Proposed Hospitality Fee Lawsuit Settlement Taking Money from Taxpayers

By Paul Gable

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.

What is probably most egregious on the part of Bethune, Hatley and Childs is that they could have received the total $19.5 million for their respective city needs without paying attorneys by agreeing to a proposal county council offered in the form of a resolution last spring.

The proposed settlement agreement is essentially the same that the county resolution offered eight months ago to the cities without including such an outrageous amount of taxpayer dollars to the city attorneys. The blame for wasting taxpayer dollars in such a manner should be laid at the feet of the mayors, especially Bethune who was extremely vocal about turning down the county offer.

The settlement allows the county to continue collecting a 1.5% hospitality fee countywide. Two-thirds of that amount collected within the city jurisdictions will be rebated to the respective cities in which it is collected. One-third of the 1.5% will be put into a fund to pay for the county’s portion of Interstate 73.

For the county it is not a bad deal in that the lawsuit is settled for only billed attorney fees and the county keeps the entire 1.5% collected in the unincorporated areas. This revenue can be spent on the county road plan, according to current county ordinance.

For the cities, or rather their taxpayers, over $7 million will go to attorneys that would be better spent on city needs.

In light of last week’s announcement by the state Board of Economic Advisors that the state will experience a budget surplus of approximately $2 billion (yes that’s with a B) this year, one wonders why any county council members still support county funding for I-73.

If the road is of such a potential benefit and necessity for the county as the Myrtle Beach Area Chamber of Commerce, most of our state legislative delegation and Governor Henry McMaster claim, there should be no problem getting some of that $2 billion excess revenue appropriated for such an important project.

The governor was down here recently spreading the word that the hospitality fee lawsuit must be settled and county funding from hospitality tax must continue in order for the state to continue its grant request to the federal government of $346 million for I-73.

The cost of completing I-73 from Horry County to Interstate 95 in Dillon is estimated at $1.2 billion. The state could pay all of this from excess revenue and still have $800 million or so to spread around the remainder of the state in pork barrel projects.

It’s time for the Chamber, our state legislators and the governor to go to work in Columbia and either put up or shut up about I-73. If I-73 is indeed important, pay for it with state and federal funds, as has been done with other interstate highway projects.

Leave the tax money collected in Horry County alone so it can be spent on flood mitigation, crumbling infrastructure and public safety to name a few areas of need important to county citizens.



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