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HomeMy WebLinkAboutAgenda - 02-17-2003-8jORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: February 17, 2003 Action Agenda Item No. ~_ SUBJECT: 2002-2003 Small Business and Technology Development Center (SBTDC) Contract DEPARTMENT: Economic Development PUBLIC HEARING: (Y/N) No ATTACHMENT(S): Orange County Success Stories SBTDC Contract INFORMATION CONTACT: Dianne Reid, ext 2326 TELEPHONE NUMBERS: Hillsborough Chapel Hill Durham Mebane 732-8181 968-4501 688-7331 336-227-2031 PURPOSE: The purpose of this contract is to continue support of small business development services for Orange County citizens, as stated in the Economic Development Strategic Plan adopted May 14, 1996, and reaffirmed by the Economic Development Commission in its strategic planning session in August 2000. BACKGROUND: A primary goal of the Economic Development Commission since its inception has been providing assistance to small businesses to enable them to grow and prosper in Orange County. The Small Business and Technology Development Center (SBTDC) provides significant services to local businesses and has operated under contract with Orange County since 1990. The contract provides for $10,000 to be paid in two installments of $5,000 each. The first is to be paid on or about March 15, 2003 and the second on or about May 15, 2003. During calendar year 2002, the SBTDC served 184 Orange County clients for a total of 1,510.5 hours of counseling time: 16 were considered pre-venture clients (in the process of starting their business) representing 46 hours of counseling. 155 were existing businesses representing 919 hours of counseling 13 were High Growth/High Impact businesses representing 545.5 hours of counseling (The 2002 Orange County figures represent a significant increase over 2001, with a 70 percent increase in the number of Orange County clients - 184 versus 108 - and a 30 percent increase in counseling time - 1,510.5 hours versus 1,165 hours.) During 2002, the SBTDC helped six local businesses secure $1,170,000 in financing, enabling these businesses to create 9 part-time and 4 full-time jobs and to retain 5 full-time jobs. Annual economic impact assessments undertaken at the state level (performed by an independent assessment firm) show that SBTDC clients significantly outperform the average for all North Carolina small businesses in both sales and employment growth. Orange County Success Stories for 2002 is included as an attachment to this abstract. With the implementation of the Orange County Small Business Loan Program, the County's partnership with SBTDC has become more important. SBTDC counselors have been working closely with staff of the Economic Development Commission to make potential borrowers aware of the program. In addition, SBTDC counselors have been assisting potential loan pool clients in preparing business plans. To date, all three applicants for the loan program have worked with SBTDC staff on business plan preparation. In addition, the SBTDC has begun working with the Agricultural Economic Development Coordinator this year to offer basic financial record-keeping courses to Orange County farmers. The pilot course, attended by nine local farmers, was held during the week of January 27th. Two more classes are scheduled within the next 60 days. FINANCIAL IMPACT: The annual budget for the Economic Development Commission approved for Fiscal Year 2002-2003 includes $10,000 for professional contract services for this contract. RECOMMENDATION(S): The Manager recommends that the Board approve the contract and authorize the Manager and the Clerk to the Board to execute the contract. Attachment A 3 Orange County Success Stories 2002 Law Firm - Hillsborough "K.S." split from her law partner and opened a new office in Hillsborough, employing two additional attorneys and two office personnel. She had cash flow and revenue problems with the new practice. The SBTDC was able to identify spending reductions, employee billing issues, and marketing ideas to improve cash flow. Immediately after applying recommendations, the practice was able to show significant improvement to profitability. Restaurant - Carrboro "K.M." and her partner owned and operated well-known restaurant in Carrboro. They then opened this second, new operation in downtown Carrboro. They came to the SBTDC for assistance with finding financing to complete renovations. The client was able to obtain amicro-loan from the town of Carrboro; loan package assistance provided by the SBTDC. Coffee Shop - Chapel Hill "R.M." wished to open a coffee business in a new commercial building not far from downtown Chapel Hill. He approached the SBTDC for assistance in writing the business plan and sourcing financing. The SBTDC helped develop the plan and located the financing for this start-up business, to open within a few weeks. Publishing Business - Carrboro A relatively new travel publication business focusing on off-beat destinations in major cities around the world was in danger of failing and came to the SBTDC for immediate assistance. "P.J." and his partner have now published their 5~' issue and have placement in many major retailers and newsstands throughout the country. The SBTDC worked with the client to obtain a Carrboro micro-loan for working capital, and also assisted in the areas of marketing, accounting, and business plan development. Cafe and Pub -Hillsborough "D.B." and her partner, "C.S.", purchased an existing restaurant in Hillsborough, completed extensive renovations, and re-opened in 2002. The SBTDC assisted in valuating the business, writing the business plan, financial projections, and sources of 4 financing. Clients were able to obtain financing to assist with the working capital and renovations. Restaurant - Carrboro A well-known restaurant which has been a client of the SBTDC for many years was encouraged to submit and supported in an application to be recognized by the SBA at various levels as an outstanding business. SBTDC project work included business valuation, succession planning, operations analysis, strategic plan development /training for staff, and MBA team work. Outcome -client won Small Business Person of the Year in North Carolina, and 3rd Runner Up Small Business Person of the U. S. for 2002. Hair Salon -Chapel Hill "C.H." was a partner in an existing hair salon in Carrboro and wished to open her own store. She approached the SBTDC for help with dissolving the old business, writing a business plan, cash flow projections, and sources of financing. Client was able to open her business in the fall of 2002. Aesthetician /Spa Facility - Carrboro Client seeking expansion of her business was assisted by the SBTDC with business plan development, creation of an operations and marketing plan, presentations to potential investors, and application to Carrboro micro-loan program. Outcomes include - successful business relocation which has tripled the company's work space, projections of 55% increase in revenues, and having accomplished this without taking on any additional debt. Various Businesses Throughout Orange County Six local companies were assisted by the SBTDC by means of coordination of 3rd year law students conducting "small business legal audits" and providing other legal consultations. A variety of issues were identified, potential liabilities were addressed / avoided, and companies were able to receive this support without incurring any costs. Eight companies also received in-depth business counseling /services provided by MBA teams from UNC-CH's Kenan-Flagler Business School, and from Elon University's Love School of Business. Projects ranged from writing complete business plans to market research to strategic plan formulations, sourcing of funds, and strategic operations analysis. NORTH CAROLINA ORANGE COUNTY THIS AGREEMENT, made and entered into the day of , 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, 333 Fayetteville Street Mall, Suite 1150, Raleigh, North Carolina 27601-1742, hereinafter referred to as the "SBTDC". WITNESSETH: WHEREAS, the on-going work of the Orange County SBTDC is consistent with 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 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 three 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 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 6 software such as FISCALa 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 bi-annually 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, Goodwork, Self Help, and local professional and civic groups. Sixth, the SBTDC will provide technical assistance, business plan and loan package preparation assistance to businesses and individuals preparing to apply for financing from the Orange County Small Business Loan Pool. Seventh, the SBTDC will provide the EDC with a written 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. Eighth, 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. Ninth, in return for the foregoing, the County will pay the SBTDC $10,000 in two $5,000 installments. The first such installment shall be paid on or about March 15, 2003, and the final payment will be paid on or about May 15, 2003. Tenth, the EDC will actively support and promote the programs and services of the SBTDC within Orange County. Eleventh, the Director of the EDC will become a member of the SBTDC state- wide Advisory Board, as long as this agreement is in effect. Twelfth, the term of this agreement will be 1 year beginning July 1, 2002 and ending June 30, 2003. Thirteenth, this agreement maybe terminated at any time upon the mutual consent of the parties or upon 90 days advance written notice by either party. Fourteenth, 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. Fifteenth, 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 terminate and the SBTDC will return any moneys 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 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. ORANGE COUNTY ATTEST: Clerk to the Orange County Board of Commissioners By: John M. Link County Manager UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL By: Robert P. Lowman, Director Office of Research Services NORTH CAROLINA ORANGE COUNTY I, ,Notary Public for said County and State, certify that Donna Baker 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 , 2003. Notary Public My commission expires: North Carolina Orange County I, , 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 Hill, the foregoing instrument was signed in its name by him. Witness my hand and official seal, this the day of , 2003. Notary Public My commission expires: