testing at the same time. Once perfected, Wal-Mart can then roll out the service or format on a larger scale. We continue to see them testing and fine tuning new ideas in small markets first,” Spieckerman said.

She recalls only a few years ago Wal-Mart’s huge physical presence was seen as “clunky and cumbersome” but says it’s been exciting to see the retailer think about how it can leverage the 4,000 physical stores and 200 million store visitors each week.

Wells Fargo Securities analyst Matt Nemer thinks the likelihood of “crowd source” delivery being adopted throughout the retailer’s entire network is low. But he agreed Wal-Mart will likely test the delivery program in some stores, perhaps only keeping it more metro markets and for higher-priced items.

Robin Sherk, analyst with Kantar Retail, agrees Wal-Mart is continually looking for ways to give customers speedy and low-cost deliveries. She said Wal-Mart is already making a push to fill online orders directly from its stores in an effort to reduce logistical costs and employing FedEx for home deliveries that  are fulfilled in nearby stores.

Wal-Mart said this week it will double this effort to 50 stores in the coming months to serve more of is customers. The retailer also is testing “Walmart to Go” which is same-day delivery by it’s own trucks in five metro markets.

Sherk says she wouldn’t be surprised if Wal-Mart expanded its storage locker concept beyond the physical store parameters recently announced.

As a resident of New York City, a market Wal-Mart continues to pursue, Sherk says it makes more sense in some areas like NYC to have the lockers placed in other businesses, perhaps gas stations or drive through facilities.

One thing is for certain, analysts in general are excited to see Wal-Mart exploring new possibilities in terms of delivery and customer service, while also working to keep prices affordable.

Fort Smith sales tax collections continue to run in the wrong direction, with the February report showing a 5.5% decline for the city’s 1% taxes compared to the 2012 period. The report marked four consecutive months of declines in tax revenue collections.

Each of the city’s 1% sales taxes (1% for streets and 1% for water and sewer projects) collected $1.497 million in the February report, down 5.53% from the same period in 2012.

The collections in the February report were 8.41% below budget estimates. (Because the state of Arkansas has a two-month delay in reporting collections back to the cities, the city of Fort Smith — for budgeting purposes — has historically reflected the collections on a one-month delay. Which is to say, the tax collections remitted to cities in March are from taxes collected in January and transferred by merchants to the state in February.)

For the first two reporting months of 2013, each of the 1% sales taxes generated $3.426 million, down 5.73% compared to the 2012 period and 8.2% below the budget estimate.

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

However, the revenue trend began to decline during the fourth quarter of 2012. City Finance Director Kara Bushkuhl has already warned that budget cuts may be needed in 2013.

Fort Smith’s general fund at the end of 2012 was $5.975 million, down $722,144 less than estimated once prepaid expenditures are accounted for. Overall, city revenue during 2012 was $329,000 below estimates.

Most impacting the city’s general fund is the revenue received – or not received – from the city’s share of the countywide 1% sales tax. The countywide tax collection is critical because the revenue is a little more than 40% of the city’s general budget of roughly $42 million. A majority of the general fund budget general supports fire, police and other critical city functions.

Bushkuhl said Thursday that department heads have been asked to submit cuts of up to 4% for any budgets funded by the general fund. She said specifics on the proposed cuts will be presented to the Fort Smith Board of Directors during their April 9 meeting.

Fort Smith’s share of the county 1% sales tax in the February report is $1.187 million, down 4.37% compared to February 2012. The collection was down 6.76% compared to the revenue estimate.

For the first two months of 2012, the countywide tax has generated $2.651 million for Fort Smith, down 5.34% compared to 2011 and down 7.57% compared to budget forecasts.

Several years of high unemployment in the Fort Smith area is the likely factor pushing tax collections lower. The number of unemployed in the Fort Smith metro during January was estimated at 11,480, according to the U.S. Bureau of Labor Statistics. The annual monthly average for unemployed in 2011 was 11,413, up compared to the 2010 monthly average of 11,156 and the 2009 average of 10,091. The 2008 monthly average was 6,884.

January was the 48th consecutive month the Fort Smith metro jobless rate has been at or above 7%, and was the second consecutive month the rate has been above 8%.

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

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

The RFID Research Center and the Center for Advanced Spatial Technologies (CAST) at the University of Arkansas have partnered to conduct research that will integrate emerging visual identification technologies to use for retail applications.

This new visual technology uses 2-D and 3-D imaging processes already found in cell phones and video gaming devices.

Researchers say retailers will be able to use this technology to identify objects without the need for traditional barcodes.

Products on store shelves or in warehouses can be recognized quickly and linked to product information databases. When linked to associated product information, the product can be added to inventory, verified for correct location and removed from inventory at checkout.

“There are millions of devices in the hands of retailers and consumers across the United States today that can take a picture of an item – an apple or a detergent bottle, for example – send that picture to a server and then let software automatically identify the item,” said Justin Patton, managing director of the RFID Center.

“The process is as simple as scanning a barcode, but it works from all angles and can capture many items at once. An image is enough, and the hardware is cheap.”

Researchers will collaborate to make applications that translate into reliable tools that can help retailers identify items missing from store shelves, speed up the self-check-out process and locate items within vast distribution centers.

“What is needed is a common digital data standard for shared items that can be used across platforms and amongst retailers,” said Jackson Cothren, associate professor of geosciences and director of CAST. “You can buy a bag of chips at a concert in Germany or at a gas station in New Mexico, and the standard VIT traits of that item are shared. This will have a major impact on the retail industry in the next three years.”

Preliminary research began in 2010 with early prototypes of Microsoft Kinect systems that can identify grocery items. The centers are now conducting studies on deep scans of actual store environments and within laboratory space at the RFID Research Center.

The researchers have created 3-D models of the products and store environments comprised of billions of data points. They have begun to identify promising data that can be used to create a standard library of object information. Initial results will be issued this fall.

The RFID Research Center serves a large network of retailers and suppliers and has broad knowledge of store processes. The center has been successful at integrating new technology at large retailers such as Walmart, Dillard’s, JC Penney and Bloomingdale’s.

Construction is the livelihood for several thousand local residents who are happier to see the building pace accelerate from what was deemed a decent 2012 by most.

The region’s four largest cities issued new construction permits valued at more than $35.783 million in February. Roughly 86% – or $30.885 million – of the total permit value was for new residential, which is single family or duplex construction.

A year ago, combined residential permits issued in Fayetteville, Springdale, Rogers and Bentonville totaled $21.661 million. Housing starts accelerated 21% from a year ago with 124 projects compared to 103 in February 2012.

The values rose by $9.2 million, or 29%, in the year-over-year period.

Brent Hanby, co-owner of Encore Flooring and Building Products in Springdale, relies heavily on the residential construction for his livelihood.

“I regularly survey title companies, movers and builders to try and gauge their assessment of the local market. Everyone I am talking with is busier these days, with the exception of a few restoration specialists who focus largely on insurance claim jobs from natural disasters. Business is not the crazy pace it was at the market peak but it’s steady with modest improvements these days,” Hanby said.

Builders across the four cities stayed active with Rausch Coleman, ARC Walker Brothers and Riggins Brothers actively building in multiple subdivisions.

Hanby said several spec builders are reporting multiple offers while the homes are still under construction.

The overall new inventory is still quite low at between 200 and 300 homes in the two counties. Hanby remembers well the frantic pace in late 2006 which led to more than 2,000 finished, but occupied homes.

“I doubt lenders or builders will ever let that happen again, it’s been a long recovery but we are encouraged by the growth our business has experienced in the past two years,” Hanby said.

When he opened the building supply business in 2011, he hired 14 employees. Hanby said he added three more this month to give the firm a total of 34.

“Our outside and inside sales are growing as people in general feel better about investing in their homes, especially now that values are going up.” he added.

Each of the four cities in this report show positive gains in residential permit values in February when compared to the prior-year period.

New Residential (February)
Bentonville: permits totaled $10.792 million, up 17.38%
Rogers: permits totaled $6.173 million, up 120.7%
Fayetteville: permits totaled $8.324 million, up 77%
Springdale: permits totaled $5.594 million, up 11.9%

COMMERCIAL RECAP
The new commercial construction pace remains soft, but is showing sparks of growth in Rogers thanks to the ongoing development by Hunt Ventures, a partnership between Johnelle Hunt and Tim Graham.

In western Rogers, commercial construction along Promenade Boulevard is active with three Hunt Venture projects under way at this time. Spokesman John George told The City Wire, that  two new retail projects will add 12,500 square feet of space which will be home to Bliss Cupcakes and Dickie’s Barbecue and two other businesses whose names will be released in the next week or so.

He said Party Place is occupying another building which will be roughly 10,000 square feet.

Across Interstate 540, and to the south of Hunt Towers, a 60,000 square foot office building is going up. George said two large Wal-Mart vendors have pre-leased space in the building, which leaves about 8,000 square feet for two other large tenants.

George said traffic at the Promenade Mall and Cabela’s has been strong and Hunt Ventures will also add another retail/office building along Pauline Whitaker Parkway, which is near the Neighborhood Market in the Pinnacle area.

New commercial projects remain sparse among most of the four cities, with the exception of owner-occupied projects. In Bentonville there were no new commercial permits issued in February. A year ago, the city issued one permit ($460,000) for a new McDonald’s to be built along Airport Road.

New Commercial (February)
Rogers: permits totaled $2.175 million, up 162%
Fayetteville: permits totaled $2.364 million, up 93.59%
Springdale: permits totaled $359,328, down 81%
Bentonville: permits totaled $0, down 100%

SKYLINE NOTES
The Skyline Report for the second half of 2012 was released this week and gives a comprehensive look at the commercial and multifamily markets in the two counties.

“Job growth and population growth are having similar effects on the commercial real estate market as on the multifamily market, said Kathy Deck, director for the Center for Business and Economic Research at the University of Arkansas.

“Vacancy rates in the last half of 2012 decreased in all submarkets of commercial real estate except for the warehouse submarket, which rose to 20.2% at the end of the fourth quarter of 2012 from the 19.9% reported at the end of the second quarter of 2012. That increase was due to an owner-occupied building that was put into the warehouse space market when the owner vacated it,” Deck added.

Every submarket of the Northwest Arkansas commercial real estate experienced positive net absorption of space. Only 136,425 square feet of new space was added to the market while 1,306,921 square feet of commercial space was absorbed, netting positive absorption of 1,170,496 square feet.

The largest gains in absorption came in the industrial submarket with 277,529 square feet and the office submarket with net positive absorption of 225,292 square feet. The warehouse and retail/warehouse submarkets had positive net absorption of 198,350 square feet and 121,292 square feet, respectively.

The office/warehouse submarket had positive net absorption of 120,801 square feet, the office/retail submarket had 115,142 square feet and the retail submarket had 106,353 square feet.

“While I cannot understate the progress we are making in the commercial real estate market, we will continue to see more projects developed as ‘build-to-suit’ rather than speculative building,” Deck said. “And that is only prudent.”

All of the commercial submarkets had lower vacancy rates than in December 2011.

NWA Commercial Vacancy Rates (December 2012)
Retail: 11.4%, down from 13.1%
Office: 15.3%, down from 19.5%
Office Retail: 15.4% down from 18.8%
Office Warehouse: 16.9%, down from 21.3%
Warehouse: 20.2%, down from 21.2%

“Developers and builders are doing their homework and moving forward with well-reasoned projects that fill a particular need within our market,” said Kent Williamson, loan manager with Arvest Bank in Springdale. “Everyone, including the banking industry, is taking a thoughtful approach to projects that contribute to the further economic prosperity of Northwest Arkansas.”

When the closing bell rang on Thursday (March 28) on Good Friday eve, shareholders from shore to shore were surely smiling from ear to ear.

Widespread profits abound. And with no markets open on Good Friday, Thursday was the official end of the first quarter in 2013.

The benchmark S&P 500 closed its strongest quarter in a year – up 10%. The Dow climbed 11.3% and the Nasdaq gained 8.2% for the first three months of the year.

Eight companies based in Northwest Arkansas and Fort Smith also posted strong results over the first quarter, which is good news for the thousands of local shareholders who live in the four counties between Fort Smith and Bentonville.

TYSON FOODS (NYSE: TSN)
Springdale-based Tyson Foods set a new 52-week high on Thursday closing at $24.82, up 2.65% on the day. Shares are up an impressive 24.22% this year. Tyson recently garnered praise from CNBC’s Jim Cramer who rates the stock a buy. He cites solid stock price performance, revenue growth, attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. Tyson will report second quarter earnings on May 6.

J.B. HUNT TRANSPORT (NASDAQ: JBHT)
Stockholders of Lowell-based J.B. Hunt Transport enjoyed a smooth ride in the first quarter of 2013.  Earlier in the week the stock set a new 52-week high price of $75.34. The shares rallied back after some profit taking midweek to close Thursday at $74.48, up 62 cents. During the first quarter shares rose 21.58%. J.B. Hunt will report first quarter earnings on April 11.

P.A.M. TRANSPORTATION (NASDAQ: PTSI)
Shares of the thinly traded truckline P.A.M. Transportation closed Thursday at $11, up 5.35%. For the full quarter P.A.M. shares rose 14.22% from the $9.63 level where they began trading on Jan. 3. The Tontitown-based operation will report first quarter earnings on April 22.

USA TRUCK (NASDAQ: USAK)
Van-Buren-based USA Truck stock closed Thursday at $4.91, up 7 cents or 1.45%. The shares rose 44.83% from where they began the year at $3.39. Shares remain down some 37% from one year ago. In February John Simone was appointed CEO, and former CEO Cliff Beckham returned to his previous role of chief financial officer. USA Truck will report first quarter earnings sometime in mid-April.

ARKANSAS BEST CORP. (NASDAQ: ABFS)
Fort Smith-based Arkansas Best Corp., the parent of ABF Freight System, was the one locally based firm in this report to end the quarter with a downward tick. Shares closed Thursday at $11.68, down 13 cents, or 1.1% lower than the previous day. For the full quarter shares rose 19.3%. In the three month period shares traded as high as $12.78 in the past two weeks. The 52-week high for the shares is $19.38 which was set in March 2012. The less-than-truckload trucking company will report its first quarter earnings in April.

AMERICA’S CAR-MART (NASDAQ: CRMT)
America’s Car-Mart and its shareholders had quite a joyride in the first quarter of 2013. The stock closed Thursday at $46.74, up $1.15, or 2.40%. Car-Mart shares started the year $41.30 and rose as high as $49.52 last week. For the full quarter the shares were up 13.17%.  Bentonville-based Car-Mart will report its fourth quarter results on May 20.

WAL-MART STORES (NYSE: WMT)
Shares of widely held Wal-Mart Stores Inc. closed at $74.83, up 5 cents on Thursday. The retailer’s stock price rose 8.76% in the first quarter of 2013, but fell shy of the annual high $77.60 set in October of last year. Wal-Mart will report first quarter earnings on May 16.

Prior to the January 2009 purchase by FSM Redevelopment Partners of the crumbling former Phoenix Village Mall, Lance Beaty simply intended to generate a modest income by converting Arkansas’ first enclosed mall into warehouse space.

But a little more than four years later, the more than $10 million invested in the property has become a “job engine” that will soon be home to more than 1,000 jobs in the about 40-acre site.

Naples, Fla.-based Health Management Associates announced plans on April 4 to operate a regional service center in Fort Smith that will employ more than 500 with average annual salaries potentially exceeding $40,000.

The almost 90,000-square-foot facility will be housed in what is now the Phoenix Expo Center in what was once a portion of Phoenix Village Mall. HMA estimates the annual payroll will be $21.5 million, with the center at full employment within 12 months. The company is also investing $4 million in furniture, fixtures and equipment for the new center. The facility is scheduled to begin operations in July.

‘DEVELOPMENT ENGINE’
Those jobs will add to the about 450 at the Sykes call center also located on the Phoenix property. Other businesses located on the Phoenix property includes the Cooper Clinic Pro Med urgent care office, a regional office for AFLAC, Sebastian County Solid Waste office and several retail stores. Beaty also said there are doctors interested in leasing space in the professional office building.

“Obviously we’re pleased to have developed a project that’s been a development engine, a job engine, and helped put a thousand people to work. That’s a significant accomplishment,” Beaty said.

The former Phoenix property is second only to Chaffee Crossing in terms of jobs created. Chaffee Crossing officials say the former military base has about 1,100 jobs. However, Chaffee Crossing has benefitted from at least $100 million in tax dollars for employment incentives and infrastructure – water and sewer systems, street work, Interstate 49 work, etc. – improvements, while FSM Redevelopment Partners has only received tax support indirectly in the form of state incentives for the jobs recruited to the site.

DEVELOPMENT CHANGES
Beaty’s warehouse plan was scrapped in early 2010 when he decided to spend $4 million and renovate a part of the facility into an 80,000-square-foot meeting and expo center. With that project complete, Beaty moved to utilized the remaining almost 400,000 square feet of enclosed space. Part of that effort resulted in recruiting Sykes.

Bolstered by his role in wooing Sykes to the property, Beaty began searching for other companies to recruit to the location. That eventually resulted in the HMA deal.

Beaty is also working on other retail possibilities, but he declined to comment on details.

HMA IMPACT
Based on a basic Implan report from Gregory Hamilton, a researcher with the Institute for Economic Advancement at the University of Arkansas at Little Rock, the Phoenix property is indeed a job engine.

Hamilton’s report suggests that the 500 HMA “office administration” jobs will result in another 250 jobs in the region and around the state. The total effect of HMA bringing a 500-employee service center to Fort Smith is 760 jobs with an annual labor income of $31.154 million. (The report is preliminary and based on computer models of impact based on the type of jobs created. It was requested by The City Wire to provide an early “ballpark” estimate of the potential impact of the new HMA jobs.)

“The 500 new jobs causes other business to increase employment by approximately 124 (indirect effect) in Fort Smith and 6 jobs in the rest of the state. The gains in payrolls to the community and local expenditures derived from those payrolls causes an additional 126 jobs (induced) in Fort Smith. Another 10 jobs (induced effects ROS) are gained in the rest of the state because of this reduction at Whirlpool. The total job creation is in the state is 760 jobs,” Hamilton noted in the report.

Beaty was surprised by the impact total.

“That’s great. I didn’t realize the impact would be that much, but that makes the deal even better for the area,” Beaty said.

In addition to the HMA impact, the average annual salary of the jobs – 500 jobs at an estimate annual payroll of $21.5 million – is $43,000, considerably higher than the Fort Smith regional per capita income of $31,782, and also higher than the Arkansas per capita income average of $33,740. (The per capita figures are the most recent provided by the St. Louis branch of the Federal Reserve Bank.)

“Obviously, I had no idea we’d be this successful, so yes, I am surprised by the development here. But there is more in the works, maybe not to this (HMA) level, but there is more property here that we can develop and lease,” Beaty said.

Setting the bar high for the industry to follow is nothing new for J.B. Hunt Transport Services. However; the Lowell-based transport company fell short of that bar in the first quarter of this year, its first misstep in 12 quarters.

J.B. Hunt posted net income of $73.3 million during the first quarter, up from $67.7 million during the 2012 quarter. Bottom line profits rose 8.29% from a year ago.

However, the per share earnings of 61 cents, missed the consensus estimate of 64 cents as predicted by industry analysts. Earnings were dinged because of higher than anticipated operating costs in two of the company’s four segments.

Total revenue for the quarter was $1.29 billion, ahead of the $1.165 billion posted in the 2012 period and this number did line up with Wall Street predictions.

The company contributed its revenue growth to several factors such as a 13% load boost in its Intermodal segment, expansion in its Integrated Capacity Solutions segment as well as a 9% increase in operating revenue from its Dedicated Contract Services division.

Operating income for the quarter totaled $125 million versus $117 million a year ago. Improvements in freight mix and high load volume were offset by investments in equipment, higher claims costs and reduced profitability in the company’s truckload segment.

INTERMODAL
Segment revenue rose 15% to $796 million, in the quarter and was bolstered by steady demand which resulted in 13% more loads over the prior year. The load growth was related to tighter trucking capacity led to double-digit increases in the company’s Eastern network and transcontinental business.

Operating income rose 22% to $96.8 million from a year ago. 

Industrywide during the first quarter of this year intermodal traffic rose 5.3% from the same period a year ago and March was a record high, according to Transport Topics.

DEDICATED CONTRACT SERVICES

DCS revenue increased 9% during the quarter to total $279 million. The division was able to increase productivity as 633 new revenue producing trucks were added to this fleet over the same period in 2012.

Adding all that equipment dented the segment’s operating income which decreased by 22% from a year ago. Operating income totaled $21.9 million in the first quarter.
The segment also incurred less profits on equipment sales and took a hit from increased bad debt expenses.

While new customer accounts increased in the quarter, the company also spent about $1.7 million in implementation costs associated with hiring personnel, relocation, equipment repositioning and other infrastructure costs. These exceptionally large private fleet conversions will take approximately 6 to 8 months to fully implement. Additional implementation costs expected to be expensed in the coming periods are estimated to be $2.5 million, the company noted in its release.

INTEGRATED CAPACITY SOLUTIONS

ICS revenue totaled $122 million, up 26% compared to the first quarter 2012. Volumes grew faster than revenue due to a change in freight mix driven by customer demand.

Operating income increased 27% to $5.2 million in the year-over-year period. The gain is a result of improved overhead cost controls and load increases. 

The company also mentioned a competitive brokerage environment and tighter supply of carriers which led to a slight dip in gross profit margins for the segment.

ICS’s carrier base increased 9% and the segment employee count increased 16% compared to first quarter 2012, the company said.

TRUCK LOAD

The truck segment revenue totaled $102 million in the quarter, down 21% compared to the same quarter 2012. This relates to a 21% reduction in fleet size and lower utilization per truck.

Rate per loaded mile, excluding fuel surcharges, increased 3.8% over the same period last year but on a 9.8% shorter length of haul.

Rates from consistent shippers improved 0.5% year-over-year. At the end of the quarter, the segment’s tractor count was 2,011 compared to 2,561 in first quarter 2012.

Operating income of $1.1 million for the quarter decreased 78% compared to the same period of 2012.

FINANCIAL GLANCE
J.B.Hunt reports net capital expenditures of $115 million, up from $84 million a year ago as it invests in its fleet and expansion of services to its growing customer base.

The company had cash of $5.7 million on hand at the end of the quarter, with solid balance sheet performance according to analysts.

In late February, J.B. Hunt was upgraded to outperform from market perform by Avondale Partners on improving intermodal volumes and pricing. The firm raised its price target on Hunt's shares to 80 from 60.

Some analysts, like Michael Baudendistel at Stifel Nicolaus, said prior to Thursday’s report that shares were overvalued.

“Our fair value estimate does not provide any upside relative to the share’s most recent trading price. Therefore we are hard pressed to justify a ‘Buy’ rating on the company’s common shares”

“Aside from valuation, we are favorably disposed towards the company as its intermodal franchise is the clear industry leader and its dedicated franchise is among the industry leaders. We view the truck and ICS businesses as complimentary to the other two. Should the company’s common shares trade down to $50, we would be inclined to revisit our rating,” Baudendistal notes.”

Shares of J.B. Hunt rallied to a new 52-week high – $76.36 – set in after hour trading on the Wednesday (April 10). That rally was in anticipation of another stellar quarter report. But, following the earnings release after hours today (April 11) shares slid nearly 3% in the $72 range within a few minutes of the public release.

Investors have been along for quite a joy ride as J.B. Hunt’s share price rose 25% since the start of the year. Shares closed Thursday’s regular session at $74.22, down 65 cents.

Bank of the Ozarks, Inc. announced that net income for the quarter ended March 31, 2013 was $20.0 million, an 11.1% increase from $18 million for the first quarter of 2012.

During the fourth quarter of 2012, Little Rock-based Bank of the Ozarks completed its acquisition of Genala Banc Inc. of Alabama and its wholly owned subsidiary, The Citizens Bank. The acquisition resulted in a gain, net of acquisition and conversion costs, of approximately $1.1 million after taxes.

“We are very pleased to report an excellent first quarter,” said Bank of the Ozarks CEO George Gleason. “While our results for the quarter, including loan and lease growth, reflect some of the headwinds typically encountered during the first quarter, our excellent net interest margin, superb asset quality, near-record mortgage lending income and good control of non-interest expenses provide a great start for 2013.”

Bank of the Ozarks financial highlights included:
• Total loans and leases were $2.74 billion at March 31, 2013, a 3.4% increase from $2.65 billion at March 31, 2012.

• Deposits were $2.99 billion at March 31, 2013, a 2.2% increase compared to $2.93 billion at March 31, 2012.

• Total assets were $3.95 billion at March 31, 2013, a 3.0% increase compared to $3.84 billion at March 31, 2012.