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Economic Development Department Directed To Create A Worker Co-op Pilot Program

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The Austin Cooperative Business Association announces a big win for cooperatives in Central Texas, as the Austin City Council passes an express directive to the Economic Development Department to pilot a worker cooperative development program in fiscal year 2020.  This program will create outreach and education materials, and provide direct technical assistance to groups seeking to form worker owned businesses as well as cooperative conversions, in which an existing business is sold to its workers.

In 2014 Austin City Council commissioned a study of how the City could support the development of cooperatives more concretely. In 2016 the results of the Economic Development study by Morningside Research provided many recommendations for how the city could move forward to support small business development in Austin by supporting the cooperative model. In 2017 the Economic Prosperity Committee and City Council requested that the recommendations from the 2014-2016 report be responded to and implemented. City staff responded with specific recommendations, including that $75k be allocated towards specific cooperative development initiatives.

The specifics of the recommendation include $50,000 for a pilot program to provide training, technical assistance, referrals, and outreach, $20,000 for providing technical assistance to owners and workers when converting businesses to co-ops, and $5,000 for advertising costs to promote succession to a worker cooperative to a wider audience, and assisting the city’s Small business Program with developing an online “How To” guide.

Last year, this item was favorably received by several Council members during the budgeting process, although it was not ultimately included in the 2019 budget. Now a budget directive, introduced by CM Leslie Pool and championed by CMs Garza, Tovo, Harper-Madison and Casar, will enable the Economic Development Department to move forward creating programming to support cooperative businesses here in Austin.

With the initiation of this pilot program, Austin joins peer cities around the country who already include co-ops in their overall small business development programming such as Madison, WI, Berkeley, CA, New York City and Cincinnati, OH.

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