Milwaukee County is establishing a small business enterprise program and is nearing a deadline to craft a definition of an SBE. Those companies that qualify for the program would have access to a certain percentage of contract money that has been set aside, much like the county’s disadvantaged business enterprise program.
The county’s original definition of a small business was one that averaged $22.4 million per year over a three-year period, which is the same cap as that used for companies in the DBE program.
But Nelson Soler, director of the county’s Community Business Development Partners office, which would govern the SBE program, has proposed dropping the SBE cap to $4 million, a change that has drawn the ire of the Hispanic Chamber of Commerce of Wisconsin, a veto from Milwaukee County Executive Chris Abele and, on Monday, a second committee hearing to gather public input.
Those critics have expressed concern that the cap would be too low and could restrict the opportunities for many businesses.
But that reaction, Soler said Monday, might be based on misinformation. Ninety percent of the companies that qualify for the county’s DBE program would fall under that $4 million cap, he said, meaning those companies also could qualify as SBEs.
The County Board originally approved the $4 million cap unanimously in March, but Abele vetoed it, citing confusion about how the $4 million cap was established and concerns that community stakeholders were not involved in the process.
Rather than act on that veto, the board called for a second round of vetting through the Economic and Community Development Committee, which on Monday again approved the cap to set up a May 23 County Board vote to override Abele’s veto.
During that hearing Monday, Maria Monreal-Cameron, the Hispanic chamber’s president and CEO, told committee members she is concerned the $4 million cap would be too low.
“A small business can easily exceed this,” she said. “You need to keep that in in perspective.”
Monreal-Cameron could not be immediately reached for further comment Monday afternoon.
Raisa Koltun, Abele’s director of strategic planning, voiced another concern Monday, telling the committee Abele is worried a blanket revenue cap for all industries could hurt some companies. A $4 million cap for one industry, she said, might not mean the same thing in another industry.
But a $22.4 million cap would be too high for SBEs, Soler said, and three factors led him to that conclusion: the $1.2 million, three-year average for DBE revenue in the county; similar size limits in Dane County and the city of Madison; and U.S. Small Business Administration recommendations for set-asides for women-owned businesses.
And a decision must be made soon if the county is to get the program off the ground.
The county’s SBE program, Soler said, received U.S. Department of Transportation approval about nine months ago. He said he was given until May to show progress establishing the program, though he said he suspects he could extend that deadline to a point.
“We’re facing an audit on July 8,” he said after the meeting. “I assume this is one of the questions they would like to have addressed.”
The Federal Aviation Administration, one of the agencies that gives money to the county’s DBE program, will conduct the audit.
Although the Hispanic Chamber spoke against the change, representatives from three other groups threw their support behind it. Charles Vang, president and CEO of the Hmong Wisconsin Chamber of Commerce; Eve Hall, president and CEO of the African American Chamber of Commerce; and Carla Cross, executive director of The Business Council, which is affiliated with the Metropolitan Milwaukee Association of Commerce all said the $4 million cap would benefit their members.
“Most of our members are under the $4 million size,” Cross told the committee. “So we support the change.”