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VOL. 6 | NO. 16 | Saturday, April 13, 2013

Daily Digest

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Fred’s Key Revenue Figure Falls 3 Percent in March

Discount retailer Fred's Inc. said Thursday its March revenue at stores open at least a year fell 3 percent, hurt by unseasonably cool weather and a timing shift in the Easter holiday.

The drop was bigger than Wall Street expected. Analysts polled by Thomson Reuters expected a decrease of 1.7 percent. The metric is a key measure of a retailer's health, because it excludes revenue at stores that recently opened or closed.

Total sales for the five-week period ended April 6, fell 2 percent to $190.4 million from $194 million.

Fred's said that as expected, cooler-than-usual weather in many parts of the country and the timing of the Easter holiday reduced March sales at its lawn and garden and seasonal departments.

The company's pharmacy department got a boost from strong prescription growth, but those gains were offset by the continued shift toward generic drugs, which resulted in lower overall pharmacy sales. The company said it expects that trend to continue throughout most of the year.

For the first two months of fiscal 2013, revenue at stores open at least a year fell 2.3 percent, while total sales edged down 1 percent to $349.4 million from $352.9 million.

Fred's operates 713 stores, including 21 franchised stores, in the southeastern U.S.

Luttrell Doesn’t Want Memphis Animal Shelter

Shelby County Mayor Mark Luttrell said Wednesday, April 11, he is not interested in making the Memphis Animal Shelter a county government operation.

Luttrell was asked by County Commissioner Chris Thomas about the swap being proposed by several Memphis City Council members.

Luttrell said neither he nor Memphis Mayor A C Wharton Jr. have been consulted in the talks between the council and commission.

“Do I want the animal shelter? No,” Luttrell told commissioners.

City Council member Shea Flinn pitched the idea to commissioners last month in exchange for the city continuing to fund Memphis police officers in Memphis schools after city and county public schools are consolidated.

Luttrell said the animal shelter used by county government is privately operated.

Indie Memphis Offers Four Swedish Films

Indie Memphis is offering four Swedish films next month as part of Memphis in May’s salute to Sweden.

The series, named "Sweden @ 24 FPS" in reference to the 24 frames-per-second speed at which 35mm film is projected, will be held over four consecutive Wednesdays in May at Malco’s Studio on the Square.

All films in the series will be presented from 35mm film prints.

The series will open on May 8 with “The Seventh Seal,” followed by “Wild Strawberries” on May 15. After that is “Beyond” on May 22 and “Sound of Noise” on May 29.

Each film will be shown twice, at 7 p.m. and 9:15 p.m. Tickets are $8 each and are available in advance at indiememphis.com/sweden.

Indie Memphis members will have free admission with their Indie Memphis membership card, as seating permits.

All four films will be presented in Swedish with English subtitles.

Kyle Awarded Wilder Law School Scholarship

Glen Alan Kyle is the 2013 recipient of the first BankTennessee John S. Wilder Law School Scholarship.

The scholarship is named in memory of former Tennessee Lt. Gov. John Wilder, a former vice chairman of BankTennessee’s board of directors and one of the founders of the bank. The endowed scholarship is awarded annually to a University of Memphis third-year law student and Tennessee resident who has demonstrated a commitment to public service and to enhancing the common good.

Kyle is from Murfreesboro, and after he graduates he hopes to clerk for a judge for one year. After that, he wants to work in elder law, bankruptcy or for a government agency.

State Info Technologists Must Apply to Keep Jobs

Information technology employees of state government must re-apply for their jobs.

The administration of Gov. Bill Haslam has told IT workers statewide to submit applications if they want to keep the jobs they currently fill.

State government IT chief Mark Bengel told The Tennessean the aim is be certain that workers' skills match the state's needs.

"This is really not about getting rid of people," Bengel said Wednesday. "It's about making sure that we do have the skills and we have the ability to develop and retain staff in the future."

Haslam told the newspaper last year that some state computer systems were "in the ditch."

The governor has established an office to centralize IT expertise.

Last year, the administration was successful in steering through a legislative bill that rewrote civil service rules, allowing the state to lay off employees based on job performance, instead of straight seniority.

According to a state Office of Information Resources memo obtained by The Tennessean, each state agency with IT operations "will receive a draft, standardized organizational structure that has been aligned with the mission of the agency. This draft organizational structure will be populated with newly created IT job classifications."

The memo specifies that state IT workers who meet minimum qualifications are eligible to apply and be interviewed for the new classifications.

"Technology is moving so fast that skills are obsolete in the blink of an eye," Bengel said.

Robert O'Connell, executive director of the Tennessee State Employees Association, said it is stressful to IT workers who are being forced to re-apply for jobs they already hold.

But Bengel said the state must fiercely compete with private industry and a scarcity of information technologists.

Raymond James Adds Fellman as Senior Vice President

Ted Fellman has joined Raymond James as a senior vice president in the firm’s public finance group.

Fellman, who is based in Nashville, has had an extensive career in state government, including serving 18 years with the Tennessee Housing Development Agency. His work with that group included stints as executive director and chief financial officer.

Fellman also is a certified public accountant and certified government financial manager.

In other Raymond James news, the company in the first quarter was the leading underwriter of municipal bonds in Tennessee, according to municipal bond information service Thomson Reuters.

In 2012, the firm was the ninth-leading underwriter nationally of municipal bonds, serving as senior manager on 748 issues with a par amount of $12.1 billion. In senior led and co-managed issues in 2012, Raymond James completed 1,250 transactions with a total par amount of $86.9 billion, representing more completed transactions than any other firm in the nation, according to Thomson Reuters.

Justice Department Seeks to Close Mo’ Money Taxes

The U.S. Justice Department is seeking a permanent injunction in federal court to stop Mo’ Money Taxes from doing business.

The complaint for a permanent injunction against the company under several corporate names it uses as well as the three partners who own the businesses was filed Tuesday, April 9, in the U.S. District Court for the Western District of Tennessee. The 53-page civil action prepared by the tax division of the U.S. Justice Department alleges those hired by the Mo’ Money companies to prepare tax returns for others or who have a licensing agreement with one of the companies are not required to have any tax preparation experience or training.

The civil action also questions the preparation the companies give those who become licensees after paying money to use the tax preparation software.

Young Professionals Group Hits One-Year Mark

The Germantown Young Professionals group that’s associated with the Germantown Area Chamber of Commerce recently celebrated its one-year anniversary.

The young professionals group was founded on Feb. 8, 2012. It holds monthly mixers and social networking events throughout the year as well as professional development luncheons featuring local business leaders. The group also organized two drives this past year in support of Literacy Mid-South and the Mid-South Food Bank, and group members participated in the Annual Gobble Wobble 5K Race and the Germantown Holiday Parade.

They also assisted with several Germantown chamber events including the Annual Golf Tournament and Taste of the Town fundraiser.

With a current membership above 100, the group is open to members of the Germantown chamber who are between 22 and 40.

Post Office Retreats on Eliminating Saturday Mail

The U.S. Postal Service backed down from its plan to eliminate Saturday mail delivery because Congress barred it, officials said Wednesday.

But its governing board said it’s not possible for the financially ailing agency to meet cost-cutting goals without altering its delivery schedule. Delaying “responsible changes,” the board said, only makes it more likely that the Postal Service “may become a burden” to taxpayers.

The Postal Service said in February that it planned to switch to five-day-a-week deliveries beginning in August for everything except packages as a way to hold down losses.

But that announcement was a gamble. The agency essentially was asking Congress to drop from spending legislation the longtime ban on five-day-only delivery. Congress did not do that when it passed a spending measure last month.

“By including restrictive language ... Congress has prohibited implementation of a new national delivery schedule for mail and package,” the postal Board of Governors said in a statement Wednesday.

“Although disappointed with this congressional action, the board will follow the law and has directed the Postal Service to delay implementation of its new delivery schedule until legislation is passed that provides the Postal Service with the authority to implement a financially appropriate and responsible delivery schedule,” it said.

The board made the decision in a closed meeting Tuesday.

Memphis Makes Top 15 ‘Termite Towns’

Memphis-based Terminix has ranked Memphis in its top 15 metro areas with the highest probability of termite swarms.

The rankings, topped by Atlanta, are based on termite service calls to Terminix from 2011 and 2012 and balanced with population density statistics.

Memphis ranked 15th on the top 15 list. Nashville was 11th.

The swarms are when termites leave their colony to find mates and begin establishing new colonies. With a cool spring so far, the swarms have been delayed a bit in many parts of the country.

Terminix is one of the brands that is part of Memphis-based The ServiceMaster Co.

International Paper Takes on Forest Protection

International Paper Co. and a forest conservation group announced a plan Wednesday to protect endangered forests in key paper-producing areas of the South.

The Memphis-based paper company and Dogwood Alliance said they will map areas around International Paper’s southeastern operations to identify endangered forests or places where conservation of natural resources is vital to environmental health.

The agreement between International Paper and Dogwood, a longtime critic of the company, also includes a plan to discourage the conversion of natural hardwood forests to pine plantations.

The first step will be a pilot project to map forests around the company’s mill in Riegelwood, N.C. The partners will then try to apply the mapping practices to other paper-producing areas in the region.

The South is one of the world’s largest paper-producing areas, and International Paper has a large presence there. Some environmental experts point to deforestation as an element of climate change, and conservation groups have pushed paper companies to change the way they harvest wood.

Dogwood has been critical of International Paper in the past, claiming the company has supported and funded destructive forestry practices such as logging endangered forests, draining wetlands and converting natural forests to tree plantations.

Dogwood pressured International Paper by securing deals from the company’s larger customers, such as Staples and Office Depot, to adopt paper procurement policies that would change the company’s practices.

One of Dogwood’s goals is to develop more sources of paper and wood products that are certified to the high standards of the Forest Stewardship Council.

In addition to the partnership announced Wednesday, International Paper also has announced a $7.5 million, five-year project with the National Fish and Wildlife Foundation to restore and conserve forests in the Coastal Carolinas, Cumberland Plateau, and the piney woods regions of Texas and Arkansas.

International Paper said it’s important to engage critics as part of its process to improve the company.

Hope House Operating at Half Capacity

Hope House, a Memphis nonprofit that assists children and families impacted by HIV and poverty, is operating at half capacity due to lack of funding.

Last year, 65 area children were born HIV-positive, making them eligible to receive Hope House services. But without funding, all 65 children may not be able to receive the early childhood education that could have a major impact on their lives, says Craig Locke, director of development at Hope House.

The nonprofit was recently reaccredited by the National Association for the Education of Young Children to continue providing early childhood education services.

Companies Post More Jobs But Fill Them Slowly

U.S. employers advertised the most job openings in nearly five years in February, but they boosted hiring at a much slower pace. The figures suggest that companies remain too cautious about the economy to quickly fill open jobs.

The number of openings rose 8.7 percent in February from January to a seasonally adjusted 3.93 million, the Labor Department said Tuesday. That was the most since May 2008.

At the same time, companies hired a seasonally adjusted 4.4 million people, just 2.8 percent more than in January. And hiring remains lower than it was a year ago, when it reached 4.49 million.

Economists point to several likely reasons for the disparity between a surge in job openings but only a modest rise in hiring. Many unemployed workers may lack the skills employers want. Some companies may not be offering enough pay.

And recruiting and staffing firms say some employers seem reluctant to fill jobs until they find what they regard as perfect candidates.

U.S. hiring slowed sharply in March, despite the increase in job openings the previous month. Employers added only 88,000 jobs last month, the government reported Friday. That was the fewest in nine months and nearly half the pace of the previous six months.

Some companies may also have slowed hiring after steep government spending cuts began taking effect March 1. Those cuts are expected to shave about a half-point from economic growth this year.

There were 3.1 unemployed people, on average, for each opening in February. That exceeds the roughly 2-to-1 ratio typical of a healthy economy. But it’s down sharply from a peak of 6.7 in July 2009, the highest in the 12 years the government has tracked the data.

Still, until employers start filling jobs more quickly, the ratio of unemployed people to openings may overstate the health of the job market.

US Wholesale Stockpiles Fell 0.3 Percent in February

U.S. wholesalers cut their restocking in February by the most in 17 months. But their sales jumped, suggesting companies underestimated consumer demand.

The Commerce Department said Tuesday that stockpiles at the wholesale level declined 0.3 percent in February. That followed a 0.8 percent increase in January, which was revised lower.

The decline was the first in eight months and the biggest since September 2011. Farm products and gasoline led the drop. Agriculture stockpiles have fallen in recent months because of a drought in the Midwest.

Sales at the wholesale level rose 1.7 percent, the most since November. The increase was led by large gains in gasoline, clothes and computers.

Shrinking stockpiles weigh on economic growth because it means factories are producing fewer goods. But a jump in consumer spending in February suggests companies will have to build their stockpiles faster in the coming months, which should spur more growth.

Sluggish growth in stockpiles was a key reason the economy barely grew in the October-December quarter. But economists are looking for a significant rebound in business restocking this year, helped by a resilient consumer that has continued to spend despite paying higher taxes.

Most economists expect growth accelerated in the January-March quarter to an annual rate of more than 3 percent. That would be a vast improvement over the 0.4 percent growth in the final three months of 2012.

County Veterans Court Receives $20,000 Grant

Shelby County’s Veterans Court is getting a $20,000 grant from the Tennessee Commission on Continuing Legal Education and Specialization, the commission announced Monday, April 8.

The court, headed by General Sessions Criminal Court Judge Bill Anderson, is one of two freestanding courts in the state that focus on a docket of offenders who are military veterans or are currently serving in the military.

The courts, including the one in Montgomery County, specialize in long-term, multi-phased programs for offenders who are a high risk to repeat their offenses. With a judge supervising and a follow-up staff that supervises an intensive intervention, the court targets veterans with mental health issues and/or substance abuse issues.

The Montgomery County court also received a $20,000 grant from the state commission.

The funding comes from late fees attorneys pay for not completing their continuing legal education requirements on time. The commission has earmarked a total of $100,000 from the fund in incentives for courts across the state to get training and administrative support to try such courts and dockets.

UPS Appeals Decision Against TNT Deal

United Parcel Service Inc. is appealing a European regulator’s ruling that blocked UPS’ attempted purchase of Dutch delivery company TNT Express.

UPS believes the ruling was based on “legal and factual errors,” and it doesn’t want antitrust regulators to use the decision as a precedent for any future acquisitions, company spokeswoman Peggy Gardner said Monday.

UPS withdrew its $6.7 billion offer for TNT in January. Gardner said the decision to appeal the European Commission’s ruling shouldn’t be seen as a precursor to a new bid.

“This is not any sort of signal about TNT,” Gardner said. Asked if UPS had ruled out a new offer for TNT, she replied, “We don’t ever speculate on future acquisitions.”

In blocking the UPS bid for TNT, regulators said it would have resulted in insufficient competition and higher prices for delivering small packages. The European Union’s antitrust chief, Joaquin Almunia, had said that regulators were still discussing potential concessions from UPS to salvage a deal when UPS dropped its bid.

The takeover of TNT would have been the largest ever for Atlanta-based UPS.

Faith Leaders Urge Use of Medicaid Money

Faith leaders from across the state are urging Gov. Bill Haslam and state lawmakers to accept $1.4 billion in Medicaid money if the federal government doesn’t approve an alternate plan for Medicaid expansion in Tennessee.

About 15 clergy were at the state Capitol on Monday delivering 133 baskets of loaves and paper fish to the offices of each of the legislators and the governor.

They say the loaves and fish are symbolic of the story of Jesus feeding the multitude, and that the Republican governor can use the money to ensure thousands have health insurance.

Haslam has excluded the Medicaid expansion money from his budget proposal this year, but says he’s in pursuit of a special deal that could be struck at any time.

Federal Cuts Blamed For Modest Tennessee Retail Activity

State Finance Commissioner Mark Emkes says federal spending cuts and tax hikes are to blame for a dip in consumer confidence in Tennessee.

Emkes in a release Friday said March sales tax collections, which reflect spending activity in the previous month, came in $2.8 million below estimates.

That’s a growth rate of just 0.1 percent, well below the 1.8 percent growth rate posted through the first eight months of the budget year.

Emkes said the 2 percent hike in the federal payroll tax in January and budget cuts have caused “temporary erosion in consumer confidence.” Nearly two-thirds of the state’s general fund revenue is derived from sales tax dollars.

The general fund was bolstered by strong corporate taxes, as franchise and excise tax collections beat projections by $35 million.

Six Tennessee Airports Nab Aeronautics Grants

Six Tennessee airports will be getting federal and state aeronautics grants totaling more than $281,000.

The state Transportation Department announced last week that grants will be going to McKellar-Sipes Regional Airport in Jackson, McGhee Tyson in Knoxville, General DeWitt Spain in Memphis, Millington Regional Jetport, Savannah-Hardin County Airport and Gatlinburg-Pigeon Forge Airport in Sevierville.

The grants are made available through the department’s aeronautics division.

It administers federal and state funding to assist in the location, design, construction and maintenance of the state’s public aviation system.

Regions Bank Moves West Tennessee President

Regions Bank has moved Joe DiNicolantonio, the bank’s West Tennessee area president, to be the head of a new business line.

DiNicolantonio is now leading Regions’ new Business and Community Banking Division, which will focus on providing a variety of banking, lending and advisory services to businesses with up to $20 million in sales.

Regions previously managed business and community banking, including small business, as part of the company’s business services group. The new division will allow Regions to increase its focus on serving small-business customers through both branch and relationship-managed channels.

DiNicolantonio joined Regions in 1998 and has held a number of leadership roles in the retail and small-business banking areas. As West Tennessee area president, he had oversight for the bank’s retail, commercial, middle market and small-business banking activities throughout Memphis and surrounding communities.

Majority of Election Commission Reappointed

The Shelby County Election Commission looks much the same with the recent appointment of local election commissioners by the Tennessee Election Commission.

Democratic legislators from Memphis recommended replacing local Democratic election commissioner George Monger with Anthony Tate and retaining fellow Democrat Norma Lester on the five-member body.

Republican legislators from Shelby County recommended keeping all three Republican election commissioners – Dee Nollner, Steve Stamson and Chairman Robert Meyers.

The state Election Commission followed through with those actions for new terms that began April 1. Every election commission has three Republicans and two Democrats reflecting the Republican majorities in the Tennessee legislature.

MORTGAGES 54 374 1,120
BUILDING PERMITS 177 767 2,425