Tag: Horry County

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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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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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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Tomorrow’s Special Council Meeting, Gardner and the People v. DiSabato

Horry County Council will hold a special meeting tomorrow to discuss the SLED report and the part played by Administrator Chris Eldridge in taking false allegations to SLED in order to prompt an investigation of Chairman Johnny Gardner.

It is obvious from the SLED report and lack of evidence of any wrongdoing, Eldridge tried to set up Gardner in order to advance a particular agenda.

What is that agenda? It appears to be to subvert the will of the tens of thousands of voters who put Gardner in office in order to effect much needed change in the way the county was being run.

The agenda includes attempting to guarantee construction of Interstate 73 while ignoring the infrastructure already in place. The recent flooding in three of the last four years demonstrates there is immediate need for improvements and flood mitigation on U.S. 501, S.C. 22 and S.C. 9 as well as needs for improvements on Hwy 90 and Hwy 905.

It includes ignoring the needs for increased staffing for public safety departments while pushing the purchase of $12 million of swamp land for some kind of half-baked wetlands mitigation scheme.

It includes alienating an overwhelming majority of county employees by mistaking the title administrator for dictator.

It includes picking a fight with Treasurer Angie Jones over the addition of one person in her office while costing the county more money in legal fees than would have been spent to fund the position as well as attempting to dictate to other countywide elected officials while only filling an appointed position.

It includes a half-baked scheme to extend the collection of hospitality fees to fund the I-73 project that the cities are in the process of destroying, thereby losing a potential source of revenue that could have benefited the citizens of the entire county by helping fund some of the above mentioned needs.

It includes never taking a serious look at how impact fees could be used in order to keep current residents from having to fund goods and services for new development.

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Budgets - Cuts, Spending and You

Changing Focus on the County Budget Process

Horry County began its budget process for Fiscal Year 2020 with its fall planning retreat November 28th.

This was the beginning of what could prove to be a very interesting budget year.

Incoming council chairman Johnny Gardner pledged on the campaign trail, “Public Safety Priority One Day One” as his approach to the county budget process.

County staff heard a portion of that message. The early budget outline includes an additional approximately eight million dollars for public safety. That addition is based on what staff believes can be used from excess hospitality fee revenues after Ride I bonds are paid off early in 2019.

However, despite a county council resolution to use approximately $18 million from those revenues toward public safety, infrastructure and areas like recreation, staff has held firm to the $8 million it proposed last July.

Additionally, council directed staff to prepare an ordinance amending current county code pertaining to the funds received from what is known as the 1.5% portion of hospitality fee revenue that currently goes to pay off the Ride I bonds. Currently all of that revenue is deposited in a special road fund per county code.

To date, staff has not presented an ordinance amendment to change that designation to include public safety, infrastructure, recreation and the like.

This avoidance of acting on a resolution designating the will of council can only be attributed to at least certain members of county senior staff continuing to desire that all of the Ride I 1.5% money go to I-73, which was initially proposed to council.

Therein lies the basic contradiction in the county budget process – council directs, but staff does what it wants to.

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Horry County Voters Send Message on Impact Fees, Representation to County Council

Horry County voters resoundingly supported the concept of having new construction pay for the improvements in county goods and services it requires on a referendum question Tuesday night.

Asked whether they supported imposing impact fees on new development, 74,904 voters out of the 103,186 answering the question, said YES.

The question was asked as an advisory referendum, which means it is non-binding and only an expression of voter will. However, when such an overwhelming majority of voters supports an issue, elected officials would do well to hear the message being sent.

State law currently includes language for imposing impact fees, but the legislation is so restrictive as to make it generally useless to a local government.

In the past, Horry County’s legislative delegation has been responsible for much of that language and has generally listened to the wishes of the real estate and development lobby at the expense of average citizens.

Many of these legislators have been given a ‘free pass’ in elections with little or no opposition to their holding office. It is time for that to change.

Results from Horry County Council contests in this election cycle provide an interesting view of what may be to come when solid challengers take on incumbents.

There were two contested Republican primaries with challenger Johnny Gardner defeating incumbent Mark Lazarus by 111 votes for the council chairman nomination. Gardner was unopposed in last night’s general election and will take office in January 2019.

Incumbent Bill Howard squeaked by challenger Dean Pappas by 33 votes in the other contested primary to barely hold onto his Council District Two seat.

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Have Your Vote Counted November 6th

A little over a week remains until the November 6th general election and several thousand absentee ballots have already been cast in Horry County.

Horry County voters began a movement of change in the June Republican primaries for Horry County Council Chairman and S.C. House District 104 by nominating Johnny Gardner and William Bailey respectively.

The same happened in a special July Republican primary for Horry County School Board Chairman with businessman Ken Richardson coming out on top.

All three were successful because they connected with average citizens.

Throughout his campaign Gardner spoke of putting “Public Safety Priority One Day One” and charging fees on new development to help pay for the impact it causes on county goods and services, both issues that resonated with the general populace.

Gardner will look to fully staff all categories of first responders so that citizens will have the protection of persons and property that they expect. This has been an area ignored by county government for too long.

Bailey promised to stop tax hikes and reduce government spending at the state level, end corruption and demand transparency in government and give first responders the tools they need to protect our homes and families.

One of Bailey’s goals will be to bring more tax dollars generated in Horry County back to the residents. Horry County has been a donor county to other areas of the state for years and our current legislative delegation has done little to change the situation.

Richardson described his “passion for education” and his intention to manage the school budget to avoid tax increases.

Richardson will look to change the governance policy of the school district so that the elected Board of Education sets policy with the appointed staff carrying out the board’s policies rather than determining their own.

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County Drops Ball on Mosquito Control – Updated

It has been nearly two weeks since Hurricane Florence dumped record amounts of rain on Horry County and, to date, no meaningful attempts have been made by county officials to combat the resulting mosquitoes.

It’s not like all the water that Florence dumped on the area was a big surprise. For at least a week before the storm made landfall, predictions of 20 plus inches of rain throughout the county were the norm.

Yet, the county remained unprepared to combat the intense breeding of mosquitoes that accompanies the rain and continued flooding we have experienced since the storm.

According to two sources with knowledge of the county’s mosquito spraying program, as late as yesterday there were only enough chemicals on hand to spray five percent (5%) of the total acreage in Horry County. Those sources said an order for more chemicals was recently placed, but when the county receives that order it will cover only 40-50 percent of total county acreage.

It’s not like the county does not have the money to pay for more chemicals. According to information provided to GSD, the county maintains a $30 million contingency fund expressly for expenses associated with disaster recovery.

And, money the county spends for things like mosquito spraying resulting from a declared state of emergency situation is recoverable from FEMA. North Carolina Governor Roy Cooper ordered $4 million from state funds to pay for mosquito spraying in the 27 North Carolina counties affected by Hurricane Florence. 

In addition, the county’s efforts at stormwater management have been lacking as we have seen from the number of sub-divisions and other areas that routinely flood during heavy rains. Did those responsible for stormwater management imagine we wouldn’t suffer serious flooding in many areas from Florence? The stormwater management department of the county is also responsible and funded for mosquito spraying, but it has chosen to spend funds on items other than mosquito control chemicals and spraying in the past few years.

According to several county council members I have spoken to, complaints are pouring in from citizens about the growing mosquito population in all areas of the county. Citizens are questioning why the county isn’t already conducting aerial spraying to combat the increasing mosquito hoard.

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Skydive Owners Lawsuits Against Horry County Consolidated

The eleven tort claims lawsuits against Horry County et al. filed by former owners and employees of Skydive Myrtle Beach have been consolidated into one tort claim case with eleven plaintiffs per a judge’s order granting consolidation filed on August 31, 2018.

Originally filed Pro Se, the 11 owners have joined together to hire attorney Robert Varnado. Varnado will be filing an amended complaint consolidating the claims against Horry County, Horry County Department of Airports, various county officials and employees and Robinson Aviation, the contract operator of the control tower at Grand Strand Airport in North Myrtle Beach.

The Federal Aviation Administration was removed as a defendant previously.

The basic claims of the complaint are conspiracy among the defendants to deprive the respective owners of Constitutional rights with respect to 14thAmendment and due process protections, for interference with the business Skydive Myrtle Beach (SDMB), and with contractual ties between SDMB and HCDA in order to illegally shutdown SDMB.

In early 2014, shortly after Skydive Myrtle Beach reported to the FAA of discriminatory actions against it by the Horry County Department of Airports, the HCDA began circulating stories about alleged safety violations committed by Skydive Myrtle Beach while it was operating out of Grand Strand Airport.

In October 2015, Horry County government ultimately evicted Skydive Myrtle Beach from Grand Strand Airport using a 73 page FAA Director’s Determination as justification. Much of the Director’s Determination report was based on 112 safety violations allegedly committed by SDMB.

Neither the county nor the FAA has documented evidence of any investigation or finding of safety violations by Skydive Myrtle Beach, according to responses to Freedom of Information Act requests filed with both the county and the FAA.

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Horry County’s Political Schism

One glance at the agenda for Tuesday’s upcoming special meeting and workshop of Horry County Council demonstrates the political schism that exists in local politics.

Council will consider two resolutions that propose advisory referendums on the upcoming November 2018 general election ballot to raise countywide property taxes by 10 mils to fund police, EMS, Sheriff and E911service improvements throughout the county and one to raise property taxes by an additional 9.5 mils in the unincorporated areas of the county to fund fire improvements.

The entire discussion of these two referendums is nothing more than a knee jerk reaction to the defeat of incumbent council chairman Mark Lazarus by Johnny Gardner in the June 2018 Republican Primary for the nomination for council chairman.

One of the reasons Gardner won the nomination was his motto of “First Responders First” and his promise to take care of the additional needs of public safety departments in upcoming county budgets. It must be noted, Gardner never proposed tax increases to fund additional personnel and pay raises for first responders. Rather, he proposed prioritizing the needs of public safety during the budget process with current revenues and funds.

Over the last five years, Lazarus and council have basically ignored the increasing needs of public safety. After the voters made themselves heard by voting Lazarus out in June, it is all of a sudden a council priority necessitating a special meeting.

Being advisory rather than binding referendums, the results will mean nothing. The resolutions were first proposed by council member Tyler Servant at the June 19, 2018 regular meeting of council.

Servant said he was a strong fiscal conservative Republican who opposed tax increases, but proposed allowing the voters to make the decision. A true, fiscal conservative would first look to current revenues and funds to meet these needs and consider tax increases only after every other option has been considered and discarded.

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