2012-05 Faulkner County Business Journal

MAY 2012

Everything UNDER THE SUN

B&A Property Maintenance is a full-service lawn maintenance and landscape company that branched out into retail earlier this year with the addition of a plant nursery. FULL STORY, PAGE 4.

Employees from the central Arkansas location pose in front of the new garden center: Back row (from left): Talia Treece, administrative coordinator; Brent Treece, partner/general manager; Michael Hatch, lawn maintenance manager; and Brian Poe, lawn application manager. Front row (from left): Brennen Quinn, office manager; and Marta Mobbs, nursery and landscape manager.

Seniors Recognized for Academic Achievement Each year, Conway Academic Signing Day recognizes a select few of the high-achieving graduating seniors from Conway Public Schools, St. Joseph and Conway Christian who have received significant academic awards and substantial scholarships. The event is hosted by the Conway Area Chamber of Commerce and is presented by Acxiom Corporation.

This year’s 23 honorees met one of the following criteria to be selected for Academic Signing Day: • a cumulative GPA of 3.8 or higher and the recipient of a top scholarship from the four-year accredited college or university of their choice; • a National Merit Scholar or

National Merit Finalist designation; • an appointment to a U.S. Service Academy; • the winner of a state or national scholarship program; and

• the recipient of a Governor’s Distinguished Scholarship or Governor’s Scholarship.

Bart Shaw, vice president of operations at the Conway Area Chamber of Commerce, said that the event is a public and Be

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fun way to recognize academic excellence.

“Academic Signing Day is based loosely on letter of intent ceremonies for athletic scholarship recipients and provides insight into the collegiate destinations and academic achievements of Conway graduates,” Shaw said. “Conway Area Chamber of Commerce started this event to provide high academic achievers and their support systems with the recognition they deserve.”

The ceremony took place on May 17 at Worsham Performance Hall on the campus of Hendrix College. One by one, honorees stated where they plan to attend college, signed a placard indicating their choice, and received an award. Jeff 65

Standridge, vice president of global operations at Acxiom, was the keynote speaker.

“Acxiom has a multitude of bright and academically gifted individuals, many of whom were educated in Faulkner County schools,” said Standridge. “Acxiom recognizes that education is critical to economic development, so we want to honor those students who excel.”

Other sponsors for Academic Signing Day 2012 were Conway Corporation, HewlettPackard, Log Cabin Democrat, Crain Buick GMC, First Security Bank, Smith Ford and Southwestern Energy.

This year’s signees will attend 14 colleges and universities in seven states.

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2 | FAULKNER COUNTY BUSINESS JOURNAL

PULSE OF CONWAY: THE SEVERANCE TAX ISSUE

BY ROGER LEWIS There is much discussion in Arkansas about a proposed amendment to the Arkansas Constitution to raise the severance tax on natural gas production from the current rate of 5 percent of the value of gas produced – with exemptions for various types of wells – to 7 percent of the value with no exemptions. Opponents of the amendment claim that Arkansas would have the highest rate in the region of gasproducing states and with the current low price of natural gas, it will cause the industry to further curtail exploration in Arkansas.

The proponents claim that this is a fair and needed tax to maintain the highway system in Arkansas, and the natural gas industry contributes to the deterioration of roads, particularly rural roads, in the Fayetteville shale area.

A severance tax is a tax on natural resources that are harvested (severed) from the governing area. In Arkansas, this includes oil, natural gas, gravel, timber, mining products and salt water brine from bromide extraction. (Arkansas is the second-largest bromide producer in the world. This occurs in south Arkansas in the El Dorado/

Magnolia area.) The severance tax rate is specific to each of these natural resources. All natural resources not specifically identified under the severance tax law are taxed at 5 percent of the market value at the time and point of severance. The tax on oil and gas is 5 percent of the value produced with exemptions based on the type of production.

The exemptions are for low-producing wells and wells classified as high cost – the type that require horizontal drilling and fracturing. The three tax rates are 1.25 percent of the market value for marginally producing wells, and 1.5 percent for newly discovered or high cost wells for a period of 24 to 36 months with a provision for an extension.

All other wells are at 5 percent.

Below is the table of the number of wells by classification: Number of Gas Wells by Severance Tax Rate* Wells at 1.25% Wells at 1.5% Wells at 5% Total Number of Wells *As of April 2012

3,602 2,869 2,309 8,780

Before 2009, the severance tax rate on natural gas production was three-tenths of one percent per 1000 cubic feet of gas. This rate produced revenue

of approximately $1 million per year. The new rate of 5 percent produced $59 million in 2011.

Natural gas prices are low, averaging $3.95 per thousand cubic feet (MCF) in 2011, down from $7.97 in 2008 when the new severance tax was enacted. Had the gas prices been at the 2008 level, the severance tax revenue would have been more than $100 million for 2011.

Ninety-five percent of the severance tax revenue on natural gas goes to the Arkansas State Highway and Transportation Department, and 30 percent of that revenue is turned back to county and municipal governments for transportation and road maintenance. All counties and municipalities in Arkansas receive this funding regardless of where the gas wells are located. Faulkner County and the municipalities in the county received a total of $521,000 in 2011.

The state of Pennsylvania conducted a thorough study of severance taxes on natural gas in 2009. At that time, 28 states imposed a severance tax on natural gas and 96 percent of all gas produced is in states that impose a severance tax.

Severance taxes are based either on the value of production

or the volume of production, and some states use a combination of this. The Pennsylvania study based severance tax revenue on natural gas valued at $5.97 per MCF (the average for 2009) and converted the tax rates from each state to a percentage of the value for comparison. Alaska had the highest rate with 25 percent, and California had the lowest rate with 0.13 percent.

Arkansas at 5 percent ranked 15th.

The natural gas severance tax rates for states surrounding Arkansas that produce natural gas are Louisiana, $.148 per MCF; Oklahoma, 7.1 percent; and Texas, 7.5 percent. Converting Louisiana to a percentage at the market rate of $3 per MCF would equal approximately 5 percent.

Louisiana’s rate by volume is set each year based on the price of natural gas, so in effect it is really value-based rather than volume-based.

Each of these states have exemptions for high-cost wells and low-producing wells, making the effective rate much lower. The proposed Arkansas amendment to set the tax at 7 percent with no exemptions would make the effective rate 7 percent, which is higher than any of the surround-

ing gas-producing states. This would move Arkansas from 15th in rank to approximately seventh.

Natural gas exploration has declined significantly due to low prices, and the industry has turned to oil exploration where the prices are much higher. Also, large gas fields discovered in Texas, Louisiana and Pennsylvania leave Arkansas ranked fourth in production. If this industry is to thrive in Arkansas, it must be competitive; keeping the severance tax at 5 percent with exemptions is one way to accomplish this. Most of the county and city governments across Arkansas where gas exploration is taking place have opposed the amendment initiative to raise the tax to 7 percent.

In my opinion, we should not raise the severance tax at this time. It is an issue that should be considered at a later time when the industry becomes more profitable. Rather than raising it to 7 percent, we should consider revising the exemptions.

More information on the Fayetteville Shale gas production and severance tax revenue can be found at Pulse of Conway’s website, pulseofconway.com.

Allison, Chairman of Home BancShares and Centennial Bank, to Speak at Chamber Luncheon John Allison, founder and current board chairman for Home BancShares Inc., will be the guest speaker at the Conway Area Chamber of Commerce’s upcoming CEO Luncheon. The event will take place Tuesday, June 5, from 11:30 a.m. until 1 p.m. at the Central Baptist College Dining Hall.

Headquartered in Conway, Home BancShares Inc. is the parent company of Centennial

Bank. Centennial Bank has locations in central, north central and southern Arkansas; south Alabama; and the Florida Keys, Panhandle, and southwestern and central Florida.

Allison’s presentation, titled “Home BancShares: A Conway Success Story,” will give insight into how the company grew into a publicly traded banking organization with $3.6 billion in assets.

In 1998, Allison and Rob-

ert Adcock Jr. — the current vice chairman of HomeBanc Shares Inc. — led an investor group that formed the bank holding company. The group obtained its first bank charter in 1999 and established First State Bank in Conway.

Home BancShares later acquired and integrated five additional community banks.

In 2008 and 2009, the company completed the combination of its bank charters into one

charter, which is Centennial Bank.

Before founding Home BancShares Inc., Allison served more than 20 years as chairman of the board of First National Bank of Conway, which is now Regions Bank.

He was also chairman of the executive committee for First Commercial Corporation, a former Little Rock-based holding company.

Allison is the owner of

Capital Buyers Inc., a mobile home brokerage and financing company.

CEO Luncheons are open to all employees of Chamber member businesses. Individual tickets are $25 per person.

Reserved tables of eight are available for $200.

For reservations, call 501327-7788 or email GetSmart@ConwayArkansas.org.

The reservation deadline is Wednesday, May 30.

FAULKNER COUNTY BUSINESS JOURNAL | 3

B&A PROPERTY MAINTENANCE

Everything Under The Sun

W

e are firm believers in building a company around people and not building a company and then trying to hire people to fill certain roles.

Full-Service Lawn Maintenance and Landscape Company Adds Plant Nursery From the hanging baskets lining the streets of downtown Conway to the landscaping at the local McDonald’s restaurants, B&A Property Maintenance has spruced up hundreds of residential and commercial properties for the past 11 years.

The full-service lawn maintenance and landscape company branched out into retail earlier this year, and its plant nursery is now open for business.

Brent Treece founded B&A Landscape in 2001 upon landing his first commercial account. The company grew to add more commercial and residential clients and began offering additional services. Ten years later, the name changed from B&A Landscape to B&A Property Maintenance to reflect the variety of services the company now offers.

“We started off as just a lawn maintenance company and moved to landscape design and installation, lawn applications, irrigation, pressure washing and lot sweeping,” Treece said. “In January of this year, we started on our 4 | FAULKNER COUNTY BUSINESS JOURNAL

plant nursery and had a grand opening last month. It is our first venture into retail.”

Treece credits Marta Mobbs, the nursery and landscape manager, with implementing the garden center at B&A Property Maintenance. “We started the nursery because of Marta; we didn’t start the nursery and then hire Marta,” Treece said. “We are firm believers in building a company around people and not building a company and then trying to hire people to fill certain roles.”

Mobbs has 16 years’ experience working in high-end residential landscape design and installation as well as some commercial landscaping. She and Treece became acquainted seven years ago because they shared some of the same customers – Treece mowed lawns, and Mobbs planted and pruned shrubs and flowers.

“It has always been my dream to set up a plant nursery,” Mobbs said. “Working with Brent has been the perfect opportunity because my job has allowed me to start a nursery and continue my landscape design work for residential and commercial customers.”

The three-quarter acre outdoor

garden center at B&A Property Maintenance features a wide selection of annual and perennial flowers, mulch, trees, shrubs, and arrangements of assorted potted and hanging plants that Mobbs assembles herself. Decorative garden ornaments, including wind chimes, garden bug stakes and ball trees, adorn the inside of the building.

“If we don’t have what you’re looking for in stock, I can order it, and it’ll arrive fairly quickly,” she said.

This commitment to customer service goes beyond the nursery itself. At no additional charge, Mobbs designs landscaping plans for retail customers.

“Customers can bring me a picture of their house, and I can sketch out a plan for them,” Mobbs said. “Many people want to do their own work, but they aren’t sure where to start. We can help them with that and can also sell them the flowers on-site. And if they realize that they don’t want to do their own work, we offer landscape installation, too.”

Treece said that he is unaware of any other companies in the area that provide the array of services that B&A Property Maintenance provides.

“There are landscaping and lawn application companies that do some mowing, and there are mowing companies that do landscaping and lawn application,” Treece said. “But to my knowledge, there are no other companies where you can get landscape design ideas at a nursery; purchase flowers from the nursery; and hire people for landscape installation, lawn maintenance, weed control, pressure washing and irrigation services.”

B&A Property Maintenance has nearly 50 employees working at its three locations in central, northwest and northeast Arkansas. The central Arkansas location employs 35 and is housed at 509 Highway 65 North in Greenbrier – five miles north of Exit 125 in Conway.

The garden center is open from 8 a.m. until 5 p.m., Monday through Saturday.

For more information about B&A Property Maintenance’s garden center, visit their Facebook page at Facebook. com/BAGardenCenter or call 501-6790550.

To request a landscaping or lawn maintenance estimate from B&A Property Maintenance, visit BandAPM.com or call 501-428-3646.

deadline FOR Tech Conference Registration nearING A group of area technology professionals hope to assemble more than 200 like minded people for a one day event this June. The event is BarCamp Conway. A BarCamp is described as a “participatory “un-conference” event, where the attendees are in charge of what happens.” All attendees are given the opportunity to propose a breakout session topic that they would present.

The attendees then select what topics they want to hear about. The result is an organic conference that instantly creates a tailor made agenda for everyone attending.

“Our goal with BCC is to foster growth of the tech/entrepreneurship community in AR. We don’t want to make this another conference, or an event exclusive to just web designers or graphic designers,” said event organizer Drew Spurgers. “Our hope is that anyone interested in design, promotion, business, and entrepreneurship will come to the event and leave with new energy and passion.”

In keeping with BarCamp tradition, the event is free.

This year the event will be held at the UCA Business

Luke Irvin leads a breakout session at the 2010 BarCamp. BarCamp Conway is scheduled for June 2 at UCA.

Building on Saturday, June 2nd. In 2010, the inaugural event drew more than 100 participants. This year’s event has already preregistered more than 150 attendees. Spurgers thinks the success of the first event and the BarCamp movement nationwide will drive more participation. “BCC is beneficial for a number of reasons.

BarCamps are happening all over the country - the tech community is linked more and more because of social media

and the ease of communication. BarCamp Conway is a great way for us to ‘rally the geeks’ and really ramp up the community in Central Arkansas. It’s a time to learn from and share with peers, make connections, and bounce ideas off each other.”

To register for the 2012 BarCamp Conway visit www.

BarCampConway.com. The 2012 BarCamp is presented by the Conway Area Chamber of Commerce, UCA College of Business and ABC Financial.

Crafton Tull, Chamber Bowl for Business Bowling for Business, the Conway Area Chamber of Commerce’s annual networking and team building event, will take place Friday, June 29, at Conway Family Bowl.

Crafton Tull is the presenting sponsor for this year’s event.

At Bowling for Business, Chamber members have the opportunity to network with other professionals in a fun and relaxed environment.

“We already have a cross section of our business community represented at this year’s event,” said Bart Shaw, vice president of operations at the Chamber.

“The past two years have been a success, and we hope to build on that.”

The event also serves as a team building activity for employees. David Grimes of American Management Corporation said that his company assembles a bowling team from different departments to encourage interaction.

“Bowling for Business gives people who may not often work together a chance to get to know each other better in a fun, laid-back atmosphere,” Grimes said.

Bowling for Business offers a morning and afternoon “flight” separated by a luncheon. The

morning flight is from 10 a.m. until noon, and the afternoon flight is from 1-3 p.m.

Lunch is from noon to 1 p.m.

During lunch, more than 200 professionals have the chance to interact while enjoying traditional bowling alley fare.

Lunch is sponsored by Smith Ford and Southwestern Energy.

Lane sponsorships are available for $400, which includes signage at the event and a five-person team.

Five-person team sponsorships are available for $200, and individuals may bowl for $50.

Lunch is included for all participants.

To participate in Bowling for Business on June 29, register online at ConwayArkCC.org/ events. For more information, contact Mary Margaret Satterfield, director of events, at Mary@ConwayArkansas.org or 501-932-5412.

Lunch & Learn to Explore Cloud Services for Small Businesses Softwyre, an Arkansas-based website design and software development company, will discuss the practicality of cloud services at the Conway Area Chamber of Commerce’s upcoming Small Business Lunch & Learn. The “Living in the Cloud” session is free to employees of Chamber member businesses and will take place Tuesday, May 22, from 11:30

a.m. until 1 p.m.

Cloud-computing services such as Drop Box, Ring Central and SkyDrive allow businesses to access, share and store files without drives or servers. Softwyre will provide information about the following services: • Drop Box allows users to share and access photos, documents and videos anywhere.

6 | FAULKNER COUNTY BUSINESS JOURNAL

• Ring Central is a cloudcomputing-based phone system designed to help small businesses manage mobile, fax and email communications.

• SkyDrive is a file-hosting service that allows users to upload and sync files to cloud storage and then access them from a browser or local device.

• Gmail is a free, advertisingsupported webmail, POP3,

and IMAP service provided by Google.

• Office 365 is a Microsoft Office suite of desktop applications delivered and accessed over the Internet. It features hosted versions of Microsoft’s Server products, including Exchange Server, SharePoint Server and Lync Server.

More information regarding these cloud services and their

implementation will be available at the Small Business Lunch & Learn. The session is sponsored by Softwyre and will take place at the Conway Chamber building located at 900 Oak Street.

Seating is limited to the first 40 participants. To register for the Small Business Lunch & Learn, visit ConwayArkCC.org/ events.

Chamber Adds More Than 330 New Members at April Event

Over the course of two days and with the help of 203 volunteers, the Conway Area Chamber of Commerce gained 333 new members at its April Membership Event. Your Chamber Connection – a Texas-based company specializing in increasing membership and membership participation for chambers of commerce – facilitated the event.

“We are thankful to our new members for investing in our community and are grateful for our volunteers” said Lindsay Wygal, vice president of member services. “We couldn’t accomplish this without them.”

This was the Chamber’s third membership event. The last membership event took place in 2010 and added 223 new members in less than three days. The first membership event for the Conway Chamber was in 2007 and added 388 new members.

The record growth during previous membership events positioned the Conway Area Chamber of Commerce as the

fifth largest chamber in Arkansas based on membership number, according to information in a ranking by Arkansas Business.

The Conway Chamber now has more than 1500 members.

Perhaps what is even more important than new member recruitment is member retention. The Chamber offers a suite of business-to-business and targeted consumer opportunities for its members.

“While this membership event has helped the Chamber grow, we aim to make sure the relationship we have with our members is a mutually beneficial one,” Wygal said. “Chamber members have access to a variety of products and services that can positively impact their business, and we’re constantly looking for ways to enhance our offerings.”

The Home Depot, Fairfield Inn & Suites by Marriott, Virco, The Ford Theater, and T.G.I. Friday’s sponsored the Membership Event, which took place at Hole in the Wall Café at the Old Gin.

Increased Natural Gas Severance Taxes Would Cost Ark. 8,300 Jobs Increasing the severance tax on natural gas production in Arkansas would lead to significant economic losses including 8,322 permanent jobs, $2.7 billion in total spending, and $960 million in gross product, according to a study released by the Conway Chamber of Commerce. The study indicates the proposed increase to a flat rate of 7 percent – with no incentives for new wells or high-cost drilling – is likely to reduce well completion and production by 8.5 percent, and will compel companies to shift production to areas with lower tax rates.

“Raising the severance tax rate in Arkansas would reduce the level of economically-feasible production, diminish the state’s position relative to other producing regions and bring job losses to the state,” Dr. Ray Perryman, founder and president of The Perryman Group and author of the study said.

“Exploration and production are significant economic engines for Arkansas, and a decrease in energy sector activity would harm the state’s economy.”

Tax rates in Arkansas today are competitive with those in Texas — the largest gasproducing state in the country — and other areas with substantial drilling and exploration activity. A significant tax rate change would raise the relative cost of investing in Arkansas’ resources, which is a critical parameter in producers’ decision-making processes.

According to the study, higher taxes will also lead to decreased personal income and expenditures across several sectors.

Sector

Losses in Jobs Lost Total Expenditure

Mining $1,305,728,080 Finance, Insurance & Real Estate $295,513,997 Retail Trade $211,888,348 Nondurable Manufacturing $194,605,307 Construction $155,873,675

672 317 2,906 452 1,103

“The livelihoods of thousands of Arkansans depend on natural gas exploration and production—incomes that would be jeopardized by an increase in the severance tax rate,” said Brad Lacy, President and CEO of the Conway Area Chamber of Commerce.

“Exploration and production provide millions of dollars in spending, gross product, and personal income, as well as thousands of good jobs to our economy. These contributions directly benefit businesses, state and local governments, and schools. Our state’s focus should be squarely on growing jobs not putting them at risk.”

Sponsorships Available for Collegiate SMART Card

Local businesses have the opportunity to welcome more than 3,600 incoming freshmen to the Conway area by way of the collegiate SMART Card.

At the start of the 2012-2013 school year, the Conway Area Chamber of Commerce will distribute the promotional discount card to college freshmen on the campuses of Central Baptist College, Hendrix College, the University of Central Arkansas, and the University of Arkansas Community College at Morrilton.

The SMART Card comes in the form of a plastic wallet card and a plastic keychain tag

that is color specific to each college. Card sponsors’ logos and the SMART Card website will be printed on the back of

the wallet card. The website address and a quick-response, or QR, code will be printed on the back of the keychain tag.

Users can scan the QR code with their smartphones, which will send them directly to the SMART Card website that lists the sponsors and participating businesses.

This is the second year the Chamber has issued the SMART Card to college freshmen. In previous years, first-year students received “welcome bags” filled with promotional items and fliers from local businesses. Whitney Farris, director of communications at the Chamber, said that the SMART Card is a modern, more environmentally friendly alternative to the “welcome

bags” and was well received by last year’s college freshmen.

“The SMART Card is a greener concept that was a hit among technologically savvy college students,” Farris said.

“Participating businesses told us that they received several phone calls and visits from freshmen looking to redeem their special offers.”

To learn more about sponsoring the SMART Card or about serving as a participating business on the SMART Card website, contact Whitney Farris at 501-932-5411 or Whitney@ConwayArkansas.org.

FAULKNER COUNTY BUSINESS JOURNAL | 7