MYRTLE BEACH — A decision by Blue Crab Festival organizers to keep a year’s worth of profits in the bank rather than distribute them to area nonprofit groups has put a financial squeeze on the Little River Chamber of Commerce, but Horry County Councilman Harold Worley said the decision will benefit everyone in the long run.

“The [festival] board decided last month to put last year’s profit in reserve,” said Worley, who helped organize efforts last year to save the festival. The festival, held each May along the waterfront in Little River, traditionally has split its profits among several civic and charitable groups, including the chamber. But Worley said the festival would have been left without any money in the bank if it had distributed last year’s profits as originally planned.

“That would have left the organizers pulling money out of their pockets to pay the bills if there was a rainout,” Worley said. “The [festival] board didn’t want to do that. Hopefully this year, if we have a good year, we should have between $80,000 and $100,000 to give out to our list of organizations.”

The promise of a future windfall is good news for Ed Horton, chairman of the chamber’s board of directors, but in the meantime the chamber is operating on a shoestring budget.

“Our financial situation right now is very tenuous,” Horton said. Horton did not give specific financial figures for the chamber, but the group historically operates on a budget of about $250,000 per year, according to Guidestar, a database of nonprofit financial information.

“We had anticipated and budgeted for money from the Blue Crab Festival, so it would be a great benefit if we were to get it,” he said. “Not getting it has created a terrible cash flow problem.”

Festival organizers initially said they would give money from the 2012 event to the chamber and other nonprofit groups. But festival organizers were hit with tens of thousands of dollars in unexpected expenses when they had to purchase or rent new tents, electrical and other equipment just months before last year’s event. Tracie Waller, the festival’s director, said some of the businesses that had donated the use of tents and equipment in the past decided not to let the festival use them in 2012.

Waller said the festival expects to sign new sponsors this year that will help defray some of the equipment rental costs.

However, the possibility of unexpected expenses again this year led organizers to keep the 2012 profits – between $40,000 and $50,000, according to Worley – in the bank instead of doling them out to other groups.

“We felt like we need to be a bit conservative with our money,” Waller said. “It takes a lot of money to put on an event like this. You have to pay for security, an electrician, the shuttle buses, insurance, tickets . . . a lot of little things most people just don’t think about.”

For example, the event nearly doubled its $10,000 advertising budget to make sure the public knew the 2012 festival was going to be held after previous organizers announced that it had been canceled.

A group led by former festival chairman Allen Lee sent a letter to Little River business owners in November 2011 saying that the following year’s Blue Crab Festival would not be held so the committee could “address issues such as [the] number of vendors the festival can accommodate, selection, placement and set up of vendors/exhibitors, vendor parking, entertainment, transportation and security.”

During an Horry County Council meeting in December 2011, Steve Speros – another former festival organizer – said the Blue Crab Festival had grown too large for the small group of volunteers who had been running it to provide proper oversight of the event. Speros said those volunteers “had worked themselves to death to keep it going and after nine years they were tired,” according to minutes of the council meeting.

Worley, saying the festival is too vital to Little River’s economy to take a year off, helped organize a new festival committee – comprised of waterfront business owners, residents, community leaders and chamber officials – to pull off the 2012 event in less than four months. When that committee was formed, it promised the chamber would continue to receive some of the festival’s profits. That decision was reversed during a committee meeting last month.

“We were to be a major beneficiary . . . that was the way it was described in the earlier meetings,” Horton said. “There was never any contract, but we were anticipating $10,000 from the festival.”

Without the funding, Horton said, the chamber has had to rely on the county to cover costs of waterway and highway lighting and median maintenance, including mowing and trash pickup that traditionally has been funded through the chamber’s budget. The county has agreed to give the chamber $113,697 in accommodations tax collections this fiscal year to cover those costs and festival marketing, but it can take months for those disbursements to occur. The Blue Crab Festival money would have helped cover some of the costs between the time they are incurred and when the tax money arrives, Horton said.

“Hopefully, by the end of January it [the tax money] will come,” he said. When it does, Horton said the chamber will reimburse the county for the lighting and median work it has done.

The Blue Crab Festival also will be getting $10,000 this year from accommodations tax funds – collected on lodging stays in the county – to help market the event.

The chamber also is planning its own festival – an outdoor sports show in April – to bring in some additional revenue. That festival, to be held at the Harbourgate Marina, is in addition to the chamber’s annual Shrimp Festival held each October. The outdoor sports festival will feature an in-water boat show, archery, fishing, hunting and garden and landscaping demonstrations.

Worley – who represents District 1, which includes Little River – said Blue Crab Festival organizers are smart to keep last year’s profits in reserve to ensure the event remains financially sound in the future. After all, without a festival there would be no money to distribute to others. However, Worley said the festival’s longtime mission of donating its money to nonprofit groups is important and will continue this year.

“The chamber will get the lion’s share of that money,” Worley said. “I’ve said that from day one and I won’t change my mind.”

Contact DAVID WREN at 626-0281.