Tag: settlement agreement

I-73 Funding Remains Roadblock to Hospitality Fee Lawsuit Settlement

The question of funding Interstate 73 is the obstacle preventing settlement of the hospitality fee lawsuit brought by Myrtle Beach against Horry County earlier this year.

A proposed settlement agreement that was voted on Monday by the councils of North Myrtle Beach, Myrtle Beach, Surfside Beach, Aynor and Atlantic Beach as well as Horry County Council included a provision that one-third of the proceeds from a continuation of the 1.5% countywide hospitality fee collected by Horry County would be dedicated to funding I-73.

The five municipalities voting approved the agreement. Horry County amended the agreement, which necessitates a reconsideration by the five municipalities. Conway and Loris did not vote.  

City of Conway officials said in various media reports over the last day that they have no intention of voting on the amended settlement agreement to the hospitality fee lawsuit proposed by Horry County Council Monday night.

Properly looking out for the interests of its citizens, Conway City Council wants to reserve the right to use any hospitality fee revenue collected within its city limits to meet local needs in accordance with allowable uses of hospitality funds.

The refusal by Conway to vote on the agreement effectively kills the amended settlement agreement since one condition of the amendment was that the cities in the county, less Briarcliff Acres, must unanimously approve the amended agreement.

Myrtle Beach Mayor Brenda Bethune tried to take the high road when the county amended the agreement, but she can’t. It was Bethune who summarily dismissed the county’s offer to settle the dispute in early April, long before attorneys began racking up large bills to continue the lawsuit.

The exact same conditions the county proposed in April became the conditions for settlement voted on Monday night, including the I-73 funding.

Attorneys representing Myrtle Beach negotiated with attorneys representing Horry County with the other municipalities essentially left out of the negotiations. The settlement agreement was presented to those municipalities, essentially as a fait accompli. Conway and Loris chose not to accept and Horry County Council members chose to amend it.

Continue Reading →

County Council Adds More Controversy to Hospitality Fee Settlement

Horry County Council approved an amended settlement agreement at its special meeting Monday night that added to the controversy regarding settling the hospitality fee lawsuit.

Council split 7-5 on votes to amend the settlement agreement and to approve the settlement agreement as amended. Those voting for the agreement were Johnny Vaught, Dennis DiSabato, Cam Crawford, Gary Loftis, Bill Howard, Tyler Servant and Orton Bellamy.

The Deep Six (Vaught, DiSabato, Crawford, Loftis, Servant and Howard) can always be counted on to support anything the Myrtle Beach Area Chamber and other special interests in the county want. Vaught is counting on that group to fund his run for chairman in two years while DiSabato, Crawford and Loftis expect significant donations from special interests to fund their upcoming reelection campaigns.

The special interests want I-73, they fall in line to keep it in play.

Voting against the settlement were Chairman Johnny Gardner, Harold Worley, Al Allen, Danny Hardee and Paul Prince.

As Worley said at the beginning of open debate on the question, the elephant in the room was I-73.

The settlement agreement as presented Monday night would provide approximately $14.5 million per year toward I-73. As Worley pointed out this amount is a drop in the bucket for a project that will require approximately $670 million to complete the road in Horry County, $1.3 billion to reach I-95 and over $2 billion for the total project to the North Carolina border in Marlboro County.

But the drop in the bucket is important to those landowners in Horry County who will benefit from right of way purchases for the road and the engineering and other businesses who will profit from the early design and site work for the project.

The federal and state governments will have to come in with significant money for the road to ever be completed but the local special interests can realize a significant income from the early work that can be paid for if the county contributes. Like always, it’s all about the money.

Continue Reading →

Questions Surround Proposed Hospitality Fee Settlement Agreement

As Horry County and the municipal councils prepare to vote on a proposed settlement agreement for the Hospitality Fee lawsuit Monday night, many questions remain about what really has taken place behind closed doors since the lawsuit was filed last March.

According to sources familiar with the settlement agreement, the basic proposal approved in a resolution by Horry County Council at its April 2, 2019 regular meeting and publicly rejected by Myrtle Beach Mayor Brenda Bethune within a few days thereafter is the agreement that will be voted on Monday night?

The basic terms of that proposal as it was offered in April and will be considered Monday night are as follows: a) Horry County will continue to collect a 1.5% Hospitality Fee countywide; b) one-third of that fee (0.5%) will go toward funding I-73; c) the remaining two-thirds (1%) will be remitted to the respective taxing jurisdictions (unincorporated county or city) in which it was collected; d) Revenues from the 1.5% countywide hospitality fee collected between the date bonds for Ride I projects were paid off (sometime in February 2019) and June 30, 2019 will be remitted in a lump sum to the respective taxing jurisdiction in which those revenues were collected.

Horry County Council Chairman Johnny Gardner sent a letter to each of the city mayors proposing that settlement on April 3, 2019.

The county was prohibited from collecting the 1.5% countywide hospitality fee within the city jurisdictions after June 30, 2019 by judge’s order. The sum collected within city jurisdictions between February 2019 and June 30, 2019 (currently held in escrow) and subject to lump sum payments back to the cities is approximately $19 million.

Why is a proposed settlement that was publicly and totally rejected by Bethune in April 2019 suddenly the terms for settlement? (See Gardner’s letter to the mayors and Bethune’s rejection letter at the links below)

The mayor’s main points of contention have not changed in the agreement to be voted on for approval Monday night: a) continued collection of the countywide hospitality fee is illegal; b) the city cannot delegate to the county the authority to control the disposition of revenues which are properly within the city’s authority to collect and manage and c) no benefit to city residents from that arrangement.

What has changed?

Continue Reading →

Proposed Hospitality Fee Lawsuit Settlement Taking Money from Taxpayers

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.

Continue Reading →