Arkansas now has eight public compressed natural gas fueling stations with the opening Thursday (Aug. 7) of Fort Smith's second compressed natural gas fueling station at 4315 Savannah Road. The Fort Smith stations are owned by Arkansas Oklahoma Gas Corp.

Two public CNG stations are under construction in Springdale, and one is planned for West Memphis. The first CNG station in Fort Smith opened in April 2011 and was the first public facility in Arkansas.

The new Fort Smith fueling station houses one pump that can be used by two vehicles at one time, with a second pump scheduled for installation before year's end, according to Fred Kirkwood, senior vice president of customer development at Arkansas Oklahoma Gas (AOG).

"(This station) has three times the capacity of our existing station (just off Rogers Avenue)," he said, adding that plumbing and electric are already in place for the additional pump.

‘PURE SAVINGS’
AOG President Mike Callan said the opening of the new fueling station is an investment – roughly $1 million – in what the company believes is the future of American fuel.

"We really believe at AOG that this is the wave of the future. As you can see from the sign, we're selling compressed natural gas for $1.63 per gasoline gallon equivalent," he said.

Compressed natural gas is a cleaner burning fuel than gasoline or diesel and is inexpensive enough, that AOG has invested in conversion of many vehicles in its fleet to run on the fuel, he said.

"What we do is we amortize, we look at our fuel savings," he said. "We're going to save around $1.50 to $2 per gallon on our fuel, so the more gallon equivalent of CNG that we burn, we're calculating that savings into covering the cost of the vehicle conversion and then everything after that is just pure savings on our operating cost each month."

When AOG was originally doing their own conversions, he said conversion kits would cost about $8,500 per vehicle. Now the company is able to purchase vehicles directly from Ford, General Motors and Ram with CNG already pre-installed at the factory.

Barry Rowton, owner of Falcon CNG — a Fort Smith-based CNG conversion business — has said the factory conversions typically run between $9,000 and $10,000, but added his company could convert a half-ton pickup truck with a 16.5 gallon CNG tank for about $6,800 "when it's fully said and done and out the door."

Using the factory installs, Callan said AOG is able to recoup the nearly $10,000 investments in a short amount of time.

"It is different for each vehicle. It is very dependent on how many miles that vehicle drives. Most of our vehicles, we're looking at at an amortization of less than three years. We're able to pay for the conversion and then everything after that is pure operations cost savings," he said, adding that a typical vehicle stays in AOG's fleet for a minimum of 175,000 miles.

GOVERNMENT FLEET CONVERSION
One of the largest purchasers of fleet vehicles on an annual basis are local governments. The Springdale Water and Sewer Commission announced July 16 it would buy two CNG trucks. With the purchase of two compressed natural gas vehicles, Springdale Water Utilities will become the first public entity in Northwest Arkansas to use CNG. The two vehicles are a pilot program to determine whether cost savings can be accomplished by converting more of the utility's more than 70 vehicle to reliance on the alternative fuel.

In the most recent budget year, the Fort Smith Board of Directors set a priority to incorporate more CNG conversions into the city's fleet to realize the cost savings touted by Rowton, Callan and others at the Thursday grand opening of the CNG station.

But according to Deputy City Administrator Jeff Dingman, the costs outweighed any fuel savings and do not justify the expenditure for vehicles with CNG conversion kits, though he said many of the city's bids this year for new vehicles have also included price quotes for conversions.

"I think it would be, just because there's a Board directive to try to be more proactive, if the margin gets close enough then I think we'd go for it. But I don't know what close enough means, really, whether it's $500 or $2,000. I think if it got in that ballpark, we'd certainly try to make it happen. But when we're talking about vehicles, I mean, a lot of times when you pencil out the fuel costs with the conversion on a vehicle… how long do you keep a vehicle for its intended purpose? Is 10 years too much? Will it take 10 years for it to break even? Does it come within $1,000 or $2,000 of breaking even? Are you even going to keep that vehicle for 10 years or do they rotate out every seven years?"

Dingman said the city has yet to purchase a new CNG vehicle this year beyond some transit vehicles and other vehicles that were converted using grant monies to test whether it would be a benefit for the city. Vice Mayor Kevin Settle said even though no vehicles were purchased with CNG this year, it would not change the desire of the Board to see additional CNG vehicles added to the city fleet.

"The costs will come down and the technology will get better," he said. "We'll see those prohibitive costs come down. This is not a one year action, it is a long-term action through the years. Other cities are doing this in transit. That is one of the major areas. And I think the Board has said it is a long-term goal, not just a one or two year goal."

‘STAGGERING’ SAVINGS
Dean Pendergrass, commercial fleet sales manager at Breeden Dodge Chrysler Jeep Ram in Fort Smith — who has been involved in some of the city's bids for new vehicles this year, including CNG conversions — said many businesses see the fuel costs reduce by about 60% per year once CNG vehicles are introduced into fleets. So he said while the up front costs may be higher to the city, it makes sense to go ahead and purchase a conversion in the long run.

"For this year, they are trying to go green, but at the end of the day costs is kind of prohibitive. But the fuel savings (are) there. But it's the initial cost that really kind of scares people, but they do eventually recoup that out, especially on a municipal level because they do drive a lot of miles. So they would recoup it, but it's just getting your administration to recognize that initial cost upfront is there, but you're going to recoup it later in the life of the vehicle."

Rowton of Falcon CNG said more and more companies are seeing the benefits.

"We have some companies here in town that drive very high miles and get very low miles to the gallon, they're saving thousands per month per truck. It's staggering the kind of money (saved)."

And it is because of those savings that AOG has decided to invest in the second fueling station and Rowton is expanding his business, as well, which just opened earlier this year.

"It's been going great. Fixing to have to bring on some more staff to keep up with it. I'm just not able to keep up."

Arvest Bank, which turned over $551,764 to the Benton County Court in the interpleader case of H. Dennis Smiley, has reportedly settled with 18 of the 20 banks holding claims against the money. While the cost of that settlement may never be known, the claims and legal costs exceed $3 million, according to court filings.

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

Arvest, Smiley’s former employer, filed the interpleader case in April asking the court to decide how the proceeds would be split from Smiley’s retirement fund after his termination. The funds were pledged as collateral among at least 20 banks staking claims far exceeding the retirement funds.

Last week 18 of the banks involved in the interpleading signed over their interests to Arvest Bank, who then asked the court to dismiss their claims as of July 30. Following is the list of banks settling their claims against Arvest.
Bank of Oklahoma
The Bank of Fayetteville
Bank of the Ozarks
Benefit Bank
Chambers Bank
Centennial Bank
Delta Trust & Bank
First Bank, Hampton
First Federal Bank, now Bear State Financial
First National Bank of Fort Smith
Integrity First Bank
First Security Bank
First State Bank of Lonoke
First National Bank of NWA
First State Bank of Russellville
First Western Bank of Booneville
Legacy National Bank
Summit Bank in Arkadelphia

Signature Bank and First State Bank of DeQueen did not settle with Arvest and will have their day in court on Sept. 18. Benton County Circuit Judge John Scott has ordered a pretrial and status conference. Scott filed that notice with the court Thursday, (Aug. 7). He said on Sept. 18, he will schedule future hearings and or a trial in this matter. He told The City Wire he wanted to conduct status hearings in all of the Smiley cases on Sept. 18. At that hearing Scott said he will decide all pending motions and set all other matters for trial if needed.

Jason Kincy, spokesman for Arvest, said the bank did ask the court to dismiss the claims of the 18 banks mentioned in the filing. He said the bank has no comment on the settlement or any of the actions that led to the dismissal, or any of the pending litigation. Kincy also re-affirmed that no other Arvest employee has been implicated in the Smiley situation, despite their names being mentioned in several of the court filings. 

“We don’t expect there to be any other personnel changes related to this case, all of those associates named in the filings remain employed by Arvest,” Kincy said.

A number of the banks settling their claims told the court that Arvest knew or should have known about the multiple usage of collateral pledged by Smiley, a bank officer. There have been no public records of the settlements made, and there likely won’t be, according to the court.

Cases that remain open for hearing on Sept. 18 include:
• Arvest interpleder versus H.Dennis Smiley, Signature Bank and First State Bank of DeQueen;
• Delta Trust Bank versus HDH Holdings, a business entity of Smiley;
• First Security Bank foreclosure on Smiley’s home at 56 Champions Boulevard in Rogers Pinnacle Country Club;
• Simmons First National versus Henry Dennis Smiley, Design for the Home;
• First Federal Bank versus HDH Holdings, H. Dennis Smiley Jr.; and
• First State Bank versus Henry D. Smiley Jr.

For the second time in a week, Northwest Arkansas’ manufacturing sector was handed a slap in the face as jobs are being moved elsewhere amid corporate consolidations. APEX Tool, formerly Danaher Tool, employs roughly 250 workers whose jobs will be moving to South Carolina in 2015.

"APEX Tool Group has made the difficult decision to close our manufacturing facilities in Dallas, Texas and Springdale, Ark., by the end of 2015, and to consolidate production of our Made in the USA brands to an existing facility we own in Sumter, S.C.,” the APEX Tool Group noted in a statement. “We plan to add 150 to 200 jobs in Sumter to handle this additional capacity, and our associates in Dallas and Springdale whose jobs are impacted will have the first opportunity to apply for these positions. All three of these facilities are operating substantially below capacity so we need to consolidate these manufacturing operations in order to be competitive and serve our customers efficiently.”
 
APEX confirmed the local layoffs will begin in 2015 and the local plant employment is 250. 

“We were informed today of the corporate decision. ... We have known for some time that plant consolidation was part of the company’s long range plans. We were the beneficiary of this strategy in 2009 when we were able to assist our local plant in securing consolidated tool lines from New York at the time APEX Tool Group was formed by Danaher Tool Group and another tool firm,” said Perry Webb, Springdale Chamber of Commerce president.

Webb said the plant has been part of Springdale’s economy for more than 45 years and it was hard to hear the official word. 

“While this is a setback, it is our understanding that there will be no immediate layoffs. That gives us time to mitigate the impact of this announcement through continued job creation in Springdale,” he added.

APEX closed a plant in Gastonia, N.C., in June of 2013 after production of Craftsman tools was shifted to the Texas plant and to China. A year later the Texas plant is set to close as well. The consolidations have come under the ownership of Bain Capital, who purchased Danaher and Cooper Tools early last year.

“I am disappointed to hear of the corporate decision to move Springdale’s plant to another state and am saddened for the employees and their families who are impacted. APEX Tool Group, and Danaher Tool before it, have been excellent corporate citizens for many years. Layoffs are never good news but we are confident our strong local economy will continue to create quality jobs that can address the demand created by this announcement,” said Springdale Mayor Doug Sprouse.

The APEX Tool news comes on the heels of the Superior Industries decision announced July 30 to shutter its plant in Rogers, which will result in the loss of 500 local jobs.

There were 26,300 manufacturing jobs in Northwest Arkansas as of June, the Superior and APEX Tool closures will mean a 2.85% decrease in the overall sector, according to Kathy Deck, director for the Center for Economic Research at the University of Arkansas. While the news is not surprising, Deck said swallowing the losses is not easy, even for a growing economy like Northwest Arkansas.

The Pinnacle Country Club home of former Arvest Bank president Dennis Smiley will soon go on the auction block, with mortgage lenders First Security Bank and Arvest claiming rights to the property now in foreclosure.

First Security Bank recently filed foreclosure documents with the Benton County Circuit Court for real property located at 56 Champions Boulevard in Rogers. The 2,967 square-foot home was built in 1992 and has been on the market for 130 days listed at $568,500. There is a pending sale offer on the home for an unknown amount, according to Gary Leis, with Appraisers of NWA. Leis said the home, though it was built in 1992 has had contemporary updates including marble and Brazilian wood floors throughout.

First Security notes that it financed the mortgage for H. Dennis Smiley and wife Cynthia with a $200,000 note recorded May 16, 2012. County records indicate that Smiley purchased the home in April 2012 for $385,000 and Arvest Bank also recorded a mortgage that same month.

First Security said in the complaint that Smiley was in default of the $200,000 mortgage, owing $191,143 as of June 26, with an additional $3,800 owed in late fees and past due interest. Smiley is also in default of a second loan of $40,150 made by First Security in June 2013, using the home as collateral.

Arvest holds a $200,000 mortgage against the property and the assigned interest from Fort Smith-based Benefit Bank who also loaned $40,000 on the real property as the result of a mortgage filed on Dec. 28, 2012.

Counsel for Smiley filed an answer with the court that indicated the family is no longer residing in the home, but they do have some belongings there. The Smileys told the court they have not abandoned the home and are paying the utility bills and other bills related to yard and house maintenance.

Arvest responded to the court filing that it does hold a first lien on the property and has the responsibility for collecting another $40,000 which it was assigned by Benefit Bank’s interest as part of a settlement agreement. Arvest asked the court to dismiss First Security’s claim against the bank.

Smiley’s father, Henry D. Smiley Sr., also responded to the court as he was named as one of the guarantors in the second loan ($41,150) made to HDS Holdings in February 2013.

First Security said the loan to HDS was backed by the home as collateral. As of June 26, Smiley was in default for $37,240 with $1,150 in past due interest and late fees.
The bank asked for judgment against Dennis and Henry Smiley for $37,240. 

The answer of Henry Smiley filed with the court July 30, indicates that he never signed the documents which were presented between his son and First Security Bank. He affirms defenses of fraud against him and asked the court to dismiss the claim.

Fort Smith area business leaders, politicians and other local stakeholders got a first hand glimpse of the United States' largest diesel tugboat as the U.S. Army Corps of Engineers brought together the diverse group of nearly 100 individuals for a nearly three hour tour along the Arkansas River.

The river cruise on the Motor Vessel Mississippi started at Lock and Dam 13 in Barling and made its way along the river boundary between Fort Smith and Van Buren to discuss the future of the Arkansas River and its impact on the regional economy.

Col. Courtney Paul, Little Rock District Engineer with the Corps, said the MV Mississippi — a Memphis-based tugboat that spends the vast majority of its time engaged in construction work along the Mississippi River — brought the communities along the Arkansas River a rare occasion.

"This is a unique opportunity for us. It's the second time ever that the Motor Vessel Mississippi has come up the McClellan-Kerr Arkansas River Navigation System," he said, adding that the Mississippi River Commission would hold public hearings next week on the vessel as it travels from Catoosa, Okla., and works its way back down the Arkansas River.

Public hearings will focus on navigation, the environment and the relationships between recreation and industry along the busy waterway. Paul said among the individuals scheduled on the manifest Monday as the towboat makes its way back through Fort Smith is Gov. Mary Fallin, R-Okla.

He said before the meetings begin, each of the commanders from different regions along the river — such his office in Little Rock and the Tulsa office that manages the river from the Oklahoma border at Fort Smith to Catoosa — are inviting the public to participate and engage with the Corps so the topics of importance to communities all along the river can be made known to the commission.

"We can kind of educate or explain what's going on (along) the river to folks," he added.

According to Paul, policy will be front and center during the meetings with the commission, with testimony during the meetings placed in the Congressional record. And while communities including Fort Smith may push for policies such as the 12 foot channel or a new harbor, he said part of the trip along the river is about an educational experience for the public and local leaders in business and government to understand the Corps' priorities in order to keep industry flowing through river towns like Fort Smith and Van Buren.

He said while local priorities like the 12-foot channel are important, the public needs to understand the threats to the system and how it could impact not only river commerce, but train and truck transport at ports all along the river and how one threat could derail plans like the 12 foot channel. Arkansas business groups are advocating for the river channel to be dredged and maintained to a 12-foot channel along the Arkansas River, deeper than the 9-foot standard in place.

"One of the greatest threats is the situation at the mouth of the system, which is what you call the three rivers area which is the confluence of the Mississippi, the White and the Arkansas Rivers. Why it's a threat to the reliability is that right now, the way it's set up you flow into the McClellan-Kerr Arkansas River Navigation System into the White River, you're in the first pool. You go into the Arkansas post canal, you're in the second pool. And then you follow the Arkansas River up to here and then on to Catoosa. The White River wants to do what … rivers want to do, and that is to meander and join up with the Arkansas. It's done that in the past, we've kind of patched that with a soil-cement levy, but every year we run the risk of a breach of the soil-cement levy."

If a breach occurs, he said it could shut down the river for as many as three or four months, cost local economies in the short term and possibly costing ports, towns and companies along the navigation system in the long term if companies find other ways to transport goods by bypassing the Arkansas River.

He said the risk of a breach means the Corps will make funding a permanent fix a priority with the hope for other projects down the road.

The tour comes just less than two weeks before U.S. Sens. John Boozman, R-Ark., and Jim Inhofe, R-Okla., are scheduled to be in Fort Smith to discuss transportation issues in a question and answer session to take place with the area's Regional Intermodal Transportation Authority (RITA).

The meeting with Boozman and Inhofe on Aug. 19 was organized by consultant Matt Sagely, who RITA has hired to organize meetings between the agency and influential members of Congress focusing on infrastructure issues of importance to the Fort Smith region, including a proposed inland harbor.

The MV Mississippi is scheduled to travel Catoosa before eventually looping back toward Fort Smith Monday evening, where Fallin is scheduled to be in attendance at the Mississippi River Commission meeting on the vessel.

Wal-Mart took part during the past week in a three-day U.S.-African Business Forum in Washington, D.C. where business and government leaders discussed investment and economic opportunities.

Wal-Mart CEO Doug McMillon helped open the forum on a panel moderated by President Bill Clinton on Tuesday (Aug. 5). McMillon along with the CEOs of 
Dangote Group, General Electric, The Dow Chemical Company and Shanduka Group. Each identified ways to strengthen their business ties and generate economic growth with African connections.

Over the past decade, six of the 10 fastest growing economies are in Africa, which has already prompted some of country’s largest firms like Wal-Mart, Procter & Gamble and General Electric to invest in sub-Saharan regions. Africa’s GDP is expected to rise 6% annually over the next decade and real income has increased more than 30% over the last 10 years, according to economists.

The conference was expected to spur investments from U.S. companies to the tune of $14 billion in deals that would benefit Africa but also enhance U.S. profits of the giving companies.

"I want Africans buying more American products. I want Americans buying more African products," said President Barack Obama, who addressed the forum on Thursday (Aug. 7).

MCMILLON NOTES
Wal-Mart owns a majority stake in Massmart, a large retailer based in South Africa it purchased for $2.4 billion in 2011 and the retailer continues to invest in Sub-Saharan Africa.

“We’re investing for the long term, empowering African producers through hands-on training and using our global supply chain to connect them with our businesses around the world,” McMillon said. “Everywhere we operate we see that our customers have so much in common. Our customers in Africa want to spend less on everyday needs so they can provide more for their families.”

He also referenced the success of Seven Sisters Wines, a South African wine producer that supplies a range of wines to 500 U.S. stores. Seven Sisters CEO Vivian Kleynhans took part in Massmart's Developing Wine Brands Program, which helps local suppliers grow their business in South Africa and beyond.

WALMART INVESTMENT
On Thursday (Aug. 7) Wal-Mart and its foundation announced a $3 million investment in three farmer training programs in Rwanda, Zambia and Kenya.

As part of Wal-Mart's commitment to train one million small farmers in emerging economies, the Walmart Foundation is working in partnership with the U.S. Agency for International Development (USAID) to fund training in agricultural best practices for 135,000 farmers, including more than 80,000 women, according to Maggie Sans, vice president of international corporate affairs at Wal-Mart.
 
Walmart Foundation funding in Rwanda is supporting expansion and providing training to 50,000 farmers on agricultural techniques, emphasizing the production of corn, beans and dairy farming.  

Sans said an additional 45,000 farmers will be trained in business skills and leadership in agriculture in Zambi  as part of Agribusiness Systems International’s Women's Improved Marketing and Asset Control (WIMAC) project.
 
In Kenya, Walmart Foundation funding will support the expansion of the One Acre Fund program to improve agricultural practices and market access for 40,000 farmers, which will see them receive high-quality inputs such as seed and fertilizer, as well as post-harvest support. This process is expected to result in a higher crop yield that could double incomes in one planting season, she said.
 
Sans said women in emerging markets typically invest more than 90% of their income back into their families and communities. She ended by reiterating that Walmart is committed to empowering supply chains in Africa, particularly women farmers.

U.S. PLAN 
President Obama outlined a series of steps the U.S. is taking to boost economic ties with Africa.

• As part of the "Doing Business in Africa" campaign, the President announced an additional $7 billion in new financing to promote American exports in Africa.

• U.S. will continue to partner with Africa to build the necessary infrastructure for a flourishing economy. Aiming to bring electricity to more than 60 million homes and business, with a total commitment of more than $26 billion to Power Africa.

• The President called on Congress to renew and enhance the African Growth and Opportunity Act (AGOA). 

• The United States is going to continue to help more Africans trade with each other — because, as the President noted, "the markets with the greatest potential are often the countries right next door."

Arvest had plenty of reasons to settle claims with 18 of 20 banks who were owed money by former Arvest group president Dennis Smiley. The Fayetteville-based Arvest Bank reached private settlements with all but two of the banks staking claim to Smiley’s retirement funds.

Banking consultant Phillip Knight said it was “wise for Arvest to settle and to stop the long, arduous legal battle that had begun between many banks across the state.” He said from a publications relations standpoint, a sealed settlement that allowed Arvest to contain the publicity and offer the banks even pennies on the dollar makes more sense than letting each of the individual claims languish in the court system with legal meters running.

Arvest chose not to comment on the settlement or any of the conversations that led to that action or the pending cases to be heard on Sept. 18 in Benton County Circuit Court by Judge John Scott.

Tim Tarvin, banking expert with University of Arkansas Law School, said Arvest’s decision to settle makes sense on a number of levels.

“Arvest’s decision to button up the matter with a settlement made sense given the high profile nature of the employee involved. This is positive for rebuilding public image and could help to restore relationships with sister banks,” Tarvin said.

BANK CLAIMS
It will likely never be known what the 18 settling banks got in the deal, or if Arvest paid more than the $551,764 from Smiley’s retirement account. Banking insiders agree the total outstanding debts were relatively small for an institution as large as Arvest.

The claims filed with Benton County Court totaled more than $2.2 million:
Delta Trust Bank $245,100 
First Bank Hampton $179,000
First Federal Bank $70,000
Bank of Fayetteville $520,800
First Western Bank $210,900
First Bank Lonoke, $159,000
Integrity Bank Mountain Home $160,900
Simmons First National $85,000
First National Bank Russellville, $145,900
First National Bank Fort Smith, $393,380
Summit Bank, undisclosed amount 
Legacy National Bank, undisclosed amount
Chambers Bank, undisclosed amount
First Security Bank, undisclosed amount.
Benefit Bank, undisclosed amount
Bank of the Ozarks, undisclosed amount
Bank of Oklahoma, undisclosed amount
Centennial Bank, undisclosed amount

Gary Head, President of Signature Bank, told The City Wire he was not approached for settlement by Arvest. Though Signature Bank was listed among those with claims to Smiley’s retirement account, Head said the bank did not file a claim with Benton County Court for payment.

“Our lawyers have been working directly with Dennis and his counsel. We prefer not to kick a man when he’s down, but we will continue to pursue payment for the money we are owed and will have counsel at the hearing next month,” Head said.

First State Bank of DeQueen was the other institution not settling with Arvest. Bank officials reportedly said they too were not approached.

LIABILITY AGAINST FRAUD
Bank officers such as Smiley typically are required to carry professional liability coverage that protects them and their employer against financial loss. 

Garland Binns, attorney with Dover Dixon & Horne in Little Rock, said banks typically have blanket liability coverage on their officers and employees in fiduciary positions. He said the policy can provide against financial loss in the case of fraud. It is not known if Arvest had blanket liability coverage on Smiley, or if the bank has filed any claims with liability carriers regarding the fraud alleged by Smiley.

Smiley allegedly signed other bank officer names on official Arvest documents that allowed him to borrow money from 20 banks using his bank retirement account as collateral. The retirement account had a value of roughly $500,000, but Smiley pledged that same collateral several times without the knowledge of Arvest or the lending banks.

Arvest told The City Wire that none of the officers whose names were signed in connection with pledging Smiley’s retirement account had knowledge of the loan and did not sign the papers. 

“No other Arvest employees have been implicated in this matter,” said Jason Kincy, spokesman for Arvest Bank.

Smiley’s father, Henry Smiley Sr., also told the court that his signature was forged on loan documents to which he had no knowledge. Smiley Sr. claimed that he too, had been a victim of fraud in this matter.

The Federal Bureau of Investigation continues to probe the fraud allegations but no criminal charges have been filed. The statue of limitations on white collar fraud is seven years. 

Tarvin said any criminal charges must come from the federal prosecuting attorney. He said the prosecution generally takes its time to fully investigate each case so that no stone is left unturned before a plea is entered.

Head said several years ago, he had a bank employee that committed a crime and it took three years before she had her day in federal court.

Accountant Staci Taylor has joined Van Buren-based Jimmy Bell Real Estate Company.

Taylor performs accounting for more than 30 companies relating to all aspects of the Jimmy Bell Real Estate group. Her accounting responsibilities encompass residential and commercial real estate sales and rentals, development of planned communities and industrial land development.

Taylor earned a bachelor’s degree with a double major in accounting and business administration from the University of Arkansas at Fort Smith. She is a native of Paris, Ark. and resides in Fort Smith with her husband, Shea.

“We are excited to have Staci on board,” J. Kevin Bell, president of Jimmy Bell Real Estate Company, said in a statement. “She is an extremely bright and dedicated person who brings energy and a diverse skillset to the Jimmy Bell Real Estate team. Staci fills a very important role for us as we continue to expand our business.”

For 38 years, Jimmy Bell Real Estate Company has operated for 38 years in Van Buren for 38 years and the surrounding area as a residential, commercial and development company.

The latest survey of more than 150 Arkansas company leaders indicates an improved outlook for the rest of 2014 on the sales and hiring front, as well as expectations that economic conditions will improve in the last half of the year.

Talk Business & Politics — in conjunction with the Arkansas State Chamber of Commerce and consulting group CEG Partners – released its second “Business Leaders Confidence Survey,” which captures opinions on the future direction of Arkansas economic conditions. The Greater Little Rock Chamber of Commerce also aided in this latest survey.

“There is a lot of good news from this survey and nationally, but it’s kind of like pedaling a bike in the Ozarks. As soon as you make it over one hill, there seems to be another one in front of you,” said Mike Stafford, managing partner with Little Rock-based CEG Partners, which conducted and analyzed the mid-year report.

CEG Partners received results from 154 state business leaders representing top executives in all major industry categories, such as manufacturing, health care, finance, energy, construction and utilities.

Some key takeaways:
• 69% of respondents expect sales and revenues to increase slightly or significantly during the next 6 months – an 8% improvement from January 2014.

• 49% expect hiring to increase slightly or significantly – a 23% improvement from the number we saw in our last survey 6 months ago.

• 47% said economic conditions are better today than 6 months ago – an 88% improvement from our last survey.

• 51% said they expect conditions to improve in the next 6 months – a 46% improvement from six months ago.

“There’s no question that the economy, at long last, in this now five-year old recovery seems to be getting some legs, so this is good news,” said Randy Zook, CEO of the Arkansas State Chamber of Commerce and Associated Industries of Arkansas.

There was one negative highlight in the report related to capital spending. Despite the optimism for employment, revenue increases and the overall economy, business leaders are still cautious regarding capital expenditures. About 51% of business leaders surveyed expect capital spending to increase in the second half of 2014, a 2% decline from 6 months ago.

Stafford said capital expenditures remain a long-term investment, and presently, there is still lingering uncertainty for the long-run even though short-term conditions look positive.

Zook added there is still a lot of “slack capacity” in industry statewide and nationally, which could explain the hesitation in this category.

The results of the Business Leaders Confidence Survey are a contrast to Arkansas consumer opinion on business conditions. The recently released Arvest Consumer Sentiment Survey found only 22% of Arkansas consumers expect business conditions to be more favorable one year from now, mainly because of concerns regarding unemployment.

It’s not enough that Northwest Arkansas be considered a bedrock of retail expertise, some say it now must become a technology hub in its own right as retail and every industry sectors move in sync with digital demand.

“The fly wheel is rolling here and we can become a major technology hub. ... We are not going to become Silicon Valley or Austin, Texas, but we do have some unfair competitive advantages in Northwest Arkansas,” said Jeff Amerine, director of Arkansas Technology Ventures.

Amerine was the morning keynote speaker at the NWA Technology Summit on Monday (Aug. 11) held at John Q. Hammons Convention Center in Rogers. The Bentonville-Bella Vista Chamber of Commerce event packed in 400 tech professionals for a half-day of conversation and collaboration about growing the regional tech sector

MORE THAN JUST REDNECKS
“I wouldn’t normally think of Arkansas as a tech haven but we’re in the midst of creating a Northwest Arkansas venture ecosystem with some amazing things happening in the tech and startup scene,” Amerine said.

He admits that to much of the outside world sees Arkansas and Northwest Arkansas as a place where “gap-toothed, gun-toting rednecks drive huge pickup trucks.” He adds that Sam Walton and J.B. Hunt faced similar perceptions about the region when they sowed their entrepreneurial seeds years ago. 

“That perception is a constant we have to overcome and show the world what we have to offer,” Amerine said. “Growing this tech sector with a supportive venture ecosystem matter because that’s where future economic growth will come from.”

He said the Kauffman Foundation, a think tank for entrepreneurial interests, indicates that 85% of all net new job growth comes from startup businesses.

“If you look at the areas that have this bubbling activity, this churn of disruptive activity, we see talent migrating to areas where there is good quality of life and where innovation occurs. That feeling of innovation and the support that comes from a local ecosystem is very, very important,” Amerine said.

He explained that the formula is not magical, it begins with STEM education – focusing on science, technologies, engineering and math. 

“The creatives and technologists have to be nurtured, it has to start early on. That’s the call to action,” Amerine said. “Tech talent is crucial to keeping the movement going and that’s one of the key problems we face. But that’s not unique to us. That’s every flyover state in the country as talent tends to concentrate on the coasts. We have got to grow our own.”

He added that entrepreneurial outreach and networking opportunities are also key as are more angel investors networks that can provide needed capital at all stages for local startups.

“We need a large scale locally based venture fund that is focused on tech,” Amerine said. “We’re making progress, but there is more work to do.

RETAIL-TECH CONNECTIONS
Angelo Welihindha, head of mass market retail sales at Google, said during Monday’s panel discussion that retail is not just retail anymore because technology is a natural follow-up given the collision between physical and digital commerce.

He said Northwest Arkansas can be an important tech center because of the retail expertise centered here. Welhindha spent more than two years with Nestle after graduating from the University of Arkansas. He worked six years at Wal-Mart before moving to Google earlier this year. 

Stan Zylowski, president of Movista, said Northwest Arkansas is a logical place for tech energy given that there are so many Fortune 500 and Fortune 1000 companies with top retail professionals based here. He said as retailers and suppliers move toward seamless digital and physical interaction they all require top technology talent.

Carol Spieckerman, CEO of NewMarketBuilders said, the lines are blurring like never before between suppliers and retailers who are finding ways to share content. She said technology is the link that will allow seamless transitions between physical and digital shopping and customer experiences. Spieckerman said Wal-Mart has been a leader in the retail space integrating technology and thinking more like a start-up. 

“Macy’s is playing a quick game of catch-up and Target is woefully behind, but perhaps that will change under the new leadership of Brian Cornell and some other outside tech hires,” she added.

STARTUP MINDSET
As a new guy at Google, Welihindha said he sees firsthand how important it is for large companies to think like startups and to foster a climate of networking among its staff, which is something Google does every day.

Welihindha said corporate giants need to foster and support the creative disruptions from technology talent knowing there will be some failures along the way. When Welhindla was a University of Arkansas student in 2004, his entrepreneurial team developed a concept for e-receipts. They were able to pitch the concept to Wal-Mart.

“They told us that e-wallet was the answer and they dismissed our idea. They shooed us out the door pretty quickly and we never heard from them again. We were so disappointed and we thought that if the world’s largest retailer didn’t see the value, we should give up. We had been in revenue sharing talks with IBM but we gave that up and took corporate jobs,” Welihindha said. “Last year when Neil Ashe, CEO of Walmart e-commerce, stood up and said Wal-Mart would be offering e-receipts, I was so angry but at that point I was already headed to California (Google). Keep your minds open and you will understand how emerging technologies can make your company better.” 

Michael Stich, chief innovation officer at Rockfish Interactive, said since 2006 the company has grown to more than 250 people across 10 locations and trying to keep that startup mentality and agility has been a challenge. He said one of the core missions at Rockfish is to foster an environment that welcomes entrepreneurs to try new ventures, with the support of Rockfish. He said the company demands a lot from its people, but also supports their dreams for entrepreneurial ventures.

WAL-MART TECH
Karenann Terrell, chief information officer for Wal-Mart Stores, said she was proud to be an engineer in a family of teachers, but her parents never really understand what her job is. Terrell said Wal-Mart is a retailer and that will never change, but it’s also tech invested and that’s the future for giving customers what they demand.

She said Northwest Arkansas has got to do a better job fostering STEM education.

“We have the opportunity here to make the University of Arkansas great. Wal-Mart and other companies have to be able to co-exist with entrepreneurial ventures and companies have to elevate the role of technology within their corporations investing in talent,” Terrell said.

She said the UA, like many colleges, must put more emphasis on computer science graduates. Just one in 17 technologists nationwide graduated with a degree in computer science. In a room of roughly 400 technology professionals there were less than five computer science graduates from the UA. There were 50 or so who claimed to be graduates of the UA business school. 

“As we see the business school’s entrepreneurial program feed the talent pool, there is much more to be done in computer science education,” Terrell said. “If we don’t, we will miss an opportunity.”

Capital is the essential grease that keeps the entrepreneurial wheels turning and despite lots of cash on the table, area startups say investments are more difficult to secure than they once thought.

“I feel like the teenage guy waiting to kiss a girl, I know it will happen but the waiting is so hard to deal with in the meantime,” said Mark Brandon, serial entrepreneur and founder of Qbox Inc.

Brandon said his Fayetteville-based tech firm is still trying to raise $1.5 million to fund its next phase of growth. 

“We have a growing client base and are bringing in tens of thousands in monthly revenue but we have tapped out about every Arkansas capital source and I have spent a lot time on the coasts trying to draw financial support. I am hearing from investment groups that have requests from 4,000 ventures and they are going to fund 12. Mostly likely that will be those located near them, not miles away in Arkansas,” Brandon said.

Michael Paladino, one of the founders of Overwatch, said his venture is also beating the pavement for investment capital and it’s proved harder than they once believed.

Jeff Amerine, a keynote speaker at the NWA Technology Summit, said Northwest Arkansas is in dire need of its own venture fund that focuses on technology startups. He said there has been a lot work in establishing the local angel investment group that now has 300 members. This group looks at five deals each month, but that is not nearly enough for the deal flow created in this region alone.

Amerine said there is a need for all stages of capital to support ongoing technology ventures. He said the region and state has made major steps in the right direction over the last five years when there was just one angel fund in the entire state. He said accelerator programs like the ARK Challenge, provide some teams some seed money to start but when they need more money to ramp up it can be difficult. Brandon and Paladino, who were each ARK Challenge winners, agreed with Amerine’s assessment.

Abigail Kiefer, founder of Red Clay, moved to Bentonville to start her business a few years ago. In 2012 Red Clay raised $170,000 through local angel investors. Since then they have raised $1 million successfully using crowd sourcing.

“Over three years we have been able raise $1.5 million and it’s never easy. The best capital for a startup is revenue. Area companies who reach out and do business with local startups are the best,” Kiefer said.

Amerine said there have been a few success stories in the past five years that keep the hope alive for other startups, something that is essential for creating a technology hub in this region. There are 10 new angel investor funds in the state, when five years ago there was just one.

Acumen Brands closed the largest deal in the state with an $83 million investment from a capital venture fund that could have gone anywhere and invested in any company, Amerine said.

He said last year, Updata’s $10.5 million purchase of Collective Bias was a huge score.

Ryan Frazier and his team at DataRank got into the Y Combinator in Silicon Valley with a top 5 finish, according to Amerine. Within 24 hours DataRank raised $1.4 million in capital, enough to buy them a few more years and expanded growth opportunities.

The Walmart MoneyCard that is managed and issued by Green Dot Bank was recently named “Best Card” in three categories of the CardHub 2014 Prepaid Card Report.

• Best alternative checking account
• Best alternative check cashing tool
• Best access to electronic transactions

The Walmart BlueBird card which is issued by American Express also ranked as best card in two of the five categories:

• Lowest fees

• Best access to electronic transactions

More consumers are turning away from traditional checking accounts towards alternative cash management tools including prepaid cards. According to the Nilson Report, general purpose prepaid cards issued by the nation’s top 50 banks accounted for $118 billion in spending at merchants in 2013, up 6.1% from 2012.

The Mercator Advisory Group notes the amount of money loaded on general purpose reloadable prepaid debit cards almost tripled from 2008 to 2012, rising to $76.7 billion. Mercator predicts that number will rise to $168.4 billion by 2015.

A 2014 Pew study found 32% of consumers compared the terms and fees before choosing a card as most simply selected a cared while in a store. CardHub conducts an annual comparison among the most popular cards in circulation, measuring the total cost and eligibility of 26 prepaid cards, based on their features and fees.

The Rogers Municipal-Carter Field Airport will receive a $3.3 million grant from the Federal Aviation Administration to continue rehabilitation of the airport’s apron. The work will include more than 230,000 square feet of new pavement.

The announcement came from the offices of U.S. Sens. Mark Pryor, D-Ark., and John Boozman, R-Ark., and U.S. Rep. Steve Womack, R-Rogers.

“Over the past few years, we’ve seen incredible population and job growth in Northwest Arkansas,” Pryor said in the statement. “These resources will allow Rogers to meet the demands of a rapidly growing region while ensuring that the airport can continue to deliver passengers and cargo safely to and from the airport.”

“The airport in Rogers plays a critical role in the economic growth of Northwest Arkansas. It’s necessary that the transportation infrastructure meets the needs of region’s booming business activity so we can continue to benefit from development and commerce,” Boozman said.

“As more and more people make Northwest Arkansas their home for their families and businesses, we must ensure our transportation infrastructure keeps pace and can support our growing population. This grant will enable the Rogers Municipal-Carter Field Airport to make necessary upgrades to meet the demands of the region, allowing both our population and our economy to continue to grow,” said Womack.

Tyson Foods and other local poultry companies are breathing easier with expectations of record U.S. corn and soybean crops this year, according to U.S. Department of Agriculture’s latest  forecast.

Poultry companies keep a close eye corn and soybean meal prices at all times as they are the two main ingredients used to feed chickens.

USDA forecast record corps this year based on actual field surveys. U.S. corn production for the 2014 to 2015 year is forecast at 14.03 billion bushels, up 172 million bushels from last month’s forecast. The projected season-average farm price for corn is lowered 10 cents at both ends of the range to $3.55 to $4.25 per bushel.

Corn supplies for this next year are projected at a record 15.24 billion bushels with the increase in production partly offset by a 65-million-bushel reduction in beginning stocks. Exports are expected to be 25 million bushels, compared to 20 million bushels last year.

Soybean production is forecast at 3.81 billion bushels, up 16 million due to a higher yield.

Soybean supplies for this year are projected slightly above last month’s estimate. With minimal supply gains, soybean exports and crush are unchanged, leaving ending stocks projected at 430 million bushels.

The U.S. season-average soybean price for this year is forecast at $9.35 to $11.35 per bushel, down 15 cents on both ends.

Soybean meal and oil prices are forecast at $340 to $380, down 10 dollars at the midpoint.

In the first nine months of this year Tyson Foods reported a $460 million savings in feed costs from the same period last year. Those savings should be larger next year if pricing stays strong.

Retailers from Wal-Mart to Nordstrom are well aware of the challenges they face from ever-changing retail trends often driven by more consumer personalization and a plethora of subscription services that reduce physical store traffic and comparable sales.

Angelo Welihindha, head of hardware sales for Google and former Wal-Mart merchant and buyer for Sam’s Club, said consumers crave personalization features in their shopping experiences and that is not likely to change.

“Amazon has been offering personalization for some time on its site. Wal-Mart is playing a quick game of catch-up with Pangaea — its new e-commerce platform,” Welihindha said during his presentation on e-commerce at the NWA Technology Summit in Rogers on Aug. 11.

MAKE IT PERSONAL
WalmartLabs over the past year has unified all of the retailer’s online entities into a single in-house platform known as Pangaea. The retailer said Pangaea allows for more personalization, better customer service and more payment options.

Lowe’s is also doing more to allow consumers to find previous purchases for items like light bulbs, filters, plants or any product sold in-store or online. These personalization capabilities require continued investment, something Wal-Mart remains committed to, noting that ongoing acquisitions in the e-commerce division would shave a few cents off the bottom line profits this year.

Nordstrom recently anted up an estimated $340 million to purchase Trunk Club, an online personal shopping service for men. The five-year old Chicago-based startup offers a subscription-based service that’s like having a personal stylist on demand who picks out top designer labels and ships them to the customer’s home for free.

After signing up, men are interviewed by a stylist about their own personal tastes, and provide their measurements. They then receive their first “trunk” – a box containing a selection of clothing and other items, and they only pay for what they don’t mail back within 10 days. Trunk Club did more than $100 million in sales last year, proving that there are plenty of men who want help with their wardrobe.

“Trunk Club operates a bit more like a personalized shopping service and it is a perfect fit for Nordstrom and very ‘in brand’ given its well-known reputation for personalized customer service,” said Carol Spieckerman, CEO of NewMarketBuilders in Bentonville.

Jason Long, CEO of Shift Marketing, said brick and mortar retailers have an opportunity to drive in-store traffic through the use of various personalization practices.

“Home Depot for instance knows which customers are shopping for certain power tools online or who shops the store regularly for upgrades and latest models. They could take that information and notify the customer by email or text as soon as a new model becomes available ... perhaps offer a coupon to get them to pick up in-store. Research shows that 30% to 40% of those who order online and pick-up in the store also purchase items when they come inside,” Long said.

He said while there is some capital outlay needed to make the personalization possible, it’s more likely upfront costs could be recovered if more traffic is driven into the store.

PERSONAL OPPORTUNITIES
Retailers like Old Navy, Wal-Mart and Amazon are looking for ways to connect with their shoppers and they are consciously looking at abandoned online shopping carts. Old Navy will often send an email to the shopper who has abandoned items in an online cart. The email typically offers a deeper discount than previously extended. Wal-Mart and Amazon also send emails, with price notifications if there has been a rollback.

Experts see opportunities for more personal interaction between a retailer’s online and physical stores.

“Managing shopping cart abandonment and serving up relevant deals in the digital space are one thing but the next step will be to bridge digital browsing and purchasing behavior with physical retail,” said Spieckerman. “Many of the digital solutions available today are isolated to that environment and focus on digital conversion yet shoppers are channel agnostic.”

She said the next opportunity is to remind shoppers of their online journeys and choices while they are in the store, most logically through retailers’ shopping apps. For example, she said retailers could offer a personalized promotion on an item that was abandoned in an online shopping cart while a customer is in a store. 

“In the meantime and back to the digital-only environment, Google is said to be testing a capability that will connect mobile browsing with mobile apps, which will allow marketers to create seamless campaigns and promotions across both, rather than building them in silos. This is an exciting development that promises to shore up the digital marketing opportunity,” Spieckerman said.

Long said many retailers are already reaching out to consumers who abandon items in their online shopping cart through Facebook and other social media feeds. Images of those abandoned or previously browsed items seemingly follow the user around on the social media sites as a subtle reminder from the retailer.

SUBSCRIPTION CRAZE
Welihindha also said popularity of subscription services linked to a membership are a changing dynamic in the traditional retail space. Consumers may sign up on a plethora of websites for everything from regular delivery of dog treats to gourmet ingredients for dinner tonight or tomorrow night.

“Membership is really taking off. It goes much further than apparel, “ Welihindha said.

Naturebox will deliver five full-sized healthy snack packages to the front door. The product can be chosen by the subscriber or they may opt for the surprise package. Founded in 2011, the California-based snack company launched 60 products and shipped 50,000 boxes in 2012. Last year it added 100 more products and shipped a million boxes as more consumers look for healthy snack options.

BlueApron will deliver fresh ingredients in the exact amounts needed to prepare gourmet recipes. The subscription service claims to do the legwork for the consumer who loves to cook but has little time to plan and shop for the ingredients.

BirchBox is an online service that sends five beauty aids for men or women for a standard $10 per month. The personalized beauty and lifestyle samples that have been tailored to the consumer profile. The service allows consumers to try products from niche brands, up-and-coming lines and brand favorites.

BarkBox is a subscription service available monthly, quarterly or semi-annually. Subscribers tell the company how large their dog is and they select the frequency of delivery. BarkBox does the rest in choosing four or more products such as toys, treats and grooming products which are shipped to the subscriber’s front door. Subscriptions begin at $19 per month.

SUBSCRIPTION IMPACT
Welihindha said as subscription services become more mainstream the impact to retailers will likely be felt sooner rather than later. To that point, Michael Santoli, senior financial columnist at Yahoo!, said Tuesday (Aug. 12) that Wal-Mart, like many other retailers, continue to report lighter traffic and soft comparable sales. 

“They are struggling with too much square-footage at a time when the industry dynamics are changing toward online sales. Consumers have more options than ever and it's not that they are shopping less but perhaps spreading their spend around,” Santoli said.

Spieckerman disagrees with the sentiment that subscriptions result in lighter traffic.

“At this point, I don’t see subscription services making a major dent in big box store traffic. They are more of a novelty and in no way replace a stock-up or fill-in trip to a retailer,” she said.

Spieckerman said these types of services aren’t necessarily complementary to retailers’ core businesses either as Wal-Mart’s shuttering of its subscription service, Goodies Co., bears out.  

“That said, subscription services are a great way for brand marketers to introduce brands and products to new consumer groups and to inject an element of surprise into their overall marketing strategies. The results from these programs can then be leveraged to lobby for space within traditional retailers,” Spieckerman adds.

Just like Amazon Fresh is an add-on service for Amazon Prime, there are possibilities that Spieckerman sees for Sam’s Club, also a membership-based shopping experience.

“Sam’s more loyal members might consider a subscription service as a convenience option, and it could be a good fit for members that demonstrate high levels of engagement within Sam’s ecosystem – those who take advantage of Sam’s savings programs, travel services and other offerings. These members would have the trust level required for the service to make sense,” Spieckerman said.

Long said subscriptions seems to be more suited to niche areas and he does not believe the sales lost to subscription services are enough to move the needle backward at big box retailers. He adds that Costco and Sam’s Club could risk key impulse sales in their club if they bought too heavily into the subscription arena.

In a special meeting, the Fort Smith Regional Airport Commission on Tuesday (Aug. 12) approved entering into contract negotiations with Pro-Tec Fire Services to provide fire protection for the airport once the firefighting mission staffed by the 188th Wing ceases operations on Sept. 30.

According to John Parker, executive director of the airport, the airport chose to go with a contracted provider versus forming its own fire department due to communications problems with the National Guard Bureau in Washington, D.C., regarding the use of the 188th's firehouse and equipment.

"We looked at the variables and studied if we could take on the tasks ourselves, but at the time we were relying on the agreements that the National Guard Bureau had made (to the airport verbally) but we had a window of time where we weren't getting any feedback from the Guard Bureau, so that's when we opted to go with someone who could provide all of the elements of aircraft firefighting, personnel, training, all of those things. That's why we requested the proposals. In doing so, we requested the proposals for a turnkey (operation) all the way down to personnel."

While Parker has previously stated that contracting services could eat up to $750,000 each year from the airport budget — a third of the airport's total revenue— he expects the a final contract with Pro-Tec using National Guard-owned equipment could bring the total expended on the firefighting operation down to possibly half that total or more.

"We anticipate through the contract negotiations, and depending upon the execution of the Guard agreement with the station and equipment, that we anticipate spending between $200,000 and $400,000," he said. "But we do not know exactly. We need to enter the contract negotiations to see what levels of service we need. We won't be far removed from that on either end."

He added, "Obviously, one is an extremely low-case scenario and another is a little bit higher, but that involves more support."

An agreement with the Guard will secure use of the equipment for the foreseeable future at little to not cost, but Parker said the Federal Aviation Administration will eventually require the airport to purchase its own equipment or Pro-Tec will need to acquire equipment.

"It (the equipment and firehouse) will be basically available to us until such time we can manage our own equipment, but no monetary considerations at this point. But that is still an open question in the future and it's an FAA requirement that we have to enter into those negotiations a little bit down the road here," he said, adding that a timeline is not yet available for when the airport will have to secure its own equipment.

With the company now selected and negotiations underway with both Pro-Tec and the National Guard Bureau, Parker said he anticipates having the private firefighting company on-site by Sept. 15 to begin to "transition" the airport's firefighting mission in anticipation of the Sept. 30 shutdown of the 188th's firefighting mission and the Oct. 1 takeover by the airport's contracted provider.

"It will be close, but in the RFP (requests for proposal), we asked for them to plan to be on site and ready for a transition period on the 15th of September. That gives us some leeway and flux because everything doesn't work as people anticipate. The transfer of equipment will probably occur in that window, as well. But Oct. 1 is when we're responsible for fire protective services. The 188th will perform services on that last day of September and the next day we're the ones in charge."

In other business, the airport commission approved acceptance of a $4.9 million grant that will pay for completion of a major taxiway realignment by the fall of 2015. The grant was announced Monday (Aug. 11) and is believed to be the largest-ever FAA grant.

Including the grant from the FAA, the airport commission will expend a total of $5.199 million to complete the realignment of the Taxiway A West.

NorthWest Arkansas Community College’s Adult Education Program is offering citizenship classes during the 2014 fall semester. 

The classes are free and are available on Tuesday and Thursday afternoons from 1 to 3 p.m. and Tuesday and Thursday evenings from 6 to 8 p.m. The classes are held at the Adult Education Center at 1200 W. Walnut St. in Rogers. 

In these classes, students will learn about the local community; about United States government and history; listening, speaking, reading, and writing English skills; about eligibility requirements for U.S. citizenship; the questions used in the citizenship interview; and how to complete the Application for Citizenship form.

The 2014 fall semester begins Aug. 25. Adults may enroll at any time. For more information, contact the NWACC Adult Education office at (479) 986-6911.

Sentencing in the high-profile fraud case of former Northwest Arkansas developer Brandon Barber has been moved from Aug. 13 to Oct. 28. The delay may allow Barber attorneys and the prosecution more time to support their respective arguments as to if Barber should go to prison for five years or more than 24 years.

No reason was given for delay of the sentencing hearing. U.S. District Court Judge P.K. Holmes III is expected to preside over the hearing to be held in the Judge Isaac C. Parker Federal Building in Fort Smith. Based on memos from the prosecution and Barber’s attorney, the sentencing testimony may require more than a full day.

BRIEF CASE HISTORY
Barber in July 2013 admitted to guilt in various schemes to prop up his Northwest Arkansas real estate and development company between 2005 and 2009. The charges Barber plead guilty to included the following felonies - conspiracy to commit bankruptcy fraud, conspiracy to commit bank fraud and money laundering. The maximum sentence for all charges is 45 years, with fines possibly maxing out at $1.5 million.

Following were the specific charges to which Barber admitted guilt.
• Conspiracy to Commit Bankruptcy Fraud
Beginning in April 2008 and continuing through Nov. 9, 2010, Barber reached an agreement with K. Vaughn Knight and James Van Doren to conceal and disguise income and funds belonging to Barber in order to hide those funds from creditors.

• Conspiracy to Commit Bank Fraud
From around Aug. 2008 to around Dec. 2008, barber conspired with Jeff Whorton, Brandon Rains, David Fisher and others to defraud First Federal Bank. The parties falsely and fraudulently represented the purchase prices of certain lots known as "Executive Plaza" to be higher than the actual sales prices in order to obtain higher loans from First Federal Bank.

• Money Laundering
Barber engaged in money laundering when he conducted monetary transaction of criminally derived property through a financial institution. …Barber had agreed with Van Doren and Knight to conceal certain income and transactions from the bankruptcy court.

PROSECUTION PUSH
U.S. Attorney (Western District of Arkansas) Conner Eldridge supports the U.S. Probation’s Office sentencing range request of 19.5 years to almost 24 and a half years in prison. The prison term is based on a fraud amount of more than $32.343 million, and because Barber was the “leader” of a conspiracy that involved others.

“The United States agrees with the Probation Office that the defendant should be assessed a two-level enhancement for acting as an organizer, supervisor, or leader in exercising decision-making authority and directing the activities of his co-conspirators,” Eldridge and Assistant U.S. Attorney Wendy Johnson noted in their July 23 sentencing memorandum. (Link here for a PDF of the memo.)

The $32 million loss was calculated, according to Eldridge and Johnson, with the following information.
• $9.901 million
Legacy Bank losses in the Legacy Condominiums transactions

• $7.608 million
Enterprise Bank loss in the Bellafont Retail transaction

• $5.293 million
First Federal Bank loss in the Outfield, Spring Creek and Executive Plaza real estate transactions

• $3.689 million
Todays Bank (formerly First State Bank of NWA) loss in fraudulent loans to Barber personally and Lynnkohn, an entity controlled by Barber, which was used in the Legacy Condominiums real estate project

• $2.395 million
Bank of Fayetteville loss in real estate loans to SCB Investments, and Metro District, in which Barber submitted false financial information

• $1.8 million
First State Bank of Lonoke loss in The Peaks Condos real estate transaction in which Barber submitted false financial information

• $1.655 million
Simmons First loss in the Metro District transactions

Eldridge has never hinted he would favor leniency in the Barber case. A July 31, 2013 statement from Eldridge following Barber’s admission of guilt noted: “This is a significant step in bringing several individuals involved in committing fraud, including fraud on the federal bankruptcy court, to justice. This case indicates that we are serious about identifying, investigating, and prosecuting those who perpetuate fraud, swindle others out of money, and engage in financial crimes.”

‘DOWNWARD DEPARTURES’
Through his attorneys, Asa Hutchinson and Asa Hutchinson III, Barber is hoping for leniency. The 50-page sentencing memo submitted by Hutchinson III, with Rogers-based The Asa Hutchinson Law Group, details why Barber’s sentence should be set at five years. Reasons for the “downward departures” from the sentencing range pushed by the prosecution include:
• Barber’s guilty plea and subsequent cooperation with government officials;
• Lesser amount of financial damage than is being alleged by the prosecution;
• A “more complete perspective” of Barber’s downfall and his life prior to committing fraud;
• His charitable contributions prior to committing fraud; and
• Comparison of “national sentencing statistics” that apply to the Barber case history.

As to the financial damage, Barber’s attorneys argue that the damage is less than $20 million instead of the more than $32.343 million argued by the prosecution.

LETTERS OF SUPPORT
The memo from Hutchinson III also includes several pages describing the more than 40 letters from people providing background as to Barber’s “contributions to the community, his love for family and his own character.” The letters are part of documents provided to the court by Barber’s attorneys.

“These are respected and accomplished leaders and citizens who do not excuse Brandon’s conduct but do offer unique and important perspectives to the Court,” Hutchinson III noted in the memo. “These individuals have very personally described their history with Barber and the contributions he has made in the lives of individuals, charitable organizations and community projects. The letters are not form letters but they personally describe a person who is caring, committed to his children and hard working.”

One letter is from Richard Hudson, the recently retired top lobbyist for the University of Arkansas. Hudson noted: “Had the national recession not occurred, I believe Brandon would today be a highly successful and well-respected business leader in Northwest Arkansas.”

The recession is also a mitigating factor. Hutchinson III wrote: “Brandon Barber fought hard to avoid bankruptcy, to land on his feet, to keep his businesses going and in the fighting he erred and committed the fraud. Because he tried too hard and because he cut corners in his fighting, he lost everything and in his struggles he caused financial harm to others as well.”

Hutchinson III also argued that national statistics show sentencing of first time, white collar criminals “is far below Mr. Barber’s advisory guideline range” and he requested the court take this into consideration.

Link here for the sentencing memo from Hutchinson III.

The Fort Smith Board of Directors dove into the region's economy and attempted to understand why the city has some of the highest numbers of households depending on welfare and other supplemental income and has some of the lowest number of households relying on earnings earned through employment.

According to a memo from City Administrator Ray Gosack, the study session topic came about as a result of a 2013 report from the college of business at the University of Arkansas at Fort Smith that compared "sources of household income in the Fort Smith region with the United States, Arkansas, Oklahoma, and the northwest Arkansas region."

The various sources of income, Gosack said, included earnings (wages, salaries, etc.), social security, retirement/pension, supplemental security (stipends to low income elderly, blind or disabled persons), cash public assistance and food stamp/SNAP benefits.

"The concern," Gosack wrote, "is that a smaller percentage of the Fort Smith population in the comparison group is participating in the workforce."

THE DEMOGRAPHICS
Dr. Kermit Kuehn, the UAFS College of Business's author of the report, explained some of the figures in depth and explained that in Fort Smith, 35% of the local population earns an income from Social Security while only 29% of the nation, 34.3% of Arkansas and 31.0% of Oklahoma does the same.

The number of people age 65 and older in Fort Smith is 12.7%, while the state as a whole has 14.4% of the population 65 and older and 14.1% of the national population is 65 or older. The study also showed that 19.7% of Fort Smith residents do not hold a high school diploma, compared with only 16.7% of Arkansas as a whole, 13.8% of Oklahoma and 14.3% of the nation.

When it comes to income, Fort Smith's median household income is $37,232 versus $40,531 across the state of Arkansas, $44,531 in Oklahoma and $53,046 nationally.

Kuehn's research, using figures from the Bureau of Labor Statistics, also shows that from January 2007 through January 2013, the total workforce declined in Fort Smith from 3.97% while the U.S. workforce has grown by 1.89% during the same period. By comparison, Arkansas' overall workforce only shrank 1.48% while Oklahoma's increased by 4.75% and the Northwest Arkansas region improved by 4.45%.

There were no simple answers to reversing the trends, he said, adding that the Fort Smith economic picture has been "consistent."

"The picture for Fort Smith has been very consistent. I did a study back in 2010 of similar characteristics of the community and that data revealed a pretty consistent picture of a community that tends to have lower income, the demographics tend to have lower education levels and thus a higher dependency on public support systems like you had mentioned Social Security, SNAP programs and these type of public assistance. You add to that the aging of the population and you begin to see fruits of that and the implications of that as far as the disposal income that becomes available as time goes on."

As a result of the lower incomes and dependence on public assistance, the entire economy suffers, Kuehn said.

"The net result is what you have is a population, a community that has probably less disposable income and probably will (continue declining) as aging of the population continues and boomers continue to retire and Social Security and disposable income decline," he said.

RECENT NUMBERS
A continued decline in the size of the workforce and the number of employed edged the Fort Smith metro jobless rate to 6.4% in June compared to 6.3% in May. The rate was lower than the 8.2% in June 2013, but the number of employed in the region fell 2.24% in the 12-month period.

The size of the Fort Smith regional workforce during June was 126,822, down slightly from 126,971 during May, and well below the 132,323 during June 2013, according to figures released by the U.S. Bureau of Labor Statistics. The labor force reached a revised high of 140,253 in June 2007, meaning the June workforce size is down 9.57% from the peak number.

The number of employed in the Fort Smith region totaled 118,751 in June, down from 118,929 in May, and an estimated 2,726 jobs below the 121,477 employed in June 2013.

Kuehn said losses of large manufacturers has also hurt because many employers now require additional skills, even in manufacturing, and some of the only real growth in the employment sector has been in hospitality (tourism), which he said are traditionally the lowest paying jobs and hardly fill the void created by some of the highest paying jobs lost from the exodus of manufacturers in Fort Smith.

COST OF JOBS
He said the costs of jobs — fuel to and from work, the cost of so-called "work" or professional clothing, babysitting costs, etc. — have in some cases disincentivized both adults in a home from working when the net benefit is only a few hundred dollars a month or less.

City Director George Catsavis asked Kuehn what the city could do in this "new frontier" to spur economic development in the absence of traditional manufacturing employment.

Kuehn said the city must focus on growth areas, pointing to the healthcare industry as a good place to start.

"One of the great things that is happening (economically is the expansion of) health services," he said. "I think we have at least one or two administrative centers here, handling or processing for regional or nationally for Golden Living and (the Shared Services Center). But in any case, these are great types of jobs that are white collar, tend to pay more than the typical service sector-type jobs. Additionally, we have two medical centers. Further, we have clinics that are going up all over the place. Further, we have a medical college that's coming. I think these are the making of a great… I'd call them clusters, meaning there's gaps in that cluster that could be the basis of emphasis on recruiting, a pursuit to do whatever to get those gaps filled. That's important for this kind of sector. And you have a different leg growing than just a manufacturing leg or hospitality-related jobs, which really don't go very far for very many people."

Catsavis also asked Kuehn's professional opinion about efforts to raise the Arkansas minimum wage to $8.50 within three years. In response, Kuehn said it would hurt the Arkansas economy, especially in Fort Smith where the overall income is lower.

He said adding income could result in companies furthering automation efforts to reduce payroll costs, leading to higher unemployment. In other areas, cuts may come in hourly workers' shifts coupled with increases in the cost of goods.

"There's always a payday. Nothing's ever free, it always works through and the consumer pays for that."

When a local business owner or local representative of a national company visits the Northwest Arkansas Business Expo, that person has the potential of finding a local business to fulfill a need rather than discovering similar services or products from outside the region.

The art of networking and the ability to showcase business products and services is the focus of the annual Rogers-Lowell Chamber of Commerce event, which was held Tuesday (Aug. 12) in Rogers. The expo has taken on several forms in the more than 10 years that the chamber has been sponsoring the expo. Some years it has included an intense, one-day conference schedule with the business expo happening concurrently in the same location.

This year, said Steve Cox, vice president of economic development for the Rogers-Lowell Chamber, the focus was on the expo with three technology-related workshops in the afternoon. The event concluded with a Business After Hours networking event.

“We wanted to focus on the business community,” Cox said.

Instead of one day of conference sessions, the chamber created the Chamber University program, which features seminars throughout the year. Created in conjunction with the Arkansas Small Business and Technology Development Center at the University of Arkansas’s Walton College, these “University” sessions help small businesses develop and grow.

“It’s a continual schedule of business (workshops) instead of just one shot in one day,” Cox said.

This year’s expo featured about 150 vendors with many industries represented. The NWA Business Expo is known as the biggest and best in the area, Cox said.

While the success of the expo is not considered an economic indicator in of itself, several factors do indicate that Northwest Arkansas’ economy is improved. For example, in July 2012, NWA had the same number of employed people as it did before the recession. The national figures could only claim that about three months ago, Cox said. 

According to the 2012 State of the Northwest Arkansas Region Report from The Center for Business and Economic Research at the Sam M. Walton College of Business and the NWA Council, the economy was already starting to show signs of improvement several years ago.

“Since the beginning of the recession in 2008, Northwest Arkansas employment declined 2.3%, a smaller loss than all but one peer region,” the report reads. “However, the recovery of the Northwest Arkansas region was evident in the growth in employment between June 2011 and June 2012, when the region added 7,200 jobs. The total nonfarm employment in Northwest Arkansas in June 2012 stood at 211,100, which represents a new peak employment.”

Continuing, the report noted: “The region added an additional 8,800 jobs between June 2012 and June 2013. Employment in the region reached a new peak level of 219,300 in April 2013 before seasonally dropping to 218,700 in June 2013,” the report reads. 

Cox said a growing number of companies are seeking trained labor workers, which means that the approximately 500 workers from Superior Industries in Rogers who recently learned they plant was closing will be able to find jobs. 

“There’s a dramatic need for skilled labor in Northwest Arkansas,” he said. “These families will be able to find (employment).” 

Steve DeMent, president of New Life Graphics in Rogers, said he’s beginning to see more economic growth and people have more disposable income again. The printing company began two years ago as a faith-based graphic tee company and it’s now a full print shop. They offer a startup business package it’s been a popular choice for the many new businesses coming into the area, he said. 

Tuesday (Aug. 12) was the company’s first time to participate in the Expo. Previously, they had operated on word of mouth but wanted to have more business-to-business contacts. DeMent said he found more success by going to each booth and networking with other business leaders. 

Java Dave’s Coffee is based in Tulsa, Okla., and has warehouses in Jopin, Mo., and Rogers. Ashley Massey works in the company’s water sales department and she was one of several representatives from the company at the expo. She said the expo provides the opportunity to support a local economy that supports their business and for them to interact with some of their clients. They also usually earn new business from the expo each year, she added. 

The RoArk Group sponsored all of the signage at the expo and they had a booth at the event. The company is celebrating 40 years of being in business and they’ve participated in the expo for several years. Dawn Stewart is a marketing and promotional products specialist with the company and she agreed that the expo is an excellent networking tool. 

Stewart also said she’s seeing signs of overall business growth in the region. She said while some may say “print is dead,” RoArk is seeing that businesses are finding ways to utilize print services and incorporating those with other services.