Small businesses sound off about government regulations

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Local small businesses want affordable health insurance, access to government contracting and relief from reams of paperwork, confusing and conflicting regulations, and overzealous enforcement by federal agencies.

Small business representatives expressed those needs at a roundtable discussion hosted by the U.S. Small Business Administration’s Office of Advocacy on Aug. 9 at the Colorado Springs Marriott hotel.

“One of our main priorities is regulatory reform — how can we develop an arena that is good for your business?” said Daniel Nordberg, SBA regional administrator for the six-state area that includes Colorado.

To date, Nordberg said 22 federal regulations have been repealed for every one that has been introduced.

“That’s great progress, but there’s more to be done,” Nordberg said. “The emphasis is to hear from you.”

About 40 small business people attending the roundtable gave Nordberg, SBA Director of Interagency Affairs Charles Maresca and several other SBA representatives plenty of feedback about their issues.

Health insurance is a major headache for small businesses, several attendees said.

Under reporting requirements for the Affordable Care Act, “we have to contend with a huge amount of record keeping for each employee,” said Sean Leggett, chief financial officer for Nunn Construction. That’s a big burden for a company with more than 100 employees.

“It doesn’t add anything to the employee or to our business,” Leggett said. “It doesn’t affect our decisions as to what kind of insurance we buy, and I’m convinced they’re not reading all this stuff.”

Insurance premiums have doubled and deductibles tripled in the past 10 years, Leggett noted.

“For employees at certain income levels, the deductibles are unaffordable,” he said. “We offer a silver plan, but the deductible is still too high for laborers and carpenters.”

Leacia Brilliant, president and co-owner of Brazos Builders, said the high cost of health insurance has hindered her company’s ability to find qualified employees.

Brilliant said she has been unable to find affordable health insurance for her employees and has no health insurance herself.

“I feel we are at a competitive disadvantage,” Brilliant said. In addition, she said, “I feel like we are doing a disservice to our current employees, some of whom have been with me for 10-plus years.”

Several business representatives addressed access to government contracting, including the SBA mentor-protégé program. That program allows small businesses to form relationships with experienced government contractors and get business development assistance.

“We’ve been trying to break in,” said Matthew Titcombe, CEO of information security consulting firm Peak InfoSec. “All the [larger businesses] have their protégés and funnel all business to them. If you’re not connected, you’re never going to do that. Small businesses can’t compete with federal clients.”

The mentor-protégé program is one way for small businesses to win federal contracts; the small business set-aside program is another. The government limits competition for certain contracts to small businesses to help provide a level playing field.

BESL, a company that provides technical solutions for military, defense, national security and intelligence agencies, would like to see more set-aside offerings, said Nick Woerner, business development officer.

“We would also like to see the regulations strengthened and clarified regarding the ability to source to small businesses — an option we rarely see exercised,” Woerner said.

Burdensome rules

Several attendees cited complex, conflicting regulations and overzealous enforcement as problems for their small businesses.

Patrick Bollar, founder of Diversified Machine Systems, said it’s challenging for his company to figure out complex export regulations and frustrating to keep up with interpretations that leave businesses wondering what they’re supposed to do.

The company, which makes high-tech machinery for other manufacturers, is particularly concerned about a regulation that prohibits him from shipping certain finished products to countries containing parts imported from those same countries.

“It’s just not clear” what such regulations are designed to accomplish, Bollar said. “This particular one is going to be painful for us. It’s getting to where I just don’t want to do it.”

Pete Schoenfeld, vice president of sales for Fireplace Warehouse Etc., said new emissions standards for wood stoves would go into effect in 2020.

Wood stove manufacturers have less than 18 months to figure out how to meet the new standards. Although workarounds are being tested, manufacturers and retailers need more time and want an extension on compliance to 2023, Schoenfeld said.

“Right now in my store, I have three compliant stoves,” Schoenfeld said. “Even some of the pellet products couldn’t be sold.”

Randall Biles, co-owner of Pikes Peak Traveland, an RV dealership, said the Consumer Finance Protection Bureau “is trying to control the way dealerships make loans to customers. Each of us has specialty lenders that grant loans to consumers. If we can’t grant loans, we can’t sell RVs.”

“The goal behind the bureau was good — they wanted to clean up what went on in lending, … but like a lot of agencies, they can get overzealous,” Biles said. As a result, “the documentation we have to keep track of is monumental. For what purpose, is my concern.”

“Our industry is built on federal regulations,” said Josh Ewing, trainmaster at Colorado & Wyoming Railway Co., which services the Minnequa industrial area of Pueblo.

Ewing said he searches the Federal Register every day for changes in regulations for training classifications of safety personnel and would like to find a more efficient way to keep up with the changes.

Titcombe said differing compliance requirements are causing a lot of confusion in the industries with which he works.

“I’ve stepped out of doing federal contracting because it’s so onerous to do,” Titcombe said. “We need one common security framework.”

John Miner of Castle Rock Rock, a dealer of sand and gravel, said new regulations about how many hours trucks can be used “has caused a 20 percent shortage of trucks… . We are over-regulated, and we’re being outcompeted.”

Relief for small businesses

The SBA Office of Advocacy has conducted roundtables in 22 states thus far, and is hearing many of the same complaints from small businesses throughout the country.

“One thing everybody wants is some regulatory clarity,” Maresca said. “Our intention is to take every issue at these roundtables to the attention of every federal agency. If you speak, it will get the attention of the appropriate person.”

All government agencies are required to measure the impact of rules on small business, Maresca said.

Under the Regulatory Flexibility Act, the task of monitoring every agency that writes rules that affect small business is given to SBA. That’s done by 13 SBA lawyers, and the SBA can recommend changes to an agency’s approach if there is an alternative way to get the same effect.

“Our job is to put small business at the top of the list,” Maresca said. “We don’t know all the detail that you do; it’s nice to get that detail.”

Maresca said small business owners who weren’t able to attend the roundtable can submit comments on the SBA Office of Advocacy website, sba.gov/advocacy. A form for reporting federal regulatory burdens is found on the Regulatory Reform page.

“The things we find helpful are individual descriptions of your businesses and how regulations affect them,” Maresca said. “What often is the most persuasive argument we can present is when somebody has data on how federal policies are causing more expense or conflict with other regulations. Numbers are very persuasive.”

Small businesses can get information, consulting and mentoring through the SBA’s Colorado District Office, District Director Frances Padilla said.

“Our team is located in Denver, but we can come down to the Springs,” Padilla said. 

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