City of Myrtle Beach says judge’s approval of hospitality fee settlement another step closer to resolution

City of Myrtle Beach says judge’s approval of hospitality fee settlement another step closer to resolution

MYRTLE BEACH, SC (WMBF) - Following the settlement regarding the long fight surrounding hospitality fees in Horry County, a spokesperson for the city of Myrtle Beach said they’re “pleased to be one step closer to the final resolution of the Hospitality Fee dispute.”

On Tuesday, Judge William Seals filed his approval of the settlement that was brought forward by Horry County and the city of Myrtle Beach.

Last month, budget concerns became real for Myrtle Beach due to the pandemic, after the city implemented a voluntary separation program in order to save money. Approximately 45 employees were given an early departure package.

WMBF Investigates obtained a weekly newsletter sent out to city employees dated Sept. 21. Within it, city manager John Pedersen discussed the anticipated settlement, informing Myrtle Beach employees that it "should provide some financial relief to all units of local government throughout Horry County.”

The city manager’s report went on to say that he had told staff that they were “to take no further workforce reduction efforts until we have a handle on the depth of the hole created by the pandemic vs. the relief that we will be able to realize from this lawsuit.”

Wednesday, city spokesperson Mark Kruea said in an email that “we aren’t considering any further workforce reductions right now; the manager’s earlier comment still stands.”

In the September newsletter, Pedersen described a process to follow the judge’s ruling on the agreement that included city financial staff presenting an analysis for the Myrtle Beach City Council’s review.

“Once Council provides direction on this matter,” Pedersen said in the newsletter, “I will be in a better position to tell you whether we are at the end of this process (which is my hope), or whether further separations are necessary. I would anticipate reaching that point in early to mid-November.”

Kruea explained Wednesday that definitive answers following the judge’s ruling were scarce, but that the hospitality fee money is under restrictions and “can’t be used to fund general personnel expenses.”

“However,” he said in the email, “receiving some portion of the common fund money (eventually), plus ultimately freeing the hospitality-related money that we’ve been collecting in the interim and holding in escrow, will fill some holes in the overall budget picture.”

Kruea said he is unaware at this time if the city will or will not appeal the judge’s decision. He said that the settlement agreement “is a good deal for the municipalities because it allows them to keep the revenues within their jurisdiction, rather than give the county a portion.”

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