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Horry County to Consider Alternate Hospitality Fee Proposal

Horry County Council will consider a resolution at its regular meeting Tuesday night that provides an alternative strategy for hospitality fee collections and expenditures within the county.

This initiative is in response to the recent actions of Myrtle Beach, North Myrtle Beach and Surfside Beach councils in passing ordinances to capture all hospitality fee revenue generated within their municipal borders in accordance with current state law.

The county’s proposal is to save the 1.5% countywide hospitality fee with $18 million of the proceeds dedicated to funding for I-73.

While the countywide proposal appears to raise in excess of $13 million more in revenue, the expenditure of $18 million toward I-73 would leave each city and the county with less actual revenue available to offset the ever increasing demands of offsetting costs of tourism to each entity.

By dedicating money specifically for I-73, the county’s proposal also falls short of addressing current needs for repair and improvements to U.S. 501, SC-22, SC-9, Hwy 90 and Hwy 905.

Both the county and the cities would see immediate benefits from addressing the needs of those five roadways as opposed to waiting years for completion of the portion of I-73 from I-95 at Dillon to Horry County.

Why should the citizens be told to ignore the needs of those roads before the next round of flooding hits the county, yet be excited about some future roadway that may or may not be built?

It is important to remember that neither the state government nor the federal government have appropriated any funds to construction of I-73.

There should be no rush by local governments to dedicate tax dollars to I-73 while the state and federal governments continue to provide none. The loudest proponents for I-73 funding are state Reps. Alan Clemmons, Russell Fry and Heather Ammons Crawford. At least they are the loudest in Horry County. It seems their voices become quite muted when they are in Columbia.

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County Says No to Secret Negotiations on Hospitality Fees

Horry County Council members have given a resounding NO to holding secret negotiations with representatives from the municipalities about hospitality fees and possible funding for I-73.

The City of Myrtle Beach proposed discussions behind closed doors by sending a confidentiality agreement to the county and the other seven municipalities in Horry County. The city is trying to couch any discussions on hospitality fees as a resolution conference with regard to the lawsuit it recently filed against Horry County over the subject. The city said S.C. Rules of Procedure Section 408 applies to the discussions.

In the very best interpretation of the city’s position, this is a stretch.

The city filed its lawsuit against the county claiming the county’s continued collection of the 1.5% portion of the hospitality fee beyond January 1, 2017 is illegal. The complaint was structured in a way that a class action lawsuit (municipalities v the county) could be requested.

However, to date no other municipality has joined the lawsuit and no judge has certified a class action.

Therefore, any negotiations that includes representatives from other than Myrtle Beach and Horry County couldn’t truly be considered a dispute resolution conference as it would include third parties not currently included in the lawsuit.

More importantly, any discussions about dividing public tax revenues or spending public tax dollars for public projects by public agencies should be held in the open.

What appears to have happened is Myrtle Beach jumped the gun on the hospitality fee issue. It hurried a city ordinance through two readings in order to capture all hospitality tax, 2% on just prepared food and beverages, allowed under current state law, collected by the city to remain in Myrtle Beach tax coffers.

Myrtle Beach next filed its lawsuit against Horry County claiming the original hospitality tax ordinance passed by Horry County with consent of the cities in late 1996 expired on January 1, 2017. The original ordinance placed a 2.5% tax on all accommodations, prepared food and beverages and tickets sold within the county. Of that, 1.5% collected countywide was specifically designated to pay off the bonds for the Ride I projects.

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Horry County’s Embarrassing Special Meeting

Horry County Council proved during its special meeting last night it doesn’t need the county administrator or attorney to embarrass the county. Council did a fine job embarrassing itself on its own.

Two key items were up for a vote last night – not to renew the administrator’s contract upon its April 21, 2019 termination and termination of the financial participation agreement between the county and SCDOT for the I-73 project.

Council kicked both votes down the road.

There may have been some justification for not voting on the administrator’s contract because council chairman Johnny Gardner was contacted by an attorney representing administrator Chris Eldridge yesterday morning requesting negotiation of an exit package for Eldridge.

Gardner said he believes agreement can be reached on a termination package so Eldridge will depart county employment within two weeks.

Delaying cancellation of the I-73 agreement, however, is an entirely different story.

There is no benefit to the county and its citizens of keeping an agreement in place, the funding for which is a great mystery at this point.

However, the Myrtle Beach Chamber and its cronies were in full lobbying mode yesterday to keep the financial participation agreement in place.

Those council members, I’m thinking here of council’s Deep Six in particular, who are much more inclined to listen to the special interest lobbyists at the expense of the citizens of the county fell right in line.

Council member Harold Worley, the apparent leader of the Deep Six, was reportedly in favor of cancelling the financial participation agreement at the end of last week. Monday night, Worley was the foremost proponent from the council dais in maintaining the agreement and negotiation with the county’s municipalities on a new split of hospitality tax revenues.

In the past few weeks, Myrtle Beach, North Myrtle Beach and Surfside Beach have all passed ordinances whose sole purpose is to capture all hospitality tax revenues collected within their respective corporate limits.

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Will the Deep Six Continue to Allow the Administrator and Attorney to Embarrass Horry County?

A specially called meeting of Horry County Council tonight is scheduled to discuss renewing the contract of county administrator Chris Eldridge, which expires April 21, 2019.

What is really to be discussed here is whether council members expect Chairman Johnny Gardner to continue to have attempt to work with Eldridge and county attorney Arrigo Carotti after those two were unsuccessful in an attempt to smear Gardner even before he took office on January 1, 2019.

Six council members, Harold Worley, Dennis DiSabato, Tyler Servant, Cam Crawford, Gary Loftus and Bill Howard, the Deep Six as I call them, voted against firing county administrator Chris Eldridge on March 5th, after the results of a SLED investigation cleared Gardner of allegations of wrongdoing lodged by Eldridge and county attorney Arrigo Carotti.

Three of them, Worley, DiSabato and Loftus, claimed the results of the SLED investigation did not warrant firing Eldridge. The other three, Crawford, Servant and Howard, didn’t even have the courtesy to explain to the collected citizens viewing the proceedings their reasons for voting as they did.

Gardner said he has no confidence in either Carotti or Eldridge.

“People will never understand how difficult it was for me to remain calm and move forward with the business of the county with those allegations against me,” Gardner said. “But, I knew I didn’t do anything wrong and I trusted in the system, a criminal justice system I have been a part of for over 30 years, to conclude the truth. Now, after a SLED investigation exonerated me of any wrongdoing, I find that the administrator and attorney tried to rig the investigation against me.”

Through emails obtained through Freedom of Information Act requests by media, we know as early as December 12, 2018, Carotti and Eldridge in concert with former chairman Mark Lazarus were constructing a version of conversations, none of which any of the three were part of, in order to allege  wrongdoing by Gardner.

Carotti authored a five-page memo based entirely on hearsay. The memo was completed December 19, 2018, and Eldridge forwarded it to SLED December 20, 2018 after the memo was leaked to a Columbia media outlet.

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County Attorney Tried to Directly Influence SLED Investigation

New information has surfaced that demonstrates Horry County attorney Arrigo Carotti not only attempted to tell SLED investigators what direction their investigation of Horry County Chairman Johnny Gardner should take but also what conclusions they should and should not draw as a result.

Allegations of extortion against Gardner, began with a five-page memo written by Carotti, from December 14–19, 2018, in concert with input from county administrator Chris Eldridge. The memo also attempted to implicate Luke Barefoot, Donald Smith and myself in this fictitious plot.

Eldridge sent the Carotti memo to SLED December 20, 2018 requesting the agency investigate the allegations, but only after the memo was leaked to and published by a Columbia internet media outlet early in the morning of December 20th.

Eldridge told county council members, during a March 5, 2019 special meeting of council, he sent the memo to SLED only after it was leaked in the media because “he didn’t want to be accused of a cover up.”

Before the results of the SLED investigation were made public, an attorney friend of mine told me his theory on the entire affair was that a civil conspiracy plot had taken place among players who were willing to go to any length to keep Gardner from taking office on January 1, 2019. Are we talking “Deep County” here?

With more and more journalists seeking additional information about the allegations against Gardner through Freedom of Information Act requests and questions of the various people included in this saga, new revelations have come to light in recent days that add significant credence to this theory.

Carotti’s original five-page memo is based completely on hearsay about supposed conversations, none of which Carotti nor Eldridge were party to. In his memo, Carotti states he began writing it on December 14th “as a result of events that have taken place since December 5 as memory fades over time and this debacle is broadening.”

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The Demise of I-73

The City of Myrtle Beach effectively ended the possibility of any significant local funding for I-73 when it sued Horry County over Hospitality Fee collections earlier this week.

The filing of the lawsuit followed weeks in which city council passed an ordinance to capture all the hospitality fee revenue collected within Myrtle Beach corporate limits, said it may be willing to fund up to $7.5 million annually for I-73, then, completed this chain of events with the lawsuit.

One must possess a strong appreciation for the absurd to watch the Myrtle Beach council in action.

However, Myrtle Beach only provided the endgame for what has been a bungled process from the beginning with first Horry County and later Myrtle Beach attempting to save local funding for I-73.

It began in April 2017 when former chairman Mark Lazarus strong-armed Horry County Council to remove the sunset provision from the 1.5% countywide hospitality tax that was funding the Ride I bonds. Each of the municipalities in the county had formally agreed to collection of this tax within their corporate boundaries until the Ride I bonds were paid off.

Lazarus, assisted by county administrator Chris Eldridge and county attorney Arrigo Carotti, formulated a plan to move this funding source to I-73 when the Ride I bonds were paid off, an event that occurred in January 2019. However, none of the county trio thought to obtain formal agreement from the municipalities to support this plan.

After Lazarus lost the June 2018 primary for council chairman, his days to secure the deal became numbered.

In July 2018, Lazarus and his two staff cohorts worked county council to formally adopt a resolution dedicating all of the $41 million revenue from the 1.5% countywide hospitality fee collections to a special fund for I-73. Again, none of the triplets approached the municipalities for formal agreement to this plan.

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County Council Defers I-73 Decision Until Next Meeting – Updated

Update—————————-Update

John Bonsignor and I hosted North Myrtle Beach Mayor Marilyn Hatley today on our television show Talking Politics. During the discussion with Mayor Hatley, I asked about the new North Myrtle Beach city ordinance keeping all hospitality tax collected in the city. Mayor Hatley said the city expects an additional $7 million annually from the hospitality tax.

I specifically asked Mayor Hatley if anyone had approached the city about dedicating some of the new hospitality tax revenue to the I-73 project. Mayor Hatley responded that she had received a call from Myrtle Beach Mayor Brenda Bethune on that subject. 

Mayor Hatley said North Myrtle Beach would consider the request but ONLY if EVERYONE has some “skin in the game”. I inquired if “everyone” includes the state and federal governments and she said “yes.”
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Horry County Council members deferred taking any action amending the I-73 Financial Participation Agreement with SCDOT until the next regularly scheduled meeting April 2, 2019.

Issues with the agreement first arose when the cities of Myrtle Beach, North Myrtle Beach and Surfside Beach passed ordinances recently reducing hospitality tax revenues to Horry County thereby removing much of the anticipated money needed to fund the I-73 agreement.

Last week, members of the county’s Infrastructure and Regulation Committee tasked county staff with renegotiating two key areas of the financial agreement with SCDOT – delay of the start of any work under the agreement until January 1, 2020 and remove Section III(D) of the agreement which reads in part, “…“The County’s prior approval shall not be required to enter into contract agreements for improvements to SC-22, provided the cost thereof does not exceed the estimates provided in the Annual Work Plan. Nor shall the County’s prior approval be required for any right-of-way acquisition agreement or consultant agreement for work of the Project provided the cost thereof does not exceed the estimates provided in the Annual Work Plan.”

Members of the I&R Committee did not want to allow SCDOT to enter into any type of contract agreements without prior approval of county council.

As the agreement currently reads, county council only has prior approval on construction contracts.

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SC Supreme Court Overturns SkyDive MB Dismissal

By a 4-1 decision, the S. C. Supreme Court overturned decisions at the District Court and Appeals Court levels giving SkyDive Myrtle Beach the opportunity to prove its case in court.

The details of the case have never been heard as Horry County was successful at using some legal hocus pocus at the lower court levels to keep from allowing the case to go forward.

That is not the result now as the case, SkyDive Myrtle Beach v. Horry County et al, has now been remanded back to the District Court and will go on the trial roster with discovery pending immediately.

This means the case, once described by Horry County Attorney Arrigo Carotti as “rightfully dismissed by all who have discerned the true set of affairs,” was not treated in that fashion by the Supreme Court.

Referring to SkyDive Myrtle Beach owner Aaron Holly, myself and others, Carotti wrote the following to a council member inquiring about the case:

“On Aug 15, 2017, at 11:24 AM, Carotti, Arrigo wrote:

The misrepresentation of facts and the law has been ongoing on the part of Mr. Holly, misguided bloggers, and Holly surrogates for several years now, involving universally unsuccessful litigation by Holly, and pending litigation against the FAA, the State of South Carolina, Horry County, officials and employees. There have been no new admissions, the FAA’s and County’s sound positions in the matter remaining the same.  Defamatory commentary on the part of Holly and his surrogates also has been ongoing and is expected to continue, but has been rightfully dismissed by all who have discerned the true set of affairs, borne out in voluminous court documents and public records.

Arrigo P. Carotti / County Attorney”

The original case was filed on February 28, 2014 against Horry County under the general court classification “Unfair Trade Practices.” It alleged a pattern of harassment by the County and its Department of Airports (HCDA) with the ultimate goal of removing SDMB from Grand Strand Airport (GSA) as the original complaint states:

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High Drama Surrounds County’s I-73 Agreement with SCDOT

High drama surrounded a recent decision by the Horry County Council Infrastructure and Regulation Committee to consider changes and/or cancellation of the Financial Participation Agreement the county signed with SCDOT last December for the Interstate 73 project.

Like many issues in the political arena these days, this one included its share of drama queens heightening and confusing the discussion while voicing veiled threats about possible state government retaliation should local government officials significantly alter or cancel the agreement.

According to local council members who spoke with Grand Strand Daily, Reps. Russell Fry and Alan Clemmons as well as former representative and current Myrtle Beach Chamber lobbyist Mike Ryhal quickly took to phone calls and texts when they heard of the planned I&R discussion earlier this week.

Their collective message, reportedly, was leave the agreement alone or face the possibility of the General Assembly altering current state law to remove control of hospitality and accommodations tax revenue from local governments in favor of control in Columbia.

Ever since July 2017 when former county council chairman Mark Lazarus and members of county government senior staff led council down the path to partial funding of the I-73 project by removing a sunset provision from the county’s hospitality tax law, this controversy has been inevitable.

Despite massive propaganda efforts through the years by the Chamber and a few elected officials about the necessity of I-73 to provide a connection to Interstate 95, local residents have remained unconvinced of the purported benefits of the project.

Many of those who cried the loudest – the Chamber, Clemmons and U.S. Congressman Tom Rice – have been collectively unsuccessful at acquiring funding for the project at the state and federal levels.

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Eldridge and His Band of Followers

It has been one week since six members of Horry County Council blindly followed the lead of administrator Chris Eldridge with the story pitched by Eldridge about how and why he called for a SLED investigation with false allegations against Chairman Johnny Gardner.

Last week’s farce seemed more like River City than Horry County with Eldridge playing the part of Harold Hill.

But that is exactly what happens when council members are unwilling to ask questions of the administrator about his story or give more than a cursory glance at the SLED report and the tape recording at its center.

Prior to a November 30, 2018 lunch meeting between Gardner, Luke Barefoot and Sandy Davis and Sherri Steele of the Myrtle Beach Regional Economic Development Corporation (EDC) Eldridge already had his narrative established of what would be told to SLED 20 days later.

This is obvious from the sworn statements given to SLED investigators by Eldridge and Davis. Almost immediately after the lunch meeting ended, Eldridge peppered Davis with specific questions about Donald Smith, supposed stories that were supposed to be written by me, payments to the Beach Ball Classic and a statement by Eldridge about funneling money to Smith.

Eldridge told SLED Davis was “upset” after the meeting. Davis told SLED the meeting went well and EDC board chairman Neyle Wilson said Davis said the same to him and his interpretation of the meeting was quite the opposite of that of Eldridge.

Nineteen days after the meeting, Eldridge, attorney Arrigo Carotti, council members Mark Lazarus and Gary Loftus, Wilson, Davis, Steele and Fred Richardson of the EDC listened to the portion of the recording of the meeting that was pertinent to Eldridge’s false allegations.

According to Davis and Wilson, Eldridge was the only member of the group that “thought he heard something” on the tape to support his allegations. The others said there was nothing there.

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