Business owners fear effects of government shutdown

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Furloughed federal employees are feeling the pain of missing two paychecks during the lingering government shutdown, but for most local businesses, the effects appear to be minimal — at least so far.

Local businesspeople and officials say they are concerned, however, that the impacts will worsen if the shutdown stretches on much longer.

According to the Colorado Department of Labor and Employment, about 12,900 El Paso County residents were employed by the federal government as of December 2018. The vast majority of those work in some capacity for the Department of Defense, which has remained in operation since the Dec. 22 shutdown.

“DoD is running as normal,” said Dennis Casey, executive director of the Colorado Procurement and Technical Assistance Center.

That might explain why only about 90 federal employees in El Paso County had filed unemployment claims as of mid-January. That figure represents about 4 percent of more than 2,300 federal employees who have filed for unemployment throughout the state, according to the Department of Labor and Employment.

The Denver metro area represents a far greater percentage of the Colorado total: 22 percent in Jefferson County, 11 percent in Denver County and 10 percent in Arapahoe County.

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It might also mean that most local businesses, including government contractors, are relatively unscathed so far.

“We actually haven’t heard too much,” said Dani Barger, vice president of marketing and communications for the Colorado Springs Chamber & EDC. “We’ve had more inquiries from the media than from businesses.”

GOVERNMENT CONTRACTORS

The extent to which government contractors are being affected by the shutdown depends on the company’s profile, Casey said.

“Some are exclusively government [contractors], and some have a balance of work,” he said. “We always recommend they maintain a good portfolio.”

That’s what Colorado Springs general contractor Brazos Builders has done.

“Right now, we have a lot of nongovernment-related work,” CEO Leacia Brilliant said, “and we have other government-related work that’s moving forward regardless of the shutdown.”

As a Small Business Administration-certified 8(a) contractor based on woman ownership, Brazos is eligible to receive federal contracts and SBA-guaranteed loans.

Brilliant said her company was awarded two federal contracts in September. One, a repair project at the Colorado Springs Airport, was put on hold until spring because of weather and isn’t affected by the shutdown.

The project involves mainly cosmetic work on an FAA localizer platform, a structure that holds directional beacons to guide aircraft.

“That’s not really being affected right now, but if the shutdown continues, there could be potential impacts,” Brilliant said.

Another project, a room addition at the Denver Federal Center, has been impacted, however.

“The folks I’ve been dealing with at [the General Services Administration] are not working, so all of our stuff has been put on hold there,” Brilliant said. “When we can’t perform that work and we can’t realize that income, yeah, we are affected in that respect.”

Brilliant said the company has an SBA-guaranteed line of credit rendered through Vectra Bank.

“Right after the first of the year we were going to do a review and do a credit line increase, but unfortunately all SBA lending has been put on hold,” she said. “It’s always nice to have access to a line of credit when you run into some delays getting paid on something and … you’ve got expenses to cover. It gives you a little breathing room.”

Loss of potential contracts is another shutdown-related issue.

“I’m sure there are entities that would have had jobs for us to look at, but they’re not being circulated and not being put out to bid at this time,” Brilliant said.

“It’s not like all of our eggs are in one basket,” but the loan freeze is the “most potentially crippling” issue for contractors like Brazos, she said.

“For a small business, there are not really a lot of other places to turn,” Brilliant said. “We typically don’t fit into the nice, clean lending parameters of standard banking. So that’s why the SBA support is very helpful. … Going without that support short term is one thing, but if [the shutdown] pushes out to six weeks or eight weeks, then there are going to be some pretty drastic impacts.”

COLORADO SPRINGS AIRPORT

Transportation Security Admin-
istration agents are working without pay at COS, as they are at all U.S. airports.

“This is a difficult time for the TSA agents,” said COS Manager Greg Phillips, “but they are troupers, and they are coming to work.”

Phillips noted reports that TSA agents at some airports have been calling in sick in large numbers, but that hasn’t happened at COS.

“What they’ve told me is they’ve had even lower sick call counts than they do normally,” he said. “I think that says a lot about our particular group of Colorado Springs TSA agents. They are dedicated, and they’re committed to doing a good job. We wish there were things we could do for them, but they’re still hanging in there.”

Phillips said the average wait times in security screening lines have not increased. Wait times vary throughout the day, with the longest waits occurring in the early morning, when many departing flights are scheduled.

“Our checkpoint lines are short and easy,” he said. “We average through the day five to 10 minutes.” Those times can extend to 15-20 minutes during the morning rush, but those wait times are typical and not the result of shutdown-related delays.

“One area where there are potential impacts but right now seems to be working fine is in the air traffic controllers,” Phillips said. “We also have our navigational aids that are maintained by FAA employees that are in the same boat as the TSA. But by all accounts, they are also showing up to work and doing a great job.”

The airport is seeing delays related to weather, mechanical and crew rest issues, he said, but isn’t experiencing unusual delays related to the shutdown.

That could change if the shutdown continues.

“I shudder to think of it, but I just don’t know how long anybody could go without getting paid,” Phillips said. “When the ship is sinking, how long do you stay on it before you realize you have to abandon ship too? I have to imagine there’ll be some impacts, but certainly we’re not seeing it right now.”

FOOD-RELATED ISSUES

Rumors are rampant on social media that the nation’s food supply is unsafe because the Food and Drug Administration is closed and not conducting inspections. Social media posts are warning people not to eat raw produce until the shutdown is over. But in Colorado, restaurant and wholesale food inspections are continuing.

“At El Paso County Public Health, we conduct retail food inspections. All retail food establishments in El Paso County are required by state law to be licensed in Colorado,” Information Officer Danielle Oller stated in an email. “El Paso County Public Health is responsible for the licensing and inspection of these facilities. These activities are continuing and are not affected by the federal shutdown. This includes restaurants, school cafeterias, mobile food trucks, etc.

“FDA conducts inspections for wholesale food. In the state of Colorado, the FDA contracts with [the Colorado Department of Public Health and Environment] to conduct wholesale food inspections in our state. These inspections are still being conducted.”

The CDPHE Division of Environmental Health and Sustainability issues manufactured food licenses and conducts inspections of the state’s 2,000 wholesale food facilities on a risk-based inspection protocol that is unaffected by the shutdown, Director Jeff Lawrence said.

Lawrence said he would not agree with any assessment that Colorado’s food supply is unsafe.

“The U.S. Department of Agriculture oversees meat and poultry inspection, and their activities are continuing,” he said. “The FDA is continuing some critical, mission-essential functions on the food supply. So I think we’re in a good, safe place here.”

Ranch Foods Direct owner Mike Callicrate said the furlough of federal workers hasn’t had much effect on sales at his business, but he is concerned about whether the Supplemental Nutrition Assistance Program will continue.

People who are eligible and qualified for SNAP, a U.S. Department of Agriculture program, received their benefits early this month, and funding is available to cover the program in February. But there is uncertainty about March SNAP benefits.

“SNAP is a fair percentage of our business,” Callicrate said. “If those people across the street in that apartment building can’t shop at Ranch Foods Direct for their food like they’ve been doing the last 2½ years, that’s going to be very serious. … It’s also going to impact farmers.”

Callicrate said he has seen the effects of the shutdown on the inspector who visits his ranch in St. Francis, Kan.

“He’s got to drive 300 miles to come to work every day, and he’s got to stay in hotels and eat at restaurants,” he said. “He also has a student loan he’s trying to pay off. You can just feel the stress in these people that are having to finance their own expenses and donate their time. This individual that’s in charge of food safety is just being severely mistreated.”