Community colleges stop funding business centers

Santa Rosa Junior College's Small Business Development Center specializes in helping entrepreneurs make their dreams a reality. Its own future isn't looking so sunny.

About a third of the center's budget recently vanished after the community college system ended a two-decade relationship with the statewide chain of 35 SBDC centers.

"We thought it was not a good return on investment," said Ray York, dean of economic and work force development for California Community Colleges Chancellor's Office.

The state already halved funding for the centers last year. Ending it altogether means that Santa Rosa's center has seen its state funding go from $150,000 to zero in two years.

For the center, whose total budget was $483,000 last year, the losses are doubly damaging because each state dollar was matched by federal funds.

The results show in its declining output. In 2009, the Small Business Development Center consulted with 543 clients, down from a 10-year average of 840. This year, the number is on track to be lower still.

"We are in jeopardy, if we don't get matching funds, of actually closing our center," said Lorraine DuVernay, director of Santa Rosa's center.

That's dismaying to Connie Ozdil, who recently launched Ami Sol, an online apparel company specializing in sun-protective children's clothing made without synthetic materials or chemical treatments.

Ozdil got the idea for the company while raising her two small children. But she had no idea how to proceed until she began meeting with mentors at the Santa Rosa small business development center three years ago.

She credits the free consultations with shepherding her through a complex process that ranged from registering Ami Sol's trademark to testing products in Australia

"I started from ground zero," she said. "I wouldn't be where I am if it wasn't because of them."

But officials with the California Community Colleges Chancellor's Office said they had little confidence its money was going to such successes.

Despite kicking in more than $2 million a year to the centers, the college system had no say in how the money was used, York said.

Administrative control remained with the the Small Business Administration, the agency that gives federal backing to more than 1,100 small business development centers across the country.

In 2007, the community college system began measuring each center's productivity and efficiency. Santa Rosa's SBDC center was tops in the state in 2006-2007, third in 2007-2008, and seventh in 2008-2009. Community college officials, however, were more concerned with 20 other centers deemed non-performing.

But when the community college system tried to lobby its federal partner to get more influence and to make changes at the low-ranked centers, it was denied, York said.

"We finally got tired of it," he said. "We thought it was not a good use of taxpayer money."

Instead, the community college system will funnel $1.3 million to its own business incubators -- seven planned Business and Entrepreneurial Centers. In the North Bay, the nearest will be in Napa.

Kristin Johnson, chairwoman of the California Small Business Development Center program, said the network was legally not able to meet the college system's request for control.

She disputed claims of poor performance. California's SBDCs are a driving force in the state's economy, she said. In 2007-2008, the 3,720 clients who received more than five hours of consultation at the state's small business development centers created nearly 2,200 jobs.

"We are absolutely a program that is performing well," Johnson said.

The colleges' decision to pull its funds will mean tight times in the near future for the state's SBDC centers, she said.

But the scramble for short-term funding has yielded better than expected results, she said. Local entrepreneurs will still have a place to go.

"There is not going to be a closed center in Santa Rosa," she said.

You can contact Staff Writer Sam Scott at 521-5431 or sam.scott@pressdemocrat.com.