Talk Business & Politics January/February 2016

January/February 2016

John Brummett An Election Year Analysis Clean Power Plan Pros and Cons Congressman French Hill Finds the Golden Fleece Entergy Arkansas’ CEOs Hugh McDonald & Rick Riley The End of the Private Option?

The Diamond Club The 2016 Business Hall of Fame

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It was this long-term view that led us to build three hydropower plants on the Arkansas River, as well as purchase long-term contracts for wind power. As we look ahead, we are helping lead the way in developing solar power in Arkansas, as well as maintaining our state-of-the-art natural gas power plants and our lowcost coal-based plants. Through our diverse mix of generation resources and our dedication to the members we serve, the Electric Cooperatives of Arkansas are powering Arkansas today and preparing for tomorrow.

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Contents January/February 2016 5 Publisher’s Letter Commentary

55 Dr. Michael R. Pakko

What to expect in 2016

57 Congressman French Hill

38

The Golden Fleece

18 Profiles

Entergy Arkansas’ Hugh McDonald & Rick Riley

26 Downtown Developer

Jimmy Moses on the future of Little Rock

32 New State Parks Director

11 44

Grady Spann

34

Industry Manufacturing A focus on the military

38 Retail

The Supply Side

42 Health Care

A legislative task force wraps up

44 Finance

The student loan debt crisis

48

36, 47 Insights 60 Leadership

Sixth Sense: Layoffs and Losses

62 Executive Q&A

Brittany Hodak Award-winning entrepreneur

11 Cover Story: The 2016 Business Hall of Fame Four new inductees in this year’s top business class include the late Gov. Winthrop Rockefeller, Patricia Upton, William T. Dillard II, and George K. Mitchell.

66 Back Talk

48

Features The 2016 Election Cycle John Brummett takes a look at this year’s Senate, congressional and legislative landscape.

7 The Clean Power Plan Arkansas Attorney General Leslie Rutledge and Arkansas Advanced Energy Association’s Steve Patterson debate a new federal regulation impacting energy and the environment.

4

TALK BUSINESS & POLITICS | JANUARY/FEBRUARY 2016

eptember/October 2014

Marlon

kwell

ECTURE & LIFE

focused on rm is the result ire. With a e areas, the newly t respected and

Wire) and their ompany in the tical news, includconomic sectors.

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From the Publisher September/October 2014

New Year’s Wishes

The new year brings new hope to all and every year it is always fun for me to review what’s happened in the Talk Business & Politics is owned by Marlon year that’s coming to a close and preview what’s on the Blackwell Natural State Media and is published six horizon. As we enter our 17th year with Talk Business & OUR times a year.VOICE For additional copies, to be Talk Business & Politics is a multi-media news organization focused on Politics, we’ve never had a bigger 12 months of activity. included in our mailing list, or for information business and politics in Arkansas. Our new statewide platform is the result about advertising, contact Katherine Daniels of a merger between Talk Business & Politics and The City Wire. With a From our merger with The City Wire to our new staff at katherine@talkbusiness.net. combined 24 years of being news leaders in their respective areas, the newly additions and expansion of products, it’s been a banner merged Talk Business & Politics brand has become the most respected and year for our readers, viewers and listeners. Calendar January/February 2016 resourced media in the industry. year 2016 looks to be even bigger. & and CEO Content isPublisher driven by Roby Brock Michael Tilley (The City Wire) and their Here are a few wishes that I hope come true in 2016: Roby Brock team of veterans.

The recent merger created the only media company in the More manufacturing jobs. The state’s manufacturroby@talkbusiness.net state offering multi-platforms dedicated to business and political news, including sector has struggled to add jobs despite reshoring ing niche regional coverage and insights into Arkansas’ top economic sectors.

Art Director efforts and initiatives. The state was a runner-up for the Bryan DesignMatters LLC Brock isPistole, the host of Talk Business & Politics, which airs Sunday mornings at JLTV superproject, which certainly would have sparked bryan@designmattersllc.com 9:30 a.m. on KATV Channel 7, having interviewed more than 3,000 business OUR AUDIENCE and political leaders. He also moderates a radio program which airs on manufacturing NPR job growth in south Arkansas. Let’s hope Executive Editor Our audience leads with CEOs, presidents and primary executives of affiliates statewide.

Supporting staff, contributors, and content partners we win a few of the big ones in 2016.

Tilleyand experienced in their fields. companies statewide. In addition, business owners of $2.5+ million in represent theMichael most knowledgeable Startup success.

The state’s community has michael@talkbusiness.net sales revenue, elected officials at all levels,startup trade association executives and higher education representatives also receive our publication and momentum as it has in 2015. In every corner Digital platforms such as Talkbusiness.net, daily and weekly E-Newsletters, never been more connected and had as much EditorYouTube and iTunes allow news and products.

Facebook, Twitter, LinkedIn, of the state, entrepreneurs have more programming, resources, funding and networking information from the state to be made accessible as it Billaround Paddack Many of our readers viewers are also the news makers driving busi- I’ve ever seen. Here’s wishing for more is happening and keeps those most affected in the know. opportunities to beandsuccessful than at any time bill@talkbusiness.net and political headlines–inin Arkansas, growthness – and success thisnationally arena.and internationally.

The magazine edition reaches affluent decision-makers across the state and is Contributing Writers Commodities rebound. Arkansas’ number one industry, agriculture, could use a lift. an essential resource for new entrepreneurs and leaders at all levels of Steveguide Brawner government.Jeanni With a dedicated 12,000 copies bi-monthly, readers receive anCommodity prices in so many areas have row crop farmers struggling to hold on. Arkansas Brosius in-depth lookWesley at business and political profiles, the most current Brown needs farming to remain strong and an uptick in everything from cotton to corn to rice to developments in key regions and industries, plus corporate and policy strategies.

John Brummett soybeans and beyond would be beneficial for my farming friends.

Kerri Jackson Case Michael Hibblen Oil and natural gas prices to improve. I’m actually fine with lower oil prices – apologies Todd Jones to Murphy Oil – but I do like the low price of a tank of gas. It’s been good for consumers Rex Nelson TELEVISION RADIO PRINT ONLINE and it’sE-NEWSLETTERS been a nice mentalPODCASTS positive for SOCIAL me when I fill up. I like lower utility bills also, which Casey Penn Johnathan Reeves means I’m all right with low natural gas prices in that respect. However, I’d give up some Jamie Smith of my creature comforts for higher prices in these two realms, especially natural gas. The Kim Souza Fayetteville Shale boom has busted and in order to see a rebirth of the industry that helped Michael Wilkey keep Arkansas out of the economic doldrums of the Great Recession, I’m wishing for higher Photographers gas prices in order to help the industry avoid layoffs, shutdowns, and inactivity.

Stephanie Dunn More highway construction. Yes, I’d like to see more of it. Why? The orange barrels are a dunnmsteph09@yahoo.com nuisance, but we need the investment in our roads and infrastructure. More importantly, if Tim Rand you look deeper into the construction jobs that have been carrying a lot of workload for the pix@trand.com state’s strong employment growth, you’ll see road construction has been very influential. We Bob Ocken need road jobs. bob@ockenphotography.com Fewer GOP Presidential candidates. The current field of 12, 15, 17, 40 candidates – whatever it is – hurts my head.

Kat Wilson katographic@gmail.com No dark money. A guy can hope. Maybe it will stay out of the Supreme Court and Senate races. Probably, not, but wishful thinking on my part.

Vice President Sales & Marketing Special session drama. Gov. Mike Beebe always had the deal worked out when he went Katherine Daniels katherine@talkbusiness.net into a special session, which made them pretty boring and efficient. As Gov. Asa Hutchinson centers on healthcare, highways and perhaps other business, let’s hope he’s a poor vote Business Manager counter and leaves his special sessions open-ended. It would be terrible politics, but it would Daelene Brown OUR AUDIENCE daelene@talkbusiness.net make for much more adventurous reporting at the state Capitol.

Our audience leads with CEOs, presidents and primary executives of Story Topic Story Topic Story Topic Story Topic Story Topic Story Topic

ON ARCHITECTURE & LIFE

companies statewide. In addition, business owners of $2.5+ million in Printer sales revenue, elected officials at all levels, trade association executives Democrat Printing & Litho and higher education representatives also receive our publication and products.

Best wishes in 2016!

Natural State Media

Suite 600 driving busiMany of our5111 readers Rogers and viewers Ave., are also the news makers Smith, AR nationally 72908and internationally. ness and politicalFort headlines in Arkansas, 479-242-2800

Roby Brock Publisher & CEO www.talkbusiness.net

5

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TALK BUSINESS & POLITICS | JANUARY/FEBRUARY 2016

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Point Counterpoint

EPA’s Clean Power Plan Can Work for Arkansas

By Steve Patterson Steve Patterson is executive director of the Arkansas Advanced Energy Association and is owner of CDP Strategies, LLC, a political and event management consulting company based in Little Rock.

A

rkansas has nothing to fear from the Environmental Protection Agency’s Clean Power Plan (CPP). Arkansas power companies, policymakers and advanced energy companies already have the state on a path toward compliance that will have minimal impact on electricity rates – and could even save money.

The CPP will simply accelerate technology and market trends that are already moving Arkansas toward an electricity system that is more reliable, clean, affordable and responsive to customer demands. Compliance with the Clean Power Plan is not only attainable for Arkansas, it can stimulate economic growth.

In part, that’s because some things have changed. When the first draft of the CPP was released in June 2014, Arkansas was targeted for one of the highest carbon reduction requirements in the country. However, after hearing from Arkansas stakeholders, EPA moved Arkansas to the middle of the pack. That will make it easier to comply.

At the same time, the state’s two largest public utilities are developing plans to add more than 3,000 megawatts (MW) of renewable energy and natural gas and help customers save energy. Cleaner energy sources and lower energy consumption both reduce the state’s reliance on imported fossil fuels and put Arkansas on the way to meeting EPA’s emission requirements.

AAEA rejects the argument that reducing carbon emissions is beyond Arkansas’ ability or will cost too much money.

DIVERSE SOURCES OF ENERGY For Arkansas, the CPP means that, over time, more of our energy will flow from diverse local sources like: • Natural gas from the Fayetteville shale and gas fields in South Arkansas; • Large-scale solar from nearly 100 MW of solar energy now under construction and more than 1,000 MW planned by Entergy Arkansas, SWEPCO and the Electric Cooperatives of Arkansas;

• Wind generated in the Oklahoma panhandle and delivered to Arkansas by advanced energy transmission technology manufactured here at home; and • Energy efficiency, which lowers energy costs for Arkansas ratepayers and expands a thriving home-grown industry.

Already, advanced energy technologies like renewable energy and energy efficiency support 25,000 jobs in Arkansas as part of an industry valued at $2.7 billion, according to a 2014 study commissioned by the Arkansas Advanced Energy Foundation. Study author and local economist Jim Metzger, of Histecon Associates, says with the AE sector growing at about 11% annually, its impact on the overall state economy in 2020 is projected to be about $4.8 billion in direct sales and indirect activity supporting the industry.

VEHICLE FOR MODERNIZING ELECTRICITY SECTOR What this means for electric rates can be seen by using the new State Tool for Electricity Emissions Reduction (STEER), an open-access modeling tool developed by the Advanced Energy Economy Institute and customized for Arkansas at the request of the Arkansas Advanced Energy Association (AAEA). Under several different scenarios run through STEER, Arkansas is able to reach compliance with the Clean Power Plan in 2030 with a minimal increase – one-third of a cent per kilowatt-hour or less – compared with a business-as-usual projection of electricity prices for that year. It could even result in a small savings. And no existing coal plant would have to close beyond those already announced for retirement.

What will happen to the CPP in the courts, nobody knows. But AAEA rejects the argument that reducing carbon emissions is beyond Arkansas’ ability or will cost too much money.

When EPA came out with its final Clean Power Plan, Gov. Asa Hutchinson said: “When it comes to Arkansas’ energy policy, we must take a balanced approach in consideration of safety, reliability, cost-effectiveness and environmental impact.” We wholeheartedly agree.

By utilizing existing advanced energy technologies and services that are available in Arkansas today, the state’s plan to meet carbon reduction targets can be the vehicle for modernizing our electricity sector; introducing competition, choice and innovation for new products and services; and triggering significant job growth in a vital new industry. This is a future we all want and expect for Arkansas. www.talkbusiness.net

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Point Counterpoint

Fighting Heavy-Handed, Unlawful Regulations

By Attorney General Leslie Rutledge Leslie Rutledge is the 56th attorney general of Arkansas.

Elected on Nov. 4, 2014, she is the first woman and first Republican in Arkansas history to be elected to the office.

B

ureaucrats in Washington, D.C., are committed to pushing a policy agenda that far exceeds the legal authority granted to the executive branch, and unfortunately this agenda is going to significantly harm Arkansas’ economy.

The Environmental Protection Agency (EPA) ignored the significant concerns voiced by a large number of states, businesses and other stakeholders surrounding the proposed Clean Power Plan and proceeded to push this unlawful policy agenda by publishing the plan in the Federal Register on Oct. 23.

Without hesitation, I joined a bipartisan group of state attorneys general, along with the Arizona Corporation Commission, Louisiana Department of Environmental Quality and the North Carolina Department of Environmental Quality, in filing a lawsuit that challenges the CPP. As Arkansas attorney general, I represent the interests of Arkansas’ utility ratepayers.

These are hardworking Arkansans who must be protected from an overreaching federal government.

The plan imposes a misguided and costly national energy policy to rid the nation of coal-fired power plants and seeks to usurp the states’ authority over energy generation and usage.

NEGATIVE EFFECTS Some own their own small businesses, while others might maintain their multi-generational family farms.

From Fayetteville to Warren, and Texarkana to Jonesboro, and all points in between, the Clean Power Plan, if fully implemented, will have a dramatically negative effect on our citizens. In a state like ours, where over half of the electricity is responsibly generated from coal-fired power plants, the impact will hit the pocketbooks of Arkansans. These increased costs will have severe consequences on our economy and will drive down job growth.

These negative effects would be felt across the state, in both urban and rural areas. Rural communities in Arkansas are already facing difficult economic times, having seen a loss of about 30,000 manufacturing jobs in recent years. Energy prices are guaranteed to increase under the EPA’s plan, and the U.S. Chamber of Commerce estimates that the initiative will cost American taxpayers $51 billion.

Arkansas is already seeing the adverse consequences of numerous out-of-touch regulations from the EPA. In early August, Entergy Arkansas announced that it would cease all coal-fired operations at its White Bluff Electric Station in Jefferson County by 2028 due to increased regulatory costs. I am greatly concerned that White Bluff will not be the only plant forced to shut down.

PROHIBITED BY LAW The law could not be clearer that the EPA does not have legal authority to implement this regulation. The EPA already regulates coal-fired power plants under Section 112 of the Clean Air Act. Earlier this year, I testified in front of a U.S. House of Representatives subcommittee that the law specifically prohibits the EPA from invoking Section 111(d) where the “source category ... is regulated under section [112] … .”

The rule mandates the emissions reductions each state must achieve rather than providing guidelines and appropriate procedures for states to use in establishing standards of performance. This is a serious overreach by the EPA, which is ignoring the limits of the authority under the Clean Air Act. The plan imposes a misguided and costly national energy policy to rid the nation of coal-fired power plants and seeks to usurp the states’ authority over energy generation and usage.

As Arkansans, we are truly blessed. Every day we get to live in a state known across the nation for its rich, natural heritage, which includes rolling hills, dense woodlands and miles of rivers and lakes. I grew up in the Ozark foothills on a cattle farm just outside of Batesville, and I fully appreciate and am committed to preserving the clean air and clean water that help make Arkansas a great place to call home. However, I do not favor, and I will challenge legally, any heavy-handed and unlawful regulations from Washington that will hurt Arkansans.

www.talkbusiness.net

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Entergy Arkansas’ rates are lower than the state and national averages.

And here’s our plan to keep them low.

At Entergy Arkansas, we work not only to ensure reliable power, but also to make sure that power remains affordable.

That’s why Entergy Arkansas customers have rates below the average for Arkansas and the nation – and why we are committed to keeping costs down while creating value for customers now and for years to come.

1. Providing reliable power.

Our plan includes strengthening the electric grid from transmission lines to substations to transformers – to prevent storm outages by planning and maintaining a more robust network.

2. Lowering costs.

Keeping a balanced mix of energy resources is an important ingredient to providing customers with clean, reliable, and affordable electricity. Entergy Arkansas also joined the Midcontinent Independent System Operator (MISO) several months ago. And we’re already seeing monthly savings by having access to a large power market that allows us to further reduce costs.

3. Generating jobs.

Entergy Arkansas is reaching out to major companies around the world to put Arkansas on the top of their lists for new facilities. Then we work with them to make sure we have the infrastructure they need to power their business – adding more customers to share costs and putting more Arkansans to work.

4. Investing in sustainable communities.

The health of our local communities drives our quality of life as a state. Training, education and infrastructure are vital not only for economic development, but also for building a stable society for generations to come. We’re committed to helping our state grow, strengthening communities, supporting non-profits and improving education.

To learn more, visit EntergyArkansas.com.

A message from Entergy Arkansas, Inc. ©2014 Entergy Services, Inc. All Rights Reserved.

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TALK BUSINESS & POLITICS | JANUARY/FEBRUARY 2016

Cover Story A R K A N S A S B U S I N E S S H A L L O F FA M E

Four to Be Inducted at February Event

By Talk Business & Politics Staff

Recognized for their leadership in business and community service, four Arkansas icons – William T. Dillard II, George K. Mitchell, Patricia P. Upton and the late Gov. Winthrop Rockefeller – make up the 2016 class of the Arkansas Business Hall of Fame.

Established by the University of Arkansas Sam M. Walton College of Business, the Hall of Fame recognizes successful business leaders who have brought lasting fame to Arkansas. The 2016 induction event is set for Feb. 12 at the Statehouse Convention Center in Little Rock.

www.talkbusiness.net

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Cover Story: Hall of Fame

WILLIAM T. DILLARD II The chair and chief executive officer of Dillard’s Inc., William T. (“Bill”) Dillard II is the son of the late William T. Dillard, the founder of Dillard’s Department Stores.

While still in high school, the younger Dillard began working part-time in Dillard’s retail division. As a Hall of Fame recipient, Dillard is in the good company of his father, who was among the Arkansas Business Hall of Fame’s inaugural class of 1999.

After earning an accounting degree from the Sam M. Walton College of Business (1966) and a Master of Business Administration from Harvard University, Dillard stepped full-time into the family business.

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In addition to his role on the board of directors, he served as president and chief operating officer (1977-1998), chief executive officer (1998-2002) and, since 2002, company chair.

Dillard also serves on the board of directors of Acxiom Corporation and Barnes & Noble. A philanthropist, too, he contributes to community service projects statewide. A strong supporter of the University of Arkansas, Dillard was honored in April 2015 with the University of Arkansas Chancellor’s Medal. He is a former member of the Dean’s Circle and Dean’s Executive Advisory Board of the

TALK BUSINESS & POLITICS | JANUARY/FEBRUARY 2016

Walton College, and he has been a member of the Razorback Foundation for more than five decades.

First Security Bancorp Chairman and friend Reynie Rutledge commended Dillard on his achievement.

“We are proud to congratulate William T. Dillard II for his induction into the Arkansas Business Hall of Fame in recognition of his efforts in leading Dillard’s to become one of the nation’s largest fashion retailers,” Rutledge said. “He is also the first second-generation inductee into our Hall of Fame, which further exemplifies the Dillard family legacy in Arkansas.”

GEORGE K. MITCHELL, M.D. George K. Mitchell, M.D., is the former president and chief executive officer of Arkansas Blue Cross and Blue Shield. He was invited onto the insurance company’s board of directors in 1964 and, in 1968, became one of the first physicians to lead a Blue Cross organization.

An original founder of the Little Rock Diagnostic Clinic, Mitchell ran a thriving endocrinology practice prior to his first position at Arkansas Blue Cross. His medical knowledge made him instrumental in each capacity of his job and, by 1975, he was named the company’s president and chief executive officer.

A native Arkansan, Mitchell earned a degree from Hendrix College (Bachelor of Arts, 1952) before successfully pursuing medicine at the University of Arkansas School of Medicine (Bachelor of Science, 1953; Doctor of Medicine, 1956). In 1963, he became board certified in internal medicine. Mitchell served his country as a major and company commander, respectively, in

the Arkansas National Guard.

During his tenure of almost 20 years, Arkansas Blue Cross grew into the state’s largest health insurer, a leading proponent of health-care reform and a model for Blue Cross and Blue Shield plans across the nation.

Mitchell has served on the boards of many deserving organizations, including the Arkansas Symphony Orchestra and the Hendrix College Board of Trustees. He remained a vice chair of the board of Arkansas Blue Cross from 1993-2012.

Mitchell’s generosity has benefited many local organizations – among them the Arkansas Easter Seals Society, the United Way of Pulaski County, the Boy Scouts of America, the Arkansas State Chamber of Commerce, Verizon Arena and many, many others.

A notable achievement of late is the newly established George K. Mitchell, M.D. Endowed Chair in Primary Care in the College of Medicine at the University of

Arkansas for Medical Sciences. Made possible by a $1 million grant from Arkansas Blue Cross, the chair allows its holder to focus on innovations in primary care through the incorporation of teambased care, health promotion, health literacy and population health strategies into primary care settings.

Robert Shoptaw, current chairman of the board of Arkansas Blue Cross Blue Shield, credited Mitchell with leading the insurance company successfully into the managed-care era of health care.

“During his tenure, Dr. Mitchell was instrumental in guiding the company to become a patient-focused, managed-care insurance company that has remained focused on the best care for the end consumer,” Shoptaw said. “As chief executive officer of Arkansas Blue Cross, he put in place a participative management style and built a strong team that remains responsive to the purpose for which it was formed.” www.talkbusiness.net

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Cover Story: Hall of Fame

WINTHROP ROCKEFELLER Being recognized posthumously is the late Winthrop Rockefeller (1912-1973), former governor (1967-1971), economic development leader and sweeping philanthropist. The first Republican governor of Arkansas since post-Civil War reconstruction, Gov. Rockefeller served two terms in office while running his own business and contributing to the ongoing economic development of our state. As governor, Rockefeller supported public policy and government reforms that helped to create a vibrant economic and business environment.

Even before serving as governor, Rockefeller was influential in an active business environment. His life showed his pattern of hands-on work. In his early 40s, after military service, college and a short stint as a roughneck in the Texas oil fields, the business mogul pulled up stakes in New York City to relocate permanently to Arkansas.

14

He spent the rest of his life in the Natural State, working to make a difference.

In 1953, Rockefeller founded Winrock Farms, a standard-setting, still-thriving purebred cattle business that has consistently raised the bar in its industry. As founding chair of the Arkansas Economic Development Commission, he attracted business and industry to the state. His efforts brought about millions in capital investment and thousands of jobs for Arkansans.

Winthrop Rockefeller’s influence continues in Arkansas. His Rockefeller Foundation provides funding for projects related to education, economic development, and racial and social justice. During and after his life, Rockefeller effectively gave millions of dollars to state education for facility improvements. In addition, he is a co-founder of the Arkansas Arts Center and the creator of numerous charities, scholarships and activities of the Winthrop

TALK BUSINESS & POLITICS | JANUARY/FEBRUARY 2016

Rockefeller Foundation and the Winthrop Rockefeller Charitable Trust.

John C. Reap, a retired commercial banker based in Dallas, Texas, recalls the great influence Rockefeller had on his father, Alvin Reap, who instilled in Reap a great respect for Rockefeller.

“My father retired from Worthen Bank [at that time, the largest bank in Arkansas] in 1979 after 44 years of service,” Reap said. “He was in the heart of his banking career in Little Rock when Gov. Rockefeller moved to Arkansas and performed many acts of service for our state. My dad was a student of Arkansas business, and he said many times that Winthrop Rockefeller did more for business in Arkansas – and the credibility of the state – than anyone [else did]. Rockefeller was a man of integrity, professionalism and generosity. The entities that bear his name are a fitting legacy to his spirit of giving.”

PATRICIA (“PATTI”) P. UPTON When you enjoy decorative fragrance in your own home – particularly during the holiday season – it’s likely that the light bulb behind your idea is Patricia (“Patti”) P. Upton, founder and former president and chief executive officer of Heber Springs’ Aromatique Inc. Upton is the mind behind Aromatique’s signature product that still tops many Christmas lists around the country. The Smell of Christmas, a hit she created from Arkansas native botanicals fragranced with spices and oils, eventually led to a multi-million-dollar international company with products that remain innovative to the decorative fragrance industry. Aromatique

and Upton have been featured in Working Woman magazine, the International Women’s Forum, the Society of Entrepreneurs, the Easter Seal Society, People magazine, “Lifestyles of the Rich and Famous,” Southern Living and the list goes on.

Upton received a Distinguished Citizen Award from Little Rock’s KARK-TV and the Office of the Governor of the State of Arkansas for her philanthropic work done for UAMS and the Nature Conservancy.

Frances and Wayne Cranford shared excitement regarding their friend’s recognition.

“If anyone ever deserved to be inducted

into the Arkansas Business Hall of Fame, it’s Patti Upton,” Wayne Cranford said.

“She combined her love of fashion and art with her talent for business to create an innovative industry, now known as decorative fragrance. Aromatique has been a far-reaching boost to the economy of Arkansas.”

Frances Cranford adds, “Since founding Aromatique in 1982, the success of the company has enabled Patti and Aromatique to make significant contributions to many charitable organizations – generous gifts that would not have been possible were it not for her talent, innovation, dedication and leadership.”

www.talkbusiness.net

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Cover Story: Hall of Fame

‘TREMENDOUS IMPACT’ Calling it a “privilege” to celebrate their achievements, Walton College Interim Dean Matt Waller said of the four business leaders, “Their lives and careers have had a tremendous impact on business inside and outside the state, and have inspired others

to do the same. They and those inductees who have preceded them represent the best in business in Arkansas.”

Dillard, Mitchell, Rockefeller and Upton will join the 70 other members of the Hall of Fame during an Arkansas Business Hall

Winthrop Rockefeller came to a mountain and changed the world around him. We invite others to do the same.

of Fame induction ceremony on Feb. 12.

The Arkansas Business Hall of Fame is housed in the atrium of the Donald W. Reynolds Center for Enterprise Development at the Walton College on the University of Arkansas campus in Fayetteville.

WINTHROP ROCKEFELLER

left an indelible mark on Arkansas’ business community as the first chair of the Arkansas Industrial Development Commission. We are proud to perpetuate his legacy and continue the good work he started.

WWW.ROCKEFELLERINSTITUTE.ORG

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Learn more about the impact and legacy of Winthrop Rockefeller at www.rockefellerinstitute.org. |

TALK BUSINESS & POLITICS JANUARY/FEBRUARY 2016

www.talkbusiness.net

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Profiles Service PHOTOS COURTESY OF ENTERGY

Entergy’s Hugh McDonald, left, with his soon-to-be replacement, Rick Riley.

Transition Time Incoming Entergy Arkansas president and CEO Rick Riley is getting familiar with the position and spending time with employees before longtime executive Hugh McDonald retires.

By Wesley Brown

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TALK BUSINESS & POLITICS | JANUARY/FEBRUARY 2016

R

ick Riley doesn’t have a picture of Hugh McDonald on his office wall, but one will be there soon. For now, if he needs to get advice from the long-serving Entergy Arkansas Inc. president and CEO, he can simply walk across the hall of the 40th floor of the tallest building in downtown Little Rock and chat with the veteran utility executive.

“Technically now I’m working for Hugh before I take over, so I don’t want to put a picture up of him in the office yet. But that day is coming,” Riley said jokingly during a wide-ranging interview in his office at Entergy Arkansas’ corporate headquarters at the Simmons Tower.

Riley was tabbed in early June to take over as CEO of Arkansas’ largest electric utility once McDonald steps down from the helm of the company sometime in the first half of 2016. For now, Riley says he is grateful to be under McDonald’s wing where he is getting mentored on the fine points of the company’s Arkansas operations by the affable Entergy veteran who has led the utility giant since 2000.

Before he transitions into McDonald’s more spacious and comfortable corner office, Riley is now serving as group vice president of customer service and operations. The former vice president of transmission for Entergy Services Inc. said he learned of McDonald’s retirement and his big promotion at the same time when he received a personal call from Theo Bunting, group president of Entergy Corp.’s utility operations.

That call, Riley said, was an offer to accept a new role as the president and CEO of Entergy Arkansas after McDonald finishes his last lap around the track.

“I love transmissions and it was a great job. I had 800 employees across four states …, but when Theo asked me about this [position], I think had it been another [Entergy] utility I might have faltered,” Riley recalled. “Knowing about and being an admirer of [former Arkansas Power & Light CEO] Harvey Couch, this is where it started so I was really excited to come up here.”

LEARNING ABOUT ARKANSAS After accepting the chief executive position, Riley said he still had a bit of apprehension, never having lived in Arkansas

and deciding to move to a new location in a company that values executives willing to take new roles in varied locations to enhance their careers. “It’s always a big deal to move your family, but I talked with my wife [Alicia], and she was excited about it too – because our kids are out of the house and we didn’t have to worry about moving them away from school.”

But, Riley added, “it was daunting too because Hugh has been here for so long.

Everybody knows him. My first thoughts were: ‘Can I be like Hugh and help grow the state?’”

Now on the job for more than six months, Riley said his biggest challenge has been learning about the state, the company and

“At every step of his career, Hugh’s leadership and vision have been instrumental in making the right decisions on so many critical issues.”

– Theo Bunting

group president of Entergy Corp.’s utility operations the employees. “I’ve been in more of an operations environment, not [in a situation] where I worked with customers and communities,” Riley said. “One thing that I have been really focusing on is the employees. I have had time to go out a bit and meet with them, and I have a lot more meetings planned.

“I am trying to get to every local office and meet face-to-face with them. And being over customer service – that’s the bulk of our employees. I’m trying to figure out what makes them tick,” the high-energy 53-yearold utility executive said.

Offering insight into his management philosophy, Riley said he wants to make sure that every employee enjoys what they do. “I have always said that if you have a job that you believe is the best job in the world … or the company that you work for is doing something that serves the greater good – then you will like going to work every day.

I am trying to figure out if our employees think that.”

LOOKING FOR IMPROVEMENT AREAS Now on his fourth executive career stop in as many states, the well-traveled Texas native has also lived in New Orleans, the home of Entergy’s corporate headquarters, and comes to Arkansas from the company’s transmissions nerve center in Jackson, Miss.

Looking out over much of downtown Little Rock in his new office, Riley said he hopes to add to the legacy that McDonald has built in transitioning Entergy Arkansas from the system operating agreement into a free-standing subsidiary of the New Orleans-based utility operator.

“I want employees to come to work every day and know they are serving a noble purpose, but to also like what they do – so I’ve been listening,” Riley said. “Every company has areas where they can improve, and we certainly have our share. So, I have been trying to really probe into areas where we can improve.”

MCDONALD’S PATH Meanwhile, across the hall with a grand view of the downtown area and the state Capitol from his office suite, McDonald recalled receiving a similar call as Riley nearly 16 years ago from Entergy Corp.’s longtime chairman and CEO Wayne Leonard in New Orleans, where the utility holding company runs operations for the utility giant’s four operating subsidiaries in Arkansas, Louisiana, Texas, Mississippi and the Crescent City.

“I can remember that phone call from Wayne Leonard to go to Arkansas. I was certainly honored to ask to go, but also I was ‘oh my gosh, this is another major move.’

It was just a year prior to that I moved my family from Austin, Texas, back to New Orleans and my son [Bryan] was going to be a senior in high school.” www.talkbusiness.net

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TALK BUSINESS & POLITICS | JANUARY/FEBRUARY 2016

Profiles: Entergy Before taking the job, McDonald’s path to the top position at Arkansas’ largest electric utility had been much like Riley’s – with career stops at each of Entergy’s operating subsidiaries in Arkansas, Texas, Louisiana and Mississippi before making the decision to move to Little Rock.

After graduating in 1980 from North Dakota State University as a construction management major in 1980, McDonald took a job two years later as an engineer at the Waterford 3 Nuclear Station in St. Charles Parish (La.) with Middle South Services Inc., the forerunner to Entergy Corp.

On his way from South Dakota to New Orleans to take the new job, McDonald’s drive with his wife Michelle took the young couple through Arkansas for the first time where they encountered one of the state’s

most infamous ice storms in December 1980. “That was somewhat fortuitous,” McDonald said of the storm that knocked out power to a quarter million homes in Arkansas. “I stayed in an old motel in Morrilton and got up the next day and traveled to New Orleans.”

Once landing in Louisiana, within seven years McDonald had been promoted to executive assistant to the chairman and CEO of Louisiana Power & Light Company, where he led Entergy Louisiana’s total quality initiative until 1993.

CAREER JOURNEY In 1994, McDonald was serving as division manager of customer service for Entergy Mississippi. But a year later, he was promoted to director of Entergy’s regulatory

affairs in Texas, where he was responsible for Entergy Gulf States Inc.’s rate proceedings, rulemakings and transition to competition activities before the Public Utility Commission of Texas. He stayed in that position for four years until April 1999 before he led Entergy Services Inc.’s retail operations at the utility giant’s corporate headquarters.

By the time McDonald got the fateful call from Leonard, he had worked in nearly every area of Entergy operating subsidiaries in four states, from nuclear and transmission operations to regulatory affairs and customer service. At times, he said the career journey with Entergy has been challenging, but he is grateful for the opportunities he has been given over a career spanning more than 33 years.

“I’ve had the opportunity to work around

www.talkbusiness.net

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Profiles: Entergy great people,” he said quietly. “It has certainly allowed me to see all the parts of the business, but also know a lot of people around the company, and build relations around the company that I still cherish today.”

He continued: “Some of the moves were difficult from a family perspective, especially when the kids got older. Certainly they’ve sacrificed and Michelle certainly has sacrificed and stuck with me for 35 years, but you

always learn something new by moving to a different place. Even though it is one company, there are little differences in cultures.’’

Throughout his career at Entergy Arkansas as second-longest serving CEO behind the legendary Harvey Couch, who founded AP&L in 1913, McDonald has guided the Arkansas utility through what several company observers view as its toughest period.

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TALK BUSINESS & POLITICS | JANUARY/FEBRUARY 2016

ACCOMPLISHMENTS Under McDonald’s helm, Entergy Arkansas’ customer base has grown to more than 700,000 residential, commercial, industrial and governmental customers located in 63 of Arkansas’ 75 counties, covering over 40,880 square miles.

“Hugh’s 34 years of contributions to Entergy and its key stakeholders are immeasurable,” Bunting said in June when the CEO transition was announced. “At every step of his career, Hugh’s leadership and vision have been instrumental in making the right decisions on so many critical issues. He has been a passionate voice for our Arkansas customers and our employees, and he always acted with integrity, respect and compassion.”

Although McDonald’s accomplishments over the past 15 years at Entergy Arkansas are many, he will likely be remembered for his leadership in guiding Entergy Arkansas through the company’s decision to exit the long-standing System Agreement, which allocated generation costs among Entergy’s operating subsidiaries in Arkansas, Mississippi, Louisiana, Texas and the city of New Orleans.

The historic pact had embroiled the state Public Service Commission and Entergy in protracted litigation for over 30 years, resulting in significant “Grand Gulf payments”

by Arkansas ratepayers in 1985 for a nuclear unit that PSC officials said Arkansas did not need.

Although the PSC’s litigation efforts successfully shielded Arkansas ratepayers from a substantial amount of payments in subsidies to the other states, Arkansas ratepayers still ended up subsidizing the ratepayers of Entergy Arkansas’ sister companies at a cost of more than $4.5 billion from 1985 to 2011, officials said.

In late 2013, Entergy Arkansas became independent as part of its agreement with the PSC, allowing the Arkansas utility to complete the integration of its transmission system into Midcontinent Independent System Operator (MISO) following more than two years of planning and preparation with the New Orleans-based parent of Entergy Arkansas and numerous other stakeholders.

McDonald said the integration process went smoothly, and the initial projections of

more than $1 billion in savings to Entergy utility customers over the next decade are ahead of schedule. In late March of 2015, Carmel, Ind.-based MISO christened its 50,000-square-foot operations center in West Little Rock that will oversee the South region of the grid operator’s footprint that includes Entergy’s operating subsidiaries in Arkansas, Louisiana, Mississippi, Texas and the city of New Orleans.

“It has been a great decision,” McDonald said in early April.

DEALING WITH REGULATIONS McDonald said he is also proud of the fact that Arkansas has met the challenge of upgrading the state’s power infrastructure, saying technology and the advent of natural gas-fired power generation have been “game-changers” in the delivery of electricity to Arkansas consumers.

The one part of the job that McDonald said he won’t miss is the increasing encroachment of government regulations in the past decade on the way utilities operate.

“That is a huge part of our business now,” McDonald said. “It seems like the last 10 years of my time in this job, 80% of it has probably been about state and federal regulations. It has been pretty relentless on this industry.”

McDonald also admitted the EPA’s rules on carbon emissions and regional haze have changed the future landscape of the power industry in terms of electricity generation and fuel mix. “Nobody’s going to use coal anymore, at least not for the foreseeable future, which is unfortunate because we have a huge supply of that fuel in this country which would help us from an energy security standpoint,” he said. “But people in my position or generation developers are pretty much only looking at two types of energy [sources] – natural gas and renewables.”

Surprisingly, the other part of the business that he says keeps him up at night is storms – like the one he and Michelle drove through on his first trip through Arkansas in the dead of winter 33 years ago or the kind of quick-moving, mid-day tempests that alight on Arkansas during the muggiest days of summer.

STORM MODE Still, McDonald said those times also bring out the best in Entergy Arkansas’ 2,700-person workforce, from top to bottom. “During storm restoration, those are some of the most challenging times for the company, but also the most gratifying to see how the organization comes together – from communications to the lineman to what I do and what our management team does,” he said. “We shift our normal day

activity to ‘storm mode’ and everybody has a role – and that role is to get the lights on as quickly as you can, and as safely as you can.”

The soft-spoken utility executive is confident he is leaving the company in a good position for the future. He said Entergy Arkansas’ future is bright because “electrification of the economy” is going to continue in the future, including more automobiles being powered by electricity.

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Profiles: Entergy McDonald joked that his “light-bulb” moment concerning possible retirement occurred after Entergy exited the system agreement and integrated into MISO. He also said he began thinking more about stepping down because of the company’s strong financial foundation after several lean years.

Also, Entergy Arkansas’ decision to buy the 2,000-megawatt, natural gas-fired Union Power Station in El Dorado for $948 million, and the utility’s diversified portfolio mix of fossil fuels, natural gas, nuclear and renewable energy sources leave the company in a good position going forward, he said.

“Those are all important things and there are other things that I would like to be a part of, but somewhere along the way in the last year or so, I realized I can’t hang around for everything,” McDonald explained. “As much as I’d like to be involved – the next wave of technology is going to be exciting for the company and customers – but I have to let go – it’s time to move on. It has been

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16 years in this role, and that’s a pretty long time.”

Before he hands off the baton to Riley in mid-2016, McDonald said he hopes to complete the acquisition of the Union Station power plant. He also hopes to steer the company through its upcoming general rate case before the PSC, where the Arkansas utility hopes to recoup $167 million in new revenue for upgrades to the state’s power grid and the purchase of the South Arkansas power plant.

“I didn’t think it was fair to say to Rick, ‘hey this is your responsibility, I’m out of here,’” McDonald said. “Those are critical things that I need to focus on.”

McDonald added that the “planned” year-long transition will allow Riley to meet all of the company’s employees while he has the time before taking over the role as CEO. “He’s getting to know the employees, and the employees are getting to know him,” McDonald said. “Rick is an excellent leader who has a great team behind him, and he’s

TALK BUSINESS & POLITICS | JANUARY/FEBRUARY 2016

going to be great, and he is going to bring a new perspective to the company, and that’s a plus.”

Looking ahead, McDonald said he is looking forward to his retirement so he can spend more time with Michelle and “unplug.” What does he plan to do the first day he is no longer Entergy CEO? “I’m going to get a good night’s sleep,” he said jokingly. The next thing he plans to do: “The next ice storm I am going to call Entergy.”

McDonald said he and Michelle plan to stay in Arkansas, where both are involved in community and nonprofit activities. He said they also plan to travel and spend time with their adult children, two who live in California and one in Austin, Texas.

“I’ve lived in Little Rock longer than any place I lived in my life. We like it here and there’s no reason to pick up stakes and move at this stage of our lives. And there are plenty of ‘honey do’ lists that I have neglected over the years.”

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Profiles Service PHOTO: BOB OCKEN

Jimmy Moses says he wants to be remembered as someone who helped transform Little Rock back into a place where people “want to live.”

Little Rock’s Idea Man Longtime developer’s vision and follow through have helped transform the city he says is in his DNA.

By Rex Nelson

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TALK BUSINESS & POLITICS | JANUARY/FEBRUARY 2016

J

immy Moses grew up steeped in the history of Little Rock, especially its downtown.

His great-grandfather, Herman Kahn, moved to Little Rock from Frankfurt, Germany, in 1870. Kahn and his sons, Sidney L. Kahn Sr. and Alfred G Kahn, were involved in banking and real estate development. Sidney Kahn developed the Prospect Terrace neighborhood in Little Rock.

Herman Kahn’s best-known development was the Marion Hotel, which was among the most famous businesses in Arkansas for much of the 20th century. Construction began on the hotel in 1905. The Marion was the tallest structure in the state from when it opened in 1907 until 1911. The hotel closed in early 1980 and was demolished to make way for the Excelsior Hotel (which later became the Peabody and then the Marriott) and the Statehouse Convention Center.

The 500-room Marion had green carpets, bellboys in green uniforms and a marble fish pond in the lobby. The hotel was named after Herman Kahn’s wife, Marion Cohn Kahn. The Marion billed itself as the “Meeting Place of Arkansas,” and the state’s top organizations held their conventions there. Its bar was named the Gar Hole and featured a mounted alligator gar. Visitors to the Marion through the years included Eleanor Roosevelt, Harry Truman, Douglas MacArthur, Helen Keller and Will Rogers.

Within walking distance of the Marion, Moses’ family operated the music and electronics store Moses Melody Shop on Main Street. The business was established shortly after World War I by Moses’ grandfather, Grover Cleveland “Cleve” Moses, and operated for almost six decades until falling victim to downtown’s decline in the late 1960s. During the 1960s, the store had what was known as the Color TV Lounge where customers could watch color television. There were soundproof glass booths for listening to records and live Saturday radio broadcasts by radio station KALO that featured local bands. Jimmy Moses worked in the store as a boy.

TRANSFORMING THE CITY Moses describes downtown Little Rock as “being in my DNA.” He remembers the days when customers came into the Moses

Melody Shop in droves while the lobby of the Marion was filled at all hours. By the time Moses left for college at Washington and Lee University in the mountains of southwest Virginia, the capital city’s core had begun its long, slow decline.

Moses sits by the window in the Little Rock Club on the 30th floor of the Regions Center in downtown Little Rock and looks out on the city that has been central to his career. He’s now in his 60s and thinking about his legacy. He says he wants to be remembered as someone who helped transform Arkansas’ largest city back into a place where people “want to live” rather than

“Little Rock is at a crossroads.

We’ve done a lot of good things to set the stage for growth, but I’m not sure that our leadership has fully embraced the concept that we can be great.”

– Jimmy Moses

fleeing to the suburbs in Saline, Faulkner and Lonoke counties.

“Little Rock is at a crossroads,” Moses says as he gazes down on the city. “We’ve done a lot of good things to set the stage for growth, but I’m not sure that our leadership has fully embraced the concept that we can be great.”

Those who compare the relatively slow growth of Little Rock to Austin or Nashville can become depressed when thinking about the city. But those are state capitals of far larger states that also are the homes of world-class universities and bustling music scenes. They have amenities that Little Rock

will never have. Little Rock looks far better, though, when compared to Southern cities such as Birmingham, Ala., and Jackson, Miss.

In 1950, Birmingham had a population of 326,037, more than triple the size of Little Rock. Birmingham was the same size as Atlanta (331,314) at the time. By 2010, Birmingham’s population had fallen to 212,237.

While Birmingham was losing population, Little Rock was growing from 102,213 residents in 1950 to 193,524 residents in 2010.

With a population that’s expected to surpass 200,000 during the next year, Little Rock is now the same size as Birmingham rather than a third its size.

Jackson, meanwhile, had a population of 202,895 in 1980, far larger than Little Rock’s population of 159,151 at the time.

The current population of Jackson is about 170,000. The cities appear to be headed in opposite directions. In Mississippi, Bass Pro Shops and an outlet mall chose to locate in the suburb of Pearl. In Arkansas, Bass Pro and an outlet mall chose Little Rock rather than a city in the suburbs.

WORK CONTINUES Moses points out that public projects continue to complement private investments in downtown Little Rock. In addition to construction of a new Broadway Bridge, work is proceeding on the $68 million renovation of the Robinson Center. The city has committed $20 million to the Little Rock Technology Park downtown and is hoping voters approve a bond issue of between $35 million and $37 million for upgrades to the Arkansas Arts Center, the MacArthur Museum of Arkansas Military History and MacArthur Park. The bonds would be paid back over 30 years with collections from an increased hotel tax.

Other parts of town during the past year have seen the opening of a $23 million transmission operations center for Entergy Corp., a new Southern region operations center for the regional energy transmission organization Midcontinent Independent Systems Operator, a $52 million facility in southwest Little Rock for Federal Express and a major expansion of Dassault Falcon Jet adjacent to the city’s airport.

Dr. Dean Kumpuris, a longtime member of the Little Rock Board of Directors, www.talkbusiness.net

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Profiles: Jimmy Moses says: “We’re headed in the right direction.

The strongest thing we have going for us is a group of people willing to roll up their sleeves, identify the problems and then attack those problems.” He describes the decision to place the technology park downtown as “an absolute winner for everybody.”

Jimmy Moses and business partner Rett Tucker remain atop the list of those “willing to roll up their sleeves, identify the problems and then attack those problems.”

In addition to obtaining his bachelor’s degree from Washington and Lee, Moses earned a master’s degree in urban planning from the University of Florida. He was working for the planning firm Hodges Vines Fox & Associates in 1981 when Little Rock turned to the firm for suggestions on what to do with a downtown that had been gutted by so-called urban renewal. It had seen most residents and many businesses move out.

In Moses’ words, downtown “barely had a heartbeat.” It would be years before his vision began to be achieved, but Moses was

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a proponent from the first of attracting fulltime residents back downtown.

TEAMING UP WITH TUCKER In July 1982, Moses joined forces with Rick Redden and John Allison to launch Allison Moses Redden Architecture, Interiors and Planning. Allison Moses Redden later became AMR Architects Inc. when Moses and Allison began new firms.

Moses would later team up with fellow Little Rock native and Washington and Lee graduate Tucker to form what’s now Moses Tucker Real Estate.

Moses Tucker’s efforts to bring residents downtown have included development of the Arkansas Capital Commerce Center in 2002, the First Security Center in 2004, 300 Third Street in 2007 and the River Market Tower in 2009. The company has worked with hotel developer John McKibbon to bring four new hotels to the River Market District.

Moses Tucker later expanded its efforts

TALK BUSINESS & POLITICS | JANUARY/FEBRUARY 2016

to Main Street to transform the 1912 Blass Building into the Mann on Main. The popular Italian restaurant Bruno’s Little Italy was reborn in the building. Farther south on Main Street, Moses Tucker has joined forces with Cromwell Architects Engineers to bring life back to the building that housed the Arkansas Democrat from 1916 until the early 1930s. The building, designed by noted Arkansas architect Charles Thompson, later housed a furniture store and the Lido Cafeteria. The top floors have been vacant for more than 25 years.

In the River Market District, the company partnered with the Central Arkansas Library System to develop the Arcade Building, which is home to the upscale restaurant Cache, the Ron Robinson Theater and other offices and businesses. On East Capitol, Moses Tucker tore down the former Arkansas Louisiana Gas Co. headquarters and replaced it with the MacArthur Commons apartment complex. In November, the 59-unit, three-story building was sold for

$10.5 million to MacArthur Commons LLC, led by David R. Thompson. The project, which was completed in September, was already 97 percent occupied at the time of the sale.

During the summer, Moses Tucker broke ground on the 36-unit Legion Village apartments on nearby Rock Street with additional plans to renovate the former M.M. Eberts American Legion Post building. Moses Tucker expects construction to be completed by May. EAST LITTLE ROCK In October, Moses Tucker announced that it had teamed up with the Cromwell firm to develop a 3.5-acre area east of Interstate 30, near the Heifer International headquarters. Cromwell plans to transform a 50,000-square-foot warehouse into a mixeduse development and add 20,000 square feet to the building. About a third of the facility will house Cromwell’s Little Rock offices.

Moses Tucker will handle the management

and leasing of the complex. For now, the area, which already includes Lost Forty Brewing and Rock Town Distillery, is being billed as East Little Rock.

“Forty years ago, when we built our building at Markham and Spring streets, the area was in need of a major redevelopment effort,” says Dan Fowler, Cromwell’s director of finance and business development. “Our building, along with investments in the Camelot Hotel, Excelsior, Stephens Building and Capital Hotel, created a vibrant district within the core of our city. We hope to do the same east of I-30.”

Cromwell CEO Charley Penix says that the addition of restaurants and apartments to the area could lead to “the new River Market.” Moses envisions an area that mixes retail, restaurants and residents, leading to activity 24 hours a day.

“In Northwest Arkansas, you have had the Walton family and the Tyson family provide direction and vision,” Moses says. “We don’t have one dominant family here. But we do

have a chance to be a great city. What we have to realize is that we’re not finished. We have a lot of work ahead of us.”

FINANCIAL QUARTER IDEAS Moses also has turned his attention to the neighborhood where he’s having lunch on this day, which is now being called the Financial Quarter. Almost 5,000 people work in the high-rise Simmons Tower, Regions Center, Union Plaza, Bank of America Plaza and Stephens Building. A large number of those workers drive into downtown Little Rock five mornings a week, walk from parking garages into their buildings and don’t come out again until walking back to their cars at the end of the day for the drive back to places such as Bryant, Conway and Lonoke. Moses Tucker took a first step with almost $1 million in improvements to the first and second floors of the Regions Center, which it manages.

A volunteer design cooperative known as studioMAIN has worked for more than

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Profiles: Jimmy Moses a year on a plan to revitalize the Financial Quarter, which is bordered by Sixth Street on the south, the Arkansas River on the north, Main Street on the east and Broadway on the west. Both Jimmy Moses and Rett Tucker have described the neighborhood as “tired” and in need of renovation.

Once lively bank lobbies are now empty as more people do their banking online.

The first phase of a three-part plan for the

Financial Quarter will include a so-called pop-up event designed to show what the neighborhood could be, better branding and the addition of street furniture, painted crosswalks, hanging banners and landscaping.

The second phase will involve the redesign of existing plazas and bank lobbies in an effort to draw people out of their offices for dining and shopping opportunities. The

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TALK BUSINESS & POLITICS | JANUARY/FEBRUARY 2016

third phase will include plans for building out the Financial Quarter, including the replacement of surface parking lots with high-rise housing projects and adjoining parking decks. During a meeting of stakeholders last year, Moses recalled how desolate the River Market District once was and told those in attendance that the River Market area started with far fewer assets than the Financial Quarter.

CHOICE OBJECTIVES Asked to list three top objectives for Little Rock during the next decade, Moses says: • “Transforming the University of Arkansas at Little Rock. It needs to be to this city what Vanderbilt University is to Nashville. There’s no reason that UALR can’t be nationally recognized.

To be a great city, Little Rock needs a great institution of higher education.

Hiring the right person to succeed Joel Anderson as chancellor is critical to the future of this city. We must have someone who understands the role of an urban university and can build on what Joel has done.”

• “Continuing redevelopment of the city’s core. We’re creating a sense of place down here, and it’s important that we don’t lose momentum. Seeing what’s going on downtown has given people a sense of pride in the city. It’s time to accelerate that process.”

• “Building the brand of Little Rock.

We need people across the country to recognize Little Rock as a city that’s on the right path. For instance, I like the fact that UALR is now simply branding its athletic teams as Little Rock. UALR has no meaning to people outside of Arkansas. Little Rock, however, means something.”

Moses is convinced that UALR needs a significant presence downtown. He thinks the university should find a way to partner with the Little Rock Technology Park, which is trying to develop a research-technology corridor along Main Street.

“If I were the new chancellor, the first directive I would issue would be that UALR must have a satellite campus downtown and that it must be aligned with the tech park,”

Moses says. “Even if the project takes 20 years to complete, it’s important that we do it. We already have the UALR law school, the Clinton School of Public Service and the Arkansas Studies Institute downtown.

If we could somehow add more UALR departments to the mix, we could have a real intellectual powerhouse that would attract more young, talented people to live downtown. There are certain things that we simply have to do if we’re going to be great as a city, and this is one of them.”

BUSIER THAN EVER Moses realizes that a new generation is taking on leadership roles in Little Rock. His son Chris was named the president of Moses Tucker in 2013. Chris Moses graduated from Little Rock Central High School and then received a bachelor’s degree in real estate finance from Arizona State University in 2001. After working for Moses Tucker in Little Rock and firms in Orange County, Calif., and Atlanta, Chris Moses received

his master’s degree in real estate development from Clemson University in 2011. He returned to Moses Tucker after earning his master’s degree.

Despite having his son as president of the

company, Jimmy Moses has no plans to slow down. He told an interviewer in 2014: “I’d like to keep doing this for another 25 years.”

Two years after making that comment, he’s busier than ever.

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Profiles Service PHOTO COURTESY OF ARKANSAS PARKS AND TOURISM

From left, Richard Davies, Kane Webb, Grady Spann and Greg Butts.

Grady Spann Can The new director of Arkansas State Parks, a 23year veteran of the system, received enthusiastic praise on being named to the position.

By Kerri Jackson Case

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TALK BUSINESS & POLITICS | JANUARY/FEBRUARY 2016

I

t would be difficult to say for certain, but it’s possible Grady Spann is the first director of Arkansas State Parks to be fluent in Portuguese.

As the son of missionaries to Brazil, Spann spoke more Portuguese than English for a time when he was young. He was even assigned to Brazil for part of his military career because of his familiarity with the region. He’s a mild-mannered sort and rarely swears, but when he does it’s in Portuguese while he’s watching a soccer match.

“My parents are the only ones who understand me,” Spann said. “They say that I shouldn’t say those things. And I shouldn’t.

But sometimes I get a little carried away.”

A DREAM COME TRUE Arkansas Executive Director of Parks and Tourism Kane Webb named Spann the director of State Parks in a meeting with staff and Parks, Travel and Tourism Commissioners on Dec. 11. He replaces Greg Butts, who retired Dec. 31 after 25 years as Director of State Parks and 42 years total with the parks system. Spann took the reins Jan. 1.

“This is a dream come true for me,” Spann said. “Several years ago, when I was interviewing for another position, they asked me what my long-term goal was, and I told them I wanted to be the director of Arkansas State Parks. I’m very excited.”

He said his top priority is to connect with the next generation and get young people in the parks, so they can experience the product Arkansas has to offer.

Spann has been with State Parks for 23 years. He formerly served as the Region 5 supervisor, which put him over the five state parks with lodges and full-service restaurants.

The Arkansas State Parks director is responsible for leading the operation of 52 state parks and central office divisions, including administration, planning and development, marketing and revenue, program services and five regional offices. The division has a $126 million annual budget.

When making the announcement, Webb said the decision was difficult because of the solid bench Butts had built throughout the department, but clear. “He has the right experience, the right background, the respect of his co-workers, a vision for the

future of the parks and the passion to make it happen,” Webb said. “When I was making the transition to my position, I did a small tour of the state parks. I knew Grady was a possibility for the position at that time. He just got glowing reports from everyone we talked to. The governor has met with him previously and gave his resounding endorsement.”

PREVIOUS EXPERIENCE Spann was the first supervisor of Region 5, a region of parks created in 2012. Up until then, all regions were geographically aligned. The creation of this region pulled together the five lodge parks: Petit Jean, Queen Wilhelmina, Mount Magazine, Lake DeGray and Ozark Folk Center. Officials re-

“We hear all the time how surprised people are that a state park lodge could be so nice.”

– Director of State Parks Grady Spann alized that the parks with lodges had unique challenges and wanted to create consistency across the system, from soap to restaurant food to mattresses.

“It’s allowed us to get cost savings from pooling all our spending, and also guarantees the continuity of quality that guests experience when they come to a park,” Spann said. “We hear all the time how surprised people are that a state park lodge could be so nice.”

Spann served as the superintendent of the Ozark Folk Center State Park from 2005 to 2012, of Historic Washington State Park from 2002 to 2005 and of Parkin Archeological State Park from 1993 to 2002.

A 1995 graduate of the Arkansas Law Enforcement Training Academy, Spann is a certified law-enforcement officer/park ranger. He holds a Bachelor of Science degree in parks administration, with a minor in military science from Henderson State

University. He served as a military officer for nine years previous to his tenure with Arkansas State Parks.

Butts said he thought Spann was an excellent choice. “He will do a fantastic job,” the outgoing director said. “I’m leaving the department in good hands.”

Jim Shamburger, a member of the Arkansas State Parks, Recreation and Travel Commission, was on the interview committee.

“This was a good move by Webb,” Shamburger said after the announcement.

“Grady has always been one of our problem solvers. When we have an issue or problem, we assign him to it. It doesn’t take him very long to figure it out and solve it. That’s what we need.”

Richard Davies, recently retired executive director of Parks and Tourism, was on hand for the announcement. He said he thought Spann would be an excellent choice as well.

“He does not shrink from challenges,” Davies said. “He’s been in the system long enough to know roughly how everything works. Part of the reason he’s successful is that he gets input from the players. He’s what we would call a ‘players coach.’ He listens to all the involved parties. Those can be anyone from a housekeeper or maintenance man to the governor or a congressman.”

LARGE SYSTEM Arkansas state parks and museums cover 54,353 acres of forest, wetlands, fish and wildlife habitat, outdoor recreation facilities and unique historic and cultural resources.

The system includes 1,100 buildings (including 183 historic structures), six National Historic Landmarks, a National Natural Landmark and 16 sites on the National Register of Historic Places.

The state parks have 1,771 camp sites, 1,050 picnic sites, 208 cabins, four lodges, eight restaurants, 10 marinas and 415 miles of trails. Eight million visitors annually come from all regions of the country. Park staffs provide over 42,000 education programs, activities and special events to more than 700,000 participants each year.

Established in 1927, Arkansas State Parks preserve special places for future generations, provide quality recreation and education opportunities, enhance the state’s economy through tourism, and provide leadership in resource conservation. www.talkbusiness.net

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Industry PHOTO: SHUTTERSTOCK

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TALK BUSINESS & POLITICS | JANUARY/FEBRUARY 2016

Military Attention Panel established to help state position itself to better support armed service installations, personnel and related manufacturers.

By Steve Brawner

A

rkansas is home to major military installations, numerous National Guard and Reserves units, and military manufacturers.

Gov. Asa Hutchinson would like to keep it that way.

Hutchinson announced the creation of a Military Affairs Committee at Camp Robinson on Sept. 21 with a helicopter behind him and military personnel around him, explaining that the state’s military installations not only contribute to national defense but also $1 billion annually to the state’s economy.

The Little Rock Air Force Base, the state’s fourth largest employer with more than 8,000 airmen and 1,500 civilian employees, contributes more than $813 million to the local economy. The Pine Bluff Arsenal, the state’s only remaining active Army installation, has a $60 million annual payroll, while the Air Force’s 188th Fighter Wing in Fort Smith has a $66 million economic impact with average salaries of $87,000.

Those numbers are why the Military Affairs Committee is being housed in the Arkansas Economic Development Commission. AEDC Senior Manager Becky Rheinhardt has been assigned to support military installations as one of the state’s targeted industry sectors. “I think it is very appropriate that is in that agency. …

As [AEDC Director] Mike Preston knows and anyone in economic development, the first opportunity for growth is that within our own industry,” Hutchinson said at the announcement.

BEING A ‘GOOD PARTNER’ Hutchinson said he was seeding the initiative with $400,000 from his discretionary account to establish it and produce an economic impact study. Using that funding and contributions from private initiatives, Hutchinson said he hoped to showcase what those installations do, generate more community and state support, and hopefully

increase the local installations’ missions – for example, a cybersecurity mission at Camp Robinson – at a time when defense budgets are shrinking and efficiencies are expected. He charged the committee with seeing how the private sector and local communities are tied to military installations and determine what kind of supports and infrastructure are needed.

“The Department of Defense [is] looking at those states that are good partners,” Hutchinson said. “If we’re not a good partner and we’re not supporting our military installations, that’s a downgrade.”

Hutchinson said the $400,000 is one-time funding. Future budgets will depend on the committee’s recommendations and on upcoming needs. Infrastructure projects might require an infusion of funds where the state pays half and the local community pays half.

The 10-member committee is led by Brad Hegeman, president of Nabholz Construction Services, and includes Preston and AEDC Deputy Director Danny Games, Lt. Gov. Tim Griffin and Maj. Gen. (Ret) William Wofford, Arkansas National Guard adjutant general from February 2007 to January 2015.

ans. A number of states such as Oklahoma offer free college tuition to their state’s National Guard members, while Arkansas offers only partial tuition assistance. That imbalance leads some Arkansans living in border areas to enlist in those states’ units, which means they’re not available in case of a state emergency here.

Wofford sees the committee’s mission in broad terms. Among the National Guard’s core recruiting pool of men and women ages 18-25, most aren’t eligible to join because of their education, police record, a morals issue or drug addiction. Societal issues such as low high school graduation and high obesity rates also affect readiness.

The committee is divided into two subcommittees. Wofford is chairing one dealing with the policies the state should develop to keep and support the state’s military installations and manufacturers.

According to Griffin, that committee will be looking at what tax and regulatory policies are needed to, for example, make Arkansas sites more resistant to base closures. The other subcommittee will be considering how to implement some of those recommendations in terms of outreach and public relations.

READY TO DO BUSINESS In addition to supporting military installations, the committee also will support military-related manufacturers.

Hutchinson said in his announcement that his appointment of the commission was not a response to defense contractor Lockheed Martin’s unsuccessful attempts to land the military’s huge contract to replace the Joint Light Tactical Vehicle, which will replace the Humvee. However, he said Arkansas efforts, which included a special legislative session to create an incentive package, sent a signal to the military that Arkansas is ready to do business.

Wofford said in an interview that other states do more to entice and support veter-

BECOMING MORE ‘ATTRACTIVE’ Griffin said some states have full-time entities pursuing new military jobs.

“There’s a lot of things that communities and states can do to make themselves more attractive, and states that aren’t constantly asking those questions can find themselves behind the eight ball if that sort of thing comes up,” Griffin said.

Griffin said the committee held its first meeting the day of the appointment and then met in Fort Smith with the 188th.

Over time, it intends to travel to all the key military installations and manufacturers.

Discussions so far have been open-ended.

In addition to military installations and manufacturers, military veterans are another www.talkbusiness.net

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Industry: Military Attention potential economic development target.

According to the Department of Veterans Affairs, the state has 249,274 of them.

Griffin, a lieutenant colonel in the U.S. Army Reserves who served in Iraq with the

101st Airborne Division, said when an airman retires from the Little Rock Air Force Base after 20 years in service, he or she likely has a lot of technical expertise that the state should try to keep here.

Insights

Bad Boy Mowers Expands Operations

PHOTO COURTESY

OF BAD BOY MOWERS Gov. Asa Hutchinson calls Bad Boy Mowers “a prime example of the entrepreneurial spirit in Arkansas.”

“While still a relatively young company, Bad Boy has grown and continues to thrive here because of its strong leadership combined with a skilled and dedicated workforce,” Hutchinson said.

“We appreciate the company’s ongoing commitment to doing business in Arkansas.”

The governor and other officials were Products produced by Bad Boy are available through dealers throughout the in attendance on Dec. 14 when Bad Boy Mowers announced it is expanding its op- United States as well as Australia and Canada. erations in Batesville. The company is investing approximately $7.8 million in a 68,000 square-foot property and 10 acres across from its existing almost 1 million square-foot, 29-acre facility, and adding approximately 160 new jobs in the future, which will bring its total employment to approximately 750. Its product line includes several different types of mowers, accessories, cutters and culvert cleaners.

“Bad Boy is excited about our continued growth, and our ability to continue adding good-paying jobs to our area,” Bad Boy owner Phil Pulley said. “We are very proud of our partnership with the state of Arkansas, as well as our local community, and look forward to continued growth and success.”

Skywalk Project Gets Two Awards A project – a skywalk for the Mid-America Science Museum in Hot Springs – by the Little Rock architectural firm of Wittenberg Delony & Davidson received both the AIA Arkansas People’s Choice Award and the Members’ Choice Award during the recent annual convention in Hot Springs of the Arkansas Chapter of the American Institute of Architects.

The project team consisted of Chad Young and Jay Clark, with consulting from Jacques Pierini, HSA Engineering Consulting Services and Exploratorium. Their challenge was to create a unique visitor experience that utilized the museum’s natural wooded context and existing facility while reinforcing science education through hands-on learning and adventure play.

The science skywalk is connected by a series of bridges and ramps that change levels and provide unique tree-top observation platforms along the walkway. It is elevated 32 feet above a creek bed.

“A lot of them say, ‘I’m not going to stay here because of the tax rate. … If the people are leaving because your policies are chasing them off, don’t you want them to stay when they are high-tech workers?” he said.

Manufacturer at Booneville Recognized for Safety Record Rockline Industries’ plant in Booneville was recently awarded the Four Year Accumulative Safety Award after employees went without one lost day of work due to work-related injury or illness from Aug. 16, 2011, to Aug. 30, 2015.

Rockline spokeswoman Sarah Siefert said Rockline has more than 300 employees at the Booneville manufacturing plant, which makes personal care products for babies, women and seniors.

The award was handed out by the Arkansas Department of Labor, the Arkansas Insurance Department and the Arkansas Workers’ Compensation Commission.

Company officials attributed the Booneville plant’s accomplishment to Rockline’s behavioral-based safety program and the safety committee comprised of both employees and management. Through the program, employees provide safety feedback after observing work tasks. To ensure communication and training is successful on a team level, Rockline trains production team members as safety coordinators, officials said.

PHOTO BY DERO SANFORD COURTESY OF AIA ARKANSAS

Partially hidden from the main Mid-America Science Museum building, the science skywalk exudes a mysterious quality.

Insights is compiled by Talk Business & Politics Editor Bill Paddack. Possible items for inclusion can be sent to him at wbp17@comcast.net.

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TALK BUSINESS & POLITICS | JANUARY/FEBRUARY 2016

BRING YOUR

INNOVATIONS TO LIFE

Through an innovative partnership with Arkansas Regional Innovation Hub, Manufacturing Solutions is equipped to provide a growing portfolio of services to existing small, medium and large sized manufacturers AND hobbyists, entrepreneurs in Arkansas.

www.arhub.org/product-design-prototyping • 501-683-4410 www.talkbusiness.net

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Industry PHOTO COURTESY OF WALMART

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TALK BUSINESS & POLITICS | JANUARY/FEBRUARY 2016

THE SUPPLY SIDE:

Retail Consolidation Keeps Reducing ‘Vendorville’ Jobs

By Kim Souza

Editor’s note: The Supply Side focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. This feature, which can also be found at TalkBusiness.net, is sponsored by Propak Logistics.

C

onsolidation and divestitures changed the employment landscape in the Northwest Arkansas supplier sector in 2015 with roughly a dozen big deals, the last being a $13.22 billion acquisition of Jarden

by Newell Rubbermaid.

On Dec. 14, Newell, the maker of Sharpie pens, publicly announced plans to acquire Jarden Corp., a consumer product company and curator of Coleman outdoor gear and Yankee Candles. Both companies have large sales offices in Bentonville. Jarden also makes private label items for Wal-Mart and over the years through various acquisitions has become a diversified product supplier.

In October, Jarden bought class ring maker Jostens Inc. for $1.5 billion.

Newell said it expects the deal to expand its presence in food and beverage, baby products and kitchen appliances among key retailers and geographies. The combined company, Newell Brands, will be led by Newell Rubbermaid’s CEO Michael Polk.

Jarden founder Martin Franklin will join the board.

The deal, subject to regulatory approval, is expected to be completed in mid-2016.

Newell Brands said it expects to realize cost savings of $500 million over the next four years.

‘VENDORVILLE IS SHRINKING’ Supplier consultants say the consolidation is likely to further reduce the number of vendor-related jobs in Northwest Arkansas.

Cameron Smith, CEO of Cameron Smith & Associates, said such mergers often have a negative impact on the local employment sector. Smith said the local supplier community workforce has shrunk by more than

CEO of Cameron Smith & Associates

“Some suppliers are keeping their powder dry with regards to adding headcount.”

Clint Lazenby, co-founder of #Onshelf consulting firm in Bentonville, also said higher fees may have caused some suppliers to push the pause button with their WalMart sales teams in Northwest Arkansas. He said it’s not just the higher fees but also the various restructuring efforts at Wal-Mart that likely have suppliers being cautious with employee levels.

In recent years suppliers have expanded their marketing teams to cover social and digital platforms that have gained prominence, and that has led to an expanding local supplier workforce. But recent news that Walmart’s U.S. chief marketing officer, Stephen Quinn, will retire in January and efforts by Wal-Mart to revamp the large division is yet another reason for supplier caution with hiring plans, according to Lazenby.

10% in the past year from consolidations and other streamlining efforts.

In addition to vendor consolidation, a factor reducing vendor sector jobs in Northwest Arkansas are the increased fees Wal-Mart has imposed on suppliers.

“Vendorville is shrinking. Whales swallow guppies and always will, but this past year it’s at an all-time high. We have certainly felt the impact as well,” Smith said in an email.

TRICKLE-DOWN MOVES He also agreed that vendor consolidation leads to changes in the personnel needed in Northwest Arkansas. Lazenby, who previously worked in the local supplier community for almost two decades, has seen his share of mergers and acquisitions. He said most often there is a reduction in team leader positions when two vendors merge.

“I think back to the Cadbury Kraft deal and in that instance the head of supply chain and vice president of sales positions

“Whales swallow guppies and always will, but this past year it’s at an all-time high.”

– Cameron Smith

www.talkbusiness.net

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Industry: The Supply Side at Cadbury were consolidated into similar positions at Kraft. Replenishment jobs and analysts roles were also consolidated,” Lazenby said.

Kraft then acquired Heinz earlier this year and the local Heinz office lost a number of its top management positions. Kraft Heinz has spent the past few months restructuring its top corporate ranks, consolidating two headquarters and recently slashing 2,500

jobs, with 700 of those being corporate jobs.

J.M. Smucker announced plans in February to buy Big Heart Pets for $5.8 billion.

Both vendors have active sales teams in Northwest Arkansas. Smucker said the purchase of Big Heart Pets was an effort for the 118-year-old food staples business to expand into the growing pet category.

Food analyst Farha Aslam of Stephens Inc. predicted late last year that consolida-

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12/10/15 1:34 PM

tions like the Tyson Foods acquisition of Hillshire Brands and others were a way for financially sound companies to grow their sales. She said food company sales have been largely stagnant because people can only consume so much. Aslam said cheap money and a desire to grow top-line sales were the catalyst for the M&A boomlet in the food company sector.

Lazenby agreed that many of the mergers and acquisitions in the local supplier sector have been related to efforts to acquire innovation fueled by cheap money.

STREAMLINING EFFORTS That said, not all suppliers are seeking expansion. Some are pulling back and refocusing efforts.

ConAgra divested its private-label business earlier this year, selling Ralcorp Holdings for $6.8 billion just two years after it bought the company. ConAgra ramped up Northwest Arkansas staff when it purchased Ralcorp, but in October the food company announced a corporate restructuring and the elimination of 30% of its corporate workforce, or roughly 1,500, before the end of 2015. The restructure is expected to reduce corporate overhead costs by $200 million.

Proctor & Gamble divested 43 of its beauty brands to Coty for $12.5 billion in July. The deal will simplify P&G’s nearly $20 billion beauty business. The move reduces it to roughly $14 billion in annual sales and leaves the company more focused on hair and skin care sold at mass retailers like WalMart. P&G officials said the Coty transaction marks the sale or exit of more than 90 brands.

Earlier this year P&G announced plans to sell off Duracell batteries to Warren Buffett’s Berkshire Hathaway. Last year P&G sold Iams and other pet foods businesses that grossed about $1.6 billion in annual sales.

Lazenby said suppliers were likely sitting on pause through the end of 2015 with respect to their Wal-Mart sales teams. He said they no doubt have plans in place for 2016, but are probably waiting until Wal-Mart – and especially Walmart U.S. – finishes its restructuring before they make staffing decisions.

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倀爀漀琀攀挀琀 礀漀甀爀猀攀氀昀 眀椀琀栀 刀攀渀琀攀爀ᤠ猀 䤀渀猀甀爀愀渀挀攀⸀

www.talkbusiness.net

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Industry PHOTO: DOLLARPHOTOCLUB

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TALK BUSINESS & POLITICS | JANUARY/FEBRUARY 2016

Medicaid Expansion Health Reform Legislative Task Force supports governor negotiating changes with federal Health and Human Services Department.

By Steve Brawner

L

egislators have given Gov. Asa Hutchinson the green light to continue negotiations with the federal government for a waiver that would change and perhaps continue the private option in another form he is calling Arkansas Works.

Hutchinson asked legislators to approve the framework for Arkansas Works that he will take to U.S. Secretary of Health and Human Services Sylvia Burwell starting in January. The state must receive a waiver from Burwell’s department to enact those reforms.

The Health Reform Legislative Task Force had been considering changes to the state’s Medicaid and private option programs and was required to issue its first report by the end of December.

The task force was formed by legislation to resolve disagreements over the private option, the program created in 2013 that uses federal Medicaid dollars through the Affordable Care Act to purchase private health insurance for Arkansans with incomes between 17 to 138% of the federal poverty level. The program has helped reduce the number of uninsured Arkansans, but critics say it is a costly expansion of Obamacare that the state will not be able to afford when it starts picking up part of the cost in 2017. By 2020, Arkansas will be responsible for 10% of the cost.

UNIFIED RECOMMENDATION Hutchinson said he needed legislative support to pursue those reforms, and the future of the Medicaid expansion will depend on what waivers Burwell approves.

He asked for a unified recommendation, and no legislators voted no in a voice vote.

However, when they met on Dec. 16, not all legislators voted yes. State Sen. Cecile Bledsoe, R-Rogers, who has voted against the private option in the past, abstained.

She told reporters afterward that legislators were voting merely to give Hutchinson the authority to pursue negotiations and said she remained doubtful that a Medicaid expansion such as Arkansas Works can be

sustained.

Hutchinson said staff members will meet with DHHS officials in January while he will meet with Burwell. A detailed plan will be formed in January and April, followed by action by the task force and then a special session of the Arkansas Legislature.

The motion also supported Hutchinson’s contention that the state must save $835 million in Medicaid costs over five years.

That amount would equal $167 million a year, the state’s share being $50 million to $60 million. That would cover the state’s 10% share of the private option. He said $250 million could be saved with changes to long-term care, $20 million could be saved in the Medicaid dental program, $110 million could be saved in pharmacy benefits, $231 million could be saved in behavioral health, and $232 million could be saved in services for persons with developmental disabilities.

GOVERNOR’S CONDITIONS “My bottom line is, we have to achieve the savings. … Any path to get to those savings has to be credible, has to be measurable, and has to be independently affirmed,” he said.

In addition to the $835 million in savings, Hutchinson said that the Medicaid expansion must reinforce Arkansas values to include encouraging employer-based insurance, acknowledging personal responsibility and ensuring program integrity.

Specifically, the waivers Hutchinson will seek will include a requirement that beneficiaries enroll in employer-based insurance where available rather than staying on Arkansas Works, with the state sharing in the costs and the premiums. Moving those recipients to employer-based health insurance could save $29 million per year.

He said recipients should be referred to work training and should be responsible for paying part of the premium. Recipients with low incomes but substantial assets also could be responsible for part of the costs.

He said he would like to eliminate the ability

of new recipients to be covered for 90 days prior to their enrollment. Instead, coverage would begin the day they enroll. Also, the state needs a path to exit the program if the federal government changes the 90-10 match rate.

“What we’re trying to do is get the best service for the customer at the best price for the taxpayer,” he said.

Hutchinson said waivers have been granted in other states for the employerbased insurance, for the work referral and for recipients with incomes above 100% of the federal poverty level being responsible for part of their insurance premiums. He did not expect the asset test to be approved.

He backed away from an earlier proposal that would temporarily lock out from the program recipients who do not pay their premiums. Afterward, he told reporters, “Accountability is the key, and I’ve always said incentives are better than punitive measures… so I’ve indicated to legislators that expressed some concern about that that we’ll work through what is the right accountability for those type of premium requirements.”

MANAGED CARE Finding the $835 million in savings could include the state adopting a managed care model, or instead it could expand its patient-centered medical home model.

Under managed care, the state would contract with a private company to manage part of the Medicaid program and be responsible for covering costs if they are higher than expected. Under the patientcentered medical home concept, a primary care physician coordinates care to promote effectiveness and efficiency.

Legislators are divided as to their preference for those two models. They voted to ask its consultant, The Stephen Group, to look for at least $835 million in savings over five years using the state’s current patient-centered medical home concept, except in the area of dental care, which most agree should use the managed care model. www.talkbusiness.net

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Industry PHOTO: DOLLARPHOTOCLUB

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TALK BUSINESS & POLITICS | JANUARY/FEBRUARY 2016

Student Debt: Rising, But Worth It? It’s the second biggest form of debt in the U.S., reaching nearly $1.2 trillion in 2014.

By Steve Brawner

B

rittany Stokes has a degree, a job that doesn’t use it and $39,000 in student debt.

The graduate of Arkansas State University in Jonesboro finished school in May 2012 with a Spanish degree, her fifth major in six years. She now works at the front desk of a dentist’s office – a job she likes even though she rarely speaks Spanish there – and has started making $130 monthly payments on her debt.

“To be honest, I picked that degree just to have a college piece of paper that said I graduated, because I never really found something that I said, ‘This is what I wanted to do for the rest of my life,’” she said. “I still don’t know how to answer that question. I like office work, but you don’t need a degree for that, but you also don’t make a lot of money in it, either.”

Student loan debt like Stokes’ has become the second biggest form of debt in the United States, bigger than credit card debt and smaller only than mortgage debt. Citing the New York Fed Consumer Credit Panel and Equifax, the Arkansas Student Loan Authority (ASLA) says student debt has increased from about $350 billion in 2004 to nearly $1.2 trillion in 2014.

Total student loan debt in Arkansas is $9.02 billion, according to the U.S. Department of Education. According to the Institute for College Access and Success, 55% of Arkansas graduates in 2014 left school with an average of $25,344 in student debt, based on data submitted by 11 institutions.

The University of Arkansas led the state in total student debt with $102 million, while Arkansas State students had $86 million, ASLA says.

That doesn’t count those who didn’t graduate and still owe. According to the National Center for Education Statistics, 41% of

students who started college at a four-year school in 2007 did not earn their bachelor’s degree within six years.

COLLEGE COSTS RISE What’s fueling the rise in student debt?

College costs, in large part. According to ASLA and the Bureau of Labor Statistics, tuition and fees have increased 1,225% since 1978-80 – twice as much as medical care, which increased 634%. Meanwhile, state funding for colleges in Arkansas has been flat.

The issue has drawn the attention of state legislators. State Rep. Greg Leding, D-Fayetteville, authored a study of campus data that is being conducted by the Bureau of Legislative Research that will be published

by July 1, 2017.

Leding said universities too often are in an arms race to attract students by spending more and more money on campus amenities. He’s received letters from University of Arkansas students who want the school to build a lazy river water pool on campus because Louisiana State University and the University of Missouri have one.

“To go asking the campus to build a lazy river, I mean, what kind of value does that have when it comes to your education, right?” he asked.

Leding hosted a town hall meeting on Fayetteville’s campus about the issue and hopes to have more meetings at other colleges. Rachel Spencer, a UA graduate student who helped organize that event, said students are talking about the issue.

“We hear a lot of bleak comments, honestly. … I think people are becoming more and more aware of this issue,” she said.

“Students are becoming increasingly aware of it, and they’re also becoming increasingly aware of how it impacts their future and

their present, if that makes sense. Education is such an investment, but the return on that investment I think is a little bit uncertain for some of us these days.”

IT DOESN’T GO AWAY Student debt in some ways is among the most and least burdensome debts to carry.

Unlike other forms of debt, it doesn’t go away as a result of bankruptcy. On the other hand, a repossessor can’t haul away a diploma, so when a new graduate is struggling to make ends meet and it’s either the car payment or the student loan, the car payment comes first.

“What we see over and over is that former students, they think if they run long enough, that the federal government will forget about it, but the federal government never forgets, and that debt will always be there until it’s satisfied by the student,” ASLA’s Williams said.

Students have a six-month period after leaving school before they must start making payments and are considered to be in default at 360 days delinquent. The good news is that default rates have been coming down. For the 2012 cohort, 14.5% of Arkansans were in default, compared to a national rate of 11.8%. In 2010, the Arkansas default rate was 19%, while the national rate was 14.7%. UAMS had the lowest default rate in 2012 at 1.1%, while the Crossett School of Cosmetology had the highest rate at 30.6%.

Williams said that when colleges experience an increase in default rates, it can put their federal financial aid plans at risk. As a result, they have taken steps to discourage over-borrowing.

Chuck Welch, Arkansas State University System president, said colleges and universities understand the burden that student debt places on students. He said financial www.talkbusiness.net

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Industry: Student Debt aid officers counsel students on how much money they need and what their options are. But schools are limited by federal regulations.

“We cannot force a student to take less money than they want to,” Welch said.

“One of the things that we hear repeatedly now is that people used to get money so that they could go to college, and now they go to college so they can get money. And unfortunately, we have some of that where people are simply coming so that they can get access to loans that don’t require them to have a good credit history or anything of that nature. And then they take out far more than is necessary to get the degree.”

VALUABLE INVESTMENT Welch knows what he’s talking about from personal experience: He only paid off his own student loans in 2014. After earning his undergraduate degree with no debt, he attended grad school at a private university and racked up about $60,000 in student

loans by the time he earned his doctorate in 2003. Looking back, he said he took a larger loan than necessary and then had to pay it back one month at a time. He said colleges and universities could do a better job of counseling students on the front end when they start school, but, “that’s a hard conversation to have with an 18-year-old in many cases, and I’m example number one of that.”

While Welch doesn’t deny that student loan debt is a problem, he said average student loan rates are skewed by those on the upper end, like medical school students.

Welch points out that a college degree earned with $25,000 in student debt is far more valuable than a $25,000 pickup truck, which many students won’t think twice about obtaining a loan to buy. College graduates have lower unemployment rates, they earn more, they live longer, they need less government help and they are far less likely to be incarcerated, he said.

“I don’t think there’s any question that it’s the best investment an individual can make

in their lifetime,” he said.

Unlike Welch, Stokes’ $39,000 debt has not yet led to the presidency of a university system. Her fiancé, who doesn’t have a degree, makes more money than she does, as does her stepfather, who did not finish high school. “I know my life would be different,” she said, “but financially my life would probably be a little bit better if I wouldn’t have gone to college because the degree I have, I don’t have to have for the job that I have, but I have the debt.”

On the other hand, she did learn to speak basic Spanish and spent a semester in Spain, which was an amazing experience. So in the end, even though it took her six years, and even though she now owes $39,000, she doesn’t have regrets.

“Just the experience of having college, I think was worth it,” she said. “Honestly, right now, if you said if you could really go back in time and not go to college, I wouldn’t say that. For me, I don’t think that college was a complete waste of time.”

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TALK BUSINESS & POLITICS | JANUARY/FEBRUARY 2016

PHOTO COURTESY OF ARKANSAS STATE UNIVERSITY

Insights

Construction, including the installation of steel beams, is under way for various buildings at the ASU campus in Queretaro, Mexico.

Videos Highlight Innovative Ideas

The state Education Department has launched a monthly video series that highlights innovative educational opportunities at Arkansas public schools. The videos were created to share innovative ideas in order to duplicate or expand these practices across the state. The first video in the Innovation in Arkansas Education series features the Academies of West Memphis in the West Memphis School District, which is partnering with local businesses in its aviation mechanics and culinary arts programs. To view the videos, visit the department’s website at www.arkansased.gov and click on the video button.

Arkansas Firm Among List of Top Contractors The Systems Group, a contracting firm at El Dorado, has been named one of the Top 600 Specialty Contractors nationwide in an annual ranking report released by Engineering News-Record (ENR). Now ranked at 268 – 50 positions higher than last year at 318 – it is the highest-ranked Arkansas firm on the list and has been part of the Top 600 for four consecutive years. The Systems Group has contracting offices in El Dorado, Blytheville, Decatur, Ala., Crawfordsville, Ind., Ghent, Ky., Columbus, Miss., and Cofield, N.C.

Clinton Gets Dole Leadership Award

SHUTTERSTOCK

The Robert J. Dole Institute of Politics at the University of Kansas recently honored former President Bill Clinton with its 2015 Dole Leadership Prize.

“President Clinton’s presidency included strong leadership and bipartisanship, traits that make him a worthy recipient of the Dole Leadership Prize,” said Bill Lacy, director of the Dole Institute. “Much of his work as president – including his balancing of the budget and efforts to reach across the aisle – mirrors the mission of the Dole Institute and the values of Senator Dole.”

Former Sen. Bob Dole said that he was proud that Clinton received the award. “I speak with the president now and then, and we have become friends over the years,” he said.

Construction Progresses On ASU’s Mexico Campus Arkansas State University Chancellor Tim Hudson says construction activity has escalated on the privately funded, $75 million ASU campus in Queretaro, Mexico.

Arkansas State University Campus Queretaro (ASUCQ), a private business foundation in Mexico, has acquired 2,125 acres for a comprehensive community development plan near Queretaro. The 370-acre campus will be the focal point of the project, which will include commercial, residential and recreational components for up to 70,000 residents.

“The campus layout is now visible with substantial earth work completed, steel beams going up for the Student Union and multiple levels of infrastructure being installed,” Hudson said.

The Mexico campus incorporates the ASU brand and logo and the university’s curriculum. Courses will be taught in English by credentialed faculty approved by Arkansas State, and degrees will be jointly recognized in both Mexico and the United States.

Little Rock Set to Host Development Meetings

PHOTO COURTESY ARKANSAS DEPARTMENT OF PARKS AND TOURISM

Little Rock will host two upcoming international economic development conferences. The Site Selectors Guild plans to hold its 2016 Fall Forum in Little Rock in October. It is an international gathering of economic developers and member consultants to discuss industry trends, challenges and related topics.

“Arkansas is a small state with a big story to tell, and we have found that when people come to visit, they always leave impressed,” Arkansas Economic Development Commission Executive Director Mike Preston said. “Hosting the Site Selector’s Guild Forum will give us the opportunity to showcase the advantages Arkansas has to offer to companies and site consultants on a global stage.”

The International Economic Development Council’s 2017 Future Economic Forum will be held June 4-6, 2017, in Little Rock. With more than 4,500 members throughout the world, IEDC members promote economic well-being and quality of life for their communities by creating, retaining and expanding jobs that facilitate growth, enhance wealth and provide a stable tax base.

For more information, visit www.siteselectorsguild.com and www.iedconline.org. www.talkbusiness.net

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Feature

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ANOTHER

ELECTION YEAR

BRINGS ITS OWN

QUESTIONS Earlier primaries, Republicans challenging each other, prospects for Democrats – 2016 could be an interesting year or more of the same.

By John Brummett The author of this article is a regular columnist for the Arkansas Democrat-Gazette.

ILLUSTRATIONS BY SHAFALI ANAND

A

s we embark on another big election year, three questions dominate the specific Arkansas experience.

One – Now that we have moved our primaries to March 1, ostensibly to accommodate the presidential campaign of former Gov. Mike Huckabee, will Huckabee remain a viable or even active candidate by March 1? www.talkbusiness.net

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Feature: Election Year Two – For all the worry about pragmatically prone Republican state legislators getting opposed and unseated by more conservative Tea Party-style challengers in the primary – challengers who would be funded by Koch brothers’ groups or the even-more-conservative Conduit for Commerce – do those challenges really pose pervasive threats, or even much exist?

Three – Whither the Arkansas Democrats? Can they still compete much – if at all – outside a few liberal wards and the black community, and, if so, by what tactics and messages?

So to dispense first with perhaps the least consequential of those questions: Huckabee remains formally endorsed by most of the state Republican Party’s establishment – as a courtesy, mostly, as well as a convenience for someone like Gov. Asa Hutchinson who didn’t want to be bothered with having to endorse someone else.

But a state Republican political consultant, speaking not for attribution, says most AAD Ad, Jan 2016.ai 1 12/21/2015 1:59:24 PM

of those establishment figures – including all the state constitutional officers and all of the Washington delegation except for U.S. Sen. Tom Cotton – have begun to look for alternatives.

“Huckabee has to win Iowa to stay in the race,” the consultant says.

CAN HUCKABEE WIN ARKANSAS? Polls show Huckabee scraping the bottom nationally and in Iowa, where he won in 2008. But Huckabee’s contention is that polls engage people who answer telephones, not people so engaged and motivated as to venture out on a cold, snowy night in Iowa to stand in a caucus for a candidate.

The evangelicals of Iowa stood for him in Iowa in ’08, and for Rick Santorum in 2012.

Thus they sustained for a while, if for only a while, these two religion-based candidacies.

This time Iowa evangelicals seem – from the polls, at least – to be favoring Ben Carson and Ted Cruz and, maybe, even Donald Trump to an extent.

Actually, the emerging question for Arkansas on March 1 regarding Huckabee is two-fold: Beyond whether he will remain active or viable by March 1, it is whether he would necessarily win the state even if still in the race.

Most likely the goodwill toward him among the state’s Republican establishment would net him a courtesy plurality, most agree.

His main rival in Arkansas seems to be Cruz, whom Huckabee’s advisors have long identified as the former governor’s chief competition for evangelicals and arch-conservative outsiders. But there also is evident support in Arkansas for Trump, Carson and Marco Rubio, the latter of whom employs longtime Arkansas Republican operative Clint Reed – a partner in the Impact Management firm of Little Rock – as a key operative in Iowa.

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TALK BUSINESS & POLITICS | JANUARY/FEBRUARY 2016

lican legislators walking around with a dark cloud over their heads, which goes much like this: If these Republican legislators cast a vote they know to be right or best or the most reasonable of bad choices, such as to endorse the private option form of Medicaid expansion or direct additional funding to the highway system, then they risk opposition in primaries from arch-conservative forces who don’t countenance going along with government-as-usual and who will brand them, crazy as it might seem, liberal.

That actual circumstance has arisen only scarcely, which is not to say the scarce occurrences aren’t interesting.

In this year’s GOP primary, there are perhaps a dozen cases of contested primaries pitting really conservative Republicans against really, really conservative Republicans – that being the nature of the choice.

But the specific scenario of a sitting Republican legislator casting a conspicuous vote for the private option and then drawing worrisome primary opposition because of

that vote actually exists on this year’s ballot in only two cases.

Both instances can be found in the 35-member state Senate, and both are rather classic examples.

For the current year, though, all reasonable indications are that the stranglehold will remain firm.

The private option exists because, in the fiscal session of 2014, state Sen. Jane English of North Little Rock cast the clinching 27th

vote, locking down the essential threefourths majority, after she extracted a major policy concession regarding her special interest – vocational education and training.

She’d long argued that the state’s vocational education program was incoherent and ineffective. So when told by leading Republican state legislators and then-Gov. Mike Beebe that they would impose some of her reforms if she would vote for the private option, she decided to go along – only because, by her reckoning, Medicaid recipients would be given better job-training services to enhance their chances of getting off the private option.

OPPOSING ENGLISH So now comes first-term state Rep. Donnie Copeland of North Little Rock, an arch-conservative preacher and private option detester, to oppose English’s re-nomination for the Senate. He says it’s because of that vote, or, more precisely, because English got elected promising to oppose Obamacare

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Feature: Election Year and then didn’t keep that promise.

She was “elected on one guise, one ideology, and then didn’t follow through,” Copeland says.

As Copeland sees it, English traded her vote to expand government by extracting a “pet” project.

She actually made a trade for a “pet” project not in the rawest political sense, meaning for a specific favor for her district or for specific money for state installation or local capital improvement. Instead she traded for a statewide policy she had long believed in.

Copeland’s first campaign finance report showed a long list of maximum personal contributions from family members and associations of Joe Maynard, a businessman in Fayetteville who founded a network of nonprofit conservative organizations – primarily known as Conduit for Commerce – that opposes expanded government and is notable for being even less tolerant of government programs than the Koch

brothers’ Americans for Prosperity.

It seems unfair, Copeland says, to make something of that, when Conduit for Com-

John Boozman

merce is “not seeking anything other than a policy it believes in, and Jane is getting money from groups and health-care

providers who stand to benefit financially from expanded Medicaid.”

The other classic example is a primary challenge to state Sen. Eddie Joe Williams, former mayor of Cabot and a consistent private option supporter. Earlier rumors had state Rep. Joe Farrer of Jacksonville, an outspoken private option opponent, thinking of making the race against Williams. In the end, a conservative quorum court member in Lonoke – auto salvage businessman R. D. Hopper of Cabot – filed against Williams.

Gov. Asa Hutchinson, taking sides for the incumbent pragmatists against the challenges from the right, has endorsed both English and Williams.

NOW TO THE DEMOCRATS Finally, to the question about the relative ineptitude of the state Democratic Party in the wreckage of the anti-Obama Republican revolution since 2010: The answer seems to be that the Democrats are rather substan-

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tially inept.

Democrats could muster only a token candidate in only one of the four congressional districts – in Dianne Curry in opposition to Congressman French Hill in the Second District of Central Arkansas.

The other three Republicans got a free pass except from Libertarians, who managed to do what Democrats could not and produce ballot presences.

In the state House of Representatives, no one on either side expects significant change in the current Republican advantage of 6435. Democrats point out that three of those 35 are now open seats, meaning, by their account, they are only defending 32 seats, not 35.

That doesn’t sound particularly confident.

Most projections are that Democrats are at mild risk of dipping below 30 seats in the House; could get close to 40 seats by an optimistic view that would restore some viability, and, most likely, will wind up between 30 and 40 and closer to 30.

AHCA ad half page horizontal.pdf

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Democrats tout as their best prospects for actual gains: Copeland’s abandoned seat in North Little Rock, being sought by

Conner Eldridge

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Nate Looney, a young Jonesboro lawyer and supposed rising Democrat who is challenging a Republican incumbent, Brandt Smith, who won a relatively close race amid the GOP sweep of 2014; and Dorothy Hall of Sheridan, who narrowly lost a Democratic primary two years ago to Mike Holcomb of Pine Bluff, who subsequently got elected and then switched to the Republicans.

In all cases, the Democratic candidates present themselves as more honorable. They stress that they would go to Little Rock to take care of constituents, not venture into divisive national issues, which, of course, are devastating to Democrats in Arkansas.

On the Senate side, there seems to be little to no chance for the Republicans’ 24-11 advantage to be disturbed. The fun is in those aforementioned Republican primaries for English and Williams.

One Democratic state senator, Bobby Pierce of Sheridan, has potentially serious competition in Republican Trent Garner of El Dorado.

Quality care for

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Feature: Election Year EMERGENCE OF ELDRIDGE The year’s marquee Democratic candidacy is the one for the U.S. Senate by a preppy 38-year-old former U.S. attorney, Conner Eldridge.

He’s a Davidson College graduate who hails from eastern Arkansas but has spent his recent adulthood in the western part of the state. He formerly worked as a staff aide to Blanche Lincoln and Marion Berry.

He says he’s running for the Senate because he wants to make a difference and you can’t do that in the House.

He has distinguished himself, and left the Democratic base uninspired, by staking out rightward positions on Obamacare, Planned Parenthood and Syrian refugees. But in a recent interview he worked hard to make a case that he is different from the amiably nondescript Republican incumbent – U. S.

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6/16/2015 10:16:58 AM

Sen. John Boozman.

Eldridge stressed that he wanted to improve the Affordable Care Act, not repeal it; de-fund Planned Parenthood only if assured of replacement reproductive health services for women; and not end altogether the nation’s acceptance of Syrian refugees.

Beyond that, he says he supports a path to legal status for illegal immigrants, the hate crimes law and a “live and let live” attitude on social policy, including advocacy for protections against employment discrimination on account of sexual orientation.

FAMILIAR FORMULA Eldridge says he’s “old school meets new school,” meaning a Democrat in the Arkansas tradition of populist conservatism but new in that Arkansas voters are sicker than ever of politics as usual, which he says Boozman practices on a straight-line party basis, but that he will not embrace on the Democratic side.

A source says Eldridge seems convinced he can compete if he can lock down Democrats and neutralize and win over some Republicans.

The problem for him is that the formula is not new. It worked for years for Democrats in Arkansas, but seemed to lose validity about 2010 with the state’s strong backlash against Obama and the transformation of media and politics in Arkansas in a way that made politics about generic national issues rather than peculiar in-state ones.

Even so, there is speculation among Democratic insiders that Eldridge conceivably could creep to the mid-40s – with Hillary Clinton, not Obama, on the ballot – and, by that relatively decent showing, set himself up as a key player in the state Democratic Party’s future should the Republican takeover begin to lose its stranglehold.

For the current year, though, all reasonable indications are that the stranglehold will remain firm.

Reports both of serious intraparty Republican division and continued Democratic vibrancy appear to have been overly worrisome in one case and overly wishful in the other.

Commentary

Arkansas’ Economic Outlook: Continuation of Recent Trends

By Dr. Michael R. Pakko Dr. Michael R. Pakko is the chief economist and state economic forecaster at the Institute for Economic Advancement at the University of Arkansas at Little Rock.

F

or some time after the Great Recession of 2008-09, the recovery of the Arkansas economy had been lagging behind the rest of the nation, but signs of accelerating economic growth and job creation have emerged that bode well for the outlook. In my forecast for 2016, I anticipate that these trends will continue, with the state experiencing positive but modest economic growth.

The most prominent sign of an improving economy has been job creation. Although payroll employment rebounded in the immediate aftermath of the recession, cumulative job growth during 2012 and 2013 was essentially zero. Since mid-2014, however, employment growth has accelerated, with recent year-over-year increases exceeding 20,000 net new jobs (1.7%).

The Arkansas economy appears poised for modest, trend-related growth during 2016.

UNEMPLOYMENT RATE DOWN Employment in manufacturing has remained stagnant, but service-providing sectors have been expanding and employment in the construction sector has recently surged. Meanwhile, the unemployment rate has fallen to near 5% – a level consistent with long-run full-employment. The unemployment rate might fall below 5% in coming months, but is likely to stabilize near recent levels.

Personal income growth has roughly kept pace with the national average, but the composition of that growth in Arkansas has been skewed. Income from property ownership (dividends, interest and rent) has increased sharply in recent years, while the slow pace of job creation has held back the growth of wage and salary income. The recent acceleration in job growth and upward pressure on wages is expected to show through to higher growth rates of wage and salary income in coming months.

This improvement in wage growth should, in turn, boost consumer spending. We’re already seeing signs of improvement in that regard, with growth of Arkansas Taxable Sales running in the 4 to 5% range since late 2014. Low gasoline prices have helped to boost household purchasing power as well, contributing to the improved momentum of consumer spending.

LOOK FOR GROWTH IN HOME SALES Another area where we have recently seen clear improvement is in home sales. According to data from the Arkansas Realtors Association, new and existing home sales have been increasing for the past two years, and were on pace to end 2015 at around 10% growth. Low mortgage rates have helped boost home sales and should continue to help support rising home sales figures during 2016 as interest rates slowly rise toward more normal levels. In fact, my forecast projects double-digit growth in home sales for 2016 (but tapering after that).

More generally, my forecasts for 2016 project a continuation of recent trends. Employment growth in 2015 is likely to be revised downward slightly, with the final data showing a net gain of 14,000 jobs (1.2%).

Employment growth in 2016 is projected to be slightly higher at 15,600 jobs (1.3%). Employment in manufacturing should improve somewhat, but most of the projected employment gains will be in the areas of Professional & Business Services and Education & Health Services.

Boosted by improving wage and salary growth, personal incomes are expected to rise 3.7% in 2015. Adjusted for expected inflation, this projection represents a growth rate for real personal income of just under 2%.

Along with continued low gasoline prices and some degree of pent-up demand, the improvement in wage income will also help boost consumer spending. Arkansas Taxable Sales are forecast to increase by 4.9% in 2016.

Even after adjusting for inflation, this projection represents a real growth rate of approximately 3%.

There is always uncertainty associated with economic forecasts. Unexpected events might reshape the outlook dramatically. Overall, however, the Arkansas economy appears poised for modest, trend-related growth during 2016.

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Commentary

Playful Golden Fleece Award Shows the Need for Reforms

By Congressman French Hill Congressman French Hill, R-Little Rock, represents Arkansas’ Second District. He is a member of the House Committee on Financial Services, the Subcommittee on Capital Markets and Government-Sponsored Enterprises and the Subcommittee on Oversight and Investigations.

I

n the 1980s, when I was a staffer working for then-Texas Sen. John Tower, I saw first-hand that government oversight of the spending of taxpayer dollars could be done in a way that created public excitement.

Late-Democratic Sen. William Proxmire of Wisconsin had become well known in Washington for his Golden Fleece Award, an ignominious trophy given to government agencies that wasted money in foolish ways.

The Golden Fleece Award became a staple in the U.S. Senate during the 1970s and 1980s, and then-West Virginia Sen. Robert Byrd once stated that the awards were “as much a part of the Senate as quorum calls and filibusters.”

When I ran for Congress, I said I would work to bring fiscal sanity back to the federal government. This is a serious undertaking, but that doesn’t mean it can’t be done through playful devices as I have done in reviving the Golden Fleece Award. This award again has the opportunity to serve as an important reminder to taxpayers about the need for necessary, common-sense reforms to our federal spending.

It is already proving to be a valuable part of the process …

SPOTLIGHTING $17 BILLION IN WASTED SPENDING In 2015, I handed out Golden Fleece Awards to six different departments and agencies. The award has highlighted almost $17 billion in wasted spending, a number that is sadly only a fraction of the actual amount wasted by the government each year.

My first Golden Fleece was to the U.S. Department of Veterans Affairs (VA) for its mishandling of an $8 million solar panel project at the Little Rock Veterans Affairs Medical Center (VAMC). In February 2012, VA received that money to build a 1.8-megawatt solar photovoltaic (PV) system in the parking lot of the VAMC, but they were never even turned on and were torn down in 2015 to make way for a parking structure.

This was a local problem with national implications, and after hearing

about the solar panel debacle on the news, my staff and I began to further investigate, finding that there were 91 other solar PV system projects across the country listed under the VA’s Green Management Program. Not only did this government failure receive a Golden Fleece Award, but it also prompted Sen. John Boozman to join me and call on the VA Office of the Inspector General (OIG) to investigate all 91 solar PV system projects listed under the VA’s Green Management Program.

It is remarkable how often I am asked about the status of the solar panel investigation. Some of this continued interest can be attributed to the outrageousness of the project itself, but there is no doubt the majority of it came from the Golden Fleece Award. The award has been successful in doing what it is intended to accomplish by making Arkansans more aware of some of the most shocking failures of their federal government.

ENCOURAGING SENSIBLE LEGISLATION Another example of a Golden Fleece success story was July’s. The Federal Housing Finance Agency (FHFA) was awarded a Golden Fleece for its approval of $4 million in raises for the CEOs of the government-sponsored enterprises (GSE) Fannie Mae and Freddie Mac. These GSEs have received almost $200 billion in government assistance since 2008, by far the costliest taxpayer bailout resulting from the financial crisis. What was even more puzzling about these raises was the FHFA approved them despite opposition from Congress, the U.S. Department of Treasury and even the White House.

Fortunately, after much uproar from Congress, the House and Senate passed, and the president signed into law the Equity in the Government Compensation Act, which caps the pay of the CEOs of these two GSEs. I was delighted that a Golden Fleece Award helped spur sensible legislation that enjoyed bipartisan support through Congress and all the way to the White House.

The Golden Fleece Award is not a silver bullet for solving our government’s financial woes, but it is already proving to be a valuable part of the process of reforming the federal government, and I look forward to continuing to use it to identify the most egregious examples of government waste.

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September/October 2014

Story Topic Story Topic Story Topic Story Topic Story Topic Story Topic

OUR VOICE

Marlon

Blackwell ON ARCHITECTURE & LIFE

Talk Business & Politics is a multi-media news organization focused on business and politics in Arkansas. Our new statewide platform is the result of a merger between Talk Business & Politics and The City Wire. With a combined 24 years of being news leaders in their respective areas, the newly merged Talk Business & Politics brand has become the most respected and resourced media in the industry.

Content is driven by Roby Brock and Michael Tilley (The City Wire) and their team of veterans. The recent merger created the only media company in the state offering multi-platforms dedicated to business and political news, including niche regional coverage and insights into Arkansas’ top economic sectors.

Brock is the host of Talk Business & Politics, which airs Sunday mornings at 9:30 a.m. on KATV Channel 7, having interviewed more than 3,000 business and political leaders. He also moderates a radio program which airs on NPR affiliates statewide. Supporting staff, contributors, and content partners represent the most knowledgeable and experienced in their fields.

Digital platforms such as Talkbusiness.net, daily and weekly E-Newsletters, Facebook, Twitter, LinkedIn, YouTube and iTunes allow news and information from around the state to be made accessible as it is happening and keeps those most affected in the know.

OUR AUDIENCE

Our audience leads with CEOs, presidents and primary executives of companies statewide. In addition, business owners of $2.5+ million in sales revenue, elected officials at all levels, trade association executives and higher education representatives also receive our publication and products.

Many of our readers and viewers are also the news makers driving business and political headlines in Arkansas, nationally and internationally.

The magazine edition reaches affluent decision-makers across the state and is an essential resource guide for new entrepreneurs and leaders at all levels of government. With a dedicated 12,000 copies bi-monthly, readers receive an in-depth look at business and political profiles, the most current developments in key regions and industries, plus corporate and policy strategies.

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ADVERTORIAL

Medicaid Expansion Is Unaffordable, Regardless Of Its Name

By David Ray

David Ray is the State Director of Americans for Prosperity – Arkansas.

The week before Christmas, Governor Asa Hutchinson spoke before the healthcare task force and reiterated his support for continuing the Obamacare Medicaid expansion program known as the Private Option. But as the Governor previously noted, the phrase “Private Option” has become politically toxic, so his proposed re-branding of the program will showcase an even more benign-sounding name: “Arkansas Works.” But instead of re-branding this massive expansion of government, our state should formulate a plan to end the Medicaid expansion experiment, not continue it indefinitely.

Obamacare’s Medicaid Expansion, whether it’s called Private Option or Arkansas Works, is fiscally unsustainable. In just a few short years, our share of the bill for this program is coming due. When that bill arrives, our state will have to face difficult choices. We’ll have to choose between raising taxes to pay for this new welfare program and cutting funding to core functions of government like roads, education, and public safety. Voters won’t be particularly excited about either option.

The state is already grappling with how to pay for everything from highways to prison overcrowding to foster care. Paying for essential needs won’t get any easier if we permanently extend a costly new entitlement program for able-bodied, working aged adults.

The Governor acknowledges that our share of this program will cost at least $50-60 million per year of General Revenue.

But that’s under the rosiest possible scenario. What happens if enrollment continues to surpass government projections, as it already has both in Arkansas and almost every state that has expanded Medicaid under Obamacare? What happens

if the federal government, who isn’t exactly well known for keeping their promises, decides to pull back on the 90%-10% funding match with the states? Everyone from Paul Ryan on the right to Barack Obama on the left has indicated it’s just a matter of time before that generous match rate goes away, leaving Arkansas taxpayers holding the bag.

That’s why Governor Hutchinson has proposed finding $835 million in savings from traditional Medicaid so that the state can continue to provide benefits to the expanded population.

There is undoubtedly savings that can be achieved from traditional Medicaid, and the Governor and the legislature should be commended for taking the effort to find it. But take a big-picture look at what is happening: the state is already being forced to find savings from Medicaid, a program intended for the truly needy among us, in order to provide subsidized insurance to a population of healthy, able-bodied, working aged adults up to 38 percent above the federal poverty line. This is the perverse incentive of Obamacare: it’s more cost-effective for states to make cuts to the truly needy than it is to Medicaid expansion.

It’s also worth mentioning that the Medicaid expansion, which is one of the central pillars of Obamacare, is a product of Washington’s proclivity to spend money it doesn’t have.

Our federal government is borrowing the money for this program from countries like China. Meanwhile, our national debt continues to climb past $18 trillion, and President Obama himself admits the Medicaid is one of the single largest drivers of our national debt.

The reason most conservatives opposed Obamacare’s Medicaid expansion wasn’t because they didn’t like the name.

It’s because the program is fundamentally unsustainable.

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Leadership

Sixth Sense:

A Tough Decision Six business leaders give us their thoughts on making the call to shut down a division, operation or company, knowing the ramifications for layoffs and lost revenue.

By Bill Paddack

Randy Zook

Donna Townsell

Paul Vitale

Only change is constant. That maxim is nowhere more pertinent than in a business setting. Markets change, customer expectations change, supplier prices change, government regulations change and on and on.

It’s a daunting task to adapt and continue to thrive among all these shifting forces. And sometimes a business just can’t keep up and consequently must make major adjustments.

When a plant or office must be closed and its employees let go, the owners or managers usually do everything reasonable to mitigate the impact. Severance pay, transfers to other locations and extended benefit programs may be part of the total effort.

Economists call the pain of these dislocations the “creative destruction” of freemarket capitalism. Businesses fail because of a host of reasons not the least of which is disruptive technology. Think of the classic example of buggy whip makers when automobiles started replacing horses for transportation. Bad news for buggy whip factory employees, but great news for most others. Progress and improvement can often entail short-term pain for some.

The best way to prepare for potential dislocation is just that: expect it and prepare for it. Acquiring new skills, saving for the rainy day, being prepared to move to new opportunities are just a few smart steps we can all take.

Centennial Bank has completed 14 acquisitions since 2010. With a bank acquisition you encounter two potential areas of duplication. One is back office personnel and the other could be branches when we acquire within our footprint.

You don’t see two pitchers on the mound at the same time or two catchers behind the plate. So there are some obvious duplicate positions with any acquisition. The philosophy at Centennial Bank is to go in day one and start having honest dialogue with the employees about what positions are going to be available. Attrition handles some of the duplication for us. In many cases, a person has transferrable skills and we can find another position for them. We have never had a “layoff ”; we’ve only dealt with duplication.

In the case of a branch closure, we evaluate proximity, the building, foot traffic and make the decision for the bank that will glean the most profitable and convenient location. Closing a branch doesn’t necessarily equate to lost revenue. Even if there is a reduction in revenue the evaluation is how much reduction, if any, and how does that number compare to the expense savings of closing the branch.

Making the call to cease business is one of the most gut-wrenching decisions any high-level leader will ever make.

Over the years of working with industry executives, I have learned that the most common reasons for an entity to halt operations are: financial instability, being outpaced by the competition, not fulfilling its stated mission, or its product or service is no longer relevant.

When the pendulum begins to swing in a negative direction, it is necessary to define the reality of where the organization stands, while recognizing the impact any decision made will have on its loyal employees.

Throughout this process, putting in place the best possible exit strategy for everyone concerned is imperative. Don’t get sidetracked by the short-term ramifications; rather, envision the long-term results making a change can produce. Communicate this approach to your team.

Keep in mind, setbacks can be setups for enormous growth. Those who not only survive but thrive throughout the reinvention process are resilient during setbacks, admit mistakes while learning lessons, and act boldly and decisively when making adjustments. Give yourself and your team permission to move ahead, while recognizing that in the long run, new directions create new opportunities.

President & CEO Arkansas State Chamber of Commerce and the Associated Industries of Arkansas Little Rock

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Senior Executive Vice President of Corporate Efficiencies Home BancShares and Centennial Bank Conway

TALK BUSINESS & POLITICS | JANUARY/FEBRUARY 2016

Professional Speaker & Author Vital Communications, Inc. Little Rock

Dr. Ed Bashaw

Kristi Dannelley

Mike Steely

As a dean of a state-supported university, I take the stewardship of taxpayer and student resources very seriously. At times a program or unit needs to be shut down.

Because these decisions can be very emotional, I find it valuable to have a set of questions ready which help guide the decision. They are: 1) Does the program meet the state minimums for production? If not, there is no need to spend time on this decision because the state mandates the program be closed.

2) Is this program mission-critical or at least mission-supportive? “Legacy programs” may exist from previous regimes that are no longer connected to the mission.

3) Can this program be self-sustaining? In the early stages of a program, unsustainable investments may be made at launch. Deans should determine whether the program will be “profitable” without the investments.

4) Does it serve as a useful “loss-leader”?

A good example of a loss leader would be a doctoral program that is unprofitable but that attracts research grants.

In today’s print world, things are always changing. That’s just one of the reasons why Magna IV is constantly investing in new technologies – from digital printers to online print automation tools – to best serve our customers’ needs.

As we acquire new technologies or businesses, however, we must take a serious look at how it impacts our operations and staffing needs.

At Magna IV, we approach each situation like a puzzle. We calculate the volume we’re gaining from the acquisition or efficiencies expected from new equipment against the updated forecast for manpower hours needed.

In the case of new acquisitions, we also take into account a certain percentage of lost sales due to conflicts or existing relationships.

Like any company, we are sometimes forced to make tough decisions like layoffs in order to preserve our return on investment. While challenging, we must do what’s best for our clients, employees and company.

As an entrepreneur, one of the most important things you can do is get your head out of the emotional sand when it comes to the performance of your company.

I’ve seen many young companies, including one of my own a few years ago, that ignored problems with a lack of viable revenue model and continued down a failed path. This ends up being a very costly mistake financially and in terms of future business relationships. Entrepreneurs by nature have a sense of independence, which can be good, but you’re not going to have every answer and you’re going to make mistakes. Make sure you pay attention to them, seek a mentor’s advice on improvements to make and take corrective actions.

Even if that means a complete shut down or total shift in strategy.

Some of the highest growth companies today – Twitter, PayPal, Starbucks, etc. – came from a “pivot” in direction.

Dean, College of Business Arkansas Tech University Russellville

Chief Operating Officer Magna IV Little Rock

Co-founder Sparkible Little Rock

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Executive Q&A PHOTO COURTESY OF BRITTANY HODAK

Besides being the co-founder of ZinePak, Brittany Hodak is also a co-founder of the charity Per Diems Against Poverty.

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TALK BUSINESS & POLITICS | JANUARY/FEBRUARY 2016

Brittany Hodak Co-founder of an entertainment marketing company, the UCA grad and Fort Smith native talks jobs, ‘Shark Tank’ and entrepreneurial lessons learned.

By Todd Jones

B

rittany Hodak is a co-founder of ZinePak, a company receiving much attention this year, especially after Hodak and business partner Kim Kaupe appeared on “Shark Tank” and won a $725,000 investment.

ZinePak’s website notes that the company “partners with the world’s top brands, entertainers and properties to develop unique experiences that elevate everyday consumer promotions into extraordinary activations.”

Hodak is a graduate of the University of Central Arkansas and grew up in Fort Smith. She and Kaupe have received numerous awards for their entrepreneurial moves, including awards by Entrepreneur, Forbes and Inc. magazines. In addition, Hodak received numerous individual awards for entrepreneurship.

In addition to being the co-founder of ZinePak, Brittany is also a co-founder of an Arkansas-based charity startup called Per Diems Against Poverty. It is a 501(c)(3) non-profit organization that was founded in 2015 to reallocate donated per diems, or meal allowances, to provide food for Americans struggling with poverty and food insecurity. Recently, Hodak was in Arkansas celebrating homecoming at UCA and she spoke with Talk Business & Politics about her business path.

TB&P: What was your favorite subject in school?

Hodak: My favorite subject at UCA was marketing. I enjoyed my required marketing course, with Dr. Scott Markham, so much that I ended up getting a minor in the subject. I think I took 24 credits of marketing classes in three semesters. After graduation, I went on to get my master’s in marketing in New York.

TB&P: What was your first job?

Hodak: My first job was a radio station mascot in Fort Smith, Arkansas. I was paid to dress up in a bee costume. Luckily, I had the good fortune that my name (Brittany Jones) sounded similar to Bridget Jones, the lead character in a popular book/movie series called “Bridget Jones’ Diary,” so I was quickly promoted to being able to write articles for the station’s website. That helped lay the groundwork for what I’m still doing today: helping artists tell stories to fans.

“Don’t wait for ‘the right time’ to start your business!”

– ZinePak co-founder

Brittany Hodak TB&P: What book had the biggest impact on you?

Hodak: Great question! There are lots of books that have had an impact on me, like “Rework” and “The Checklist Manifesto” and “The War of Art.” However, the most impactful book I’ve read this year is called “The Life-Changing Magic of Tidying Up”

by Marie Kondo. Although it’s a book about cleaning one’s house, the main premise – to surround oneself only with things that bring you joy – really resonated with me.

I’ve taken the premise beyond the walls of my home, now asking the question, “Does this bring me joy?” before committing to new things. By asking that simple question,

I’ve eliminated a lot of things (networking events, casual hang-outs with people who weren’t close friends, etc.) from my social calendar and replaced them with things I do enjoy: guitar lessons, more time with close friends, etc. It was a great behavior-modifying book for me.

TB&P: What was the most important thing you took away from your “Shark Tank” experience?

Hodak: The greatest lesson I took away from appearing on “Shark Tank” is that I have many, many people rooting for me.

It was amazing to see the love and support from people around me – including so, so many from the Central Arkansas community – all of whom are pulling for me to succeed. Having that support has given me the courage to go through with other things that seem intimidating and scary, like pursuing my love of songwriting and launching another company, Per Diems Against Poverty.

TB&P: What is the next big step for ZinePak? Hodak: There are so many exciting things happening at ZinePak right now! We’ve started working with several professional sports teams since “Shark Tank” aired. We’ve also really expanded our work with consumer-packaged goods companies, adding lots of new capabilities and marketing offerings to our arsenal.

TB&P: What is your top three pieces of advice for other entrepreneurs?

Hodak: 1. Don’t wait for “the right time” to start your business! There will never be a “perfect” time, but today is closer to perfect than tomorrow will be! Set a goal of what success means to you in a year. Tell yourself that if you haven’t hit that milestone in a www.talkbusiness.net

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Executive Q&A: Hodak year, you’ll allow yourself to consider getting a 9-to-5 again.

2. Don’t take “no” for an answer from anyone who doesn’t have the authority to tell you “yes.” Go to the decision-maker whenever you can. Otherwise, you’re introducing many more people to the conversation than necessary. You only care about one yes: the one from the person who can make things happen for you. Also, know that a “no” today doesn’t mean “no” forever. Don’t be afraid to approach someone who’s told you “no” in the past – circumstances change, and so do decisions.

3. Hold on to your equity for as long as you can. It’s very, very difficult (and potentially expensive!) to get it back. Even when you’re a brand new company, treat each point of equity as if it were very, very valuable – because one day it might be!

TB&P: What are your top five apps or tools to help with productivity?

Hodak: 1. Slack. My team uses this messaging app for all internal communication,

BUSINESS FORECAST PRESENTED BY: THE CENTER FOR BUSINESS AND ECONOMIC RESEARCH

Friday, January 29, 2016 11:30 a.m. - 1:30 p.m.

John Q. Hammons Convention Center

Moderator Bill Dillard Vice President Dillard’s, Inc.

Global Forecaster Michael Drury Chief Economist McVean Trading & Investments, LLC

Domestic Speaker Kevin Kliesen Business Economist Federal Reserve Bank of St. Louis

For more information or to register, contact the Center for Business and Economic Research at 479-575-4151, cber@walton.uark.edu or cber.uark.edu.

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TALK BUSINESS & POLITICS | JANUARY/FEBRUARY 2016

Regional Speaker Kathy Deck Director Center for Business and Economic Research

so it’s entirely replaced instant messages and emails for our company. It’s fantastic, and it’s free!

2. Basecamp. We use this project management tool to track all of our projects. The calendar and checklist features are really great for collaborating across teams.

3. Boomerang. Boomerang is a great Gmail plug-in that lets you schedule your emails to send at a later time, and returns messages to you that aren’t answered.

4. Edgar. Edgar is a scheduling app for social media that helps your messages work harder by scheduling them to automatically repeat based on rules and parameters you set up. It’s really easy to use and helps every carefully-crafted tweet and Facebook message get seen by more people.

5. Unroll.me. Unroll.me is an awesome tool that “rolls up” all of your email subscriptions into one daily digest. You can also use it to mass-unsubscribe from marketing emails you no longer want to get. It’s great and helps remove tons of emails from your inbox every day.

N I ’ P U L L A E R E W .

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Sometimes, the best way to recharge

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“There is a transformation of retail underway. Will the store eventually be replaced by virtual experiences?

You can’t win In some cases, it the war on already has.”

A collection of recent quotes

by Arkansas newsmakers.

terrorism on defense. You have to win on offense.”

founder and CEO of Rockfish

– Congressman Steve Womack

R-Rogers, on the leadership qualities of new House Speaker Paul Ryan.

– Sen. Tom Cotton

– Kane Webb

– Simmons Bank CEO George Makris

regarding the future of Pine Bluff.

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at the third Democratic presidential debate.

as we call it, Paul is also a gifted speaker on behalf of the values and the planks in our platform.”

“AT DASSAULT, WE LIKE TO SAY, ‘AT EVERY MOMENT OF EVERY DAY, THERE IS A BIT OF LITTLE ROCK FLYING SOME PLACE IN THE WORLD’ BECAUSE OF THE OUTSTANDING WORK THAT IS DONE HERE.”

newly appointed executive director of the Arkansas Parks & Tourism department

We are going to make sure that we put tough questions on the table that will require tough answers.”

– Former Secretary of State Hillary Clinton

“In all of his ‘wonkiness’

– Kenny Tomlin

R-Ark., after the terrorist attacks in Paris.

“We have to look at ISIS as the leading threat of an international terror network. It cannot be contained; it must be defeated.”

– Dassault Chairman and CEO Eric Trappier

in Little Rock at the company’s $60 million expansion opening.

“I’m really looking for something that will benefit both sides, both the input for the users of it and the end users, the people of Arkansas, that want to pull information out of it and see who’s donating to who in Arkansas. Because right now, we are blind to that.”

– Rep. Jana Della Rosa

R-Rogers, who is advocating for stronger requirements to electronically file campaign finance data.

TALK BUSINESS & POLITICS | JANUARY/FEBRUARY 2016

“We are pleased with the continued sales growth in Walmart U.S. and in our international business.

Strong traffic and our fifth consecutive quarter of positive comps in Walmart U.S. stores show we are taking the right steps to win with customers.”

– Wal-Mart CEO Doug McMillon

save live

Grow.

plan

At Deltic Timber Corporation, we believe in a harmonious balance of environment and expansion. And this philosophy is backed by our responsible management of hundreds of thousands of acres of sustainable forests.

All of our communities – Chenal Valley, Chenal Downs and Wildwood Place in Little Rock, and Red Oak Ridge in Hot Springs – are designed to embrace nature and sustainability. They’re also designed to provide the convenience and amenities you appreciate in comfortable living. Why? Because the best communities in the Natural State are the ones that help keep it that way.

DelticDevelopments.com | 501.821.5555

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Deltic Timber Corporation is a natural resources company engaged in the ownership and management of timberland. The Company also develops to its highest and best use residential and commercial properties in Little Rock and Hot Springs, Arkansas, through its subsidiary, Chenal Properties, Inc. Deltic is publicly traded on the New York Stock Exchange under the symbol DEL.

WHERE WILL YOU FIND US IN 2016?

NOWHERE ELSE.

At First Security, it’s our privilege to serve friends and neighbors throughout Arkansas – and only in Arkansas. Thank you for another fantastic year of taking care of customers in our home state. We look forward to many more!

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