Industry-recruiting alliance considering making budget cuts

David Ginn, president and CEO of the Charleston Regional Development Alliance, talks about the agency in the firm's North Charleston office.

The embattled Charleston region's chief industry-recruiting agency doesn't plan to fold up its tent, but it is looking at contingency plans if full funding doesn't come through from its three main government donors.

In a worst-case scenario with private-sector funding of about half of last year's $3.1 million spending plan, the 11-member executive committee of the Charleston Regional Development Alliance said Monday it will have to decide in September what cuts to start making or whether it will dip into its rainy day fund to make ends meet.

Cuts could include staffing, office space and other overhead, but Vice President of Operations Karen Kuchenbecker pointed out Monday that those decisions haven't been made. If another $300,000 comes through from new investors over the next 30 days, no staff members will be affected for the current year.

"I don't think we have advanced the ball very much with the counties," Alliance chairman Lonnie Carter said. "We have to assume we are not going to get funding other than the $50,000 from Dorchester County. The plan is to continue the CRDA with whatever resources we have."

He asked the committee members if anybody thought there was a reason not to continue going forward with the alliance. The room fell silent.

"That means we are going to stay the course and make the appropriate adjustments," Carter said.

"Our mission won't change," said committee member Wayne Hall. "The way you do it will change."

Charleston County pulled its $500,000 funding from the agency last week, saying it didn't like the way business was being operated and wanted to form a new alliance with Berkeley and Dorchester counties.

Berkeley is withholding its $258,000 allotment until issues are resolved. Dorchester County slashed its funding to $50,000 this year over budget constraints and questions of return on investment.

Dorchester County Council Chairman Bill Hearn, a member of the alliance's executive committee, said he is committed to honoring the county's commitment, but the final decision rests with County Council. He added no one has yet raised the issue of withdrawing from the group.

The alliance is hopeful all three counties remain a part of the 19-year-old organization.

"The olive branch is out," Carter said. "We are happy to meet with all of them and work out what the issues are."

Noticeably absent from the executive committee were representatives of Charleston and Berkeley counties. All of the other committee members were there.

Carter also said $675,000 in matching funds from the state for the current budget year are earmarked for the alliance and cannot be disbursed to another group this year if one is formed.

The alliance has about $650,000 in a cash reserve fund, but treasurer Rudy Thomas said it will start going away at a clip of more than $50,000 a month once it's tapped, depleting the savings by June of next year.

He laid out three options: cut costs, ask investors for more money or continue the current course and hire a consultant to help redesign the alliance under a new working model.

The executive committee is leaning toward hiring the consultant next month if it knows for sure by then whether all three counties are in or out. Without full funding, hard decisions will have to be made and if they include staff cuts, they want affected workers to be able to wind down projects by the end of the year.

The alliance is currently working 29 active projects, seven of them new, agency CEO David Ginn said.

About half of the reserve fund will be used up under any scenario, Thomas said.

The alliance has set a goal of raising $2 million in private-sector funding this year. So far, it has commitments for $1.5 million, Kuchenbecker said. If another $300,000 is committed from private investors, no staff members will be affected, she added.

Reach Warren L. Wise at 937-5524 or