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Kingsport Chamber adjusts to economic downturn

Sharon Hayes • Jul 25, 2009 at 12:00 AM

KINGSPORT — Miles Burdine doesn’t like to hear the “R” word (recession). He refuses to speak it.

The president and chief executive officer of the Kingsport Area Chamber of Commerce wants to stay on the bright side regardless of the economy.

“We like to think that anything that comes out of this building would be positive in regards to our community, but the fact of the matter is — the chamber of commerce is a small business, and we are feeling the effects of the economy,” Burdine said in his office last week.

Although preliminary figures suggest Fun Fest may have ended the year on a good note, other chamber programs are in the hole, unable to meet their budgets, and searching for ways to cut back.

Burdine said chamber sponsorships since the first of the year are down more than $100,000. Some fund-raisers have finished below expectations, and donations for certain programs have fallen.

“We expected some of it, had hoped for the best, planned for the worst, and knew that this was going to happen, and we are handling it like most businesses would,” Burdine said.

Each program budget within the chamber has been scrutinized, adjusted, and readjusted some more. Two full-time positions and one part-time job have been eliminated to cut costs, and another full-time job that was vacated won’t be filled.

Burdine said the chamber may also consider cutting or freezing employee salaries and possibly adjusting employee benefits to help make the numbers work.

“This is happening at other chambers across the country. Some of them are doing fine, but others are really suffering. We’re a reflection of the business community,” Burdine said.

The chamber consists of various programs, including Fun Fest, the Kingsport Convention & Visitors Bureau, the Kingsport Office of Small Business Development & Entrepreneurship, Leadership Kingsport, Keep Kingsport Beautiful, Move to Kingsport, Government Relations, Education, Membership, and Community and Public Relations. It also has the downtown summer concert series under its belt — the city contracts with the chamber to hold the concerts, and the chamber subcontracts out the work.

Each program has its own budget and receives funding through various sources. Some rely heavily on fund-raisers, donations, and sponsorships while others receive grants and money from city contracts.

As of Dec. 31, 2008, the chamber’s total combined revenues were $3.27 million. Of that, the Kingsport Convention & Visitors Bureau had the largest portion at $1.15 million.

Here’s a breakout of the chamber’s bottom line:

• KCVB — $1.15 million

• Membership dues and events — $613,095

• Fun Fest — $591,474

• The Kingsport Office of Small Business Development & Entrepreneurship — $216,815

• Downtown concerts — $137,838

• Education — $135,534

• Keep Kingsport Beautiful — $135,007

• Leadership Kingsport — $125,172

• Move to Kingsport — $64,888

• Chamber Foundation — $50,682

• Government Relations — $47,558

All the programs are located in the same building, allowing them to share infrastructure and support personnel.

“All the programs share in the overall cost to run the (chamber) business. So they all pay a piece of the roof over their head, electric bill, water bill, salaries for accounting and salaries for the front desk. We all share in those costs, which is a great benefit to the community because each of those programs doesn’t have to hire individuals to do that,” Burdine said.

The budget system also allows the chamber to determine if program events or activities aren’t receiving the support from the community they should.

“It forces us to look and see whether or not it still has value. Does it need to be changed or revamped, or done away with?” Burdine said.

One program that won’t be going away anytime soon is Fun Fest. Burdine said the official totals won’t be available for at least another month, but early statistics indicate this was a good year for the nine-day festival. Perhaps more people attended Fun Fest events because they cut back on expensive vacations this year.

“T-shirt sales were up, ticket sales were consistent, sponsorships at least in most cases were at a higher level. So we’re very encouraged that the numbers are going to come in positive,” Burdine said.

That’s not always the case. Burdine said Fun Fest is a big risk. The weather can impact the crowds and hence ticket sales, sponsorships are sometimes down, and sometimes T-shirts don’t sell well.

Indeed, Fun Fest has operated in a deficit for the last couple of years, Burdine said.

“It’s a big risk but one that needs to be taken,” he said. “It’s a great community event.”

The chamber’s recent membership drive posed another question mark this year. Because of the recession, chamber officials wondered if they should hold a membership drive at all.

“We actually discussed whether or not it was appropriate to go out and seek new members when indeed the community was experiencing a downturn,” Burdine said. “Then we decided — it’s more appropriate that the chamber set a positive example to show the business community that now is the time to be aggressive and try to grow your business.”

The chamber added 35 new members as a result of its spring membership drive. It hopes to add a total of 100 new members for the entire year.

Total chamber membership stands at about 750.

So far, 68 new members have joined since the first of the year.

“We will meet our goals — we’re already ahead of our goals, and anticipate that by the end of the year, we’ll exceed those goals,” Burdine said.

“Most importantly of all — those who joined saw value in becoming a member. I think it was a very positive message.”

As for the rest of the year, Burdine said he reads publications from the U.S. Chamber of Commerce and the Tennessee Chamber of Commerce and stays in touch with chamber officials in other areas. He said the general feeling among his contacts is positive for economic recovery.

“The feeling is we’ve already started coming out of it,” Burdine said. “A particular business may argue with you on that, and I would certainly understand. But generally speaking, we are beginning to come out of it already.”

Still, he said recovery will be “a slow process.”

“The bottom line, as it stands right now — I think things are looking up, not only for the business community but also for this chamber of commerce,” Burdine said.

“I think in the long run we’re going to be just fine and we’ll probably be stronger as a result by the time we come out of this ‘R’ word.”

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