It’s Your Money: How much taxpayer money has been spent so far in hospitality fee dispute

Updated: Oct. 1, 2019 at 7:52 PM EDT
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MYRTLE BEACH, SC (WMBF) - The city of Myrtle Beach sued Horry County over the collection of hospitality fees seven months ago and now the cost of the lawsuit is adding up for taxpayers.

Myrtle Beach spent more than half a million dollars on Willoughby and Hoefer, the law firm representing the city in the case.

City check registers show the firm received an average monthly payment of $90,000 labeled as ‘legal fees/ city mb vs hc’ over six months.

The city of Myrtle Beach filed the lawsuit in March claiming Horry County illegally collected millions of dollars in hospitality tax money.

Since March, there have been court filings, injunctions, mediation, special-called meetings and mass confusion over the hospitality fee collection.

A judge declared in June that Myrtle Beach and other municipalities are able to collect their own fees as the case works its way through the courts.

The lawsuit is currently waiting for the South Carolina Supreme Court to review Horry County’s appeal.

As the case drags on, the cost adds up.

Myrtle Beach residents aren’t the only ones footing the bill for the dispute.

Attorneys from Burr and Forman are defending Horry County, according to court records.

The county spent $269,000 on the law firm between March and August. Horry County did not confirm if this is the only legal matter Burr and Forman are assisting it with. The firm did not receive any money from the county prior to March when the lawsuit was filed, according to the county’s check register.

The county attorney budgeted half of its budget, $504,000, for contractual services for 2018-2019.

When asked if this is a good use of taxpayers’ money, Horry County councilman Danny Hardee said that is a question to ask Myrtle Beach because they filed the lawsuit.

City spokesperson Mark Kruea declined to speak on camera about the issue but sent a statement.

“The city defends its legal position and protects the right to collect and use these revenues for the benefit of the city’s residents and businesses,” Kruea said in an email.

WMBF reached out to every member of Myrtle Beach city council and the mayor on whether $535,000 is a justified use of taxpayer money. Councilman Mike Chestnut said he was aware of the cost but had “no comment” at this time.

Councilman Gregg Smith said council members were told before taking action that the lawsuit would cost a ‘considerable amount.’ He said the city does not spend taxpayer dollars lightly and explained this lawsuit is over a very important issue that impacts millions of dollars within Myrtle Beach.

WMBF Investigates previously reported Myrtle Beach spent $430,000 on five outside law firms in 2018 for various legal matters. So far in 2019, the city spent $100,000 more on just one law firm for this one case.

Although Myrtle Beach filed the lawsuit, a judge ruled in June other cities including North Myrtle Beach and Surfside Beach could collect their own fees.

WMBF reached out to the other cities about expenses related to the hospitality dispute.

North Myrtle Beach has paid $75,000 to the law firm Nexsen Pruet for “legal advice concerning North Myrtle Beach’s position in the lawsuit and the potential impacts of that decision on the City,” according to city spokesperson Pat Dowling.

Dowling said the expense comes out of the city’s legal department. The payment to Nexsen and Pruet is around 31% of the department’s $239,000 budget for 2019-2020.

Surfside Beach paid $19,600 to Haynsworth Sinkler and Boyd for legal advice regarding the hospitality fee dispute, according to finance director Diana King.

Aynor Town Manager Tony Godsey said he had “no comment” on the expense.

Atlantic Beach and Loris said they did not have any expense related to the issue.

WMBF is still waiting for a response from Conway to see if it spent any money on the legal matter.

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