Natural gas severance tax revenue for the first four reporting months of 2013 is ahead of the same period in 2011 when the collections eventually reached a record annual tally of $58.905 million.

The January-April collections total $19.714 million, well ahead of the $15.787 million during the same period of 2012, and 6% higher than the $18.585 million during the record-setting 2011. The severance tax data is compiled by the Revenue Division of the Arkansas Department of Finance & Administration using monthly tax reports filed by producers.

“I think the big difference is going to be the quantity and the market price,” said Kelly Robbins, executive vice president of Arkansas Independent Producers & Royalty Owners, adding that natural gas prices remain historically low but have risen in recent months.

Natural gas prices (based on the Henry Hub spot price) have almost doubled since May 2012, with the price rising from just above $2 per MMBtu to a little over $4 per MMBtu. According to the U.S. Energy Information Administration (EIA), the cooler than normal Spring has kept natural gas prices higher than normal.

“Since late February 2013, the weather turned colder than normal, as measured by the gas-weighted heating degree-days compared to the 5-year average. Natural gas consumption was thus higher and prices rose more than $1 per MMBtu through the end of April,” noted the EIA report.

In 2009, the first year of the severance tax hike, Arkansas joined the list of the nation’s top marketed natural gas producers when sales of Arkansas natural gas spiked 57.5% to 690 billion cubic feet (Bcf). Arkansas natural gas sales rose another 36.1% to 939 Bcf of annual production in 2010, according to DF&A and EIA figures.

A portion of the severance tax collections since 2009 are used for road and other infrastructure support in the counties seeing the increased natural gas production.

With production in Arkansas’ Fayetteville Shale Play dramatically diminished in the past few years, the price of natural gas does have more of an impact on severance tax collection levels.

Robbins said there are about 15 rigs in the Fayetteville Play – located in north and central Arkansas – compared to more than 55 rigs about five years ago, and down from 22 a year ago. The monthly average for natural gas rigs in Arkansas during 2010 was 39.

It’s not just Arkansas seeing a reduced number of rigs drilling for natural gas. The North American natural gas rig count was 354 as of May 31, down from 588 during the same period in 2012, and down from 1,606 in August 2008.

The price factor is evident when looking at collections during the past three years. In 2010, when prices ranged between $4 and $5 per MMBtu, the state collected $54.4 million on 939.4 million MCF. Compare that to collections of $40.96 million in 2012 on more than 1.15 billion MCF.

In 2005 the price approached $15 per million BTU, which began a push by producers to use fracking and other innovative and unconventional drilling methods to find and produce natural gas.

Robbins said he would not be surprised to see activity return to Arkansas if natural gas prices continue to rise. However, the Fayetteville Shale Play natural gas does not have the economic advantages of the “wet gas” from other U.S. plays. Wet gas can provide ethane, butane and other liquid natural gases that can be sold to generate a more diverse revenue stream.

“What has happened is that the Fayetteville Shale Play is a dry natural gas and it doesn’t have a lot of other uses. So the companies are moving to the Marcellus (Shale Play) and other areas with more wet gas where the by-products often it make it more economical to go after,” Robbins said.

On a national level, higher natural gas prices also curb the use of natural gas in other areas. The EIA recently reported that the use of natural gas to generate electricity is declining as the rising price makes coal more economical.

“Natural gas used to generate electricity so far this year is below the high level during the comparable 2012 period, when low natural gas prices led to significant displacement of coal by natural gas for power generation,” noted the EIA report. “In early 2013, coal recovered some market share as natural gas prices rose. By late March, wholesale natural gas prices at the Henry Hub trading center were back to $4 per million British thermal units (MMBtu). In response, electricity generators used 16% less natural gas this March compared with March 2012.”

Changes in living and commuting trends among younger generations are not widely seen in Northwest Arkansas and the Fort Smith region, but officials do see signs that such trends could change development in the two areas.

A report from the Urban Land Institute suggests that the next generations looking for places to live will prefer option that create demand for “infill residential development that is less car-dependent.” The trend could cause less demand for residential development in outlying suburbs.

The ULI surveyed 1,202 adults in January and February to develop the report.

Among all respondents, 61% said they would prefer a smaller home with a shorter commute over a larger home with longer commute; 53% want to live close to shopping; 52% would prefer to live in mixed-income housing and 51% prefer access to public transportation.

Generation Y (those born between 1979 and 1995), those likely to drive housing trends in future decades, prefer to live in walkable communities in which entertainment, shopping and work are in close proximity.

"The choices being made by these groups are upending long-held notions about what is considered traditional neighborhood development," ULI CEO Patrick Phillips said in a statement. "We've entered an era in land use that will be defined by development that conserves land and energy, and which offers consumers plenty of options in where they live and how they get from one place to another."

Patsy Christie, director of Planning and Community Development for Springdale, said there is some movement toward infill development, but not much.

“We are seeing some activity but not a substantial amount at this time. I believe with the completion of the Razorback Greenway through the downtown area of Springdale we will begin to see a rise of infill residential development and it will expand to other areas of the city as the trail system is expanded and other areas are connected,” Christie explained.

The Razorback Regional Greenway is planned as a 36-mile, walking and bicycling trail that extends from the Bella Vista Trail in north Bentonville south to the Frisco Trail in south Fayetteville. To date, 14.2 miles of the planned route have been built with the whole length scheduled to be open by year's end, according to its website.

Christie said the Greenway project has the potential to drive the type of development preferred by Generation Y and future generations.

“We are seeing a change in attitude with the planning and implementation of the Razorback Greenway. This is the first time in my career that a substantial amount of federal dollars is being put into an alternative transportation mode. I believe we will see a continued demand for and willingness to fund extending trails that will extend beyond this initial corridor,” Christie said.

There are no discernible trends in Fort Smith, according to Wally Bailey, director of Development Services for the city.

“I don’t think we are seeing enough data yet to say that we have a trend in this direction yet. We have seen a spike in downtown residential in the last 8 years by those that want to walk to work, entertainment, etc.,” Bailey said.

Bailey said much of the new residential development is planned for Chaffee Crossing and south Fort Smith, but he does learn of isolated cases where a person or family moved closer to Fort Smith to shorten a work commute.

“I do hear conversations that some would prefer the opportunity to live closer to work, schools, churches, medical facilities, shopping, etc. and perhaps many are buying smaller existing homes in the areas they want to live. We don’t have those kinds of statistics of the existing home buyers,” Bailey explained.

Ken Savage, director of Transit for the city of Fort Smith, believes the demand for public transit will continue to grow in the city. He said the Federal Transit Administration “has recognized the importance of sustainable and livable community development,” and is directing more grant funds toward transit stops, transit stations, sidewalks and other infrastructure.

Following are other survey findings from the ULI report.
• 71% of all respondents said buying a home is a good investment, despite the housing crisis and ensuing home price declines.

• Of those with access to buses and trains, 75 percent rate the quality as satisfactory. However, half of those with no access to buses and trains were dissatisfied by this situation.

• 52% of the population said that convenient public transportation was important to them.

• Safety and high-quality schools top the list of most sought-after community attributes: 92% of all respondents ranked neighborhood safety as the most important attribute, and good schools ranked as the second highest at 79%.

• In seemingly contradictory responses, 72% of the survey participants said having space between neighbors is a priority; yet 71%  placed a high value on being close to employment , schools, and healthcare facilities, and 70% rated walkability as a key attribute.

• 77% of the respondents reported using a car, truck or motorcycle nearly every day. However, 22% said they walk to a destination almost daily, and 6% said they take public transit.

Arvest Bank is one of the leading bank lenders to U.S. agriculture, according to the American Bankers Association’s (ABA) list of the top 100 farm lenders.

The bank ranked 27th nationally with approximately $462 million in agricultural loans at the end of last year according to the American Banker’s Association annual list of 100 largest farm lenders. In 2012, Arvest originated approximately $452 million in farm loans, up 9% from $415 million in 2011.

“In the regions where we operate, Arvest has a number of customers who make their living in the agricultural industry. Many of our associates have backgrounds in agriculture, so it’s natural that we would focus on providing farmers with various loans, such as SBA and FSA. We are always working on building the expertise that agribusiness people need to be profitable. We are thrilled to partner with so many agriculturally-based businesses and customers in our communities,” Kent Williamson, loan manager for Arvest Bank in Springdale, said in a bank statement.

The 2012 ABA Farm Bank Performance Report stated that the U.S. banking industry is the nation’s most important supplier of credit to the agriculture industry, providing more than 50% ($141 billion) of all farm loans.

Agricultural lending is an area in which Arvest continues to experience growth. Since 2006, total farm loans at Arvest (farm production loans plus farmland loans) have more than doubled. The bank originated $227 million in farm loans in 2006, and approximately $452 million in 2012. Since 2006, total farm loans made by all banks have increased 67% from $49.1 billion in 2006 to $81.8 billion in 2012. Also, 6% of Arvest’s total loan portfolio is farm lending.

Nearly 5,000 Walmart employees from U.S. stores get a message of “real opportunities, everyday possibilities” at the annual meeting in Fayetteville on Wednesday (June 5).

Gisel Ruiz, chief operating officer for Walmart U.S., wasted no time in renouncing OUR Walmart, which is an affiliate of the United Food and Commercial Workers International Union. Wal-Mart recently obtained a restraining order from the Benton County Circuit Court against OUR Walmart to prevent the group from disrupting shareholder week activities.

“They don’t represent Wal-Mart, or you. You represent the truth,” she said. “Let me be clear, this organization is not associated with Wal-Mart, they are paid to be here by unions to disrupt, and that is just wrong.”

She said 41% of those chosen to attend this years Walmart US meeting have 10 years of service with the company. In total, the group in attendance had more than 22,237 combined years of service with the world’s largest retailer, according to Michael Bender, president of Walmart U.S., western division.

BIG NUMBERS
As the world’s largest retailer, the numbers behind the giant company are also staggering.

• The company has just under 1.4 million employees in the United States.

• About 162,000 workers were promoted last year, with 7,400 of those moving into management roles.

• There are between 15,000 and 50,000 open positions at Wal-Mart at any given time during the year.

• Wal-Mart associates spent 1.3 million hours volunteering in their respective communities last year, generating $10.2 million in VAP grant contributions. (Volunteering Always Pays is a program that credit charitable organizations with cash for hear hour of time donated by its employees.)

• Wal-Mart awarded $733 million in bonuses to hourly workers – full and part-time. Bonuses are based on store performance.

• Wal-Mart logistics delivered 600 million more cases and drove 1.3 million less miles between 2007 and 2012, according to Chris Sultemeier, executive vice president of Walmart Logistics.

DUCK CALLING
Duncan Mac Naughton, chief merchandising officer for Walmart U.S. introduced Willie and Korie Robertson of Duck Dynasty fame, who sang the praises of their association with Wal-Mart.

Willie Robertson said the family’s duck calls got into 40 stores originally from going door-to-door. He said the hit television show, was launched from a series of DVDs first made for distribution at Wal-Mart.

“Back then I told them not to film my uncle Si, and boy was that mistake. Everywhere I go today, people ask me where is Si and if he is really that way. He is quite the cat for sure,” Robertson said.

Mac Naughton shared that the No.1 selling tee-shirt in Walmart stores today are Duck Dynasty. And that is the top shirt among all departments.

Robertson joked that he had been approached by a Wal-Mart manager a few years ago when traveling in his family RV about any need they had for food.

“I think he thought I was homeless. I told him the one thing I always had plenty of was food,” he said.

Korie Robertson said the Robertson men used to shave their beards before calling on Wal-Mart at the home office in Bentonville.

“Nobody could recognize them without the facial hair so Willie said the beards are who we are and they haven’t shaved since,” she said.

UPWARD BOUND
Ruiz highlighted three individuals who have been upward bound within Wal-Mart’s store operations: Jermane, Natasha and Marisa.

Jermane had been unemployed for more than two years when he took a part-time job at Walmart. He worked his way into store management and has been able to keep his family in their hometown.

Natasha, an immigrant from Armenia, took a job a Walmart in 1992 and is now a zone manager in her Tennessee store.

Marisa Miller of Colorado took advantage of Wal-Mart’s flexible work shifts since her husband has been deployed to military service.

“I signed up for every shift I could get and went from 4.5 hours a week to 30 hours. The extra money allowed us take a short trip before my husband deployed,” Miller said.

She also worked her way up from a seasonal holiday employee to the manager of toys in her Colorado store.

Bill Simon, president of Walmart U.S., said he knew what it was like to work his way up. He spent 25 years in the military, both active and reserve duty. He worked at PepsiCo and in state government for former Florida Gov. Jeb Bush.

In just seven years at Wal-Mart, he has risen to the No. 2 spot with the global retailer. He credited the millions of associates for the company’s success, and he closed the meeting by noting that Wal-Mart would not stand by and take shots from groups critical of the company.

“There are no more free shots at Wal-Mart this year. No more free shots at you. We are telling our story loud and proud through a media campaign that highlights the opportunities at Wal-Mart,” Simon said.

Officials with Wal-Mart Stores announced earlier this year a plan to source an additional $50 billion in products from the U.S. during the next 10 years. The company said Wednesday (June 5) it is still focused on the goal, with a company in Fort Smith a beneficiary of the effort.

Hal Sirkin, a senior partner with Boston Consulting Group, said the initiative will mean an additional 100,000 U.S. jobs if Wal-Mart is successful.

Michelle Gloeckler, senior vice president of Walmart home, told the media Wednesday afternoon that the retailer is making “great strides” since the initiative was announced earlier this year. She said two-thirds of the products in Walmart U.S. stores are already sourced from the U.S.

Gloeckler highlighted local candle maker Burt Hanna of Fayetteville as one of the existing U.S. suppliers who worked with Wal-Mart on this initiative.

Growing business with existing suppliers is one of the three ways Gloeckler said Wal-Mart will achieve its goal.

Hanna told The City Wire he employs 150 people in his Fayetteville operations and has been manufacturing candles, mostly private label (Mainstay) for Wal-Mart for several years. He said since Wal-Mart has expanded its efforts to source locally, his sales have increased.

Gloeckler said candle sales have risen from $4 million annually to $30 million, and she credits the buyers who are seeking out the opportunities with local suppliers.

Michael Rothbard, CEO of Authentic Comfort, said his firm manufactures memory foam toppers for Wal-Mart, which is 20% of Wal-Mart’s business in this product. He said all the product materials are sourced in the U.S. including chemicals from Peterson Chemical Technology in Fort Smith.

Rothbard said the company’s products are made in Georgia and California and support jobs there as well in other areas such as Fort Smith. He said U.S. manufacturing is more responsive to customer demand and is becoming more feasible for several industries.

Gloeckler said prior to offering the product from Comfort Sleeping, all of the form toppers sold at Wal-Mart were made in China. Rothbard said he had to prove he was able to provide quality and competitive prices. He said Wal-Mart rolled back the price by $10 on the product, added a “Made in the U.S.” tag on it, and sales are up double digit this year over last.

Sirkin said with inflation driving labor costs higher in China, more industries are finding they can be competitive using U.S. manufactured products.

“Overseas manufacturing is no longer the default option. Product coming from China is on the water 2.5 to three months,” Sirkin said.

Gloeckler said Wal-Mart is committed to U.S. sourcing because it just makes sense. She said some studies show consumers will actually pay more for a “Made in America” tag, “but we don’t they should have to.”

There is a clear sense of anxiety and frustration among even those who understand how medical insurance works and how the new federal health care law is theoretically designed to change the system.

Broader implementation of the federal health care law approved in 2009 – commonly referred to as Obamacare – will begin in October when states must provide a “marketplace” for consumers to shop for health insurance plans within Arkansas’ Health Insurance Marketplace (HIM). Enrollment in the HIM begins Oct. 1, and ends March 31, 2014.

An estimated 500,000 Arkansans are expected to gain health care insurance through Obamacare and Arkansas’ “private option” plan approved during the recent Legislative Session. The insurance plans range from plans on the books now to taxpayer-subsidized insurance.

‘UNCERTAINTY’ AND FRUSTRATION
Dennis Jumper, owner of Conway-based Arkansas Training Solutions and a lead healthcare-implementation trainer for the state of Arkansas, said “everybody is pulling their hair out” trying to get consistent information on new rules and regulations.

Cal Kellogg, an executive vice president for Arkansas Blue Cross Blue Shield, said, “The issue for us is all the uncertainty it creates.”

With less than 30 days before insurance carriers have to submit qualifying plans for Arkansas’ HIM, Arkansas QualChoice President & CEO Mike Stock said the company is “continuing to assess and implement operational changes needed to meet demands of new law.”

Jennifer Parks, who represents HealthPointe Insurance Services and has clients in the Northwest Arkansas and Fort Smith areas, said frustration is building among agents and business owners who can’t get pricing plans and policy guidelines for 2014.

“People are terrified because they don’t know what is going to happen,” Parks said.

TO PAY OR NOT TO PAY
Parks said in the past few months she has signed up three groups of more than 50 employees who did not have health insurance. One of the businesses has operated for about 15 years.

“The reason they did it, the reason these groups signed up, is because they knew they were going to have to do it eventually,” Parks said.

She was quick to add that the three groups are an exception. More business owners are mulling their options, with one of those options paying a penalty for not offering a health insurance plan.

The law requires a company employing 50 or more full-time equivalent employees (FTE) to offer insurance. In the first year, the penalty for an employer is $2,000 per employee, with the penalty exempted for the first 30 employees. If a company has 51 employees and decides to not offer insurance, the penalty the first year is $42,000 ($2,000 x 21 employees).

Depending on the situation, Parks said the penalty could be less than what the employer would pay to provide insurance to all employees. Kellogg, with Arkansas Blue Cross Blue Shield, said the per employee penalty could rise to $3,000 if an employee is contributing more than 9.5% of their W2 wage to pay the premium on an insurance plan offered by the employer.

“It can get complicated fast,” Kellogg said.

Kellogg said the initial thinking was that many employers would simply “walk away” from providing insurance, which would send their employees to the Arkansas HIM to obtain coverage. But there are more factors than just the cost. Kellogg said paying for employee insurance is tax deductible, but the penalties are not. Also, employees can contribute to premiums with pre-tax income, but the pre-tax option is not available for the employee who buys insurance through an exchange.

“When we take employers through that process ... what they find is that it ends up being a better deal for the employer and most of their employees if they continue to offer the coverage,” Kellogg said, adding that an employer also has to factor in the cost of keeping good employees happy.

HIGHER COSTS LIKELY
Parks agreed that employers want to do the right thing, but employers also have to live within a budget. The potential for higher insurance premiums is another big unknown.

Insurance companies aren’t providing guidance on premium costs in 2014 because of several factors that create uncertainty for the actuaries who determine such rates, Parks said. She said one factor is that there will be many more “lives” covered by insurance, and many of those new lives are those who previously couldn’t afford or couldn’t get insurance.

“The insurance companies know that many of them (newly insured) are the ones who will utilize a lot of services,” Parks said. “We all know that will drive up the costs.”

Kellogg agreed.

“Early on, we expect a lot of usage of the insurance,” he said.

And while there will be pressure on the medical and insurance system in the short term, Kellogg said in the long term “maybe this will cause us to focus on the real issues of cost and quality and how medical care is delivered.”

The goal, of course, is to reduce the number of Arkansans without health insurance.

Stock, with QualChoice, provided info from a March 2013 report published by the Society of Actuaries that estimated the change in insured after three years of exchanges. The estimate was that the percentage uninsured nationally will decrease from 16.6% to between 6.8% and 6.6%. In Arkansas, the number of uninsured in three years will fall from 18.1% to between 10% and 4.9%.

‘MASS EXODUS’
But for Parks and her clients, getting through the short term is trying – especially when insurance carriers are not yet willing to provide 2014 rates for some plans.

“They won’t even give you a ballpark figure because they are saying the numbers are so high that they are hoping they are wrong,” Parks explained.

Parks said she is aware of a company with 600 employees where the decision makers have “run the actuarial tables” and believe the penalty may be the best financial option for the company. Officials with the self-insured company are waiting for more clarity on the rules, regulations, policies and prices. If the rules are too onerous and the premiums are too high, Parks predicted a “mass exodus” of small employers who will drop group plans and choose to take the penalty.

“We are holding our breath basically, until January 1st. If on January 1st, if the rates go up for my employers, they’ll drop their plans because many of them are already at the high end of their budget. They all want to do the right thing for their employees, but if it goes up sky high, they will not have any choice. It will be either close the doors ... or drop the plan,” Parks said.

‘MORE QUESTIONS THAN ANSWERS’
As Kellogg noted, educating people about the process helps ease the uncertainty, but according to Jumper, there remain many blank pages in the rule book.

“I have more questions than answers. The real world will not know (the key rules and regs) and will probably not have things really firm until late August,” Jumper said. “With that (uncertainty) you have business owners that can’t make informed decisions. ... And who knows at this point what those (2014) rates will look like.”

For Jumper to be uncertain highlights the extent of how little is known just a few months before exchanges in all 50 states are supposed to be up and operating.

Working for the Arkansas government through the network of Arkansas’ community colleges, Jumper is training the people who will train “in-person assisters” (IPA).  The assisters will travel the state explaining the rules and regulations to insurance agents, human resources workers and other people involved in the health care insurance process.

“They (IPA) will be the folks that the state will be equipping and then you have a second group of people who are called ‘navigators’ and they will be federally funded folks ... who will also be doing a lot of what the IPAs are doing,” Jumper said.

He estimated as many as 560 state-funded assisters will be used.

SHORT TESTING TIME
Not only is there uncertainty about what is mandated through the new rules, but Jumper said the expedited time in which insurance carriers must develop new plans has added to the tension. He said the normal cycle for an insurance company to roll out a new product is 18-24 months.

“What we’re looking at here is doing the same thing, but doing it in less than a six-month time frame,” Jumper explained.

Kellogg said the schedule is tough. The insurance carriers have to submit their plans (pricing, policies, etc.) to state officials by June 30. The state has 30 days to review and must have recommended policies to the U.S. Department of Human Services by July 31. The federal HHS is expected to issue its decisions by Sept. 4, Kellogg said.

The expedited time frame has also crunched the testing of computer systems needed to connect the insurance carriers, state officials and federal officials. With “several hundred thousand people” expected to enter the exchanges in just a few months, Kellogg said government officials “are only going to give us about three weeks to interact with their system.”

‘NOBODY HAS THE ANSWERS’
There are rumors that full implementation of the federal health care law approved in 2009 could be delayed to provide more time for all parties to adjust to new policies, prices and other factors.

Jumper doubts a delay will happen, but would not rule it out.

“My official position is that I tell everyone, ‘It’s coming. Be ready to go.’ But it would not surprise me one bit that in the first part of July or in August that a big decision is made to push this off for another year,” Jumper said.

He also suggested the members of Congress who supported the law may want to delay full implementation “because they probably don’t want this to blow up in their face during that election year in 2014.”

The one thing of which Jumper is certain is that each day delivers either more clarity, or a change to the previous clarity.

“Every day is a new day. Nobody has the answers. If anyone thinks they do, they’re a fool.”

Arkansas’ economy grew an estimated 1.3% in 2012, with growth in manufacturing, utilities and trade responsible for most of the increase. The increase is better than the 0.7% gross domestic product (GDP) increase in 2011, but below the 2.6% gain in 2010.

The U.S. Bureau of Economic Analysis reported Thursday (June 6) that real GDP was up in 49 states and the District of Columbia during 2012. Nationwide, durable–goods manufacturing, finance and insurance, and wholesale trade were the leading contributors to economic growth. U.S. real GDP by state grew 2.5 % in 2012 after a 1.6% increase in 2011.

Connecticut ranked last in terms of GDP improvement between 2011 and 2012 (down 0.1%). North Dakota was first in terms of GDP improvement with a 13.4% increase. Texas was second with a 4.8% increase.

ARKANSAS DATA
GDP in Arkansas during 2012 is estimated at $93.892 billion, ahead of the $92.684 billion in 2011. Arkansas’ year-over-year gain ranked 38th among the 50 states.

Arkansas’ per capita GDP in 2012 was $31,837, up slightly from the $31,547, but still below the pre-recession per capita GDP of $32,054 in 2007. Per capita real GDP ranged from a high of $61,183 in Delaware to a low of $28,944 in Mississippi. Per capita real GDP for the U.S. was $42,784.

The mining sector in Arkansas during 2012 saw a 0.19% dip in activity. While the BEA report does not provide details on what causes ups and downs in specific sectors, it is possible the mining sector decline is connected to reduced activity in Arkansas’ Fayetteville Shale Play. There are about 15 rigs in the Fayetteville Play – located in north and central Arkansas – compared to more than 55 rigs about five years ago, and down from 22 a year ago. The monthly average for natural gas rigs in Arkansas during 2010 was 39.

Arkansas’ information sector was down 0.03% in 2012, health care services fell by 0.04% and the “professional, scientific and technical services” fell by 0.25%.

The state’s manufacturing sector saw a 0.37% gain during 2012. The utilities sector was up 0.26%, wholesale trade was up 0.32% and retail trade was up 0.28% during 2012. The state’s agriculture, forestry, fishing, and hunting sector was up 0.15%, and far better than the 0.4% decline seen nationwide in the sector.

NATIONAL SECTOR DATA
• Durable–goods manufacturing was the largest contributor to U.S. real GDP by state growth in 2012. This industry increased 9.1% in 2012, after increasing 6.8% in 2011.

• Finance and insurance was also a leading contributor to U.S. real GDP by state growth. Finance and insurance increased 3.6% in 2012, rebounding from a 0.6% decline in 2011.

• Wholesale trade contributed to real GDP growth in 48 states and the District of Columbia. Wholesale trade increased 4.8% in 2012, after increasing 3% in 2011.

• Although mining was not a major contributor to real GDP growth for the nation, it was a large contributor in North Dakota, West Virginia, and Texas. In North Dakota, the fastest growing state in 2012, mining contributed 3.26 percentage points to real GDP growth of 13.4%.

• Construction turned up in 2012, after eight consecutive years of contraction; increasing by 3.2% nationally. This industry contributed to real GDP growth in 43 states and the District of Columbia.

• In contrast, agriculture, forestry, fishing, and hunting subtracted from real GDP growth in 2012. This industry subtracted from real GDP growth in six of eight BEA regions and in 35 states.

ARKANSAS, OKLAHOMA, MISSOURI GDP
• Arkansas
2012: $93.892 billion
2011: $92.684 billion
2010: $92.075 billion
2009: $89.776 billion

• Missouri
2012: $221.702 billion
2011: $217.401 billion
2010: $216.681 billion
2009: $212.591 billion

• Oklahoma
2012: $138.296 billion
2011: $135.454 billion
2010: $132.917 billion
2009: $132.059 billion

Wal-Mart executives are taking the retailer’s “store of the community” seriously these days across Arkansas, Oklahoma and Missouri.

Products like Norman Lures of Greenwood, Mainstay Candles made in Fayetteville, Cavender’s Greek Seasoning of Harrison are among some of the 1,700 products displayed in Northwest Arkansas Walmart stores under the banner “Arkansas’ Own."

A similar program is also under way in Oklahoma and Missouri, according to Glenda Fleming-Willis, an operations manager at Wal-Mart. She said products go through a rigorous check to ensure they are made in-state.

Carol Johnston, senior vice president of store development, said there are 47 suppliers and 79 brands flagged as “Arkansas’ Own” providing items that are made or processed in the Natural State. Johnston said it’s a sense of pride and part of the global retailer’s efforts to focus on the local communities they serve and help sustain jobs across the state.

The “Arkansas’ Own” flagged displays went up Memorial Day weekend in a few stores across Northwest Arkansas and the placement will continue to expand in the coming weeks.

Jack Sinclair, executive vice president of Wal-Mart’s grocery division, said sourcing fresh and locally is essential in food.

“A hammer is a hammer, but food preference is a very local thing. By using big data and other analytics we are getting from Nielsen and others is helping to assess what brands local communities want,” Sinclair said during a media tour of Walmart Store No. 5260 in Rogers on Thursday (June 6).

He said ice cream was an item where grocery has focused to broaden assortments with local and regional brands throughout the country.

“We have added 1,100 sku's (items) of ice cream alone this year and will be doing the same thing with cheese. meats and other products in the future,” Sinclair said.

Wal-Mart made big headlines when it announced it would source an additional $50 billion of products made in the U.S. over the next five years. This is in addition to the fact that two-thirds of the items in Walmart stores are today are made in America.

“Arkansas’ Own” is one-closer step to localization and while the retailer did not commit to a timeline or the scale of the state initiative across the country, it is well under way in the local three-state area. Other products tagged as “Arkansas’ Own” include: Mainstays Mops, Great Value Chips, Riceland Rice, Forrester Chicken, Alliance Rubber bands, Fisher Honey, Dewafflebakkers Pankakes, Biffs Coffee, Westrock Coffee, Medlaion Chips, Yarnell’s Ice Cream, Stopby’s Cheese Dip and Petit Jean Meats.

While the buyers have the final say which products get on Wal-Mart shelves, Michelle Gloeckler, senior vice president of Walmart home, said media attention to the “source local campaign” has caused some suppliers to reach out to Wal-Mart about their products.

“Many times suppliers don’t realize that they don’t have to furnish product to all the stores and we are finding more small companies are calling us since we have launched this program,” Gloeckler said.

From e-Commerce confidence to small business challenges, top executives with Wal-Mart Stores Inc. promoted an expectation for growth at the world’s larger retailer this coming year.

Wal-Mart is unfazed by Amazon’s plans to expand into the grocery business, and while it did not comment specifically about its competition the message was clear to the several dozen reporters at Thursday’s media session in Rogers ahead of Friday’s annual shareholder meeting.

Neil Ashe, CEO of Walmart Global eCommerce, said Wal-Mart knows what it takes to make grocery delivery feasible. He said market demand, population density and ability to deliver products efficiently are the three dynamics needed.

Wal-Mart has tested home delivery in San Jose and San Francisco markets for several months and says there is not enough consumer demand to warrant expanding that program to other large urban areas. He said if someone else wants to test and develop that market density, Wal-Mart is ready roll out its own program on a grander scale.

Wal-Mart has some 4,000 stores across the nation that can serve as distribution nodes to facilitate the process of filling orders locally. It has also opened e-commerce only fulfillment centers in addition to having dedicated areas within the retailers 130 distributions centers across the country that focus on item shipping, not pallet delivery.

Ashe said this gives Wal-Mart an advantage over other competitors. He said transportation is the biggest challenge to delivery for any retailer and Wal-Mart has one of the world’s most efficient systems on its side. He said the company has also learned lessons from ASDA, its grocery business in the United Kingdom, which has already achieved a successful model for home delivery.

Ashe said Wal-Mart is reaching customers through e-Commerce in Antarctica and Easter Island, the first retailer to do so. He told the group the first order to Antarctica was filled last summer and it was an ice cream maker.

Gibu Thomas, senior vice president of mobile and digital at Walmart e-Commerce, said 50% of the transactions that start online, are finished in-store.

The pay-with-cash option for online shoppers represents between 3% and 5% of the $9 billion in annual sales last year.

INTERNATIONAL GROWTH
Doug McMillon, CEO of Walmart International, said the international market is very diverse in terms of store banners, but the growth opportunities that come with low prices  are universal.

He said the company is working to perfect its low-cost price strategy in all of the markets it serves. China, he said, is planning to begin the conversion over this next year  and Brazil is already in the process of implementing the “Everyday Low Price” cost model.

McMillon said he is pleased with how Wal-Mart Canada is faring against heightened competition in that market, especially since 40% of the stores are still the older discount store format.

“We are seeing growth in grocery marketshare in Canada,” McMillon said.

He also expects that to continue as these older formats are expanded to include more food.

The Massmart banner in South Africa is doing well, despite some softness in that economy.

He said the company’s international procurement and logistics business is helping to cut costs in supply chain as they work directly with farmers to get the product to the store.

India is another bright spot for opportunity, according to Ann Bordelon, chief financial officer for the international division.

“The cash and carry format is great for India as we can be the supplier for thousands of mom and pop vendors there,” Bordelon said.

SMALL BUSINESS COLOR
Sam’s Club relies heavily on its small business members to drive continued sales growth year over year. And while Sam’s reported a strong 2013 with $56.4 billion in revenue last year, comparable sales grew just 0.2% in the recent quarter.

Sam’s Club CEO Rosalind Brewer said times are tougher for mom and pop restaurant operators and convenience store customers, which make up a large percentage of Sam’s Club sales. She said just as some consumers live paycheck to paycheck, some small businesses are operating meal to meal.

A recent visit with a longtime club member in Texas City, Texas, just outside of Houston, revealed that times had gotten so tough that restaurant owners were using lunch proceeds to go to Sam’s to buy product need for that night’s business.

“I think times are tougher now for some of our club members than they were in 2008. As we see consolidation in the convenience store sectors many of the small mom and pop operators are being squeezed,” Brewer said.

She said more small businesses were using Sam’s as their inventory keepers, buying only what they need for a very short period of time. It’s a trend she has seen continue in recent months.

Brewer expects to grow Sam’s revenue to $100 billion in the next few years, despite the challenges some members are facing today. She sees these as opportunities to build loyalty. The club is also expanding rapidly with 15 to 20 new clubs coming online this year. This is on the heels of nine new locations last year, following several years with just two or three additions.

McMillon said Sam’s is also a growth opportunity internationally and plans to add more clubs in the next few years on a global scale.

Broadway and action movie star Hugh Jackman emceed a Wal-Mart shareholders meeting in which a party atmosphere highlighting the company’s financial successes and its employee contributions also included a few party crashers calling for more transparency on the board and in international dealings.

Rob Walton, chairman of the Wal-Mart Board of Directors and son of Wal-Mart Stores Inc. co-founders Helen and Sam Walton, welcomed the estimated 14,000 in attendance by saying the 2013 meeting was the first meeting for the company’s second 50 years.

As usual, Wal-Mart gathered an impressive list of celebrities to entertain the crowd. In addition to Jackman, the stage saw Kelly Clarkson, Tom Cruise, Jennifer Hudson, John Legend, Prince Royce and Jahmene Douglas. Douglas is an ASDA Wal-Mart employee who was a finalist on the X-Factor reality show in the United Kingdom.

Before turning the show over to Jackman, Walton said the Wal-Mart culture is father created is “strong and moving forward.” He also told the crowd to not be surprised “if protestors try to disrupt” the event.

Later in the meeting, Walton said the company “continues to investigate” the allegations of bribery and potential violations of the Foreign Corrupt Practices Act. The investigations are ongoing in Mexico, China, Brazil and India. In the first quarter earnings report, the company said it has spent $157 million on matters related to the investigation.

Jackman brought levity to the proceedings by commenting about the 7 a.m. start to the meeting.

“I have never been up this early” in my life, Jackman joked.

Later in the meeting, Wal-Mart officers discussed the company’s business performance among the various sectors. Charles Holley, Walmart executive vice president and chief financial officer, said that at the 2012 shareholders meeting the share price (NYSE: WMT) was around $64. On June 6, the share price closed at $75.63, or more than $30 billion in added value to shareholders since June 2012.

‘HALF A TRILLION’
Holley also noted that total revenue in the most recent fiscal year was $466 billion, and he is confident it will go higher.

“We’re closing in on half a trillion dollars,” Holley said.

Holley also said Wal-Mart is the only company in the Dow 30 to post gains in revenue, income and earnings per share for five consecutive years. In the past five years the company also has returned $62 billion to shareholders.

Holley also announced that the Wal-Mart board had approved another $15 billion share repurchase plan.

12 BILLION TRANSACTIONS
Doug McMillon, president and CEO of Wal-Mart International, said the company had 12 billion transactions with customers in 2012. McMillon said the transactions gives employees 12 billion opportunities to create a good impression with customers.

As did Walton, McMillon also said the company is working to strengthen global compliance measures.

“It’s not what we say, it’s what we do that really matters,” McMillon said.

Rosalind Brewer, president and CEO of Sam’s Club, announced that the club is rolling out an entrepreneur support program in 25 markets. The program is designed to help struggling small business owners in areas such as inventory control and marketing.

Brewer also said Sam’s Club plans to open 15-20 new locations in the next 12 months, and will roll out a “scan and go” mobile application in June in limited markets.

VISION AND VALUES
Wal-Mart Stores Inc. President and CEO Mike Duke talked about the company’s values and vision. He told several stories of how Wal-Mart employees went above and beyond in the jobs, including an assistant store manager who helped a family by finding a way to get a tire replaced at 3 a.m.

In a document prepared prior to the shareholders meeting, Duke outlined the following “strategic focus areas” for the company.
• Making sure the company has the best retail talent at every level of the organization by recruiting, developing and retaining the best associates;

• Delivering on the productivity loop that enables Walmart to operate for less so the company can drive prices even lower for its customers;

• Being even more disciplined about operating expenses and capital spending;

• Investing to serve more customers globally and accelerating the vision of anytime, anywhere access by bringing together best-in-class online, mobile and social capabilities and our more than 10,700 stores; and,

• Benefiting our communities and having a world class compliance organization.

SHAREHOLDER PROPOSALS
During the meeting, there were four shareholder proposals mentioned that are not supported by the company. The non-company proposals provide unions, advocacy groups, pension funds and other organizations a soapbox during the shareholders meeting.

The first proposal was presented by Kalpona Akter, a former garment worker from Bangladesh who is now seeking to improve working conditions in garment factories in the country. Akter’s proposal seeks special shareholder meetings to be allowed, with the focus to be on problems like fires at Bangladeshi garment operations that have killed several hundred workers.

Wal-Mart said it will not sign an accord with European retailers over factory safety in Bangladesh, but has opted to conduct its own inspections at 100% of the factories in that country where goods for the retail giant are made.

Akter alleged that Wal-Mart’s “supply chain is out of control” because company officials were not immediately sure if the garment workers who died made clothes for Wal-Mart stores.

Janet Sparks, a Wal-Mart employee from Louisiana, spoke on behalf of the International Brotherhood of Teamsters for a plan to require Wal-Mart execs to retain a majority of their shares until they retire. She also complained about Wal-Mart CEO Duke receiving a $20 million salary and bonus package in 2012 when bonuses were cut in many stores.

“With all due respect, I have to say, I don’t think that’s right,” Sparks said.

Tim Goodman, a representative from United Kingdom-based Hermes Fund Managers, asked shareholders to approve a plan requiring the Wal-Mart Board Chairman to be independent. He said Hermes is a “critical friend” to Wal-Mart, but that Hermes officials believe the bribery allegations and problems in Bangladesh represent “failures in the culture and the oversight.”

Cambria Allen, representing the United Auto Workers and several pension funds, asked shareholders to approve a plan that would fully disclose what Wal-Mart does to “claw back” pay from executives who violate company policies. She said the transparency would create “concrete consequences for misconduct.”

The four proposals were rejected by shareholders.

Rule No. 6 of legendary retailer Sam Walton was “celebrate your successes." But more than half of Walton’s list of “10 rules for building a business” dealt with engaging and appreciating “associates” or company employees, according to his son Rob Walton.

“Dad knew that building a business was about building up the people,” said Rob Walton, chairman of Wal-Mart Stores Inc., as he addressed more than 14,000 at the retailer’s annual meeting in Fayetteville on Friday (June 7).

The Wal-Mart “associate," was the key focus of the entire week leading up to Friday’s meeting which showcased some of the retailer’s brightest stars including Jahmene Douglas, with ASDA until recently. ASDA is the retailer’s grocery business in the United Kingdom. Michael Lundberg, a high school senior who works in a Texas Sam’s Club, was also called into spotlight.

Douglas, the X-Factor runner-up, wowed the crowd with his riveting vocal performances and he gave ASDA the credit for giving him the confidence to enter the competition.

Lundberg was tagged a “hero” by CEO Mike Duke, for continued volunteer efforts to help his fellow residents in West, Texas. On April 17, Lundberg was eating dinner at home when a fertilizer plant exploded and leveled the surrounding area. He immediately jumped in his truck and headed to the scene, Duke said.

At a nursing home next to the plant, he helped triage the injured and then went inside to pull people from the rubble. Once first responders arrived, he went to a nearby apartment building and evacuated another injured man to safety. Duke said he is still volunteering in that community and he graduates from high school tonight before he joins the Marines later next month.

“Michael when you get back from serving our country, I’ve got a job waiting for you,” Duke said.

Tributes like that were played all week and the retailer recently launched a media campaign with a similar message of opportunities and possibilities within the massive corporate giant’s family. With some 2.2 million employees around the globe, Wal-Mart is also the world’s largest private employer.

While Wal-Mart claims every shareholder week in the past has been about celebrating its employees, it is clear the retailer went to great lengths this year as Simon granted two promotions onstage during Friday’s shareholder meeting. Simon called Mary Lou Singleton from Pleasanton, Calif., and Kari Grissom from Cave Creek, Ariz., to the stage.

“She (Singleton) is very dedicated to her customers, and her manager has called her ‘the backbone’ of her store.  Kari Grissam is very positive and supportive of her team. And her market manager says she has the best in-stock in her market,” Simon on told the crowd.

“They've both recently applied for assistant manager positions, but they didn’t know if they’d gotten them until right now. Congratulations, you're both being promoted,” he said.

He gave them their new management badges and told them these jobs come with a raise. Then he simply asked, "Who’s next?”

“More so this year than any other, we are focused on our people, Duke told analysts in their Friday afternoon meeting. “Our people make the difference and I continue to be amazed at who we are recruiting, we have the best merchant talent we have ever had, the best anywhere in the world,” he said.

More than 5,000 store workers, hourly and management, made their way to Bentonville for this year’s meetings and dozens of them were proudly displayed for the media at multiple events ahead of Friday’s meeting.

Wal-Mart’s distribution centers are efficient, well-oiled operations serving the world’s largest retailer 24 hours a day. But these massive hubs also could hold the key toward improved sales growth for Wal-Mart Stores Inc., according to Bill Simon, CEO of Walmart U.S.

Jabo Floyd, the general manager of DC (distribution center) No. 6094 in Bentonville, said “there are no cash registers in a distribution center,” so the only way they can contribute to Wal-Mart’s bottomline growth is through efficiency. Efficiencies within Wal-Mart’s distribution centers saved the company $15 million in 2012, the company said.

“If you have ever seen our distribution centers and how neat, how orderly and well-organized they are … then project yourself to the backroom of a supercenter, where there is more merchandise ... you would see less organization, less efficiency,” Simon told a group of reporters last week in Rogers.

He said if Wal-Mart could have the same inventory management discipline in the backroom of its stores as seen in the distribution centers there would be “an incredible amount value to unlock.' Simon also said the supercenters have more inventory and warehouse square footage than any of the retailer's distribution centers.

He said unlocking this value is No. 1 or No. 2 on the list to do for Chris Sultemeier, senior vice president of transportation for Wal-Mart.

TIME IS MONEY
Floyd said products flow through the distribution center taking about 25 minutes to make their way from the warehouse floor into the truck once an order is created. As Wal-Mart works to keep stocked inventories lower, the ability to move product the day it is received into the warehouse from the supplier is crucial.

Floyd said products being unloaded on one end of the building can make their way through the warehouse and be reloaded in a truck for store delivery in less than 45 minutes. Orders are received from stores each night and are based on sales from that day. Those nightly orders are filled by the DC the following day and delivered based upon a customized schedule.

Products make their way into the Bentonville warehouse through 264 dock doors. The boxes then take a ride a state-of-the-art conveyer system that reads the label and sorts the product out to the warehouse floor or to the appropriate dock door for reloading. Each dock door is dedicated to one particular store. (There are 12 miles of conveyers that run across the average regional distribution center.)

FULLER TRUCKS
Floyd said large volume stores receive daily deliveries and smaller stores may get product delivered three times a week. From the Bentonville DC alone, trucks travel 1.8 million miles a month to reach the 130 stores it services.

Given that transportation is a huge expense for Wal-Mart Stores Inc. the company has continued to focus on improved efficiencies in its truck fleet.

Sultemeier said last year Wal-Mart reduced the “empty miles” driven and found other efficiencies that allowed the company to deliver 297 million more cases while driving 11 million fewer miles. One of the efficiencies was as simple as providing a step stool to the dock loaders, according to Floyd.

He said products are stacked tightly in a brick style inside the 53’ foot trailers and the shrink wrapped for more stability and shift resistance. Floyd said for years the trailers were often not stacked to the top, as most of the loaders were not tall enough to reach those heights. A two-step stool now sits outside each dock door and loaders are expected to stack floor to ceiling of each trailer.

He something as simple as this has made a huge difference in overall load efficiency.

Floyd said in a typical day warehouse workers will unload 150 to 175 trailers and load and dispatch another 100 to 150 trailers. A typical load consists of 2,000 cases and the Bentonville DC receives and ships nearly 550,000 cases each day.

GREEN GAINS
Sustainability initiatives have been big within Wal-Mart’s distribution center network and contributed millions to the bottomline since 2005. The DC network is in the midst conversion to LED lighting which is expected to be completed by 2016 with a cost savings of $11 million.

The retail distributor is also using hydrogen fuel cells to power a fleet of 255 forklifts used in the Bentonville warehouse and in one more DC in Ohio.

Solid waste recycling of plastic and cardboard within Wal-Mart’s distribution network contributed income of $18 million during 2012.

LOGISTICS NUMBERS
The distribution center in Bentonville was the No 1 DC for the company last year and employs more than 1,000 workers in conjunction with the local transportation office. Floyd said nearly 600 of those employees have logged 10 years with the company and there is very little turnover among these logistics jobs.

Wal-Mart Careers said the average wage for its full-time logistics jobs average $19 per hour and DC managers can earn more than $150,000 annually.

Wal-Mart’s Logistics division employs 78,000, which includes 7,200 drivers in the retailer’s private fleet.

Wal-Mart drivers hauled more than 4.5 million loans of merchandise last year and prides itself on having one of the best safety records in the industry. Some 66 drivers for Wal-Mart have logged than 3 million consecutive accident-free miles. Phillip Null, who met with reporters last week achieved that accomplishment in 20 years.

Floyd said it would take the average consumer 200 years to reach that milestone, driving at an average rate of 15,000 miles annually.

Import volume at the nation’s major retail container ports is expected to increase 1.1% in June over the same month last year, according to the monthly Global Port Tracker report released by the National Retail Federation.

The report reflects modest growth expectations as retailers head toward the back-to-school and holiday seasons.

“With the economic recovery moving slowly, retailers are being cautious this summer and could hold off on stocking up for the holiday season until fall,” said Jonathon Gold, vice president for supply chain and customs policy for NRF. “We aren’t expecting significant increases for imports until October, when retailers will have a better idea of what to expect for holiday demand.”

Cargo import numbers do not correlate directly with retail sales or employment because they count only the number of cargo containers brought into the country, not the value of the merchandise inside them. But the amount of merchandise imported nonetheless provides a rough barometer of retailers’ expectations.

U.S. ports followed by Global Port Tracker handled 1.31 million container units in April, the latest month for which numbers are available. Units were up 14.6%  from an unusually slow March but down 0.1% from April 2012.

May cargo was estimated at 1.4 million containers, up 2.2% from a year ago.

June is forecast at 1.4 million containers, up 1.1% from last year;
July at 1.44 million containers, up 1.9%;
August at 1.43 million containers,  up 0.5%;
September at 1.42 million containers, up 0.8%;
October at 1.45 million containers, up 7.9%.

The first six months of 2013 are expected to total 7.8 million containers, up 1.9% from the first half of 2012.

“We are witnessing a period of import trade growth that is running more or less in sync with the U.S. economic expansion. Unfortunately, both are anemic,” Hackett Associates Founder Ben Hackett said. “The impact of this extremely cautious consumer spending is that we expect import consumption to remain weak for the coming four to six months.”

Global Port Tracker, which is produced for NRF by the consulting firm Hackett Associates, covers the U.S. ports of Los Angeles/Long Beach, Oakland, Seattle and Tacoma on the West Coast; New York/New Jersey, Hampton Roads, Charleston, Savannah, Port Everglades and Miami on the East Coast, and Houston on the Gulf Coast.

Father’s Day is June 16 and retailers expect consumers to dole out $119.84 per person for dear ole dad. Spending is expected to total roughly $13.3 billion, up slightly from last year, according to the National Retail Federation and IBIS World, a market research firm.

Consumer are expected to spend about $2.5 billion on special outings like brunch or a sporting event, compared to $1.8 billion spent on clothing and $1.7 billion on electronics, according to the NRF.

It turns out consumers use this holiday to celebrate the other male relationships as well, the survey found more than half of respondents plan to buy gifts for step-dads, husbands, sons, grandfathers and brothers.

NorthWest Arkansas Community College will name a college building in honor of Dr. Becky Paneitz, Ric Clifford, chairman of the college’s board of trustees said Monday (June 10).

Clifford read a proclamation at Paneitz’s final board meeting Monday stating the student center will be named after Paneitz.

The Student Center was the first building project undertaken after Paneitz assumed the college’s chief executive role in 2003. Paneitz is retiring June 30 after serving a decade as NWACC president.

Other structures constructed during her tenure include what was Benton County’s first multistory parking garage, the Shewmaker Center for Global Business Development and the Center for Health Professions. Recently, work has begun to transform the former Highlands Oncology building into the Melba Shewmaker Southern Region National Child Protection Training Center.

During the board’s May 13 meeting, the trustees granted Paneitz status as President Emerita.

The cost of a college degree has never been higher in times of near-flat inflation like those seen in the past few years. Conversely, incomes have also been stagnant and jobs harder to come by as companies large and small have kept a damper on payrolls since the Great Recession of 2008.

The results have created a gap, trapping some college graduates into years of repayment plans for a growing number of careers such as teaching, sociology and journalism.

Bankrate.com released a study this week that examined a wide range of college degrees and ranked them in terms of value or return on investment. The study also found that a graduate degree doesn’t necessarily lead to a lucrative career.

The study suggests that careers in marketing/promotion carry a median salary of $100,000 and do not usually require a graduate degree. With this high salary range and lower schooling cost, Bankrate.com  analysts expects student loan debt could be comfortably retired in less than six years.

Conversely, teachers with a bachelor’s degree earn on average $43,000 per year with an education cost in excess of $52,000. This career likely requires more than a 20-year repayment plan and offers one of the lowest returns on investment in the study.

Wage growth has been held back for a number of reasons including a move away from organized labor over the years, said economist Jeff Collins.

“That, as well as employers’ ability to tap global markets for lower labor costs and of course higher levels of unemployment since 2008 have keep wages from growing," he explained.

He doesn’t see any real opportunity for wages to grow in the near term given unemployment rates remain elevated.

Kathy Deck, director for the Center for Business and Economic Research at the University of Arkansas, agreed that there is no catalyst to push wage grow based on the current labor market dynamics. She said inflation is below 2%, virtually non-existent, and the median wages today have the same purchasing power as they did the mid-1970s. But the cost of higher education has risen significantly in that time frame.

Interestingly, economists fared well in the Bankrate study with a return on investment of about 7 years. Bankrate estimates economists earn in excess of $90,000 annually, with an education cost of $53,000 over four years.

Deck and Collins agreed not all college degrees are created equal when it comes earnings potential. Both said degrees that involve math and sciences generally provide a wide range of career opportunities.

One of those career paths is engineering. Bankrate found civil engineers earn just under $80,000 to start and can generally repay their education cost of roughly $53,000 over an 8-year period. Engineering is one of the most more versatile degrees that will transfer into the business world and into management roles for a number of industries like retail.

Gisel Ruiz, chief operating officer for Walmart U.S., said she has 600 engineers working in her division helping to dissect operations and looking for ways to improve the company’s efficiency.

Michael Stewart, chief operating officer for Northwest Health System in Springdale, earned an engineering degree and said running the day-to-day business at a hospital is a great fit because its organizational structure.

Bankrate said while doctors earn a comfortable $172,000 annually, it still takes them more than a decade to retire their student debt which averages $135,000 over at a minimum of 8 years. Lawyers face an even steeper climb. Bankrate.com estimates that the typical lawyer will battle his/her student loans for over 13 years.

Journalists and family counselors were deemed to have the lowest return on investment with starting incomes of $37,000 and $43,000, respectively.

The study found it would take journalists an average of nearly 32 years to pay back student loans of $53,000 for the bachelor’s degree required for most traditional beginning media jobs.

Family counselors typically require a master’s degree and had the lowest value in the survey with an estimated 34 years to repay the $68,000 cost of the degree.

Financial experts said a college degree does not come with a guarantee of prosperity and students today need to be aware of the earning potential and job opportunities for specific careers long before they take out any loans.

Eric Vest, director of academic advisors at NorthWest Arkansas Community College, said students can shave some of the college costs by attending a community college either for two years ahead of transferring for a four-year university, or perhaps choosing a two-year degree that  will get them into the workforce sooner.

“We offer a number of programs in the health professions area that are two-year degrees. These can be used as stepping stones to future degrees but they also allow the student to start their careers and two years sooner in some cases,” Vest said.

Julie Simmons Cox knows too well the value of a two-year nursing degree. She earned a bachelor’s degree in kinesiology in 2005 with plans to become a physical therapist. The bachelor’s degree took four years and cost more than twice as much as the two-year nursing degree she picked up a local community college in Texas a couple of years later. Cox now works as a cardiac intensive care nurse at St. Paul Hospital in Dallas and said  the two-year nursing degree is five times more valuable than her bachelor’s degree.

Deck said health professions are in demand partly because so few are being added each year because of limited educational capacity which has kept that labor market tight.

Vest said the recently expanded health sciences center at NWACC offers five different health professions including a new health information management degree. This larger facility allowed the college to increase enrollment by nearly 400 students in those health fields from the 1,350 cap which was previously imposed because of the smaller teaching site.

He said the health professions are two-year degrees and entry into the programs are quite competitive, for instance typical applications to the nursing program number about 300 per semester, for roughly 75 spots.

Ground was broken today (June 11) that will add between 20 and 40 jobs to the Van Buren economy.

Officials with Tankersley Food Service, along with Van Buren Mayor Bob Freeman and Crawford County Judge John Hall, took part in the groundbreaking on the company's new $4 million addition to their Van Buren facility.

"We feel very fortunate to report that we've ran out of room and we need to expand," said Tankersley Food Service President Thomas Moon. "Thanks to Mr. Tankersley and the Tankersley family, we're able to fill that need."

CEO Don Tankersley said the expansion would help the company continue to expand and employ more local residents with medium- to high-wage positions.

"It's going to be more drivers, more warehouse people and more management also. We'll be adding people in all categories," he said.

To help fund the expansion, Tankersley said the company was able to take part in a program offered by the Arkansas Economic Development Commission.

"To encourage development, they give you the sales tax back," he said, explaining that construction equipment and supplies qualified for the program since the company would be creating jobs as a result of the construction work being completed at their 17-acre site in the Van Buren Industrial Park.

Moon said Tankersley would be better able to serve their customers with a larger facility, which will include an additional 28,000-square feet of freezer space, a new refrigerated dock and new customer service offices.

The expansion, which will increase the size of Tankersley's distribution center to a total of approximately 175,000-square feet, will also help the company attract new business, with Moon saying it will "broaden the scope" of its core business.

The winning bid for construction when to Primus Contractors of Atlanta, Ga., Moon said, though much of the subcontracting would be completed by local companies, adding even more to economic development to the area.

Ground was officially broken on May 28 with work expected to be complete by Oct. 7, Moon said.

"That's pretty quick. But we are looking forward to the day when we can utilize our facility."

Hiring for additional staff should be complete by that time, Tankersley said, adding that he would like to have staff trained and in place by the time the facility is complete and available for operations.

Van Buren Mayor Bob Freeman said while attracting new business was important to the community, keeping current businesses such as Tankersley and helping them grow was also vital to a continued strong economic climate.

"Everyone gets excited, and they should get excited, when we have a new company that comes into our community. But it's just as important, just as important for that retention and the expansion of what we have today and that's again why we thank you for reinvestment here in Van Buren, Ark., and what that means. And we want to work and partner with you the best we can to keep you and help you be successful."

Drew Williams of the Arkansas Economic Development Commission echoed Freeman's statement, adding that reinvestment by companies large and small was the "lifeblood" of the state's economy.

"We know that about 80% of our job creation is done through existing businesses retention," he said. "We know that's true in Arkansas and the rest of the country. And we appreciate your investment here. And we know locally, this means a lot to Van Buren, the region and we investment in the state of Arkansas."

Crawford County Judge John Hall said anything that creates jobs is a win-win for not only Van Buren and Crawford County, but for the entire Fort Smith region.

"As the mayor has said, the main thing that we appreciate is the jobs (that are) created here in Crawford County. I myself, as a county judge, most of my (work) is outside the city limits. But anything good that happens inside the city of Van Buren, and I can help the mayor and I can help the chamber and help the industry, I am here to help you and I really appreciate y'all keeping this industry here and bringing more jobs and let's look forward to the next 60 to 70 years. You've got a great company, you have great employees, and I really appreciate you all keeping them here in Crawford County."

Tankersley employs 220 people at its Van Buren facility and services numerous clients, including schools, nursing homes and restaurants, within a 225-mile radius of its Van Buren facility.

The Board of the Fort Smith Regional Chamber of Commerce on Tuesday (June 11) announced a leadership transition plan that will see Paul Harvel, CEO of the Fort Smith Regional Chamber of Commerce, leave the chamber on Dec. 31, 2013, and Tim Allen become the chamber’s president and CEO.

Allen, who joined the chamber in November 2011 as chief operations officer, recently added the president title to reflect his growing role in economic development efforts and day-to-day chamber management. Prior to joining the chamber staff, Allen spent 11 years with the  Arkansas Economic Development Commission as a project manager and 17 years with CenterPoint Energy in a variety of sales and marketing roles.

Harvel, a 45-year veteran of chamber work, joined the chamber in May 2009. Harvel has served as president and CEO of the Arkansas State Chamber of Commerce for two years, and served more than 20 years as the president and CEO of the Little Rock Regional Chamber of Commerce. When he began working for the Fort Smith Chamber, he was a commissioner on the Arkansas Economic Development Commission.

Over the course of his career, Harvel received many honors and recognitions, according to the chamber statement. In 1987, he started the Arkansas Agriculture Hall of Fame and was inducted into their Hall of Fame in 2008. In 2005, he was honored with the Chairman’s Award by the American Chamber of Commerce Executives (ACCE). This award is given to an individual that has made a significant contribution to ACCE and the Chamber profession. He also started Leadership Little Rock in 1985 and Leadership Arkansas in 2006.

NOT RETIRING
But don’t consider Harvel’s career at an end.

“I will never retire. That’s one thing that is not on my agenda,” Harvel said during a phone interview.

Between now and the end of the year, Harvel said his job will focus on governmental affairs projects related to economic development – for example, lobbying to convince Congress to pay to create and maintain a 12-foot channel depth on the Arkansas River. The channel is now maintained to a 9-foot depth. Advocates of the 12-foot channel depth say it will increase barge usage on the river, increase Arkansas exports and make the state more attractive for economic development.

Harvel also said he plans to continue visiting chamber members.

“Something I’m really proud of is that I have visited right at 700 members. I was actually in their office, not just on the phone. I am proud of that and I enjoyed that very much,” Harvel said.

Harvel’s wife, Barbara, has also been active in the community and now work as the executive director of the Leadership Fort Smith program.

REGIONAL COUNCIL
His almost five years has coincided with a relatively jobless national economic recovery that has not been kind to the Fort Smith regional economy. Harvel acknowledged the tough economic conditions in noting that the chamber didn’t hire a consultant or fundraiser but was still able to raise $2.2 million to support economic development efforts.

“We raised that money, your chamber staff raised that money at a time when times were not all that good,” Harvel said.

He’s also pleased with his role in creating the Fort Smith Regional Council. The council, announced in May 2012, is a collection of area business leaders “who have a lot of ability” within their respective companies to “exert influence,” Harvel has said. He has also said he believes the council may emulate the success of the Northwest Arkansas Council and a group formed in 1963 in Little Rock.

“I think in the long run that’s (council) going to turn out to be a good deal for this region and the economy,” Harvel said Tuesday.

GOLDEN LIVING JOBS
Harvel also said he was proud to have played a part in helping Golden Living consolidate administrative functions at the company’s administrative center in Fort Smith.

Officials with Golden Living, a healthcare services company, announced in March 2011 plans to add at least 200 jobs at the Fort Smith admin center as part of a consolidation plan. The jobs consolidated most of the company’s billing for its various subsidiaries in the 5-story, 318,000-square-foot Fort Smith building.

A more than $1.5 million incentive package from the Arkansas Governor’s office and the Arkansas Economic Development Commission and a smaller incentive from the Fort Smith Regional Chamber of Commerce helped secure the jobs.

Kelli Luneborg, public relations director for Plano, Texas-based Golden Living, recently said employment at the Fort Smith admin center has grown from 675 in March 2011 to 923 people as of May 20.

“We could have had a loss of jobs there, but we had a 200 (jobs) gain if not more,” Harvel said of the effort to recruit the consolidation to Fort Smith.

Homebuilders in the region’s four largest cities received 201 permits last month to start new building new homes in Fayetteville, Springdale, Rogers and Bentonville.

These cumulative new residential permits were valued in excess of $47.807 million, up 34% from the same month in 2012. Last year the same cities issued 132 new home permits valued at $35.6 million.

Homebuilders in the region say they are working at a fast pace trying to get inventory up as new home sales are stronger and in most cases the speculative homes are sold several months before they can be completed.

Tim McGuire, owner of Cornerstone Construction in Bentonville, said in recent months the demand for new homes has been steady and there is not much inventory on the market in several price categories.

Bentonville led the region with 79 permits valued at $21.521 million in May, up 123% from the year-ago period.

Fayetteville issued 53 new residential permits with a value of $11.065 million last month. This was nearly twice the building pace from the same time last year with 23 permits worth $6.030 million.

Builders in Rogers started 49 new homes last month with a cumulative permit value of $9.3 million. A year ago, the city issued 36 permits worth $6.564 million.

In Springdale the builders were also busier with 20 permits issued last month at a value of $5.920. Permits values rose 68.7% and contractors started 7 more homes in May, than in the prior-year period.

The new home inventory in the region last month totaled 290 properties listed on the Multiple Listing Service website. Agents say these homes include newer properties that may have been owned briefly and built in the last year or so.

Builders polled by The City Wire in the first quarter of this year said they had no inventory to speak of and hoped to get some new construction projects up and finished so they had product to show this summer as the region’s population is growing and home prices are rising again.

The four cities issued a handful of new commercial permits in May with a value of $3.83 million. Commercial permit values totaled $51.484 million a year ago, lifted by nearly $40 million in construction projects at Fayetteville High School.

Managing hundreds of acres and more than 140 Charolais cattle is truly a family affair for Tammie and Len Williams, and is also just part of what they do and have done to support the agriculture industry in the Fort Smith metro area.

Tammie and Len, both 50, are the principal owners of a cattle farm near Huntington, in south Sebastian County, and have been named the Sebastian County Farm Family of 2013.

Len began farming the land about 30 years ago, and he and Tammie have been married for more than 27 of those years.

“I had to sell a steer to pay for an engagement ring,” Len said with a laugh near the end of a media tour held Tuesday (June 11) at the farm. Len added that the steer helped pay for just part of the ring.

For about 10 years they had a dairy operation, but commodity realities forced them out.

“The milk prices and the feed prices just didn’t work for us,” Len said.

The input costs and output prices haven’t worked for a lot of farmers. U.S. Department of Agriculture data show that the number of milk cow operations have fallen from just short of 90,000 in 2003 to under 60,000 in 2012.

Prices now are good for cattle. So what keeps the Williams’ from cashing in while cattle prices are high?

“Taxes,” Len Williams replied without hesitation, adding that sometimes the economics are better to have some farm debt than a lot of farm income.

Tammie grew up on a poultry farm, and has resisted any suggestion to Len or by Len that they add a poultry operation. The cattle operation keeps them busy enough.

“It’s a 365, 24-hour a day job,” Tammie said.

Helping with that job have been their parents, Ludella and Bud Braselton and Joyce and Lendal Williams Sr., along with their two grown children, Jared and Breanna.

And a lot of help is need, because Tammie and Len have full time jobs off the farm. Tammie is a 22-year veteran with Fort Smith-based ABF Freight System. Len works for the Arkansas Highway & Transportation Department on a sign crew that covers a seven-county area.

Jared, 27, works at Alma Tractor & Supply. He helps some at nights, but mostly on the weekends. There are always fences to build or repair, hay to bale or feed, water systems to install or maintain and a laundry list of other chores that come with owning a farm.

Relatively new additions to the farm are three grandchildren. Dakota is the four-year-old son of Jared and his wife Jessie. Breanna, the 23-year-old daughter of Tammie and Len, has two active daughters, Harper (3) and Rhilynn (1).

Dakota, Harper and Rhilynn are already active with farm life, including showing animals in the “small fry” divisions at the Sebastian County Fair.

Jesse Bocksnick, a Sebastian County Extension Office agent, said two of the primary reasons the Williams family was selected Farm Family is because of their many decades of volunteer work in the regional agri industry and their willingness to pursue “progressive” farming techniques.

One of the progressive techniques has been to use a well to gravity feed several “tire tanks” with semi-filtered and cool water for the cattle. The tires are large tires used on large construction or earth-moving equipment. The insides are cut to leave the hard edges, and the tire is placed on a concrete base constructed in such a way to provide a water-tight seal with the tire.

The gravity-fed system also reduces the need for pumping equipment and the utility and maintenance costs that go with it.

Len said it’s important to provide the cattle with a water supply in which they didn’t also contaminate. The Williams have one pond fenced off from the cattle, and the well provides cleaner and much-less contaminated water for the cattle to drink.

“This is really progressive. Len and Tammie are really ahead of the curve on this. ... This is doing that (farming) with true conservation (practices),” Bocksnick said.

The Arkansas Farm Bureau has promoted the farm family program since 1947. According to the bureau’s website, the objectives of the program are:
• To give recognition and encouragement to farm families who are doing an outstanding job on their farm and in their community.

• To gain recognition of the importance of agriculture in the community and state.

• To disseminate information on improved farm practices and management.

The Williams’ volunteer work is extensive. Their more than 40 combined areas of local, state and national involvement includes serving on the Sebastian County Fair Board, the fair board’s livestock coordinator, member of the Arkansas-Oklahoma State Fair board, 4-H dairy judging team coach, Little League baseball coach, and serving on the Mansfield School District FFA Alumni board.

Son and daughter Jared and Breanna have served as president of the Dayton 4-H Club and president of the Arkansas Junior Charolais Association. Jared received the Arkansas State Grand Champion Award with a Charolais bull at the Arkansas State Fair in Little Rock. Breanna won a scholarship with her animal showings, with one of her efforts capturing the Supreme Ewe award at the Arkansas-Oklahoma State Fair.

Near the end of more than an hour of touring the farm and talking about their farm life, the Williams family was asked about any point they’d like to stress.

“Family,” Tammie Williams quickly responded. “Family is your most valuable asset, especially in farming today.”