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HomeMy WebLinkAboutAgenda - 09-06-1994 - VIII-E 1 O R A N G E C O U N T Y BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: September 6, 1994 Action Agenda Item # � SUBJECT: SBTDC Contract Renewal DEPARTMENT: Economic Development Commission PUBLIC HEARING: Yes X No ATTACHMENT (S) : INFORMATION CONTACT: SBTDC Contract (2-9) SBTDC 1883-94 Summary Report (10-18) Ted Abernathy (extension 2325) TELEPHONE NUMBERS : Hillsborough - 732-8181 Durham - 688-7331 Mebane - 227-2031 Chapel Hill - 967-925I/968-4501 PURPOSE: The purpose of this contract is to continue implementation of the Economic Development Commission Strategic Plan Challenge 5. BACKGROUND: Challenge 5 of the Orange County Economic Development Commission Strategic Plan focuses on assistance to small businesses. The Small Business and Technology Development Center (SBTDC) provides a portion of those services. The commitment is for $10.000 to be paid in two installments of $5,000 oeoh, the first to be paid on or about November 15, 1984 and the second on or about April 15, 1995. This is a continuation of the contract Orange County has had with SBTDC since 1990. RECOMMENDATION: The Manager recommends that the Board approve and execute the contract. 2 NORTH CAROLINA ORANGE COUNTY THIS AGREEMENT, made and entered into the day of , 1994 by and between Orange County, North Carolina, 200 S. Cameron Street, Hillsborough, North Carolina, hereinafter referred to as "County" and the University of North Carolina at Chapel Hill for and on behalf of its Small Business and Technology Development Center, 4509 Creedmoor Road, Suite 201, Raleigh, North Carolina 27612, hereinafter referred to as the "SBTDC" . WITNESSETH: WHEREAS, the on-going work of the Orange County SBTDC is consistent with Challenge 5 as detailed in the Orange County Economic Development Strategic Plan; and WHEREAS, the work of the Orange County SBTDC, the development of more comprehensive small business information, and a public awareness and educational program on the services available to small business, is an integral part of meeting the objectives specified in the Orange County Economic Development Strategic Plan; and WHEREAS, the Orange County Economic Development Commission, hereinafter referred to as the EDC, has endorsed the Orange County SBTDC concept, and has encouraged the 3 County' s support, financial and otherwise; and WHEREAS, the EDC is an agency of the County; and WHEREAS, economic development is an important public purpose which can be aided by contributions of Orange County funds; and WHEREAS, Orange County supports the Economic Development Strategic Plan, and public-private initiatives to implement the Plan. Now, therefore, in consideration of the above and the mutual covenants and considerations hereinafter set forth, the County and the SBTDC agree as follows: First, in consideration of the EDC' s on-going support, the SBTDC will maintain a regional office in Orange County. This will consist, at minimum, of the presence of one full time and one half time professional staff members in the County. Second, the SBTDC will make its general business consulting services and more specialized services and counseling in the areas of international trade, technology development, and government procurement (including Pro-Bid) available to small firms and would be entrepreneurs throughout the County. Where appropriate SBTDC will work with specific 4 clients referred by the EDC. Third, one or more resources libraries will be maintained in the County and hand-out materials will be available. The SBTDC also will provide access to specialized software such as FISCAL -- a loan package evaluation and spreadsheet program -- and other business start-up and assistance resources at no charge to the businesses. Fourth, the SBTDC will continue to develop and offer with the EDC and other sponsors a variety of training programs both for small business firms and for those who serve small businesses (such as bankers) . These will be scheduled periodically throughout the term of this agreement. A specific focus during the term of this contract shall be assistance to female and minority owned businesses. Fifth, the SBTDC will work actively to increase public awareness of and access to its services throughout the County. A visitation effort will be conducted to acquaint Orange County' s employers with services that can assist them with expansion. Efforts will be made to fully involve other agencies and resources such as Chambers of Commerce, SCORE, the local community college, and local professional and civic groups. Sixth, the SBTDC will provide the EDC with a written 5 report within 30 days of the close of each quarter. This will detail the program and service activities of the SBTDC in Orange County for the quarter. The SBTDC also will provide a report of client evaluations of services each quarter. Seventh, the SBTDC will make its best good faith effort to continue and/or expand the level of service in Orange County proposed under this agreement beyond the terms of this agreement. Eighth, in return for the foregoing, the County will pay the SBTDC $10,000 in two installments. The first such installment shall be paid on or about November 15, 1994, and the final payment will be paid on or about April 15, 1995. Ninth, the EDC will actively support and promote the programs and services of the SBTDC within Orange County. Tenth, the Chairperson of the EDC will become a member of the SBTDC statewide Advisory Board, as long as this agreement is in effect. Eleventh, the term of this agreement will be 1 year beginning July 1, 1994 and ending June 30, 1995. Twelfth, this agreement may be terminated at any time upon 6 the mutual consent of the parties or upon 90 days advance written notice by either party. Thirteenth, the SBTDC authorizes inspection by the Orange County Finance Director or his designee of so much of the books and records of the SBTDC which document receipt and expenditure of County funds. The books and records of the SBTDC shall be made available to the County Finance Director or his designee upon reasonable notice. Fourteenth, in the event that the SBTDC ceases to function or ceases to provide the services described herein without a County approved written assignment or release by County of its responsibilities, this agreement will, as to the SBTDC, terminate and the SBTDC will return any monies paid the SBTDC pursuant to this agreement. IN WITNESS WHEREOF, Orange County has caused this Agreement to be signed in its name by its County Manager, attested by the Clerk to the Board of Commissioners, and sealed with its corporate seal, and the University of North Carolina at Chapel Hill acting for and on behalf of its Small Business and Technology Development Center has caused this Agreement to be signed in its name by its Director, Office of Research Services, and all authority duly given, the day and year first above written. 7 ORANGE COUNTY By: County Manager [OFFICIAL SEAL] ATTEST: Clerk to the Orange County Board of Commissioners UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL By: Robert P. Lowman, Director Office of Research Services NORTH CAROLINA ORANGE COUNTY 8 , Notary Public for said County and State, certify that Beverly A. Blythe personally came before me this day and acknowledged that she is Clerk to the Board of Commissioners of Orange County, and that by authority duly given and as the act of Orange County, the foregoing instrument was signed in its name by John M. Link, Jr. , Orange County Manager, sealed with its official seal, and attested by herself as its Clerk. Witness my hand and official seal, this the day of , 1992. Notary Public My commission expires: North Carolina Orange County , a Notary Public for said County and State, do hereby certify that Robert P. Lowman personally appeared before me this day and acknowledged that he is the Director of the Office of Research Services, University of North Carolina at Chapel Hill, and that by authority duly given and as the act of the University of North Carolina at Chapel 9 Hill, the foregoing instrument was signed in its name by him. Witness my hand and official seal, this the day of , 1992. Notary Public My commission expires: Central Carolina Region 10 North Carolina Small Business and Technology Development Center 608 Airport Road Suite B Chapel Hill, NC 27514 919/962-0389 Fax: 919/962-3291 4 August 1994 Sponsoring Institutions and Offices Elizabeth City State University Mr. Ted Abernathy Elizabeth City,919/335-3247 Director East Carolina University Orange County Economic Development Commission North Carolina Wesleyan College Post Office Box 1177 Greenville,919/757-6157 Hillsborough, NC 27278 Rocky Mount,919/985-5130 g / University of North Carolina Dear Ted at Wilmington Wilmington,919/395-3744 University of North Carolina Re: SBTDC Orange County Clients - Fiscal 1993/1994 at Chapel Hill North Carolina Central University To help evaluate SBTDC service to clients in Orange Chapel Hill,919/961-0389 County, the starting point is the numbers which you will North Carolina State University find in the attached computer statistics. Beyond the num- Raleigh,919/571-4154 bers, I am also providing information on anecdotal success Fayetteville Slate University stories and special pros ects. Pembroke State University Campbell University Methodist College I trust this will be helpful for your needs. Should Fayetteville,919/486-1727 helpful Y Pembroke,919/521-6603 further information be necessary, please let me know. North Carolina A&T State University We look forward to our continuing relationship. University of North Carolina at Greensboro Greensboro, 919/334-7005 Best regards, Winston-Salem Slate University Winston-Salem,919/750-2030 University of North Carolina at Charlotte Charlotte, 704/548-1090 R. Daniel Parks Appalachian Stale University Director Boone, 704/161-2492 Western Carolina University University of North Carolina cc: Marc King at Asheville Cttllowhee, 704/227-7494 /Associate State Director, SBTDC Asheville, 704/154-1921 Hickory, 704/345-1110 Encl. A business and technology extension service operated as an inter-institutional program of The University of North Carolina 11 Computer Report: There is one report run for 7/1/93 through 12/31/93 and one run for 1/1/94 through 6/30/94 (our current system will only produce reports within a calendar year. ) Combined, these reports show that we served 227 clients during the fiscal year. Percentages are as follows: TYPES OF BUSINESS Retail 19% Service 48% Wholesale 8% Manufacturing 9% Construction 0.4% Not In Business 16% Female-owned 33% Minority-owned 18% AREAS OF COUNSELING Startup 29% Source of Capital 18.5% Marketing 17% Procurement (reported separately) Accounting 4% Fin. Analysis 8% Inventory 0 Eng. R&D/Tech. 14% (technology Incl. with R&D) Personnel 1.4% Computer Systems 0 Int' l Trade 3 .4% Bus. Liq. /Sale 5% 4' 12 SBDC BUSINESS DEVELOPMENT COUNSELING REPORT FOR CENTRAL CAROLINA REGIONAL CENTER (Name of SBDC) + + + + DATE QUARTER FISCAL YEAR TO DATE RANGES 07-01-93 THRU 12-31-93 07-01-93 THRU 12-31-93 + + + ITEM NO. HOURS* HRS PER NO. HOURS* HRS PER CASES CASE CASES CASE ALL CASE TOTALS= I 1251 778 . 951 6 .23 I 1251 778 . 951 6 .23 TYPE OF BUSINESS 1 . Retail 25 96 . 95 3 . 88 25 96 . 95 3 . 88 2 . Service 63 344 . 20 5 .46 63 344 .20 5 .46 3 . Wholesale 8 22 . 25 2 . 78 8 22 .25 2 . 78 4 . Manufacturing 6 121 . 00 20 . 17 6 121 . 00 20 . 17 5 . Construction 1 2 . 50 2 . 50 1 2 . 50 2 . 50 6 . Not In Business 21 167 . 80 7 . 99 21 167 . 80 7 . 99 BUS . OWNERSHIP/GENDER 1 . Male 62 460 . 30 7 .42 62 460 . 30 7 .42 2 . Female 40 167. 05 4 . 18 40 167 . 05 4 . 18 3 . Male/Female 22 127 .35 5 . 79 22 127 . 35 5 . 79 VETERAN STATUS 1 . Veteran 8 41 . 15 5 . 14 8 41 . 15 5 . 14 2 . Vietnam-Era Veteran 5 119 . 70 23 . 94 5 119 . 70 23 . 94 3 . Disabled Veteran 0 0 . 00 0 . 00 0 0 . 00 0 . 00 SBA CLIENT 1 . Borrower 0 0 . 00 0 . 00 0 0 . 00 0 . 00 2 . Applicant 0 0 . 00 0 . 00 0 0 . 00 0 . 00 3 . 8 (a) Client 0 0 . 00 0 . 00 0 0 . 00 0 . 00 4 . Surety Bond 0 0 . 00 0 . 00 0 0 . 00 0 . 00 5 . COC 0 0 . 00 0 . 00 0 0 . 00 0 . 00 6 . None 124 754 . 70 6 . 09 124 754 . 70 6 . 09 ETHNIC BACKGROUND A. RACE 1 . Amer. Indian or AL Native 1 1 . 50 1 . 50 1 1 . 50 1. 50 2 . Asian or Pacific Islander 8 37 . 50 4 . 69 8 37 . 50 4 . 69 3 . Black 14 56 . 65 4 . 05 14 56 . 65 4 . 05 4 . White 101 659 . 05 6 . 53 101 659 . 05 6 . 53 B . ETHNICITY 1 . Hispanic 2 4 . 10 2 . 05 2 4 . 10 2 . 05 2 . Not Hispanic 122 750 . 60 6 . 15 122 750 . 60 6 . 15 + + + + + + + (Continued on Next Page) 13 SBDC BUSINESS DEVELOPMENT COUNSELING REPORT (CONT. ) CENTRAL CAROLINA REGIONAL CENTER (Name of SBDC) QUARTER FISCAL YEAR TO DATE + + + + ITEM NO. HOURS* HRS PER NO. HOURS* HRS PER FORMS FORM FORMS FORM AREAS OF COUNSELING 1 . Bus . Startup/Acquisition 103 150 . 20 1 .46 103 150 . 20 1 .46 2 . Source of Capital 57 120 . 15 2 . 11 57 120 . 15 2 . 11 3 . Marketing/Sales 66 137 .40 2 . 08 66 137 .40 2 . 08 4 . Government Procurement 2 2 . 50 1 .25 2 2 . 50 1 . 25 5 . Accounting & Records 16 24 . 60 1 . 54 16 24 . 60 1 . 54 6 . Fin. Analysis/Cost Control 40 130 .25 3 .26 40 130 . 25 3 . 26 7 . Inventory Control 0 0 . 00 0 . 00 0 0 . 00 0 . 00 8 . Engineering R & D 24 83 . 25 3 .47 24 83 . 25 3 .47 9 . Personnel 1 1 . 50 1 . 50 1 1 . 50 1 . 50 10 . Computer Systems 0 0 . 00 0 . 00 0 0 . 00 0 . 00 11 . International Trade 15 98 . 60 6 . 57 15 98 . 60 6 . 57 12 . Business Liquidition/Sale 11 17 . 50 1. 59 11 17 . 50 1 . 59 13 . Technology 0 0 . 00 0 . 00 0 0 . 00 0 . 00 + + + + I certify that these figures are accurate to the best of my knowledge . Signature : Title : Date : 1 ■ 14 SBDC BUSINESS DEVELOPMENT COUNSELING REPORT FOR CENTRAL CAROLINA REGIONAL CENTER (Name of SBDC) + + + + DATE QUARTER FISCAL YEAR TO DATE RANGES 01-01-94 THRU 06-30-94 01-01-94 THRU 06-30-94 + + + ITEM NO. HOURS* HRS PER NO. HOURS* HRS PER CASES CASE CASES CASE ALL CASE TOTALS= 1021 735 . 95J 7 . 221 1021 7355I 7 . 221 TYPE OF BUSINESS 1 . Retail 18 60 . 00 3 . 33 18 60 . 00 3 .33 2 . Service 45 280 . 80 6 .24 45 280 . 80 6 . 24 3 . Wholesale 9 28 . 95 3 .22 9 28 . 95 3 . 22 4 . Manufacturing 14 154 . 05 11 . 00 14 154 . 05 11 . 00 5 . Construction 0 0 . 00 0 . 00 0 0 . 00 0 . 00 6 . Not In Business 15 208 . 90 13 . 93 15 208 . 90 13 . 93 BUS. OWNERSHIP/GENDER 1 . Male 53 324 . 05 6 . 11 53 324 . 05 6 . 11 2 . Female 34 119 .40 3 . 51 34 119 .40 3 . 51 3 . Male/Female 15 292 . 50 19 . 50 15 292 . 50 19 . 50 VETERAN STATUS 1 . Veteran 5 22 . 75 4 . 55 5 22 . 75 4 . 55 2 . Vietnam-Era Veteran 1 6 . 00 6 . 00 1 6 . 00 6 . 00 3 . Disabled Veteran 1 4 . 00 4 . 00 1 4 . 00 4 . 00 SBA CLIENT 1 . Borrower 0 0 . 00 0 . 00 0 0 . 00 0 . 00 2 . Applicant 0 0 . 00 0 . 00 0 0 . 00 0 . 00 3 . 8 (a) Client 0 0 . 00 0 . 00 0 0 . 00 0 . 00 4 . Surety Bond 0 0 . 00 0 . 00 0 0 . 00 0 . 00 5 . COC 0 0 . 00 0 . 00 0 0 . 00 0 . 00 6 . None 55 410 .40 7 .46 55 410 .40 7 .46 ETHNIC BACKGROUND A. RACE 1 . Amer. Indian or AL Native 3 5 . 90 1 . 97 3 5 . 90 1 . 97 2 . Asian or Pacific Islander 5 18 . 90 3 . 78 5 18 . 90 3 . 78 3 . Black 10 49 . 85 4 . 99 10 49 . 85 4 . 99 4 . White 84 661 . 30 7 . 87 84 661 . 30 7 . 87 B . ETHNICITY 1 . Hispanic 5 15 . 50 3 . 10 5 15 . 50 3 . 10 2 . Not Hispanic 97 720 .45 7 .43 97 720 .45 7 .43 + + + + + + (Continued on Next Page) } 15 SBDC BUSINESS DEVELOPMENT COUNSELING REPORT (CONT. ) CENTRAL CAROLINA REGIONAL CENTER (Name of SBDC) + + + + Q U A R T R ( FISCAL YEAR TO DATE + + + + + + + + I T E M NO. HOURS* HRS PER NO. HOURS* HRS PER FORMS FORM FORMS FORM -+ + + + AREAS OF COUNSELING 1 . Bus . Startup/Acquisition 79 114 . 10 1 .44 79 114 . 10 1 .44 2 . Source of Capital 58 209 . 20 3 . 61 58 209 . 20 3 . 61 3 . Marketing/Sales 38 74 . 85 1 . 97 38 74 . 85 1 . 97 4 . Government Procurement 0 0 . 00 0 . 00 0 0 . 00 0 . 00 5 . Accounting & Records 9 29 . 50 3 . 28 9 29 . 50 3 . 28 6 . Fin. Analysis/Cost Control 9 20 . 35 2 . 26 9 20 . 35 2 . 26 7 . Inventory Control 0 0 . 00 0 . 00 0 0 . 00 0 . 00 8 . Engineering R & D 61 201 . 50 3 . 30 61 201 . 50 3 . 30 9 . Personnel 8 18 . 90 2 . 36 8 18 . 90 2 . 36 10 . Computer Systems 0 0 . 00 0 . 00 0 0 . 00 0 . 00 11 . International Trade 6 25 . 75 4 .29 6 25 . 75 4 . 29 12 . Business Liquidition/Sale 20 39 . 90 2 . 00 20 39 . 90 2 . 00 13 . Technology 0 0 . 00 0 . 00 0 0 . 00 0 . 00 + + + + + + + + I certify that these figures are accurate to the best of my knowledge . Signature : Title: Date : 16 Success Stories: 1. Client originally approached us for help in buying an existing printing business in Durham. When her offer was rejected, she began planning to open a new duplicating center in Carrboro. She obtained approval of the Carrboro Revolving Fund for a Loan of $17, 000 and the granting of a loan of $10,000 by the Self Help Credit Union. We helped client develop a comprehensive Business Plan and Cash Flow projections. 2 . Multimedia company (Chapel Hill) has joined with the owners of video production company to produce and market video instruction packages aimed at the education market dealing with Conflict Resolution in Schools. We assisted in their business plan and various versions of a Cash Flow Projection and Break even analysis. They successfully raised $100, 000 of private capital that will enable the firm to bring the product to market. 3 . We visited manufacturing firm in the third quarter 1993 on our Orange County Manufacturer's survey. Using strategy suggested at our original meeting client approached existing bankers, CCB, through regional credit manager level and negotiated a $100,000 line against account receivables. We are now about to work with them on expanding from existing premises during 1994 and possibly buying raw land on which to build a factory/warehouse. 4 . Referred to us by a local bank, we assisted client in purchasing a major name service station in Chapel Hill including freehold and renovation. Successful completion with $550,000 in financing. We assisted with production of business plan, financial projections, and SBA loan application forms. 5. We developed a Cash Flow Projection for Hillsborough manufacturer. This enabled them to negotiate an additional $60, 000 w/capital line from their bankers, UCB. Disappointingly, UCB would not collateral- ize it solely on A/R's but a start has been made towards the eventu- al goal of stripping away personal assets as collateral leaving the lending bank with current assets as collateral. 6. Client, a young lawyer, used to work for a prestigious Hillsborough firm and wanted to establish his own law firm in that town. We worked with him and his prospective lending banker, Centura. We helped with CFP's and review of his business plan. Loan of 25k was agreed against a parental guarantee and client opened his office in December 1993. 7 . Client came to us with a very well prepared Business Plan. He was from Wilmington, Delaware with good experience in the food service industry (recent experience selling wines nationally for a Califor- nia winery) . We helped him research possible locations for a coffee roastery combined with a specialty coffee shop and reviewed his plan for strategy vis-a-vis lending Banks. We set up appointments with 5 banks: Wachovia, First Union, UCB, Centura, and CCB. Only First Union declined to lend and the client selected Wachovia as provider for his SBA Gteed loan--originally $60, 000, but raised to $80, 000 when full costs of refitting became known. Client's equity invested is $55, 000. Business located in Chapel Hill. ii 17 8 . Carrboro. Startup administrative service business (word processing, resume writing) . We helped with cash flow/review of business plan. Client received loan of $20, 000 from FUNB for expansion to new , facility. Moved 11/15/93 . 9. Long standing Hillsborough manufacturer. We provided financial planning and exploratory financial work to establish viability of company. Developed a Cash Flow Projection against which investors could test various scenarios. Assisted by updating these CFP as negotiations with existing owners and lending Bank (CCB) evolved. As part of this process investors identified a need for a CEO. We assisted in successful introduction. 10. Chapel Hill. We were asked to review the client's Business Plan. We suggested a strategy for approaching Banks after some minor amendments to plan. Set up appointments with Regional Banks-- NationsBank, Wachovia, and First Union) that would be best able to help in expansion into the South Eastern USA. First Union agreed to lend $80, 000 with a further $50,000 line of credit to assist WP to finance local publications pending investments by local physi- cians and to finance expansion regionally. 11. Orange County manufacturer. We worked closely and for many hours with the company's CPA to gain creative financing for inventory/rec- eivables. This included making 3 bank presentations with the client company. Company obtained $700,000 from UCB. CPA has requested our help with the further development of the company's marketing plan. 12 . Chapel Hill. Client has leased renovated restaurant space. They borrowed $225, 000 from Raleigh Federal Bank (Fuquay Varina) against an SBA guarantee; the balance of $300, 000 costs has been injected by owner as start-up capital. Client is in the process of hiring 6 full time and 8 part-time employees and hopes to be operational in within the month of August 1994. Our involvement was to review and comment on the client's business plan and CFP as these were developed and as a number of alternative locations were considered for the restaurant. We also referred client to a number of local banks for consideration of the loan application. 13 . Carrboro. Nonprofit organization - teaches the skills of conflict resolution through curricula and resources, workshops and profes- sional training. Client came in with concerns about the Center's recordkeeping and a system for developing reliable financial data for management and Board of Directors. CFPE has successfully computerized its recordkeeping with a system that will enable management and board to have beneficial and timely financial re- ports, a first in the ten year history of the center. SBTDC assisted with identification of software for current and future use; assisted with setup as well. 18 Projects: 1. OCCAC - Barry Phillips contributed over 200 hours to this project for the purpose of: A. Writing the business plan. B. Developing over 14 versions of cash flow incorporating sensi- tivity analysis as financing evolved from a 10 year loan to 30 year bonds. 2 . Midway Survey. Outward bound experience to talk with local busi- nesses about community and economic development issues. Report on file with Orange County EDC. 3 . Women Business Owners' Roundtable (Orange County) - SBTDC has cosponsored. Mary Brown attended regular monthly meetings sharing experiences and information that both promote and support the growth of women-owned businesses. 4 . Along with Ted Abernathy, Dan Parks and Barry Phillips met with Karen Giroux of NFM for discussion on that organization's possible interest in a Business Incubator in the Triangle Area and our potential assistance in such a plan. 5. Another initiative during the first quarter was the development of a Library for our regional center. This is a topical library for use by our counselors in their regular client service. There is other research potential. 6. I met with Chapel Hill/Carrboro Chamber of Commerce representatives regarding their study of nonprofit needs for business management. I also met with John Walker of 501 Management and the Orange County United Way concerning the Chambers nonprofit study. Financing: During this fiscal year, the SBTDC assisted in obtaining financing totalling $2 , 018, 000 for Orange County clients. This is in addition to the OCCAC project of $10.5 million.