Annexation vote has businesses worried about spike in fees

MYRTLE BEACH, SC (WMBF) - Taxation without representation is a claim facing the City of Myrtle Beach from a local attorney representing car dealerships along Highway 17. It all stems from a petition for annexation.

A small percentage of two neighborhoods wants to be incorporated into the City of Myrtle Beach. But businesses have no say in how it will greatly affect them.

Thomas Brittain led the conversation as he is representing the local car dealerships in jeopardy of losing their county residency and, as a result, tens of thousands of dollars in fees every year.

Brittain started by saying the general philosophy behind an annexation is that neighborhoods would benefit from it and the city would expand its revenue base.

There was no denying the benefit of the annexation for the neighborhood: city police presence, garbage pickup, paved roads, etc.

Neighbors living in Bridgeport understand the concerns businesses have, but still want the vote to pass.

"Everyone is looking after their side of the street. And there will be controversy. I respect where they're at, but I'm praying it will pass for the simple fact I want the upgrades. I want the neighborhood to be part of Myrtle Beach instead of 'oh that neighborhood under the bridge,'" said Debbie Ediger, a long-time resident in Bridgeport.

Brittain's issue comes from the fact that 96.5 percent of that revenue base comes from business license fees, totaling close to half a million dollars. Yet those businesses have no say in the matter.

"The businesses affected would have to pay an incredible business license fee," said Brittain.

For one dealership owner it is an increase from around$4,000 to $70,000 and it would come out of his pocket.

Brittain explained the fee is based on gross profit. While the manufacturing cost of a car goes up, the sale is the same; meaning less money is made by the dealership but more money is owed to the city. In essence,Brittain points out the dealerships will actually lose money.

It started as a petition for annexation back in 2012 for theBridgeport and Waterside communities to become part of the City of MyrtleBeach.  At that time, neighbors signed a petition to show their support in the movement.

In order for it to move forward, the petition needed to be signed by 25% or more of qualified electors. It met that number by a small margin:46 signatures when 43 were needed.

Mark Kruea, the spokesperson for Myrtle Beach, said each signature was certified and the 25 percent test was met.

However, Thomas Brittain worries since so much time has passed, the petition could be invalid. He uses the example of some neighbors moving out of town or passing away which would narrow that margin even further and make the petition invalid.

"We'll be asking the city to walk away or postpone this annexation. They may go forward with it…and we plan on contesting the legitimacy of it," said Brittain.

He said it is taxation without representation.

However, the city is within their legal rights using an annexation process allowed under state law. As Kruea points out, this is simply how an election works: business owners don't have a vote, residents do.

Brittain believes the city is only looking out for its bottom line. Under the Freedom of Information Act, he obtained emails and paperwork from the city regarding the petition process.

On July 1, 2013:

Assistant City Manager, Ron Andrews, emailed City Manager,Tom Leath the following:

"We are doing what we can to answer these questions but I wanted you to see the tone that it is now taking."

Leath responded:

"Tell them the truth. If the city were to annex justMagnolia Point, it would cost the current taxpayers. We are trying to package the annexation with some commercial property that would offset the loss. It is not a simple procedure and will take some time."

Two hours later, Andrews responded:

"This is the area petition that he is referring to, not just the one for Magnolia Point."

Leath's response to that comment:

"I know, but he has to understand that we are doing the area petition for a reason and it is a dicey move that will take some time forCouncil to get comfortable with."

Interactions like that along with the annexation map changing since the original petition have business owners feeling as if the city is pulling them into the agreement simply to get more money and widening the revenue base.

Additional emails add to their suspicions.

In December of 2012, an email was sent from Steve Moore toBill Oliver, the Director of the Public Works Department.

It discussed construction costs and in part reads:

"Now, as for the southern tract, this will cost the city substantially more than can ever be realized. Bridgeport was priced out a few years ago and the roads need massive work. The drainage system between the yards is deep and corrugated metal that is getting pretty rusted. To replace this system would require sheet piling and the destruction of a lot of yards."

In closing, the email states:

"If we are thinking about annexing these properties, there will have to be some large appropriations to the capital improvement list as well as operating accounts."

During this week's city council workshop, members discussed dropping down the fee. Kruea explained that council members realized the business license fee is a lot higher for car dealerships in the city limits compared to other jurisdictions.

For Brittain, its becoming the principal of the matter. He plans on issuing a certified letter to the City of Myrtle Beach saying that it is violating the true essence of the annexation process and asking that the vote doesn't take place.

If it does, he plans to contest the results and file an action against the city. If a business license fee is placed on his clients, he will file an injunction.

The special election regarding the annexation will be Sheldon Tuesday.