The Myrtle Beach Regional Economic Development Corp. is falling short of the revenue from membership that it budgeted for this fiscal year, causing the organization to trim costs in other areas.
EDC CEO Brad Lofton told executive committee members Wednesday that he is now projecting a $57,000 shortfall, but later said it’s possible that the original estimate will be met.
“I think we’ll hit the big number,” Lofton said after noting the EDC received $6,000 in new membership revenue Wednesday and $19,000 in the 60 days before that.
Committee members wouldn’t accept his new estimate and told him to trim just $22,000 from the year’s membership revenue projection.
“What’s a reasonable number?” executive committee member Doug Wendel asked at the meeting. “I mean $57,000, that’s a big reduction.”
Lofton originally budgeted $337,000 in membership revenue for the fiscal year that ends June 30. His new projection was $280,000, which officially became $302,000 after committee action.
Marketing services took the big hit in the cost cutting to meet the lower revenue projection, absorbing $38,000 in cuts. Some items in the overall budget were increased in the new projection, including contract services, production of the annual report, trade show attendance and business development, travel, workers comp and telephone.
But the largest of the increases was an additional $15,000 in professional fees primarily associated with attorney costs in finalizing agreements with new employers.
Most of the increased costs came from recruiting new employers. New and existing employers pledged during 2013 to hire 1,500 people in the next five years.
The EDC’s membership fees pay for things such as travel and entertainment for potential new employers that Horry County won’t allow it to pay from the $1.8 million it gives the EDC each year.
Lofton told executive committee members the EDC increased its membership revenue $35,000 in the last fiscal year, and said later his full-year estimate for this fiscal year may have been overly-optimistic. Additionally, the EDC’s old membership director left earlier this year and there was a pause in membership efforts as a new director was hired and trained.
He also said that the organization still needs to send bills to some of its big accounts, which when paid could significantly change the new projection.
Lofton said the EDC is still gaining members, ll in the last month alone. He said the EDC now has 159 members, up from 130 last year.
He said that members may pay from $150 to $40,000 to be a part of the organization. He said Santee Cooper pays the highest membership fee. Other high payers include HTC, Horry Electric, Grand Strand Water and Sewer Authority and the Myrtle Beach Area Chamber of Commerce.
“Some of the bigger contributors,” he said, “they tend to have more to gain (from new employers and more jobs).”
He said there are very few $150 members, a level reserved for individuals who want to support the EDC. Most members pay $500 and above annually.
Lofton agreed that the cuts to marketing could be felt during a planned EDC membership drive scheduled for May. The organization will be doing some advertising at the time of the drive, but Lofton expects the big push to come from current EDC members.
He said he plans to have a phone bank staffed by teams of current members who will compete against one another.
He thinks that effort could actually bring the EDC more membership revenue than had originally been budgeted.
But despite Wednesday’s lower projection, the EDC is alive and well, he emphasized.
“The sky is not falling,” he said. “I promise you.”
Contact STEVE JONES at 444-1765.