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Who will fund the CDC?

Tension ran high at the most recent meeting of the Pagosa Springs Community Development Corporation on the heels of an announcement from Archuleta County Administrator Greg Schulte that there is no room in the county budget for funding the CDC and several similar organizations.

At one point during the meeting board member Mark Weiler read from an e-mail sent by Schulte to CDC board chairperson Muriel Eason, which stated, “As the designated budget officer for the county, I am required to present a balanced proposed budget on or before October 15th. Due to the significant reductions in revenues we are expecting, I am not including in the initial proposed budget funding for organizations such as CDC, Seeds of Learning, AAA, CFR, etc.”

However, Schulte’s e-mail went on to describe a special budgetary hearing the Board of County Commissioners will hold sometime during the first week of October at which these organizations will be able to present their cases, and suggested a list of documentation that would help the commissioners decide whether or not to continue with funding.

This list included a copy of an organization’s most recent budget, a copy of its accomplishments during the year, how it has used county funding in the past, how it will use county funding in the future, and why it would be in the best interest of the county taxpayer to continue funding it.

Clifford Lucero, chairman of the BoCC, who also served a term on the CDC board, said, “I always thought with the CDC our goal was to get them going, get things up and running, and then let them do their own thing. The business community needs to support the CDC, and if it’s going to succeed it has to succeed with the business community’s help.”

Mayor Ross Aragon, who served on the CDC board at the same time as Lucero, said that he was not aware of any similar notice being sent to the CDC from the Town of Pagosa Springs, although he did echo similar concerns about whether or not it was the best way to spend taxpayer money.

Speaking of the funding the CDC has received from the town in the past, Aragon said, “It was always meant to be a hand up, not a hand out. I do my best to remain sensitive to public sentiment, and from what I have heard people don’t agree with the government using taxpayer dollars to subsidize businesses.”

Lucero said, “I was on the CDC board, but then, obviously, Rich Lindblad (executive director of the CDC) and some of the other board members wanted to get government off the board and to wean the CDC from government funding as well. At that point I came off the board, and so did the mayor, actually. We came off of the board at the same time. They felt it was important, and so do we.”

Aragon denied any personal conflicts or hard feelings surrounding the departure of himself or Lucero from the CDC. “My term was up,” he claimed. “From the beginning it was only supposed to be for one year… or maybe it was two years; I forget, but it was a limited term, and my time was just up.”

Eason, on the other hand, expressed concern that personal feelings may have played a role in the town and county pulling away from the CDC. “It seems like the town and county are setting up to say ‘no’ to funding, and it has more to do with personal issues with people on the CDC board, particularly Morgan (Murri), but also myself. It’s all personal.”

Eason went on to explain that she and Murri are outspoken opponents of Wal-Mart. “Udgar was definitely part of the energy behind the anti-Wal-Mart movement, but he was a little more in the background. He was a little more cautious about publicly putting himself out there in any direct way.” Udgar Parsons and Morgan Murri are both current CDC board members.

During the most recent CDC meeting Eason began a PowerPoint presentation in which she claimed, “The PSCDC helped create more than 47 new jobs for $1.2M in annual wages and a local economic benefit in excess of $7M/year. The PSCDC also helped retain an additional 35 jobs for an estimated annual payroll of $900K/year with a local economic benefit of 5.4M/year.” The implication is that, since the town and county investment last year totaled $110,000, the return on their investment was $112 dollars for every $1 dollar invested.

At this point Ken Vickerstaff interrupted the presentation with a question about how organizations like the CDC are funded in other counties, especially in terms of how much money comes from the government, how much comes from the private sector, and does that change over time as an economic development organization matures.

Lindblad responded, “La Plata County has had their economic development organization in place for about 12 years, but the ratio of monies coming from government to monies coming from the private sector is about 55 percent government to 45 percent private right now.”

Ed Morlan, executive director of Region 9 Economic Development District of Southwest Colorado, explained that in Montezuma County it is almost entirely funded by the government, in Dolores County it is almost all volunteer, in Silverton there is no private funding at all, and in La Plata County, whose economic development organization has the largest budget out of all five counties in region 9, funding is about half and half.

Eason said, “It sounds like that shifts over time, based on the maturity of the organization. For example, having a very mature value proposition to local businesses will win more support from those businesses.”

Vickerstaff then questioned the validity of Eason’s presentation, especially in regard to how 47 jobs could create $7M annually in economic benefit. “Something’s amiss. I only caution that good works can be skewed in the public’s view if they are presented with numbers that don’t make sense to the average layperson. You’ve got other numbers that are great. Don’t play the math game with the re-circulation number of $7M.”

At this point Eason read a question prepared by Jason Cox, the newest member of the CDC board, which asked for suggestions as to what the CDC could do in the future to be more of a benefit to the local business community, and several audience members began discussing the idea of a newsletter containing marketing information, published on a regular basis, and distributed to all businesses in town. The consensus was that small businesses do not have the time or the resources to gather such information and would benefit greatly from the CDC providing it to them.

“And we do that in great detail,” Lindblad explained. “My source of that information goes back to the Fort Lewis College Small Business Development Center. They have access to at least 12-15 databases: business databases, marketing databases, statistical databases.

“When a business is introduced to us, and we sit down and try to figure out what their needs are, we will attack that problem with however many databases are necessary to help them out. We do a little program called benchmarking, and Ed Morlan’s organization helps there as well.”

Aurora Wright, owner of Mud Shaver Car Wash, gave a testimonial about how she got her business started and how it has developed. While working at Parelli she took a 12-week entrepreneurial class through the Archuleta Economic Development Association, the precursor for the CDC, and she got so much out of the class that she decided to take it a second time. This was where she learned how to create a business plan.

“I wrote a business plan on a car wash,” she explained, “and it seemed in vain, kind of a fruitless exercise, but a year later, Mud Shaver came up for sale. I proposed my 22-page business plan to Wells Fargo SBA loan division and they said, ‘This is a no-brainer. You’ve done your due diligence. There’s some thoughtfulness here.’ In fact, we closed early, which is rare for the SBA.”

Wright went on to describe how her business has grown in the last three years with the addition of a car-detailing tent, and how this growth is a direct result of additional classes she has taken with Lindblad’s wife, Patsy, and Joe Keck from the SBDC.

She described Keck and Lindblad helping her to work on her business instead of in her business, and discovering, “Sure enough, we had tripled in the last 12 months. I had no idea. It was time for me to take my pulse and get a feel for where I was.” She described getting benchmarked and what that entailed as far as building a business strategy.

When Wright was finished there was a roar of applause, and one of the audience members said, “If you could get that presentation down to about three minutes and into every merchant’s hands in town, that would be what I was talking about. You guys have to get aggressive about selling the benefits of the CDC and this is about the best job that’s ever been done in all my time of coming here. This is what Rich does, this is what the CDC can do, and this is what my business has done with it.”

In a follow-up interview after the meeting, Lindblad described the work he has done for the CDC since he was hired last September, claiming to have worked over 250 days straight without a single day off, and describing the benchmarking process, where he will go into a business and observe how it operates until he figures out how to fix it, like Chef Ramsey from Kitchen Nightmares.

“The only problem is,” Lindblad explained, “when a business owner comes to us for help, the first thing we do is sign a confidentiality contract. We aren’t allowed to talk about the businesses we help. Unless they come forward and volunteer to testify, we can’t use them as part of a presentation to town council or the BoCC. Think about it: If you owned a business and it was struggling and you had to go to the CDC for help, you wouldn’t want anyone to know about it, especially not your competitors. They would tear you apart.”

The CDC provides these classes and benchmarking services to business owners free of charge, because the only expense the CDC has is Lindblad’s salary, which up until now has been covered by funding the CDC gets from the town and the county.

The irony of the situation is if the town and county stop providing funding, according to Eason, the CDC will either have to find alternative sources of funding or cut back on expenses, which would mean letting the salaried staff go. The question no one seems to be asking, however, is if the CDC lets Lindblad go, then what service would the CDC provide that a business owner couldn’t get directly from Ed Morlan at Region 9 or Joe Keck at the SBDC?

ed.fincher@pagosasun.com

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