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NMB TDF Vote Today

North Myrtle Beach voters will go to the polls tomorrow to decide whether a Tourism Development Fee will be instituted in the city.

I support the decision of the North Myrtle Beach City Council to allow this decision to be left up to the voters. Additionally, I support statements from council that, if passed, only the minimum TDF revenue required by law would be used for owner-occupied property tax relief with the majority of that revenue used to benefit all the citizens of the city with improved infrastructure.

The TDF was introduced to the state and this area in 2009. Since that time, it has been my opinion the TDF is used in Myrtle Beach to benefit the Myrtle Beach Area Chamber of Commerce, certain large business owners in that city and residents who live in high end homes.

The North Myrtle Beach approach is significantly different. The city is demonstrating it is not Myrtle Beach in the way TDF funds will be used if the referendum passes.

Since the recent North Myrtle Beach city council budget retreat, it appears city residents are in for some type of tax increase. A property tax increase of 2-3 mills was discussed by council at the retreat.

During presentations about the TDF, City Manager Mike Mahaney discussed the need to find a funding source to address parking problems around the city because public safety people are being tied up dealing with parking problems when they could be better utilized performing other duties.

If the TDF passes, city revenue from the fee could be the funding source for addressing parking problems, which would also benefit public safety by freeing personnel for other needs. Revenue for marketing North Myrtle Beach would be used to promote the North Myrtle Beach brand in order to maintain a strong economy in the city.

Mahaney said one mill of property tax brings in revenue of $375,000 to the city. Three mills, therefore, would bring the city an additional $1,125,000 in revenue for parking and other infrastructure.

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The Choice for North Myrtle Beach Voters

Voters in North Myrtle Beach have a choice on Tuesday when they go to the polls to vote on whether or not to approve a Tourism Development Fee in the city.

Interestingly, the choice is not between voting the TDF up or down, although that will be decided. The real choice is how voters want to pay for infrastructure and other improvement needs in the city and who should be doing the paying.

From recent discussions at the North Myrtle Beach City Council budget retreat, it appears some type of revenue increase is in the offing for North Myrtle Beach residents.

According to information I have received, the North Myrtle Beach City Council discussed a property tax increase of 2-3 mills during their budget retreat earlier in the week.

A property tax increase would be paid only by the property owners in the city. The TDF would be paid by everybody, tourists included, who makes purchases in the city.

The TDF has the added advantage of providing revenue for targeted marketing of the North Myrtle Beach brand (cleaner, safer, family oriented) to tourists who are the lifeblood of the economy in the city.

I attended a meeting of the Tidewater HOA recently where the North Myrtle Beach City Manager made a presentation on the TDF.

Part of the presentation showed pictures demonstrating the need for more parking facilities in the city, an infrastructure improvement that increased revenue to the city will fund, according to statements by council. In addition, road improvements and continued staffing of public safety personnel were discussed as needs.

Another part of the presentation compared revenue increases available from the TDF versus the possibilities from something called the Municipal Tax Reform Act, which is only at best a vague hope to at worst a pipe dream in the minds of city council.

The Municipal Tax Reform Act is a bill that has been stuck in committee in the S.C. Senate for over a year and has no hope of passage in this legislative year or the near future. (You can see more on this in other articles I have written about the referendum.)

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County Adds to Flames in Treasurer Lawsuit

Horry County Government threw more gasoline on the fire it has created with the Horry County Treasurer’s Office with a new filing in court Friday on the Treasurer lawsuit filed by Angie Jones.

The new filing is an amended answer and amended counterclaims associated with the original lawsuit against Horry County Government and Administrator Chris Eldridge, which was filed in November 2017.

One of the new complaints by Horry County is that Jones has refused to provide detailed information about her budget request for the next fiscal year to the Horry County Assistant Administrator Justin Powell.

The counterclaim states, “The Horry County budgeting process is handled by Horry County Council and administered by the Horry County Administrator.”

An email from Jones to Powell states, “I will deal directly with council in regards to my budget needs …”

From the above two quotes, it would appear that Jones is adhering to the provisions in state law. She is a countywide elected official elected by the people to run the Treasurer’s Office. The administrator is appointed by Horry County Council to administrate policies decided by vote of council for the departments that council has control over.

A South Carolina Attorney General’s Opinion dated October 26, 2007 states, “With reference to budgetary matters, while it’s true that the council exercises totally the budgetary authority of a county and can decrease, increase, or otherwise alter appropriations for county offices, nevertheless, it cannot so decrease the appropriations of an elected official’s office so as to prevent the proper functioning thereof.

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Fourth Circuit to Hear Oral Arguments in Skydive Myrtle Beach Appeal

A complaint brought by Skydive Myrtle Beach against Horry County Department of Airports has been tentatively scheduled for oral arguments before the U.S. Fourth Circuit Court of Appeals in Richmond, VA May 8-10, 2018.

See extract of official electronic notification here:

A quick recap of the case:

In early 2014, shortly after Skydive Myrtle Beach (SDMB) reported to the FAA of discriminatory actions against it by the Horry County Department of Airports (HCDA), HCDA and other Horry County officials apparently decided they wanted to eliminate SDMB from operating in Horry County.

Tandem skydiving is a recognized and approved use of publicly supported airport facilities by the Federal Aviation Administration. It is illegal for an airport that accepts publicly funded grants, as HCDA does annually, to discriminate against one type of approved aviation activity, say helicopter operations, over another – tandem skydiving.

In 2014, HCDA began circulating stories about alleged safety violations committed by SDMB while it was operating out of Grand Strand Airport.

In October 2015, Horry County government ultimately evicted SDMB from Grand Strand Airport using a 73 page FAA Director’s Determination as justification. It is the findings in the FAA Director’s Determination that is on appeal before the Fourth Circuit.

Much of the Director’s Determination report was based on 112 safety violations allegedly committed by SDMB and quite unofficially and sloppily documented by HCDA and its tower operator at Grand Strand Airport, Robinson Aviation.

On at least three occasions since the Director’s Determination was published, the FAA has admitted in email correspondence regarding Freedom of Information Act requests that it has no documentation with respect to investigations, fines or other actions taken by HCDA on the alleged 112 violations.

Likewise, Horry County Attorney Arrigo Carotti wrote in an email response to FOIA requests seeking information on the 112 alleged violations that, “These records are provided in an abundance of caution, in that each may or may not demonstrate violation by Skydive Myrtle Beach of Horry County Department of Airports Minimum Standards, as that assessment has not been undertaken.”

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North Myrtle Beach and Tourism

The beaches and the upcoming Tourism Development Fee referendum in North Myrtle Beach have hit the pages of local media recently.

The beaches must be protected from the potential dangers of offshore drilling and they must be routinely renourished in order to keep tourism viable in the city, according to recent articles.

Many arguments against the TDF were enumerated in a recent op-ed by a North Myrtle Beach resident. Unfortunately, the writer was arguing against the example of how Myrtle Beach has chosen to implement the TDF rather than how it can be positively applied in North Myrtle Beach.

There is no question that tourism is the lifeblood of all the coastal communities along the Grand Strand. In many ways, North Myrtle Beach has set an example that the others should strive to follow.

The business community has done a good job of advertising with its own dollars, promoting the North Myrtle Beach brand as a safe, clean, family friendly location.

The city has added to this effort by providing quality public safety services, stormwater outfalls to keep bacteria levels near the beaches low and other infrastructure that benefits both local citizens and tourists alike.

Properly used, the TDF, if approved, could be used to supplement these private and public efforts to keep the city competitive in the family friendly tourism market.

According to state law, from the second year onward, the TDF revenues can be split 80% for out of area tourism marketing and 20% to the city for property tax relief and/or tourism related public safety, infrastructure and other similar projects. The decision on the split and how the city portion is spent rests solely with the city council.

It was proposed in the above mentioned op-ed that it would be nice to be able to apply all of the revenue from the one percent fee totally to public safety, infrastructure and the like.

In fact, this was attempted by a bill submitted by Sen. Greg Hembree last year (S.426). Called the Municipal Tax Relief Act, this bill proposed a one-cent sales tax on all taxable purchases in the city that would go to city coffers to offset some of the demands on property tax revenues.

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Myrtle Beach International Airport

The High Risk of Privatizing the US Air Traffic Control System

Mr. Douglas A. Decker, P.E. presented a “White Paper” highlighting the high risks of privatizing the FAA air traffic control system, both to citizens of South Carolina and the nation. The presentation was made before the South Carolina Aeronautics Commission last week.

The Aeronautics Commission meeting was held in conjunction with the South Carolina Aviation Associations Annual Meeting.

Decker, reviewed the Air Traffic Control Legislation H.R. 2997 that is pending in the US House of Representatives that would turn over management of the Nation’s Air Traffic Control (ATC) system and related services to a federally chartered, not-for–profit, non-government corporation, private monopoly controlled by the airlines. Presently the FAA operates the ATC system. 

Decker presented the reasons he believes such a change is a very bad idea.  He pointed out how this would affect tens of thousands of communities like ours around the country who depend on our local airports. These airports provide critical services such as medical care, law enforcement, and disaster relief.

Decker and COL. John W. McDonald (Ret) collaborated in the preparation of the  “White Paper”, which details the many risks involved in transforming the safest and most complex aviation system in the world to a private corporation.

National Security

Decker pointed out that the United States aviation assets remain the greatest terrorism target in the world. The FAA and DOD collaborate 24/7 to protect our aerial borders and homeland security and work seamlessly and share information openly.

The DOD Policy Board raises serious concerns that privatization would jeopardize the “command and control” between DOD and FAA. What if one of these private corporation employees inserts malicious software into the ATC system? Will it shut down the US airspace indefinitely? When it comes to securing the country against a multitude of threats, federal agencies and organizations have proved competent and capable said Decker.

Do we really want a private company managing our national security assets?

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Tourism Development Fee – A Tale of Two Cities

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity,…”

Charles Dickens, A Tale of Two Cities

 The above quote from the classic Charles Dickens novel “A Tale of Two Cities” accurately sums up the respective approaches being taken by the cities of North Myrtle Beach and Myrtle Beach on the issue of the tourism development fee (TDF).

The North Myrtle Beach city council has scheduled a referendum vote for March 6, 2018, to allow voters in the city to determine whether a TDF should be allowed on purchases in the city.

The Myrtle Beach city council approved the TDF nearly nine years ago by supermajority vote of the council. The council, even with three new members, appears ready to vote to extend the TDF beyond its initial 10 year approval period again by supermajority vote of council members. Council seems unwilling to allow the question to be put before its voters.

Having voted for a referendum, North Myrtle Beach officials, both elected and appointed, cannot be seen as advocating for passage or defeat of the referendum in their official capacity. According to statements made to various media outlets, they are strictly adhering to this line to avoid any potential ethics problems.

North Myrtle Beach city officials can and should tell the public how the revenue the city will receive from the TDF will be spent, i.e. public safety, parking, other infrastructure. It appears that all residents will get some benefit from TDF revenue. In Myrtle Beach, only 17% of properties in the city (owner-occupied properties) receive all the benefits from the city revenue.

One has to wonder whether Myrtle Beach city officials would conduct themselves in the same ethical manner if a referendum on the question were pending in that city. Incumbents have been strong proponents of the TDF and even several of the new members, who said they thought a referendum should be held on the question of extending the TDF, seem to have backed away from those campaign pronouncements.

I know of several instances where local media outlets have been contacted with a request to “take it easy” on Myrtle Beach city council members if they vote to extend the TDF.

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Public Monies, Chambers of Commerce and South Carolina Supreme Court

It has been nearly four months since the South Carolina Supreme Court heard arguments in the DomainsNewMedia.com v Hilton Head – Bluffton Chamber of Commerce.

The question before the court deals with whether the Chamber of Commerce is a public body and subject to the provisions of the S. C. Freedom of Information Act.

The Myrtle Beach Area Chamber of Commerce (MBACC) filed an amicus curiae brief to the S. C. Supreme Court supporting the Hilton Head – Bluffton Chamber of Commerce position.

A Circuit Court judge in Bluffton County ruled in favor of Plaintiff DomainsNewMedia.com finding the Chamber is a public body within the definition of the law.

Actually, the law is quite straightforward. Section 30-4-20 of the S. C. Code of Laws defines a public body subject to the Freedom of Information Act as, “…any organization, corporation, or agency supported in whole or in part by public funds or expending public funds…”

The Hilton Head – Bluffton Chamber of Commerce receives accommodations tax money from the towns of Hilton Head and Bluffton as well as Beaufort County. The Chamber is the designated marketing organization for these governmental entities to expend the tax funds collected for tourism promotion.

The Chamber claimed before the Court that being the designated marketing organization for those public agencies did not negate its status as a private non-profit corporation not subject to FOIA.

The Chamber does provide a marketing budget and quarterly and year end reports for the public money to the governments involved.

In answer to a question from Justice Few about how a member of the public could find out specific information about the line items in the Chamber’s budget, the attorney for the Chamber suggested they would have to file a FOIA request with the town, who would then go to the Chamber for the specific information.

The argument was not that the public did not have a right to the information, it just didn’t have the right to request the information directly from the agency expending the funds, which is ridiculous.

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NMB Takes Proper Approach to Tourism Development Fee

North Myrtle Beach is to be commended on taking what many consider the proper approach to deciding whether to institute a tourism development fee (TDF) in the city.

City Council decided it was appropriate for the residents of North Myrtle Beach to decide whether a TDF is to be collected. Therefore, a referendum on whether to approve the TDF is scheduled for March 6, 2018 in a stand-alone vote.

The role of the city ends with the decision to hold a referendum. No government body, personnel or equipment may be involved in the campaign, according to state law. Individuals who are government personnel may only support or oppose the referendum question on their own time outside of government facilities and not as part of their official duties.

State Law Sec. 8-13-765 states in part, “No person may use government personnel, equipment, materials, or an office building in an election campaign,” and “This section does not prohibit government personnel, where not otherwise prohibited, from participating in election campaigns on their own time and on nongovernment premises.”

If approved, the TDF is a one percent fee charged on all purchases in the city to which state sales tax applies. Items such as food, rent/mortgage and medicines are exempted.

If approved, 80% of the revenue collected from the fee will be given to a marketing organization, usually the local Chamber of Commerce, to promote tourism from out-of-area locations. The remaining 20% goes to the city for things such as owner-occupied property tax rebates, public safety, parking and other infrastructure or similar types of city expenses.

From statements made recently to media, it appears the city will use the state mandated minimum (4% of the total revenue) to apply to property tax rebates to owner-occupied properties. The remaining 16% of revenues will be used for other city initiatives.

This approach is the best because it shares the benefits of the fee to the largest number of citizens, rather than keeping it for just a small percentage of the population.

A significant portion of the revenue will come directly from tourists and the city’s portion of the revenue can offset some of the costs to the local economy from the tourism industry.

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Horry County Treasurer Request Nixed by Administrator, County Council

A request by Horry County Treasurer Angie Jones to have county administrator Chris Eldridge sign off on an addendum to a contract with a county software supplier was shot down at Tuesday’s regular meeting of county council.

Jones made a presentation to county council about a new service the Treasurer wanted to institute in Horry County. The service would provide taxpayers who pay vehicle taxes in person at the Treasurer’s Office or one of the satellite offices with a new vehicle registration and decal for the license plate when the payment is made.

A convenience fee of $1 would be added to the vehicle tax notices to add this service.

According to Jones presentation, this service is already in place in 32 of the 46 counties in South Carolina and the $1 convenience fee is established by the S.C. Department of Motor Vehicles.

After Jones presentation, council chairman Mark Lazarus called for Horry County staff to address some issues with allowing the Treasurer’s Office to offer this convenience.

Eldridge moved to the microphone to speak for the staff. He began his remarks with the statement, “Of course there is litigation going on currently between the Treasurer’s Office and Horry County Council.”

Actually, the litigation is Angie Jones, Individually and as Horry County Treasurer v. Horry County, a body Politic and Chris Eldridge, in his capacity as Horry County Administrator.

Eldridge went on to say the request was a budgetary issue and if council wants it done, “it isn’t that much.” He would prefer to see it go through the normal budgetary process and would not support the $1 fee.

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