Author: Paul Gable

Recording Confirms No Extortion Attempt

A recording that Horry County Administrator Chris Eldridge and Horry County Attorney Arrigo Carotti used as a centerpiece of evidence for their allegations of wrongdoing by Horry County Council Chairman Johnny Gardner proves the allegations were entirely false.

The full recording of the lunch meeting between Gardner, his business partner Luke Barefoot and Myrtle Beach Regional Economic Development Corporation (EDC) executives Sandy Davis and Sherri Steele became entered the public arena yesterday.

The recording was supposedly the ‘smoking gun’ that would prove the Eldridge and Carotti tale of, as Eldridge described in an email, “asking for thousands of dollars to be funneled” to Donald Smith is nowhere to be heard.

What the administrator and attorney believed (hoped?) would add credence to their allegations actually proved how entirely false they were.

I listened to the entire one hour and seven minute recording. Generally it reveals a pleasant lunch meeting whose purpose was to familiarize the incoming council chairman with the workings of the EDC, its current efforts to recruit jobs and the uses of its budget.

There is an approximately four minute segment in which Barefoot and Davis discuss the possibility of contracting with Smith for public relations work for the EDC. Davis explained the procedure for submitting a proposal to the EDC and Barefoot said he understood the EDC procedures. Davis said she would be open to receiving a proposal.

At no time was there ever any threat or other effort to compel Davis to do anything and no mention of payment of thousands of dollars to Smith. Gardner said nothing during that segment of the conversation.

Not ones to let little things like facts get in the way of their efforts to discredit Gardner, Carotti authored a five-page memo laying out the case, which relied entirely on hearsay ‘to the best of Carotti’s recollection’, and Eldridge reported an alleged extortion attempt by Gardner to SLED.

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SLED Said NO! Chris and Arrigo Gotta Go

Fifteenth Circuit Solicitor Jimmy Richardson issued a press release and report Thursday evening which included a letter to SLED stating, “Based on the information you uncovered and provided in your report of this investigation, there is no credible evidence of extortion by Luther “Luke” Barefoot or Johnny Gardner…”

A link to the entire 41 page report appears at the end of this story.

Richardson’s report brings to a close an investigation into an alleged extortion attempt by Horry County Council Chairman Johnny Gardner and his business partner Luke Barefoot.

The allegations were reported to SLED by Horry County Administrator Chris Eldridge and supported by a five-page memo authored by Horry County Attorney Arrigo Carotti.

The allegations centered around comments made, or more appropriately stated not made, during a business meeting at Rivertown Bistro in Conway. Present at the meeting were Gardner, Barefoot, Myrtle Beach Regional Economic Corporation President Sandy Davis and MBREDC Director of Investor Relations Sherri Steele. The meeting was audio recorded and the recording was a key piece of evidence in determining what had not taken place – namely any extortion attempt.

As the Richardson release stated, “The recording of the conversation is consistent in form and content with what Davis, Steele, Barefoot and Gardner described to you in their individual interviews about what was discussed and the manner in which it was discussed.”

The report goes on, “President Davis never told anyone that she felt pressured. President Davis never told anyone that they tried to extort money.”

Director Steele said, “We never felt threatened or felt like we had to hire them or pay them any money.”

All four participants reported that it was “a positive meeting.”

As the report states, “Davis and Steele repeatedly state they were not threatened or extorted and they are the sole eyewitnesses to the event, or non-event as the case may be.”

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Sun Sets on I-73 Funding

Nearly two years ago Horry County Council voted to remove the sunset provision on the countywide 1.5% hospitality tax that was passed 22 years ago to pay for Ride I projects, in order to provide a long term funding source for construction of Interstate 73 within the county.

Two days ago, the sun set on the I-73 project when Myrtle Beach city council called BS on the county’s right to extend the tax beyond paying off Ride I bonds by unanimously passing first reading of an ordinance to keep all the hospitality tax collected within its corporate limits for its own projects.

Yesterday, word began circulating around the county that North Myrtle Beach and Surfside Beach would soon mirror the Myrtle Beach initiative by voting to keep hospitality tax revenues collected within their respective jurisdictions for their own uses.

Ending the county’s ability to collect a 1.5% hospitality tax countywide will force county council to immediately terminate a financial participation agreement it signed with SCDOT on December 13, 2018, to provide funding for the I-73 project.

It appears county council was seriously misinformed about its ability to continue to collect a 1.5% hospitality tax ad infinitum when it voted to end the sunset provision of the original law. As a result, available county funding for important initiatives may suffer a serious setback because of the greed of a few proponents of the I-73 project and the rush in which they moved to extend county hospitality tax collections.

According to state law, hospitality tax revenue must be spent primarily within the local jurisdiction in which it is collected.

State law allows for local governments to impose up to a 2% hospitality tax with counties able to enact a 1% countywide hospitality tax. However, the county cannot collect more than 1% within the municipalities without permission by the municipality.

Section 6-1-720(A) of state code provides: “A local governing body may impose, by ordinance, a hospitality tax not to exceed two percent…The governing body of a county may not impose a local hospitality tax in excess of one percent within the boundaries of a municipality without the consent, by resolution, of the appropriate municipal governing body.”

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Horry County Council Needs Serious Study of New Solid Waste Management Plan

Horry County Council will hold a workshop Thursday on the new Solid Waste Management Plan (SWMP) being proposed by the Horry County Solid Waste Authority (SWA).

The new plan includes a proposed further expansion of the landfill on Hwy 90 in addition to an already approved expansion that, according to previous projections, was supposed to be accepting waste in 2017 but has not been constructed or needed yet.

Since its creation by Horry County Ordinance 60-90, the SWA has been tasked, “There is a need in Horry County to develop an acceptable alternative method of solid waste disposal and to reduce tonnage of solid waste disposal in sanitary landfills due to the County’s high water table and other geologic characteristics that make utilization and expansion of the existing landfills and development of new landfills especially expensive and difficult.”

Throughout its nearly 30 year existence, the SWA has failed to live up to this task. The latest proposed SWMP clearly demonstrates this failure by planning an expansion on top of an already approved expansion of landfill facilities.

The SWA staff and board members have been pushing for approval of the new SWMP since October 2018 so the authority can go forward to the S. C. Department of Health and Environmental Control with an application for a permit for the newly proposed expansion.

But, rushing approval through council so application can be made to DHEC for approval of a second landfill expansion when one expansion is already approved but not begun seems questionable.

The burying of solid waste is expensive. It becomes even more expensive when proposed expansions are built on top of former landfills which are already closed, which is the basic plan in the approved and proposed expansions.

In addition to construction and daily operations, much of the expense associated with a landfill is the cost requirements of both the state and federal governments to properly close exhausted landfills (closure costs) and to monitor what is happening in the buried waste for 30 years beyond closure (post closure costs).

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Proposed Myrtle Beach Law Should End I-73 Funding

A proposed ordinance by the City of Myrtle Beach regarding collection and distribution of Hospitality Tax should end the I-73 funding agreement between the county and SCDOT that was approved late last year.

In the proposed ordinance, the city declares the 1.5% countywide hospitality tax passed by Horry County in early 1997 to have ended in 2017 when the county voted to extend the law beyond its original sunset provision.

The 1.5% countywide tax was used to pay off Ride I bonds. The last payment on Ride I bonds was made in January 2017, according to county sources.

With that final payment, it appears that the 1.5% countywide tax is no longer allowed by state law. It appears the county did not receive proper legal advice on its ability to remove the sunset provision and continue collecting 1.5% countywide.

Current state law allows counties to impose only a 1% countywide hospitality tax. Any more to be collected within municipalities must be approved by the municipality by resolution, which obviously is not going to happen in Myrtle Beach.

Myrtle Beach appears to believe it can collect the entire 2% local hospitality tax allowed by state law for its own use.

However, if the county moves forward to impose a 1% countywide hospitality tax, Myrtle Beach will probably end up with only the same 1% hospitality tax revenue it currently receives. Some legal wrangling between the two governments can be expected before this issue is finally resolved.,

While that legal wrangling is going on and until the county imposes the proper 1% countywide hospitality tax, the county will not be collecting enough funds to fully fund the up to $25 million that is stated in the Financial Participation Agreement it signed with SCDOT on December 13, 2018.

In addition, county council must understand the complete uses it can make of hospitality tax revenue and how much funding it can put toward things like public safety, existing roads and infrastructure, recreation facilities and storm water mitigation.

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SLED Report in Review by Solicitor

The SLED investigation report into allegations of wrongdoing by Horry County Council Chairman Johnny Gardner was delivered to the solicitor’s office late Thursday afternoon, Fifteenth Circuit Solicitor Jimmy Richardson confirmed to Grand Strand Daily today.

Richardson will receive a full briefing from SLED agents before releasing a statement about his conclusions, probably Monday.

The report included videotapes of all interviews conducted by SLED in the investigation, a complete copy of the recording of a November 30, 2018 meeting between Sandy Davis and Sherri Steele of the Myrtle Beach Regional Economic Development Corporation and Gardner and his business partner Luke Barefoot and other items related to the investigation.

According to Richardson, the report was subjected to peer review before its release, which means an agent not involved in the initial investigation checked the report for accuracy in its findings.

The attempt to smear Gardner was initiated by Horry County Administrator Chris Eldridge and Horry County Attorney Arrigo Carotti with a memo sent by Carotti, with the full concurrence of Eldridge, to council members after 6 p.m. December 19, 2018.

Before 6 a.m. December 20, 2018, the memo and a story connecting the words “Gardner” and “extortion” appeared on the website of a Columbia media outlet. The media outlet is the same one that attempted to smear Nikki Haley with allegations of illicit affairs when she was running for governor in 2010.

The less than 12 hours, evening and night hours, is much too tight for anything other than a pre-planned leak of the Carotti memo, labeled “Attorney Client Privileged”, and the accompanying sensationalized story.

Access to the memo was initially limited to the 12 members of council in December 2018 plus Eldridge and Carotti. Who leaked the memo? I can think of only three of the original 14 who could possibly think they would benefit from such a leak.

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Council Votes to Pay Magistrates Retroactive Raise

Horry County Council voted to pay the county magistrates retroactive to FY 2017 for a pay raise that was voted by council but never instituted.

Council voted a three percent pay raise for all county employees beginning FY 2017. The magistrates also received a 3.5% pay raise from the state budget beginning that year.

Despite being included in the county budget to exclude the county three percent raise for the magistrates.

Council member Al Allen questioned how the county got to the point where the magistrates had to threaten to sue the county in order to receive a pay raise approved by county council.

“The public needs to understand how we got here,” Allen said. “Who made that choice?”

Despite the presence of all senior staff at the meeting, not one had the integrity to step up and say they made the decision.

According to several sources inside county government, administrator Chris Eldridge made the decision to exclude the magistrates from the council approved budget pay raise.

Allen made the point that eliminating the magistrates from the pay raise amounted to an amendment to the county budget not approved by council. It takes a three reading budget amendment ordinance passed by an absolute super majority of council (9 yes votes) to amend the budget once it is approved.

Apparently Eldridge believes he can do it by executive fiat.

The magistrates item was not the only pay issue discussed by council.

At the regular meeting two weeks ago, council members Dennis DiSabato and Cam Crawford requested staff to prepare a study to compare the cost of the current merit raise pay policy of the county to a more standard pay scale for public safety employees, such as the one used in other counties throughout the state and in the military.

Instead, assistant administrator Justin Powell and Eldridge briefed council on a study commissioned to compare Horry County employee compensation with 15 similar counties in the region.

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County Council to Address Magistrates Pay Dispute

Horry County Council will decide tomorrow night whether to resolve a pay dispute between the county magistrates and the county government.

The dispute dates back to the Fiscal Year 2017 budget which began on July 1, 2016. During budget deliberations nearly three years ago, Horry County Council decided to approve a pay raise of 3% for all county employees.

Magistrates are state constitutionally mandated positions appointed by the governor upon the recommendation of the local legislative delegation. However, they are county employees paid for from the county general fund.

The county receives a portion of magistrate pay each year from the local government fund in the state budget. The local government fund is designed to help counties fund state mandated positions.

Historically, the S. C. General Assembly underfunds the local government fund, which is supposed to be funded according to a specific formula.

According to information received by Grand Strand Daily, the General Assembly mandated an approximately three percent pay raise for county magistrates in its FY 2017 budget and raised appropriations in the local government fund to pay for that raise.  

According to state law, counties cannot reduce the amount they pay employees in state mandated positions when the state gives those employees a raise. By not specifically excluding the magistrates from the county raise of three percent for “all county employees,” the magistrates claim they were entitled to both the county and state raises.

However, the magistrates received only the raise mandated by the state. Despite county council budget discussions and votes, the magistrates were excluded from the county pay raise. According to several sources in county government, administrator Chris Eldridge made the final decision to exclude the magistrates from the county pay raise.

The magistrates are asking the county for a retroactive three percent raise and a lump sum check for nearly three years of missed wages.

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Myrtle Beach’s Unequal Application of Law

One thing that has become consistent in the City of Myrtle Beach over recent years is the law will be applied inconsistently. It’s not what you do, it’s who you are that matters.

The Fifth and Fourteenth Amendments to the Constitution guarantee due process and equal application of the law to both federal and state jurisdictions.

But not in Myrtle Beach!

The city is currently being sued by business owners in the city for violating the owners’ rights guaranteed by the Constitution and those amendments with what the city calls its Entertainment Overlay District.

Inside that district, businesses are prohibited from selling legal products such as CBD oils and Vape accessories with the threat of having their business licenses revoked and the business being closed down.

Those same products are sold in other areas of the city without any restriction or harassment by city officials.

Most, if not all, of these businesses are beachwear stores owned by Jewish businessmen, which brings in other issues to the lawsuit in the form of violations of the Civil Rights Act and discrimination.

City officials have said these restrictions were put in place by city ordinance in an effort to make the district “family friendly” – the city’s favorite buzzword.

However, there have recently been three raids on two hotels within the same district for the sale of illegal drugs on the properties, you know heroin, cocaine and those types of drugs, with no threat to business licenses.

There is no indication that the owners or operators of those hotels were involved in the illegal activity, but that hasn’t stopped the city from closing down businesses as “nuisances” for similar activity in the past – Natalia’s Bar and Grill in the Superblock area comes quickly to mind.

Natalia’s was closed down by the city in December 2016 as a nuisance for activities such as drug sales that occurred outside the building but in the near vicinity. One month later, the city owned the property.

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I-73 Votes Ignore Immediate Local Needs

The I-73 participation agreement Horry County signed with SCDOT in December, at the urging of administrator Chris Eldridge and former council chairman Mark Lazarus, ignores local road needs, highlighted by recent flooding issues, for a new road that is years and over one billion unidentified and uncommitted dollars from completion.

When county council adopted Resolution 82-18 in July 2018, it specifically dedicated up to $25 million toward the I-73 project only. With this resolution in place, the county may not use any of this money toward repair or improvements to U.S. 501, S.C 9 or other roads in the county as flooding events since Hurricane Floyd in 1999 have shown to be needed. These funds can be used to improve S.C. 22 as that is part of the I-73 project.

There has been a general rush to dedicate funds for I-73 since right after the June 2018 primaries. Council held a special meeting on July 24, 2018 where Resolution 82-18 was passed which dedicated up to $25 million per year of 1.5% Hospitality Fee revenue to the I-73 project.

Staff immediately began conversations with SCDOT to develop and present the I-73 participation agreement. During the November 28, 2018 fall budget workshop, council approved allowing the administrator to execute the participation agreement with SCDOT. The agreement was executed by administrator Eldridge for the county and Christy Hall, the state Transportation Secretary on December 13, 2018.

At the July 2018 special meeting council also passed Resolution 84-18 directing staff to develop a plan to use $18 million of the 1.5% Hospitality Fee revenue on public safety and other roads. In addition, the resolution directed staff to draft an amendment to Section 19-6(h) of the Horry County Code of Ordinances, which currently requires all of the 1.5% revenue to be deposited in a Special Road Fund. The amendment would allow the $18 million to be used on other state approved tourism related expenses such as public safety, recreation, storm water and other infrastructure improvements.

To date no amendment has been presented to council. The amendment would require a three reading ordinance to become law. In addition, no plan for use of the $18 million has been presented.

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