Post Tagged with: "City of Myrtle Beach"

Seriously Flawed Settlement Agreement Proposed for Hospitality Fee Lawsuit

November 7, 2019 4:34 AM
Seriously Flawed Settlement Agreement Proposed for Hospitality Fee Lawsuit

The proposed settlement agreement presented to county council at its regular meeting Tuesday night appears to have many serious flaws, according to information gathered by Grand Strand Daily.

Council member Harold Worley vented his frustration with the settlement agreement during the council meeting. His complaint was having attorney fees of approximately $7 million come off the top of an approximately $20 million the settlement award if the lawsuit is settled as a class action.

The $20 million was collected from a countywide 1.5% hospitality fee collected between the date the bonds were paid off in February 2019 until June 30, 2019. Worley’s statement is based on a 1/3 contingency fee to be paid off the top of the settlement amount to the attorneys representing the cities.

The basic claim in the original lawsuit was that Horry County illegally collected a 1.5% countywide hospitality fee since January 1, 2017. The fee was collected with the agreement of the cities for an initial 20 year period beginning January 1, 1997, in order to pay off bonds issued to pay for the initial RIDE road projects.

The county first extended collection of the fee until the bonds were paid off and, later, in perpetuity. The cities allege they did not give approval for the extensions which prevents the county from legally collecting the fee in their respective taxing jurisdictions. However, the cities apparently dropped a claim for fees used to pay off the bonds between January 1, 2017 and February 2019.

But that money is not the cities to claim, a fact GSD first reported last spring when the lawsuit was filed. It is not the cities’ money. It is not the county’s money. It is taxpayer money.

 If it were held the county did illegally collect hospitality fees after the bonds were paid off, any rebates of tax revenue would be owed to the people from whom the taxes were collected, not the cities in which the fee was collected.

Hospitality fees are collected by vendors at point of sale and remitted monthly directly to the county in accordance with the provisions of state law. The cities are not involved in the collection process at all, nor is it their money being collected.

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Horry County Council at Precipice of I-73 Decision Wednesday

August 26, 2019 3:29 AM
Horry County Council at Precipice of I-73 Decision Wednesday

Horry County Council will decide the fate of its Financial Participation Agreement with the South Carolina Department of Transportation at a specially called meeting Wednesday.

The agreement, which was signed by the county and SCDOT December 13, 2018, commits the county to provide up to $25 million per year for funding the Interstate 73 project.

The county does not have the money and the only sane step for council to take is to cancel the contract before it takes effect and SCDOT begins committing money the county does not have.

County officials planned to use revenue from a countywide 1.5% hospitality fee on prepared food and beverages, accommodations, admissions tickets and rental car fees to provide the $25 million per year.

However, that plan, hatched by former council chairman Mark Lazarus and former county administrator Chris Eldridge was fatally flawed from the beginning.

The countywide hospitality fee was enacted specifically, with the consent of the cities and a hard sunset provision, for the purpose of funding the short term projects listed in the Road Improvement and Development Effort report of October 1997 and approved by then Gov. David Beasley. I-73 was not included with those projects.

County council overstepped its bounds when it removed the sunset provision from hospitality fee legislation in April 2017 at the urging of Lazarus and Eldridge who specifically wanted to use the revenue for construction of I-73 when the RIDE bonds were paid off.

That first blunder was compounded by a second when the Lazarus/Eldridge tandem put a full court press on county council to provide up to $25 million of hospitality fee revenue for I-73 in July 2018 without consulting the cities.

A trifecta of blunders was completed when, one month before he left office, Lazarus effectively bullied council into contractually obligating itself to SCDOT for I-73 funding. This was only weeks after Hurricane Florence again demonstrated to county officials the desperate need for upgrades to roads and other critical county infrastructure already in place.

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Time to End the County’s Hospitality Fee Lunacy

July 1, 2019 11:11 AM
Time to End the County’s Hospitality Fee Lunacy

Events occurring over the last week served to magnify the need for the county and the cities to get past the lunacy that has developed over the county’s efforts to continue collecting a countywide Hospitality Fee that is in all likelihood now illegal.

Myrtle Beach initially filed a lawsuit against the county “for itself and “similarly situated plaintiffs” on March 21, 2019 stating its claims against the county’s continued collection of the hospitality fee and requesting a temporary restraining order on the county’s continued collection of the fee while the case was being litigated.

After District Court Judge Seals issued a temporary restraining order on the county’s continued collection of a 1.5% hospitality fee within the City of Myrtle Beach and “similarly situated plaintiffs”, on June 21, 2019, the cities expected the county to stop collecting the fee within their jurisdictions.

Last Tuesday, the county dashed those expectations by sending out an email announcing it would only stop collecting the fee within Myrtle Beach and would continue to collect it in the other cities in the county as well as the unincorporated areas.

This led to outrage from North Myrtle Beach officials who called the county’s continued collection of the fee within their city “illegal.” In addition, Myrtle Beach filed a new motion requesting the county be required to show cause that it was not in contempt of the judge’s order.

With the angry rhetoric flying, a special meeting of county council was called for June 29, 2019 at which council was expected to vote on a recommendation to suspend collection of the fee within the cities until the lawsuit was settled.

Instead, council convened, immediately went into executive session where, according to sources with knowledge of the discussion, county attorney Arrigo Carotti and attorney Henrietta Golding, representing the county in the case, urged council to “stay the course” and continue collecting the fee in the other cities until ordered not to by the Court. In addition, the attorneys reportedly told council the judge had used the wrong standard of review in making his ruling. Golding filed a request for reconsideration of the ruling and was prepared to take the issue to the S. C. Supreme Court where, she told council, she expected the restraining order would be overturned.

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Myrtle Beach Merchants Sue City Over Constitutional Violations

December 28, 2018 5:43 AM
Myrtle Beach Merchants Sue City Over Constitutional Violations

News of Ocean Boulevard merchants suing the City of Myrtle Beach to overturn the entertainment overlay district ordinance the city passed in August 2018 was generally lost in the hype created by the county administrator’s bogus allegations last week.

However, the lawsuit could prove to be more far reaching in reining in the ability of local governments and their officials to run wild over the rights of businesses and citizens whenever and wherever they choose.

The lawsuit was filed in Florence Federal District Court because the ordinance in seen by the business owners as an all-out attack on their constitutional rights. The lawsuit alleges curtailing of free speech guaranteed by the 1st Amendment to the Constitution; lack of due process and equal protection of the law guaranteed by the 5th and 14th Amendments and civil rights violations in that the ordinance targets businesses that are almost exclusively owned by Jewish merchants.

A key paragraph in the lawsuit states, “Specifically, but not exclusively, the Ordinance is not narrowly tailored to serve any significant governmental interest and imposes restrictions that are greater than necessary to further such interests because, on its face and as applied, it restricts display and sale of merchandise that is allowed in other parts of the City of Myrtle Beach.”

Other key areas in the lawsuit are: (1) The Ordinance is an irrational and unreasonable statute, imposing unjustifiable restrictions on the exercise of constitutional rights and (2) “…all or substantially all of the merchants within the Overlay district contemplated by the Ordinance are of Jewish descent or extraction, and that as a result, the Ordinance as applied, if not facially, violates the Equal Protection Clause of the U. S. Constitution’s Fourteenth Amendment; and (3) “Plaintiffs are informed and believe that the Ordinance does and will deprive them of all or substantially all of the economically viable use of their businesses.”

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Efforts to Debunk Karon Mitchell Lawsuit Flawed

April 7, 2018 4:48 AM
Efforts to Debunk Karon Mitchell Lawsuit Flawed

(Ed. Note – Some negative reactions heard locally to the Karon Mitchell lawsuit are like the Chinese fireworks pictured above – loud and colorful but, in the end, just smoke.)

On April 5, 2018 at 3:05 p.m., Karon Mitchell filed a lawsuit against the Myrtle Beach Area Chamber of Commerce (MBACC), the City of Myrtle Beach and Horry County alleging misuse of tourism development fee (TDF) and accommodations tax (ATax) public funds.

In response to the lawsuit, MBACC issued a blanket denial of the allegations and at least one local television news outlet in the area attempted to, in its words, “fact check” the allegations.

The MBACC response came in a media statement issued April 6, 2018, by board chair Carla Schuessler:

“Today we had an opportunity to review the lawsuit that was filed against us, and l am disappointed to see that we will have to divert our time and resources to address this case which is full of conjecture, innuendo and inaccurate statements. The Chamber complies with all applicable laws regarding the use of public funds and selects vendors based on best business practices.”

The Chamber statement went on to say it will hold a press conference next week to accurately address the statements in the lawsuit.

The local news outlet broadcast a story April 6, 2018 where it claimed to find discrepancies, between claims in the lawsuit and MBACC public disclosure documents, with respect to public money spent with what are called in the lawsuit “crony companies.” According to the lawsuit, crony companies are companies formed by former and/or current Chamber employees and, in at least one instance, a company owned by a MBACC executive board member.

This appeared to be much ado about nothing as the MBACC public disclosure documents used generic descriptions instead of specific vendor names for some of the expenses listed. If those challenged expense amounts did not go to any of the crony companies, next week’s MBACC press conference can “accurately address” those statements and tell us exactly what company did receive the payments.

Another area addressed in the media story was a statement in the lawsuit that “the chamber funneled tourism tax money through the crony companies to contribute to politicians supported by the chamber.” 

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Fixing the Damage Caused by the Myrtle Beach DRC

January 14, 2018 4:30 AM
Fixing the Damage Caused by the Myrtle Beach DRC

A sometimes heated public input session at last week’s DRC (Myrtle Beach Downtown Redevelopment Corporation) board meeting highlighted the agency’s confusion about its status and the responsibility it has to the public.

The DRC likes to tout itself as a private corporation and some of its recent moves, such as secretly purchasing properties in the Superblock until outed by local media, speak to that attitude.

 However, South Carolina law is clear that the DRC is a public body and, as such, owes the citizens full transparency of its actions.

The DRC was created by Myrtle Beach city ordinance and is funded from the parking fees collected from meters and lots on city property. The city set up a $10 million line of credit from a local bank for the DRC to purchase properties. Money to pay back draws on this line of credit comes from the parking fee revenues.

Among those entities defined as a public body subject to the S.C. Freedom of Information statute are “any organization, corporation, or agency supported in whole or in part by public funds or expending public funds․” S.C.Code Ann. § 30–4–20(a). 

 In a July 17, 2013 decision (DiSabato v South Carolina Association of School Administrators), the S. C. Supreme Court held, “When a block of public funds is diverted en masse from a public body to a related organization, or when the related organization undertakes the management of the expenditure of public funds, the only way that the public can determine with specificity how those funds were spent is through access to the records and affairs of the organization receiving and spending the funds.”

The parking fees, themselves, are a problem. They appear to violate deed restrictions included when Myrtle Beach Farms transferred company owned land to the city along the oceanfront.

This violation not only applies to parking areas charging fees along the Golden Mile, but also to the many areas in the south end of the city where parking fees have been charged for a number of years.

One of the deed restrictions states, “…property shall not be used for commercial purposes by any person, private corporation, municipal corporation or agency of government.”

If parking fees are collected, the revenue is dedicated to the DRC and the DRC uses this revenue to purchase property, how can the collection of the fees not be considered “for commercial purposes?”

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State Steps into Parking Fee Controversy

April 15, 2017 5:38 AM
Travis Bell Photographers

The SC General Assembly entered the parking fee debate when local legislators Jeff Johnson and Kevin Hardee filed a bill requiring equal treatment of residents and non-residents alike, with respect to on street parking, unless otherwise approved by the General Assembly.

Ordinarily, such decisions should remain at the local level. However, the arrogance that the City of Myrtle Beach has demonstrated in its attempts to effectively privatize the stretch of Ocean Boulevard known as the “Golden Mile” to homeowners in that area, does need tempering.

One finding of the bill reads, “Whereas, the right to park on a public street is not a right incident to ownership of abutting land but rather one that is incident to use of the street for travel and commerce and one which is rightly shared by all members of the public, …”

The key section of the bill that relates directly to the Golden Mile controversy reads, “”Section 5-7-320. Any ordinance, resolution, or regulation of any municipality regarding on-street parking privileges for residents of a municipality that are not available on the same terms to nonresidents of the municipality of that county must be approved only by the General Assembly.”

The bill was filed so late in the current legislative year that it will not be acted upon until the second year of the current legislative session, which begins in January 2018. It is unknown how much support the bill will garner among legislators, but it could be considerable.

Immediately before the bill was filed, a contingent of mayors from the coastal cities was in Columbia lobbying for the General Assembly to provide an annual, dedicated revenue stream to ongoing fund beach renourishment.

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City Has Potential Nuclear Option in Parking Fee Issue

March 30, 2017 3:39 PM
City Has Potential Nuclear Option in Parking Fee Issue

The City of Myrtle Beach holds a potential nuclear option that could blow up the current parking fee debate between the city and Horry County into a much bigger and more explosive issue.

Nuclear options in political discussion come in various categories. One we hear about often is a threatened change in U.S. Senate rules that could effectively prohibit filibusters.

However, the nuclear option that Myrtle Beach appears to hold could change taxation for many residents within the county, both inside and outside the city limits.

A little background:

The city and county have been at odds over parking fees and areas they are charged in Myrtle Beach city limits.

Horry County Council Chairman Mark Lazarus has addressed city council on several occasions attempting to reach some type of compromise that would allow county residents to pay $100 per year for a parking decal that would allow county residents to park at all city owned paid parking locations.

To date, the city has been reluctant to adopt Lazarus’ plan.

Personally, I don’t believe any of the city’s parking fees are justified, especially because they go to fund the Downtown Redevelopment Corporation, a notoriously underperforming enterprise.

In response to the city’s reticence, county council voted last week to not include $200,000 for the city’s planned museum/library complex and $30,000 specifically for Chapin Memorial Library in the county budget. The city requested both amounts.

At Tuesday’s Myrtle Beach City Council meeting, council member Mary Jeffcoat requested city staff to prepare a review of the amount of property tax revenue city residents pay to the county and what services city residents receive as a result of those taxes.

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Fourth Atlantic Beach Bikefest Loop Proposed

October 13, 2014 11:00 AM
Fourth Atlantic Beach Bikefest Loop Proposed

A fourth traffic loop option for Atlantic Beach Bikefest traffic has been proposed by Horry County Council member Marion Foxworth.

The fourth option is on the agenda to be considered by the Atlantic Beach Bikefest Task Force at its meeting this afternoon.

Foxworth, who represents Horry County Council District Three, said his district is the most impacted district by Bikefest crowds and he believes, as a primary stakeholder, his input is required.

“The brunt of the ‘festival area’ is within District Three,” Foxworth said. “I am very concerned about this event and the planning that is evolving.”

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Achilles Heel of Atlantic Beach Bikefest Planning

September 30, 2014 10:00 AM
Achilles Heel of Atlantic Beach Bikefest Planning

The 40 mile traffic loop proposed by City of Myrtle Beach officials is quickly becoming the Achilles Heel of Atlantic Beach Bikefest planning.

Yesterday, Horry County Council Chairman Mark Lazarus proposed an alternate plan during the county’s Public Safety Committee meeting.

The Lazarus Plan would take traffic down Ocean Boulevard to the traffic light at Market Commons. A right turn on U.S. 17 Business to Harrelson Boulevard where a left turn onto Harrelson Boulevard would take traffic to U.S. 17 Bypass. A right turn on U.S. 17 Bypass to the intersection at 29 Avenue North with a right turn onto 29th Avenue North to Ocean Boulevard would complete the loop.

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