Post Tagged with: "Myrtle Beach"

Myrtle Beach Lawsuit Sealed Fate of Local I-73 Funding

December 26, 2019 7:24 AM
Myrtle Beach Lawsuit Sealed Fate of Local I-73 Funding

The day the City of Myrtle Beach filed suit against Horry County to end collection of the countywide hospitality fee, local funding for Interstate 73 was doomed.

This may not have been the intention of the lawsuit, but it was the inevitable result.

When Gov. Henry McMaster met with local leaders a couple of months ago encouraging them to find a way to maintain I-73 funding, Myrtle Beach Mayor Brenda Bethune told the governor the lawsuit was not about I-73.

She was right. The lawsuit was about stopping the county’s ability to keep collecting the countywide hospitality fee and keeping all revenue collected in the city for the city’s use.

What Bethune did not understand was stopping the countywide hospitality fee collection stopped the funding stream for I-73 as an unintended consequence. Myrtle Beach must take sole blame for this consequence.

A county resolution to settle the lawsuit last April provided one-third of the countywide hospitality fee revenue would go toward funding I-73. Bethune and the city rejected the offer immediately.

Horry County Council approved removing a sunset provision from its hospitality fee ordinance in May 2017. The intent at that time, as clearly stated by then council chairman Mark Lazarus, was to use the countywide hospitality fee revenue to fund I-73 construction in Horry County.

However, it wasn’t until February 2019 that RIDE I bonds were paid off (the original purpose of the hospitality fee). Myrtle Beach filed suit just a few weeks after claiming the fee collection by the county has been illegal since January 1, 2017.

The original county ordinance put a period of 20 years on collection of the fee, which ended on the above date. The ordinance was later amended to continue collections until RIDE I bonds were completely paid off.

It is clear from the initial complaint filed by Myrtle Beach that the city wants to keep all hospitality fee revenues collected within the city limits for uses determined by city council. One must wonder why the city waited until March 2019 to file suit against the county if the fee has indeed been illegal since January 2017 as the city claims.

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County Council Adds More Controversy to Hospitality Fee Settlement

December 17, 2019 5:55 PM
County Council Adds More Controversy to Hospitality Fee Settlement

Horry County Council approved an amended settlement agreement at its special meeting Monday night that added to the controversy regarding settling the hospitality fee lawsuit.

Council split 7-5 on votes to amend the settlement agreement and to approve the settlement agreement as amended. Those voting for the agreement were Johnny Vaught, Dennis DiSabato, Cam Crawford, Gary Loftis, Bill Howard, Tyler Servant and Orton Bellamy.

The Deep Six (Vaught, DiSabato, Crawford, Loftis, Servant and Howard) can always be counted on to support anything the Myrtle Beach Area Chamber and other special interests in the county want. Vaught is counting on that group to fund his run for chairman in two years while DiSabato, Crawford and Loftis expect significant donations from special interests to fund their upcoming reelection campaigns.

The special interests want I-73, they fall in line to keep it in play.

Voting against the settlement were Chairman Johnny Gardner, Harold Worley, Al Allen, Danny Hardee and Paul Prince.

As Worley said at the beginning of open debate on the question, the elephant in the room was I-73.

The settlement agreement as presented Monday night would provide approximately $14.5 million per year toward I-73. As Worley pointed out this amount is a drop in the bucket for a project that will require approximately $670 million to complete the road in Horry County, $1.3 billion to reach I-95 and over $2 billion for the total project to the North Carolina border in Marlboro County.

But the drop in the bucket is important to those landowners in Horry County who will benefit from right of way purchases for the road and the engineering and other businesses who will profit from the early design and site work for the project.

The federal and state governments will have to come in with significant money for the road to ever be completed but the local special interests can realize a significant income from the early work that can be paid for if the county contributes. Like always, it’s all about the money.

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Questions Surround Proposed Hospitality Fee Settlement Agreement

December 15, 2019 7:32 AM
Questions Surround Proposed Hospitality Fee Settlement Agreement

As Horry County and the municipal councils prepare to vote on a proposed settlement agreement for the Hospitality Fee lawsuit Monday night, many questions remain about what really has taken place behind closed doors since the lawsuit was filed last March.

According to sources familiar with the settlement agreement, the basic proposal approved in a resolution by Horry County Council at its April 2, 2019 regular meeting and publicly rejected by Myrtle Beach Mayor Brenda Bethune within a few days thereafter is the agreement that will be voted on Monday night?

The basic terms of that proposal as it was offered in April and will be considered Monday night are as follows: a) Horry County will continue to collect a 1.5% Hospitality Fee countywide; b) one-third of that fee (0.5%) will go toward funding I-73; c) the remaining two-thirds (1%) will be remitted to the respective taxing jurisdictions (unincorporated county or city) in which it was collected; d) Revenues from the 1.5% countywide hospitality fee collected between the date bonds for Ride I projects were paid off (sometime in February 2019) and June 30, 2019 will be remitted in a lump sum to the respective taxing jurisdiction in which those revenues were collected.

Horry County Council Chairman Johnny Gardner sent a letter to each of the city mayors proposing that settlement on April 3, 2019.

The county was prohibited from collecting the 1.5% countywide hospitality fee within the city jurisdictions after June 30, 2019 by judge’s order. The sum collected within city jurisdictions between February 2019 and June 30, 2019 (currently held in escrow) and subject to lump sum payments back to the cities is approximately $19 million.

Why is a proposed settlement that was publicly and totally rejected by Bethune in April 2019 suddenly the terms for settlement? (See Gardner’s letter to the mayors and Bethune’s rejection letter at the links below)

The mayor’s main points of contention have not changed in the agreement to be voted on for approval Monday night: a) continued collection of the countywide hospitality fee is illegal; b) the city cannot delegate to the county the authority to control the disposition of revenues which are properly within the city’s authority to collect and manage and c) no benefit to city residents from that arrangement.

What has changed?

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Runoff Elections Tuesday Will Finalize Municipal Council Seats

November 17, 2019 7:24 AM
Runoff Elections Tuesday Will Finalize Municipal Council Seats

Voters will go to the polls Tuesday to decide runoff elections to finalize who will represent them on municipal councils in Conway, Myrtle Beach and Surfside Beach.

The Conway runoff is between newcomer Justin Jordan and on again, off again former council member Randy Alford.

Jordan became interested in public service after founding Conway Cares, a group that helped citizens during the flooding from Hurricane Florence. He said the experience helped open his eyes to greater service to the citizens of his native city. He believes it’s time to bring some new thinking to council to preserve the Conway he grew up in for future generations and to be open minded and a voice of reason for all citizens in the city. It is believed Jordan would work well with newly elected council member Alex Hyman to bring a new dynamic to council.

Alford previously served on council but was defeated for reelection just two years ago.

The Myrtle Beach runoff for the final city council seat is between incumbent Mary Jeffcoat and newcomer John Krajc. This race brings an interesting dynamic in that Mayor Brenda Bethune has promoted the Krajc candidacy against incumbent Jeffcoat who has basically supported all of the mayor’s initiatives.

The government directed central planning of the city will apparently continue to the detriment of the businesses and citizens south of the former pavilion  site regardless of which candidate wins the runoff.

In Surfside Beach no candidate won election in the first round of voting. Bob Hellyer and Julie Samples finished one-two in the mayoral race while incumbent council member David Pellegrino was ousted. Paul Holder, Michael Drake, Cindy Keating and Kathryn Martin finished in that order for council seats. The top three vote getters in the runoff among those four will win council seats.

Surfside Beach politics is always interesting. In this election, no incumbent whose term was up chose to run for reelection. Pellegrino’s council term ends in two years. Samples previously served on council, choosing not to run for reelection when her term ended in 2017.

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Proposed Hospitality Fee Lawsuit Settlement Taking Money from Taxpayers

November 14, 2019 7:18 PM
Proposed Hospitality Fee Lawsuit Settlement Taking Money from Taxpayers

The proposed agreement that county and city councils will be voting on to settle the hospitality fee lawsuit between the county and the cities will see money that should go to the benefit of the taxpayers instead going to pay attorney fees.

This is the first lawsuit settlement negotiation that I can remember where the injured parties, the taxpayers, were not even represented in the room.

In the case of the cities through three negotiation sessions, no elected officials from any of the cities, those elected to represent the citizens, could be bothered to be present. Several elected county council members attended each session.

The absence of city elected officials, especially mayors Brenda Bethune of Myrtle Beach, Marilyn Hatley of North Myrtle Beach and Bob Childs of Surfside Beach, the three cities at the forefront of the lawsuit, resulted in attorneys representing the cities to structure the settlement with no input of those elected to represent the citizens.

According to information received by Grand Strand Daily, the settlement will structure the lawsuit as a class action which will allow the attorneys representing the cities to split 33% of the settlement amount for themselves.

The reported settlement amount is the approximately $19.5 million revenue from the countywide 1.5% countywide hospitality fee collected within the respective city limits of the cities in the county from the time the bonds for the RIDE I program were paid off in February 2019 until June 30, 2019. That means the attorneys will split a cool $6.5 million from the settlement. In addition, those attorneys have already billed the cities a total over $750,000 in legal fees before the settlement is finalized.

County council member Harold Worley stated from the council dais that he would not vote to approve any settlement that gave $7 million taxpayer dollars to attorneys. Worley was speaking as the representative of county council District 1, which includes all of North Myrtle Beach. He believes that money should be spent for infrastructure improvements, public safety and like needs allowed by the hospitality fee law.

The $7 million will come out of the settlement amount for the cities. The county is only on the hook for approximately $350,000 billed by its attorneys.

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Will Myrtle Beach Voters Select Continued Central Planning or Support the Overall Health of the City Economy?

November 4, 2019 7:48 AM
Will Myrtle Beach Voters Select Continued Central Planning or Support the Overall Health of the City Economy?

The City of Myrtle Beach elections Tuesday could go a long way in determining the future success of the city.

The question is will the majority of voters continue to allow precincts serving the Dunes and Pine Lakes residents to determine the outcome?

Two years ago, voters seemed to be voting for change. What they got instead was a council of seven sheep who allow city manager John Pedersen to do whatever he wants.

After the election results of 2017, when Mayor John Rhodes and council member Randal Wallace were defeated and council member Wayne Gray chose not to run, Pedersen was overheard saying “Now I can run the city the way I want.”

And he has.

The first step was to put in place a ‘family friendly’ overlay zone on a section of Ocean Boulevard which was nothing but an attempt to run the Jewish merchants, who have been in business there for decades, out of business by claiming the CBD oil sold by those merchants was illegal. IT’S NOT!

https://youtu.be/uxG05FB7fzU

The second step was to increase the secrecy surrounding the city’s central planning for special districts such as the ‘super block.’

After the city secretly bought most of the properties in the ‘super block’ and threatened an illegal use of eminent domain to acquire the remainder, citizens were told it was going to be redeveloped with a new library and children’s museum as the anchor.

What we have seen is those properties acquired by the city are not listed for sale nor has the city issued a general request for proposals opening the redevelopment process up to anyone who would wish to locate a business there. Only cronies are allowed to make proposals on those properties.

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County Council Kicks I-73 Decision Down the Road

August 29, 2019 8:12 AM
County Council Kicks I-73 Decision Down the Road

Horry County Council again dodged making a definitive decision on the I-73 contract with SCDOT at its special meeting Wednesday.

Instead of voting to cancel or go forward with the contract, council voted to defer a final decision until the end of the year.

In the meantime, council has asked the cities to step up with funding for the project or the county would be forced to cancel the contract by December 31, 2019.

In simple terms, the county does not have the ability to fund the up to $25 million per year currently promised in the contract. SCDOT has asked for $12.5 million in the first year, but plans to bond against $25 million per year in future years.

The City of Myrtle Beach continues to cloud the truth by saying the county can fund the contract with its hospitality fee revenues from the unincorporated areas. This is not true.

With the county now banned from collecting a 1.5% hospitality fee, the municipalities and the cities collecting their own hospitality and accommodations taxes, the county has no more than approximately $10 million it can designate for I-73.

In order to reach the $25 million per year called for in the SCDOT contract, Myrtle Beach would have to pledge approximately the same as the county, $10 million per year, and North Myrtle Beach, Surfside Beach, Conway, Loris, Aynor, Atlantic Beach and Briarcliff would have to combine to make up the remaining $5 million.

I don’t believe any of that is going to happen. Not only would the cities have to pledge the funds each year, there would need to be an intergovernmental between the county and the municipalities formalizing those commitments and each party would need to sign the contract with SCDOT.

Those are the details of what needs to happen to keep the SCDOT contract alive. However, there are other details that make keeping the contract more disturbing.

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Hospitality Fee Mediation Impasse Demands New Direction by Local Governments

August 13, 2019 4:00 AM
Hospitality Fee Mediation Impasse Demands New Direction by Local Governments

After two extended mediation sessions between representatives from Myrtle Beach and Horry County, it is obvious the two sides are at an impasse for any agreement with regard to the ongoing hospitality fee lawsuit.

This may have been the result the city was looking for from the beginning. According to sources familiar with the proceedings, not one elected council member from Myrtle Beach participated in either of the mediation sessions.

Horry County had several elected council members participate in the sessions. It is extremely difficult to come to any solution if those who will ultimately pass the legislation that would be needed to approve and institute the agreement do not participate in the process.

With a view to court decisions to date, Horry County cannot now nor hope in the future to collect a 1.5% countywide hospitality fee as it has since 1997 until challenged in court by Myrtle Beach.

The simple way out of this mess is for both sides to step away from the legal process. Myrtle Beach and the other cities can collect the revenue from the new hospitality and accommodations taxes they passed earlier this year and spend that money as they choose.

Likewise, Horry County could continue to collect either the 1.5% hospitality fee it now receives from the unincorporated areas or choose to pass new ordinances under current state law for hospitality and accommodations taxes. The county could then spend those proceeds on the projects they need locally.

There is one possible perceived obstruction from the walking away process. Included in the initial lawsuit filed by Myrtle Beach is a claim that the countywide collection of the hospitality fee has been illegal since January 1, 2017 and that the county should refund the approximately $60 million collections from that date amount to.

Several considerations seem to make this claim spurious.

Those refunds cannot go to the cities. If taxes are collected illegally the refunds must go back to those who paid them, in other words the consumers.

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I-73 Funding, the County’s Hidden Objective in Hospitality Fee Squabble

July 22, 2019 3:40 AM
I-73 Funding, the County’s Hidden Objective in Hospitality Fee Squabble

Hidden beneath an ever rising pile of complaints, answers, motions, injunctions and exhibits in the City of Myrtle Beach v. Horry County lawsuit regarding the 1.5% countywide hospitality fee is the determination of a core group of county council members, county senior staff and special interests to retain sufficient funding for the construction of Interstate 73 in the county.

This has been the objective since April 2017 when former council chairman Mark Lazarus convinced council to remove the sunset provision from the county’s hospitality fee ordinance. Lazarus’ stated purpose at that time was to provide funding for I-73.

The month after Lazarus failed to retain the Republican nomination for council chairman, he conducted a special meeting of council to dedicate the revenue from the 1.5% countywide hospitality fee to the I-73 project.

At that meeting, council approved two resolutions, 82-18 and 84-18. Resolution 82-18 dedicated up to $25 million of the revenue from the countywide hospitality fee to the I-73 project. Lazarus tried for the entire amount of revenue, approximately $43 million, but was argued down by council member Harold Worley who was holding out for $18 million to be dedicated to public safety and infrastructure needs within the county.

However, under county ordinance, all the revenue from the 1.5% hospitality fee collected by the county is placed into a special road fund. Resolution 84-18 directed county staff to prepare an ordinance amendment to allow that revenue to be spent on roads, public safety and infrastructure.

The ordinance amendment dictated by Resolution 84-18 has never been prepared to this day. County staff, with the unspoken agreement of a majority of council, ignored the will of council expressed in Resolution 84-18 so the revenue from hospitality fees cannot be used for public safety and infrastructure other than roads.

During a budget workshop in late November 2018, Lazarus led council in approving entering into a contract with the South Carolina Department of Transportation, called the I-73 Financial Participation Agreement, for the county to commit up to $25 million per year for funding the project.

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Another Hospitality Fee Filing, Another Email, More County Lunacy

July 2, 2019 1:21 PM
Another Hospitality Fee Filing, Another Email, More County Lunacy

The City of Myrtle Beach filed a supplemental memorandum Monday in support of its lawsuit against Horry County’s continued collection of hospitality fees.

Leading the memorandum is an affidavit by North Myrtle Beach City Manager Michael Mahaney providing evidence of the county’s continued collection of the hospitality fee in the City of North Myrtle Beach after June 21, 2019, and supporting a June 26, 2019 motion by Myrtle Beach for the county to show cause why it was not in contempt of a temporary restraining order issued by Judge Seals on June 21, 2019 prohibiting same.

Included in the filing was an email originated by attorney Henrietta Golding who is representing the county in the lawsuit.

The email appears to have evolved out of the string of emails that were the subject of several media stories yesterday. The email that appears to have started the string was sent by former county council chairman Mark Lazarus to Golding.

In her email, Goldings criticizes the judge and the temporary restraining order the judge issued against the county for having “many errors”; states, “This is solely the fault of Myrtle Beach” and appears to discuss the county’s strategy in moving forward by saying the county will try to get a “supersedeas” and saying “if the county took steps to suspend the ordinance (creating the hospitality fee), then probably create legal issues detrimental to the county.”

Golding’s email was sent to Lazarus, county council members Johnny Vaught, Harold Worley, Tyler Servant and Dennis DiSabato, interim administrator Steve Gosnell, county attorney Arrigo Carotti, North Myrtle Beach Mayor Marilyn Hatley, Mahaney and Surfside Beach City Manager Dennis Pieper.

The choice of recipients is confusing as Golding only represents six – the four council members, county administrator and county attorney. Lazarus has no official position with the county since his term ended December 31, 2018. Hatley, Mahaney and Pieper support the position of Myrtle Beach that the county has been illegally collecting the hospitality fees since January 1, 2017 when the original sunset provision of the county hospitality fee ordinance expired.

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