2014 figures show improvement in SHEDG bottom line

Sean C. Morgan

Based on Internal Revenue Service records for 2014 recently filed by the Sweet Home Economic Development Group, SHEDG lost money, but the amount was nearly $100,000 less than it was in 2013.

SHEDG’s Form 990 showed a net loss of $77,000 in 2014, down from a $174,000 loss in 2013.

The organization had $387,000 in expenses in 2014 and $310,000 in revenue, reducing its net assets – the money it’s saved from profitable years – from $444,000 to $367,000.

SHEDG released its Form 990 for 2014 to The New Era on Friday.

The IRS requires tax-exempt organizations to file a Form 990 annually. The form details financial status for nonprofit organizations and is a public record. SHEDG typically files its Form 990 in the fall.

“There was great improvement over the prior year,” said SHEDG President John Wittwer. “We’re in a very critical time, but I’m extremely optimistic about it. Despite the challenging economics of the situation right now, the board just really feels upbeat.”

SHEDG’s primary fund-raising tool is the Oregon Jamboree. The festival was founded in 1992 as a means to raise money for its economic development projects.

SHEDG reported $2.6 million in gross income for the 2014 Oregon Jamboree and $2.3 million in expenses, providing a net income of $278,000.

SHEDG provides an umbrella to the Sweet Home Beautification Committee, which runs an arts and crafts festival during the Jamboree to raise funds for its projects. SHEDG passes the proceeds directly to the committee. The festival raised $14,000 in gross revenue, with $6,000 in expenses, providing a net income of $8,000 for the Beautification Committee.

Other events provided some $22,000 in additional revenue, providing an overall net income of $308,000 to SHEDG.

Staff expenses are not counted among Jamboree expenses, with employee time shared among Jamboree and SHEDG functions. Employee compensation cost a total of $298,000 in 2014. The compensation for Festival Director Erin Regrutto and Marketing Director Teresa Stas, the top paid employees and the only ones listed on the form, totaled approximately $148,000.

“The 2014 event, if you talk about out-of-pocket costs and income, yes, it was a break-even,” Wittwer said. “We just need more customers in our existing space.”

Factoring in SHEDG expenses, he said, the organization saw a net loss in 2014.

SHEDG paid out $21,000 in grants and other assistance to other organizations. Remaining expenses include rent, office expenses, information technology, dues and subscriptions, property expenses, repairs and maintenance, utilities and security.

“We need to produce surpluses on the Jamboree in order to reduce those expenses,” Wittwer said. All appearances are that the 2016 event will achieve this.

“Robert (Shamek, festival director) has already taken substantial steps at reducing costs,” Wittwer said. He believes it likely will raise the organization into the black.

The 2015 event, held at the beginning of August, will be close to budget, Wittwer said. “I think we’re still in the red though.”

SHEDG had to dip into its cash reserves in 2015 for cash flow purposes, Wittwer said. “What I’m encouraged by is the budget allowed us to put money back into the reserves.”

And the reserves have already been replenished, he said.

The organization is well into the 2016 budget process, Wittwer said, and it already has a strategy for 2016.

“My hat’s off to the staff and all they’ve done to take care of that,” Wittwer said. “Robert is extremely penny-conscious and creative in how he works with vendors.”

The game has changed, Wittwer said. The staff has been really aggressive about pursuing other opportunities for SHEDG’s Sweet Events – additional events, such as the annual Mystery Concert held in Corvallis. The board will continue to support staff in seeking other opportunities for revenue.

SHEDG continues to pursue the 200-acre Knife River property, currently owned by Linn County, at the north end of Clark Mill Road and located along the South Santiam River to the west of Clark Mill. Details are almost finalized with the Oregon Department of Environmental Quality to allow the county to deed the land to SHEDG. With a clean bill of health, the property will be free of environmental liabilities at that point.

“We can head into it knowing we don’t need to look over our shoulders, with something that might have happened in the past,” Wittwer said. He praised Knife River’s assistance in reclaiming the land.

SHEDG will initially use the property as a campground, Wittwer said. A mid-term goal will be to move the Oregon Jamboree to the property. Long-term, SHEDG will begin a public outreach process to find out what Sweet Home residents would like to see on the property.

Wittwer said he would like to see a plan set within the next two or three years.