ROGERS - Elation among Northwest Arkansas officials at word that hundreds of new jobs are headed to the area was tempered Wednesday by the conviction of some that the federal government cannot afford to sustain the overhaul of health care.
The new jobs are to be delivered through Serco Inc., a Reston, Va.-based company that won the federal contract to sort applications for insurance through state and federal health-insurance exchanges.
The company is setting up a call and sorting center at the former Emerson Electric Co. plant, a 217,000-squarefoot building left vacant since 2001.
At least 600 jobs are on their way to Rogers, the Rogers-Lowell Chamber of Commerce confirmed Wednesday.
On Tuesday, sources said the facility could employ between 800 and 1,000 workers.
“It’s huge,” Rogers Mayor Greg Hines said Wednesday. “It’s obviously great for Rogers and for the state, in the condition of the country at this time, to get this many jobs. Getting to breathe new life into a vacant building in our city feels almost as good.”
Joe Holmes, spokesman for the Arkansas Economic Development Commission, and Matt DeCample, spokesman for Gov. Mike Beebe, declined to comment.
“This is still an ongoing project and we’re not able to talk about it,” Holmes said. DeCample said, “When [the commission] and any company decides the time is right to make an announcement, then we make an announcement.” Alan Hill, spokesman for Serco, did not return calls Wednesday.
“Job announcements of this size are few and far between,” said Mike Malone, president of the Northwest Arkansas Council. The council is a group of the region’s business and community leaders that has always placed a priority on economic development.
“Although it’s good for those people getting those jobs, we need tor remember that paying for those jobs is an added burden that increases the taxes,” said state Sen. Bart Hester, R-Cave Springs, who represent parts of Rogers. “We’re just growing government.”
Serco is not a health-insurance company and will not administer health programs, said Raymond Burns, president of the Rogers/Lowell Chamber of Commerce. It will process applications for health coverage, including some Medicaid applications, and make sure each application goes to the right company or agency. It will sort claims from across the nation he said. Also, although a British company has an investment interest, this branch of Serco is operationally independent of that company, Burns said.
The company has processed information for the CIA, the Department of Defense and other security-sensitive federal agencies, Burns said. This is the company’s first venture into fields related to health care, he said.
“The total number of jobs is still up in the air, but we know it will be equal to or greater than 600 jobs and that they are taking applications immediately,” Burns said. The company’s Rogers location will be “up and running by Oct. 1.”
The timeline is so tight, workers were at the plant Wednesday morning to repair the roof and make other preparations, he said.
“There will be a strong push for hiring veterans,” Burns said. All applications will be taken through the company’s website at serco-na.com, he said. Although he’s not familiar with all the details of the federal contract, Burns said it is his understanding it is for five years.
Businesses in the region expected to benefit from the opening include telecommunications, contractors helping refurbish the building and the recycling of the numerous shredded documents the center will produce, Burns said.
There are no details of payroll released yet, Burns said. Hines said that on the basis of the kind of work to be done, he does not believe that the jobs will be low-paying.
The chamber was first alerted to the possibility of Serco’s arrival “five or six months ago” when contacted by Rep. Steve Womack, R-Ark. Womack is a former mayor of Rogers.
His spokesman, Claire Burghoff, said the company approached Womack with its interest in the area, “knowing that he had worked with the chamber before as mayor and his background in economic development,” but that the congressman “only provided information” in answer to company questions.
“I’m glad they’re coming to Rogers, but we need to remember that this is a federal contract and once the contract has been fulfilled, these jobs are going away,” said state Sen. Cecile Bledsoe, R-Rogers. “
And we need to remember that we will be paying for these jobs. Already, at our last count, this country is $17 trillion in debt.” U.S. Treasury figures confirmed that, as of Wednesday, the federal debt stood at $16.9 trillion.
Bledsoe is chairman of the Senate’s Public Health, Welfare and Labor Committee. She also is one of the seven state senators who voted against implementing the state’s “private option” part of health-care overhaul in Arkansas.
She ran for Congress in 2010, in part in opposition to President Barack Obama’s health-care law. Womack won the GOP primary in that race. He also opposed the federal changes.
Sen. Uvalde Lindsey, D-Fayetteville, voted for the private option in the legislative session. He was executive director of the Northwest Arkansas Council before being elected senator in 2008. Lindsey praised the efforts of local chamber of commerce representatives and other community leaders upon hearing of the Serco project.
“One thing you can definitely take away from this is that our local and state economic development professionals are the best in the state and perhaps the southern U.S.,” Lindsey said. Competition for this project must have been fierce, he said.
The state will get more jobs from this venture than it will with Big River Steel, Lindsey said, comparing the project with a proposed steel mill in northeast Arkansas that required state-funded incentives so large that they required approval by the state Legislature. “This is a mega project that didn’t cost us anything,” Lindsey said.
Rep. Greg Leding, D-Fayetteville, is Democratic minority leader who worked to pass the private option. “We knew health-care reform would have positive economic effects, and this is a prime example.” Leding said he wished the jobs were going to Fayetteville but the announcement shows what “an economic engine Northwest Arkansas is for the state.”
The center will require the sorting of millions of pieces of mail, which is good news to the local operators of the U.S. Postal Service, Lindsey said. That will be just one part of the ripple effect that a project of this size will cause. As for the jobs being temporary, Lindsey said that the immediate boon to thelocal economy would still be great news even if the federal contract was never renewed.
“I must admit my second reaction was a sense of mystification,” Lindsey said. Sens. Mark Pryor, D-Ark. and John Boozman, R-Ark., “apparently weren’t told anything about this,” he said.
In his years of dealing with both economic development and government, a state’s U.S. senators were always informed whenever a federal government project or contract of any significant impact - much less 600 or more jobs - was coming the state’s way. “It does raise a bit of a question of whether the left hand knows what the right is doing in our federal government,” Lindsey said. Bledsoe, in a separate interview, also said she found it odd that neither senator was told. Boozman is from Rogers.
Front Section, Pages 1 on 07/11/2013