Loading...
HomeMy WebLinkAbout3 coreExhibit B 3CORE FINANCING • MENTGflING • PERSPECTIVE Butte COBntYAdmrnistration January 1D, 2D11 Frnance & Risk Management JAfV f 2 2011 Butte County Board of5upervisors 4rovi!!e, California County of Butte 25 County Center Drive, Suite 213 Oroville, CA 95965 Re: Comments on the proposed Butte County Regional Economic~Development Strategy Dear I-Eonorable Members of the Board, I appreciated being invited to the briefing"moderated by Paul Hahn and'Jennifer Macarthy last Friday concerning the proposed Butte County Regional Economic Development Strategy. This strategy, l believe, is a realistic plan to properly define the County's specific economic development interests and its role in pursuing these interests in concerti with its partners. One fact bears repeating,:=Butte'County is a haven for small businesses. According to the California Department of Finance, aiier'54%a of-Butte County busines5es`employ 5 or fewer employees while about 88% of Butte County businesses employ less than 20 employees. As you move to define this strategy and put policies into action, keep in mind that Butte County is home to these micro-enterprises, who have unique financing and technical assistance needs.'I look fonrvard to working with you to address these needs through otfr longstanding: partnership. In many respects, we are already addressing many of;the initiatives noted;in.this Strategy. One, since 2003, 3CORE and Bane County have been<in-~plerrertirig Lhe butte County Business Incubation Program (BCBIP}, a successful micro_enterprise rnentorng program. The BCB1P has heiped over"50 entrepreneurs to develop and expand. their businesses within Butte County. Currently, we are in our 5th round of funding through the State Community Deve[opment Block Grant program with $300,BD0 in Round 6 expected to start by September2{}11;:moreover, 3CORE partnered with Butte County in a successful $14D,000 Federal application to augment BCBIP funding. These funds should be available by July 2011. Two,`.3CORE has been pursuing a number of initiatives targeted at increasing capital access for small-and medium-sized businesses°in~utte County. As:you know, the banking sector has struggled these last 2 years with the implosion:ofthe~hausirig bubble"and'the`co.ntinued de-leveraging<of cor~surners~ .". businesses, and public agencies. Since 2008, 311 banks were liquidated by the Federa[ Deposit Insurance Corporation (FDlC}, with 34 of these banks in California and 4 banks in Northern California. The last FDIC estimate for troubled banks totaled 829 nationally. Cultivating Healthy Businesses Because People Matter 3120 Cohasset Road, Suite 5, Chico, CA 95973 voice 530.$93.8732 fax 530.893.0$20 www.3coreedc.org Exhibit B The continuing weakness in the banking sector has and will likely restrict capital access into the foreseeable future, but particularly to those companies that are young, small, or knowledge-rich, but hard-asset poor. SCORE, in light of this problem, is working with a private bank consortium called the California Economic Development Lending Initiative CEDLI). Formed in 1995, CEDLI is charged with expanding capital access to under-served urban and rural areas; CEDLI is capitalized with $42 million by member banks for lending through-out California. The CEDLI Board of Directors will consider, in February, a proposal to focus investment in Northern California, using SCORE (Chico), Superior California Economic Development District (Redding), Yuba- Sutter EDC (Yuba City), and SedCORP (Auburn) as distribution channels to expand lending in the 18- county footprint served by this organizations. CEDLI, through participating co-lending and loan purchases with these established development lenders, will greatly expand our reach into the local micro-enterprise financing market in rural Northern California. Concurrently, SCORE has applied to the U.S. Treasury to become a Community Development Financial Institution (CDFI). The Treasury CDFI Fund has provided over $1.1 billion to organizations dedicated to helping under-served populations and regions. We anticipate Federal approval may be as early as late February. If approved, SCORE can access both capacity funding and capital for lending in our designated service region. In al[, we hope to expand our capital base from $5 million to $10 million over the next 5 years. Since 1995, SCORE has managed Butte County's Community Development Block Grant (CDBG) loan fund. With this $238,000 fund SCORE has completed 1ta business loans since the loan funds inception, totaling $1.345 million; these loans leveraged $24.163 in combined private and public investment while creating or retaining 142 jabs. We expect to continue seeking appropriate financing projects, on behalf of Butte County, as allowed under the current CDBG program criteria and the available funds. If you have any questions whatsoever, please contact meat 893-8732 X204. l look forward to working with you o~ this important Economic Development Strategy and I urge your adoption of the Strategy. Executive Director