Chamber evaluates programs, looks to reduce overhead

Staff is smaller, office may be next

March 04, 2002|By TaNoah Morgan | TaNoah Morgan,SUN STAFF

Kara Calder, interim president of the Howard County Chamber of Commerce, had hoped for a smooth transition into leading the business organization, but it isn't happening.

Since former President Ken Williams resigned last month, the group has cut and lost staff members and struggled under a burden of excessive overhead, revenue shortfalls and business programs that don't generate enough revenue.

The cash-flow crunch could force the group to move from its downtown Columbia office. Organization leaders say they are trying to re-evaluate their formats and cut costs.

"We have too much overhead," said Michael Galeone, chairman of the chamber's board of directors. He said the group has tightened its belt by eliminating one position and not filling others that are vacant, but the chamber also has to look at its programming as a means of revenue.

"We need to be more focused on profitability from events," he said. "We'll probably look at more frequent events or more relevant events or look at events we don't need to do that are more costly in the time staffers spend on them."

Six months into its fiscal year, the group is revising its 2002 budget of $550,000 because of shortfalls in several areas. The group has no reserve fund to help it ride out the rough transition; the reserves were depleted about five years ago when the chamber made a major technology investment, and the organization made no plans to restore it, Calder said.

Although two sponsorship programs grew tremendously in the last year, revenues from membership and advertising are down significantly.

The chamber has collected approximately 21 percent less than it has billed members for renewals, and new memberships are down 15 percent from this time last year, Calder said.

Advertising took the hardest hit. The business directory, from which the chamber generates significant advertising revenue, lost about $25,000 when a printing vendor was unable to finish the job and the group had to hire another printer, Calder said. That loss alone is more than 50 percent of the revenue the group had anticipated from the directory.

Expenses for programs and events also were up last year, compared to revenues, Calder said.

"Overall, our operating structure was too high," she said. "When you get to a point where your revenues don't meet your objectives, you have to look at cost-cutting measures."

One of the first things on the chopping block is office space.

The chamber rents about 3,800 square feet in the heart of Columbia, at a rate of about $21 a square foot. But Calder said the organization needs only about 2,500 square feet, and may need to look elsewhere if it can't work out an agreement with its landlord.

"As far as return on investment goes, we don't get it from the space. It's probable that the physical space we're in is one of those things that could be changed," she said. "There are other things we could be investing in that could mean more to our membership."

Cuts have come in staffing as well. In the past month, with Williams' resignation, the seven-person operation has shrunk to four, and only one position - either a part-time bookkeeper or a project coordinator - is likely to be filled soon.

"In a sense, we're reflective of what our members are going through," Calder said, referring to the overall business slowdown.

"I fully believe we're doing everything we need to do where we're in a position to not sacrifice member service, and that in 18 months we'll be able to build back that all-too-critical reserve, and we will."

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