2012-10 Faulkner County Business Journal

OCTOBER 2012

SWITCHING MADE EASY Bank of the Ozarks Revolutionizes the Way People Switch Banks Full Story, Page 4

Debra Bowser, Vicki Causey, Amy Ball and Linda Wilcox are branch managers at Bank of the Ozarks’ four locations in Conway.

Sarah Shaw is Market President for Bank of the Ozarks in Conway.

Conway Area Chamber Announces Pre-K Initiative

The Conway Business Expo Breakfast once again played host to an exciting announcement for Conway area residents. The Conway Area Chamber of Commerce announced a new commitment to Pre-K education in the city of Conway.

The Chamber will partner with a newly formed local nonprofit, Lifelong Learners Inc., in the development of a Pre-K program focused on kindergarten readiness, parental involvement and quality instruction.

“The Chamber has been an advocate for high-quality education in Conway for more than 100 years,” said Jamie Gates, senior vice president of the Conway Area Chamber of Commerce. “Our goals haven’t changed. We want to create world-class opportunity for our young people and prepare the next generation’s workforce and neighbors. Investing

in early childhood education offers our organization the best return on our members’ time and money.”

The Lifelong Learners initiative began working with four pilot sites this fall. Those four sites will affect nine child care providers and more than 270 area pre-schoolers.

Lifelong Learners will assist local pre-schools and day cares with professional development, installation of highest quality curriculum and parent education. Lifelong Learners will also develop and distribute parenting and teaching methods focused on milestone achievement for children from birth to age 5.

“There is no population more vulnerable than kids under the age of 5. They are completely dependent and completely impressionable,” said Lifelong Learners Inc. founder Dr. Charlotte Green. “Today’s announcement says that

as a community, we get it. We’re going to work together to build their educational foundation.”

Partners in the launch of the community wide initiative include: the Chamber of Commerce, Lifelong Learners Inc., Conway Public Schools, AETN and area Pre-K providers. “We thought it was important to leverage our existing Pre-K infrastructure,” said Gates. “We want to give our providers and our area parents access to the best in training and teaching materials.”

The Conway Area Chamber also announced a commitment of $50,000 annually from its Toad Suck Daze Festival proceeds to fund the effort.

Since 1982, Toad Suck Daze has raised more than $1.4 million in college scholarships. Toad Suck Daze will continue to fund college scholarships through its foundation and annual gifts.

What’s that gonna be?

Backachers Equestrian Center The equestrian center will host horse shows, English and western shows, riding lessons and all types of group events. Along with the 130’x250’ riding arena, the facility has an event center with projection screens, a commercial kitchen and viewing area. The facility will also be home to a restaurant, Local Legends.

When will it open? Backachers Equestrian Center will open in November.

Who’s building it? Salter Construction If you are interested in booking Backachers Equestrian Facility for an event, contact Letitia McMaster at 501-472-8352 or lmcmaster@backachersranch.com 2 | FAULKNER COUNTY BUSINESS JOURNAL

TOP 5 RESIDENTIAL home sales

EDITORIAL

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VOTE FOR ISSUE NO. 1

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It’s nothing new in Arkansas politics for important ballot issues 935 Burrow to be drowned out by Centennial theMountain more “colorful” View Park Valley Golf Club political races involving Gatlin Park candidates locally and statewide. The politics of personality are easier to identify with and even 4775 Stockton Road gossip about. But that Conway t Oak St E Oak S St e nc Pri St absolutely doesn’t mean Caldwell St Laurel Park Oak Conway they’re more important Country Fifth Avenue Park Club to the quality of life and economic health of our Airport Park state.

During this election season, very little has Oak Grove Cemetery Highway 60 W been said about ballot ISSUE NO. 1. That’s a shame, because ISSUE 386 Pippin Circle NO. 1 has the potenDave Ward Dr tial to do more for our economy than anything (or anyone) else you could vote for this fall.

Proposed ConstituBrumley 1480 Gardenia tional Amendment No. 1 will establish a temporary half-cent sales tax 1500 Gardenia to be used for construction and improvement of a four-lane highway system connecting all PRICE ADDRESS CITY BED/BA/HB SUBDIVISION SQ. FT. $/SQ. FT. YEAR BUILT parts of the state. It will $309,900 1500 Gardenia Conway 4/3/0 South Wind II 3,000 $109.97 2005 also provide more than $295,000 4775 Stockton Conway 4/3/1 Nottingham 3,036 $97.17 2005 $20 million in additional $291,735 935 Burrow Avenue Conway 3/2/1 The Village at Hendrix 1,745 $167.18 2012 transportation funding to $289,900 1480 Gardenia Conway 4/3/0 South Wind II 2,701 $109.92 2006 Faulkner County and its $285,000 386 Pippin Circle Conway 4/2/1 Pippinpost 2,560 $111.33 1997 cities and towns.

Growing counties like our own are confronted daily with the challenge of investing in infrastructure. It is a struggle Representatives from Conway will discuss steps small business businesses can attend the session to keep up, much less Fire Department will present an owners and their employees can at no cost. The Green Cart Deli will build for the future. The educational seminar titled “Safety take if they receive a suspicious provide free lunch to attendees.

Arkansas State HighPrecautions for Small Business.” package or bomb threat. He will Seating is limited to the first 40 way and Transportation The free seminar is part of the Con- also outline how small businesses participants.

Department has been way Area Chamber of Commerce’s can prepare for these occurrences.

To reserve a seat at the Small a willing but sometimes Small Business Lunch and Learn Captain Mike Rhoades will lead a Business Lunch & Learn, visit unable partner as we series. hands-on demonstration about how ConwayArkCC.org/events. For try to build the Faulkner It will take place Monday, Nov. 5, to use a fire extinguisher. questions or additional information, County of tomorrow. from 11:30 a.m. until 1 p.m. at the In this interactive seminar, partici- contact Whitney Farris, director of Arkansas highways are Chamber building, located at 900 pants will be able to ask questions, communications at the Conway simply, and undeniably, Oak Street. share experiences and network.

Area Chamber, at 501-932-5411 or underfunded.

We know that projects Mike Winter, assistant fire chief, Employees of Chamber member Whitney@ConwayArkansas.org. e

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funded by ISSUE NO. 1 will support more than 40,000 jobs. We know that the expansion of Interstate 40 between Conway and Little Rock will happen more quickly if we vote FOR ISSUE NO. 1. We know that a vote FOR ISSUE NO. 1 will free up existing highway funds for partnered projects locally. We know that a vote FOR ISSUE NO. 1 will send Faulkner County more than $20 million over the life of the 10-year temporary tax. These funds can be used be used for a broad range of local transportation projects.

What is harder to quantify is the cost of doing nothing. The Northwest Arkansas Council recently commissioned a study that showed the cost of congestion on northwest Arkansas roads was more than $100 million.

The Arkansas Highway and Transportation Department has identified critical projects that more than exceed their current revenue. Their ability to partner on local projects will continue to decrease. That means growing counties like ours will have to carry a larger share of paying to improve state highways.

Aging infrastructure has to be addressed to even maintain our economic competitiveness.

For these reasons and many more, we ask that you vote FOR ISSUE NO. 1. Early voting starts Monday, Oct. 22.

For more information about ISSUE NO. 1, visit www.MoveArkansasForward.com.

FAULKNER COUNTY BUSINESS JOURNAL | 3

COVER STORY

Switching is Easy with ASAP Bank of the Ozarks Revolutionizes the Way People Switch Banks

A Consumer Reports survey this past July talked about how much hassle switching banks can be.

The survey found that one in five consumers with checking accounts considered switching to another financial institution over the 12 months ending in June, usually because of increased fees for routine services.

But more than half those who want to switch said they don’t change banks for three reasons — the trouble it takes to transfer automatic payments and deposits, the time it takes to change banks and the possibility of fees charged to transfer their own money. Thanks to Account Switch Assistance Professionals (ASAP) at Bank of the Ozarks, those hassles are gone.

“There are very few customers these days that don’t receive direct deposits or have automated debits. Nine out of 10 times customers who want to switch banks need the extra help our ASAP service provides,” said Sarah Shaw, Market President for Bank of the Ozarks in Conway.

Bank of the Ozarks’ ASAP makes switching banks incredibly fast, easy and painless. “When you visit any Bank of the Ozarks branch in Faulkner County, a banker will work with you to open a new account,” said Shaw. “We can help you transfer your automatic drafts and direct deposits with our online ASAP database. We can take care of you and make it an easy transition.”

The ASAP database has all the information needed to switch. It includes preferred

methods of contact and ways to submit updates to customer account information. All the legwork to track down the most common direct deposit and automatic draft relationships has already been done by Bank of the Ozarks.

“As she was leaving, a customer who has a small business account with us told me she wished she could transfer her personal account from the bank across the street,” said Vicki Causey, Manager at Bank of the Ozark’s Conway East office. “‘Why can’t you?’ I asked.

After I told her about our ASAP service, she sat back down across from me and opened her new personal account.”

After a new account is established, customers are ready to transfer their primary automated drafts and deposits

4 | FAULKNER COUNTY BUSINESS JOURNAL

to their new Bank of the Ozarks account. An ASAP Information Change Form is printed out to capture all the information necessary for a smooth transition.

Often customers can complete all the transfers at the same time they open a new account, but sometimes a second trip to the bank or phone call to the Account Switch Assistant Professional after filling out the ASAP Information Change Form is necessary to complete the changes.

“A man came into our bank to cash a check drawn on Bank of the Ozarks and asked what he needed to do to use ASAP,” said Amy Ball, Manager at the Conway West office. “He was back in a few days to switch.

We were able to move almost everything that day, but had to wait for one scheduled draft to

clear. We encourage customers not to close their old account until after about a month, when they know everything has been deposited and drafted smoothly for one billing cycle.”

Bank of the Ozarks also offers the ability to access ASAP Online at www. bankozarks.com/myasap to customers who prefer to make changes on their own computer.

This customer-friendly online tool kit is complete with preferred methods of contact and ways to submit updates to customer account information.

ASAP has organized information into direct deposit categories like Benefits for pension drafts, Employer for direct deposit of your paycheck, Government for Social Security or Veterans benefits and Investments for all types of investment deposits.

For automatic drafts, there are categories for Credit Card, Home, Telecommunications and Miscellaneous expenses.

“ASAP has added resources for our new customers, but we’ve always worked hard to help customers open new accounts,” said Shaw. Since Conway is a town with three colleges, Bank of the Ozarks has consistently taken account opening assistance out of their bank offices and onto college campuses early each semester.

Many students receive direct deposits for scholarship funds and pay their monthly rent through automatic drafts that are easier to switch with the ASAP tools.

As one of the fastest growing communities in Arkansas, Conway has many new residents who need to make a smooth transition to a new bank. Hewlett-Packard recently opened operations in Conway, and the new Southwestern Energy headquarters here means even more employees moving to town who are looking for the best place to bank.

A 109-year old bank with $3.82 billion in assets headquartered in Little Rock, Bank of the Ozarks has been named the top performing bank in the nation for the past two years by the ABA Banking Journal.

“We are a larger bank, but we have the small-town customer service that people in Faulkner County deserve and expect. Because of our size and reputation, people are not concerned about the security of their money in our bank, and the flexibility of a successful bank is a huge asset. Because we are profitable, we can create new, innovative programs like ASAP,” Shaw said.

MED committee members Chris Hervey, Osmar Garcia and Lee Harris present MED Awards to Chante Duncan, Ernesto Joel Castro, and Danny Patel.

Gala celebrates minority business enterprise, recognizes key players

The Conway Area Chamber of Commerce hosted an awards gala Tuesday, Oct. 9, to celebrate the achievements of minority entrepreneurs and the individuals and organizations committed to advancing minority business enterprise.

The Chamber of Commerce established the MED committee to foster growth and sustainability of minority businesses and as a way to recognize minority businesses and their supporters. It accomplished this through five categories of MED awards. Community members nominated individuals or organizations for each category.

The following individuals received awards at this year’s gala: Johnny Adams of First Security Bank was the recipient of the Access to Capital award. This award recognizes the individual, organization or business that has demonstrated outstanding leadership in the financial community by providing working or investment capital to minority businesses.

First Security Bank has provided minority-owned businesses in Faulkner County more than $6.5 million in investment capital. These businesses span several industries, including construction, farming, health care, entertainment and restaurants. Adams said receiving the Access to Capital award is a testament to First Security’s efforts to provide resources that enable minority enterprise to thrive in Faulkner County.

Ernesto Castro of Los Tres Potrillos was the recipient of the Advocate for Opportunity award. This award recognizes the individual, organization 6 | FAULKNER COUNTY BUSINESS JOURNAL

Rhea Williams accepted the award on behalf of Johnny Adams.

or business that has demonstrated significant accomplishments in educating and advocating for minority business enterprise.

Castro encouraged business owners not to waste time when it comes to making important decisions. “As Warren Buffet put it, ‘never suck your thumb,’” Castro said. “After you gather the information you need, make a decision. Success comes from immediately grabbing every opportunity you can recognize.”

Chante Duncan, owner of Funk Fusion Academy, received the Minority of the Year for Economic Development award. This award recognizes the individual, organization or business whose practices have had a significant impact on community growth and development.

Duncan opened Funk Fusion Academy in June 2009. The production academy offers students of all ages and skill levels classes in acting, modeling, taekwondo and six different types of dance. Duncan said receiving the award was an honor and a blessing.

“Funk Fusion Academy is a place where

Conway Area Chamber of Commerce president/CEO Brad Lacy presents Ronnie Williams with the Lifetime Achievement Award.

any kid or adult can take classes at a good price and feel comfortable in our studio,” she said. “We have done so much with kids in our community and will continue to do the same.”

Duncan encouraged inspiring small business owners not to give up; success comes from hard work. “If you can dream it, you can do it. But a dream is only a dream unless you have a plan to make it work.”

Country Inn & Suites, owned by Danny Patel, was named the Outstanding Minority Business of the Year. This award recognizes the business whose practices have had a significant impact on the community.

Patel has been involved in the hotel and hospitality industry for the past 10 years. In 2009, Country Inn & Suites opened its location in Conway. Patel’s hope is that his hotel is a business Conway can be proud of for years to come.

“I try my best to make my guests feel at home and to make sure that when they leave, they have no negative images in their minds,” he said. “We want them to

come back and see us again.”

Patel said knowledge is power when it comes to owning a small business.

“The more knowledge you have about your business – down to the smallest detail – the more creative and efficient you can be.”

Ronnie Williams, vice president of student services at the University of Central Arkansas, was the recipient of the Lifetime Achievement Award. The award recognizes the individual who has played an integral role in the creative, technical or professional progress of minority business development over the course of his or her life.

As a higher education administrator, Williams works to create a living and learning environment that inspires all students to achieve their full potential.

He is also active on several boards and committees within the community, which include serving as immediate past chairman of the Conway Area Chamber of Commerce, a Conway Development Corporation board member, and chairman of the AETN Commission.

“Maintaining a keen eye on where our minority community goes in the future is very important, and we must continue to set examples for the next generation,” Williams said. “If we succeed at this, then we leave a legacy to those who follow in our footsteps.”

The Minority Enterprise Development (MED) awards gala took place in the Student Center Ballroom on the UCA campus. Corliss Williamson, head men’s basketball coach at UCA, was the keynote speaker.

Conway Economy at a Glance Unemployment Rate August 2012 US ...............................8.1% Arkansas.......................7.3% Faulkner County ......... 6.3% Conway.........................6.1% Sales Tax Collections Conway* July 2012................... $1,855,774 2011................... $1,813,963 Percent Change 2.3% Year to Date (May) 2012................. $13,199,657 2011................. $12,515,057 Percent Change 5.5% Annual* 2011................. $22,366,464 2010................. $21,868,102 Percent Change 2.3% *Tax Rate 1.75% Faulkner County* July 2012...................... $711,714 2011...................... $688,259 Percent Change 3.4% Year to Date (July) 2012................... $4,934,141 2011................... $4,632,472 Percent Change 6.5% Annual* 2011................... $8,279,301 2010................... $7,834,226 Percent Change 5.7% *Tax Rate 0.5% Restaurant Sales* August 2012................. $13,899,493 2011................. $12,733,622 Percent Change 9.2% Year to Date (August) 2012............... $108,673,097 2011............... $100,197,030 Percent Change 8.5% Annual Sales 2011............... $151,462,797 2010............... $139,864,203 Percent Change 8.3% *Includes mixed drink sales Hotel Sales August 2012................... $1,537,276 2011................... $1,629,924 Percent Change -5.7% Year to Date (July) 2012................. $13,451,526 2011................. $12,816,979 Percent Change 5.0% Annual Sales 2011................. $18,662,136 2010 ............... $17,590,242 Percent Change 6.1%

Conway Building Permits Single Family Homes Permits Issued January — September 2012.................. 135 permits 2011.................. 110 permits 2010..................196 Permits Percent Change 2011-12 22.7% Annual 2011..................153 Permits 2010 ................ 223 Permits Percent Change -31.4% Average Construction Cost* Year to Date (Sept.)

2012...................... $212,175 2011..................... $206,721 2010...................... $171,767 Percent Change 2011-12 2.6% *Not including land or lot improvements Average Square Footage* Year to Date (Sept.)

2012............................ 3,044 2011............................ 2,872 2010............................ 2,620 Percent Change 2011-12 6.0% * Total under roof Lottery Sales Faulkner County September 2012................... $1,089,551 2011................... $1,344,955 Percent Change -19.0% January — September 2012................. $13,024,821 2011................. $12,644,744 Percent Change 2011-12 3.0% Annual 2011................. $16,788,678 2010................. $17,540,450 Percent Change -4.3% Total State September 2012................. $30,622,480 2011................. $38,181,351 2012................. $34,375,593 Percent Change 2011-12 -19.8% Annual 2011 .............. $474,879,701 2010............... $459,916,256 Percent Change 3.3%

Natural Gas Severance Tax Distribution October Faulkner County 2012........................ $12,651 2011.......................... 19,038 Percent Change -33.5% Conway 2012........................ $15,635 2011........................ $23,666 Percent Change -61.9% Year to Date (Jan.-October) Faulkner County 2012...................... $117,584 2011...................... $167,639 Percent Change -33.9% Conway 2012...................... $145,360 2011...................... $209,528 Percent Change -29.9% Annual Faulkner County 2011...................... $204,052 2010...................... $171,543 Percent Change 19.0% Conway 2011...................... $254,822 2010...................... $221,225 Percent Change 15.2% Wellhead Price per MCF* May 2012 ........................... $2.59 2011 ........................... $4.27 2010 ........................... $4.44 2009.............................. $3.4 2008.......................... $10.74 2007............................ $6.21 Yearly Average 2011 ......................... $3.95 2010 ......................... $4.48 2009 ......................... $3.67 2008.......................... $7.97 2007.......................... $6.25 2006 ......................... $6.39 2005 ......................... $7.33 2004 ......................... $5.46 2003 ......................... $4.88 2002 ......................... $2.95 *MCF=1000 cubic feet Number of Active Wells* Faulkner County............. 316 Total in Field . ............. 4,133 *As of July 31, 2012 Estimated Life Time Value of Production* Total Field.. $11,382,327,198 *As of November 31, 2011.

Information provided by pulseofconway.com

Conway Regional Medical Center: Economic Effects and Challenges

By Roger Lewis and Chris Spatz

In 1957 Conway Memorial Hospital ceased operations at the southeast corner of College and Western streets and moved cattycorner to a brand-new facility with 60 beds. The next census (1960), showed Faulkner County with a population of 24,303.

Today the renamed Conway Regional Medical Center (CRMC) continues to expand from that northwest corner. With 180 beds, an annual payroll of $58 million for approximately 1200 employees, and $18 million expenditures in Faulkner County for goods and services, CRMC is a major player in Faulkner County’s economy (The Faulkner County census estimate for 2011 was 116,342.)

A well-established economic model predicts that every dollar spent on payroll, goods and services generates an additional dollar in indirect expenditures.

Indirect expenditures are dollars spent by employees and vendors who received payment from CRMC. Thus for 2012, the projected economic impact of CRMC is $152 million (the $58 million payroll plus the $18 million for goods and services times two).

Expenditures for construction and equipment produce a similar story. In the five years before 2012, CRMC spent $6.7 on construction and $15.5 on equipment. This year, so far, CRMC has spent $27 million to expand and equip its operating and obstetrics center.

The effect of the 128 physicians who have privileges at CRMC is not as easy to quantify but is never-the-less important.

Physicians with privileges can admit and treat patients and use CRMC equipment and facilities.

If CRMC did not have state of the art facilities many of these physicians, especially the specialists, probably would not have located here. These physicians, their staffs, facilities, and operating costs are a significant part of the Faulkner County economy. Their contribution could well equal the $76 million that CRMC spends for payroll, goods and services.

The Hill-Burton Act, passed

by the US Congress in 1946, provided federally guaranteed loans and grants to hospitals to improve and expand their physical plants. Under this act hospitals were required to provide a reasonable amount of free care each year. One provision of the law today is that a Hill-Burton facility may not deny emergency service to anyone who resides in the facility’s service area if that person is unable to pay for services.

Today, many uninsured people, having no means to pay for hospital services, use the emergency room for their primary care.

According to a Kaiser Foundation study, there are more than 500,000 uninsured Arkansans among our population of almost 3 million. More than 75% of these uninsured are employed and most are between the ages of 19 and 64. (Children are covered

by AR KIDS First if their parents do not have insurance and those 65 and over are covered by Medicare.)

Uncompensated services, provided mainly to uninsured persons, cost CRMS approximately $5.4 million per year in direct costs. Figured at market prices these uncompensated services would generate approximately $18 million in revenue. Not only is this cost a burden on the medical center and health care providers, it is the leading cause of personal bankruptcy. A study by the Center for American for Progress Action Fund concluded that Arkansans with health insurance pay an estimated $1500 per year in their premiums as a hidden expense of treating those who can’t afford to pay. To quote Dr. Joe Thompson, Surgeon General of the State of Arkansas, “The impact of the uninsured is a cancer on our communities.”

In Faulkner County there are approximately 15,000 uninsured adults aged 19 to 64.

All health care providers today face challenges and uncertainties about the future. The federal Affordable Care Act is being phased in and rule changes for administering Medicare and Medicaid are in the works. The intent of the Affordable Care Act

is that more people will have health insurance, which would reduce the amount of uncompensated services provided by CRMC. A crucial element of the act extends eligibility for Medicaid, a hotly debated issue in our state legislature.

If the state raises the income eligibility from the federal poverty level (FPL) to 139% of the FPL, about 250,000 more people will be on Medicaid. (The FPL is $11,172 for a single person and $23,050 for a family of four; 139% levels are $15,526 and $32,039 respectively). The federal government will reimburse 100% of the cost of the increase until 2015 and then 90% until 2020. Dr. Thompson cites studies that show this change might not increase the state’s outlay because many services that are now provided free by the state will be covered by Medicaid.

These services include prenatal care, breast and cervical cancer screening, and immunization.

Under the Affordable Care Act of 2010, CRMS faces cuts in reimbursements from Medicare and Medicaid. Additionally, the Budget Control Act of 2011, adjustments by the Centers for Medicare and Medicaid Services, and the Sequestration Act may result in revenue reductions for CRMC. (The Sequestration Act requires appropriation cuts across all programs except defense if specific deficit targets are not met by January 2013.) In a worst case scenario, all projected changes are implemented which would result in CRMS receiving $80 million less in revenues over the next 10 years.

This worst case scenario probably will not happen. Congress may act to avoid sequestration.

The Arkansas legislature may adopt the extended eligibility program. It is likely there will not be an $80 million shortfall in projected revenue, but it is also likely that the shortfall will not be completely mitigated. CRMS leadership can be expected to meet these challenges and remain both a premier institution and a major economic segment of our local economy.

FAULKNER COUNTY BUSINESS JOURNAL | 7