The Colorado Springs Small Business Development Center received a temporary reprieve this week — it will receive the necessary funding from the city to continue operations, but only for a single year.
The SBDC sounded the alarm last month, when the Lodgers and Automobile Rental Tax committee zeroed out the $55,000 normally given to SBDC from the fund — designated by ordinance for tourism and economic development. Given no notice, the organization stood to lose a substantional portion of its budget.
The money is vital to the SBDC’s mission and fits within LART guidelines. But the current committee, headed by Nor’wood Development Group’s Fred Veitch, decided to remove the funding and provide money only to events that draw tourists to the city.
It was a decision that could have ended the SBDC’s very active role in the small-business and startup community in Colorado Springs — a mission that has drawn national attention and federal accolades to Colorado Springs.
“We absolutely aid in the tourism effort,” SBDC Executive Director Aikta Marcoulier said when discussing the funding issue. “If it weren’t for us, for our help with disaster grants (during the Waldo Canyon fire and the subsequent floods), there wouldn’t even be places for tourism to go. We helped keep business doors open in Manitou and Old Colorado City.”
The SBDC has a proven record of success, she said. The group provided help with $9.3 million in capital formation, increased its clients’ sales by $5 million and aided with new contracts for $969,838 last year.
They created 418 new jobs and retained 702, serving industries as diverse as agriculture, education and health care. They had 96 new business starts for veterans and 31 other business startups. They aided more than 2,000 clients in two years.
And in times of crisis, like in the aftermath of the Waldo Canyon and Black Forest fires, and the floods that came after the fires — the SBDC has been there, providing both federal grant assistance and necessary advice to get businesses back on their feet.
None of that is in danger now, thanks to a last-minute intervention from City Council that included the nonprofit organization in LART funding. The SBDC will receive $27,500 from LART money, contingent on receiving the same money from the 2016 general fund. Only Councilor Helen Collins voted against the allocation, claiming it violated the state constitution that prohibits municipal governments from partnering with corporations.
That’s not the case, as the SBDC is a nonprofit organization, and the city’s legal office confirmed that Council could provide some money to the SBDC.
It’s an investment that makes sense.
For every dollar the city spends, it receives a return on that investment of $58.69, she said. The tremendous amount of support led the Small Business Administration to name the local SBDC office the best in six states and in the Top 10 of all 1,100 SBDC offices nationwide.
But the latest good news is only a temporary fix.
City Council made it clear that LART funding won’t be used for economic development — and that makes the future uncertain for the SBDC and the Colorado Springs Regional Business Alliance, both of whom receive money from LART and the general fund.
That means both organizations will have to find new sources — beating the bushes for federal or state dollars set aside to aid small businesses. That money could be hard to get; it’s in short supply as sequestration eats away at federal budgets.
But Marcoulier remains upbeat, confident that the SBDC’s conversations with Council and Mayor John Suthers will continue.
“Thank you for starting this dialogue,” she told City Council. “Thank you for the hours and hours of work that the LART committee put in. We’ll continue the dialogue with the mayor’s office in the future.”
Marcoulier said she will seek outside money for the SBDC, but also plans to continue lobbying for Colorado Springs to pay its share.
El Paso County provides in-kind support — office space at the Citizens Service Center, human resource assistance, payroll help and back-office support.
If City Council remains true to its main priorities, which include economic development, Marcoulier and small businesses in Colorado Springs shouldn’t have to worry. The money will come, and businesses will continue to thrive.
But the conversation should involve more than just a few people.
Businesses that have benefited from SBDC or RBA assistance should tell their stories — let city government know support is vital to continue to diversify the Springs economy.