If Horry County cancels a state contract for work on I-73, the decision could prevent the project from receiving millions of federal dollars, U.S. Rep. Tom Rice said Wednesday.
“It’s absolutely vital,” Rice, R-Myrtle Beach said of the county’s agreement with the S.C. Department of Transportation. “I cannot possibly get a federal grant without match money. That is our match money. The county made that commitment. DOT relied on it when they made the federal grant [application]. If we don’t keep it, then we’re wasting our time. It’s such an awful shame that this is happening right now when we’re at the doorstep of getting some federal money.”
Rice’s comments came a day after Horry County Council voted to ask the state DOT to give the county until Oct. 1 to approve a work plan for I-73.
County officials were supposed to sign off on $12.4 million worth of DOT road projects before June 30, but the funding source for that work remains a question mark. County officials hope their continued support of the DOT contract will keep the interstate in contention for a federal grant.
“It would be good to keep it available — just in case,” said council chairman Johnny Gardner, adding that county officials would have to give the DOT 30 days’ notice if they want to abandon the deal.
County council voted for the DOT contract late last year. The first work plan proposed by the state includes road design and right-of-way acquisitions for I-73. The plan also calls for a $410,000 study of S.C. 22, which flooded after Hurricane Florence. The study would look at the cost of raising that road above flood conditions.
County leaders had planned to use hospitality fee revenues to pay for the I-73 projects, but that fee is the subject of a legal dispute between the county and local municipalities.
Earlier this year, the cities of Myrtle Beach, North Myrtle Beach and Surfside Beach opted to overhaul the hospitality fee system that has been in place for more than 20 years. The cities do not want the county to continue collecting the hospitality fee inside city limits, and they no longer plan to share any similar revenues with the county.
Myrtle Beach even sued the county and called the fee collection “illegal.” Other local municipalities have also joined the lawsuit.
During a court hearing Friday, lawyers for both sides sparred over the fees, with the cities’ lawyer arguing that the county needs their permission to continue collecting fees inside municipal borders.
County officials asked that the court issue an injunction preventing the cities from imposing new fee structures, which are scheduled to take effect July 1.
Court records filed Tuesday afternoon indicate Judge William Seals has made a decision in the matter, but his order has not been filed.
County council members discussed the lawsuit during a closed-door session at their meeting Tuesday. Afterwards, some were not optimistic about the pending order. Court records indicate the cities’ attorney will be preparing an order for the judge’s review, not the county’s lawyer. The prevailing side typically writes the order.
A spokesman for the City of Myrtle Beach could not be reached for comment.
Regardless of which side succeeds, the order does not end the case. But if the county is barred from collecting the 1.5 percent hospitality fee on all prepared foods, hotel admissions and attraction tickets in the incorporated areas, that would drastically reduce the amount of revenue county officials would have available for the I-73 contract.
Some council members want the county to scrap the DOT contract altogether because of the uncertainty about the funding.
“The sad thing is nobody can assure us how much of the 1.5 percent [hospitality fee] we’re going to get,” councilman Al Allen said. "I want to protect Horry County."
The fight between the city and the county frustrates Rice, who wrote a letter to U.S. Transportation Secretary Elaine Chao in March touting the DOT contract as a reason for I-73 to receive a federal grant. Rice wrote that Horry County planned to commit $300 million to the project. Senators Lindsey Graham and Tim Scott also signed the letter.
“I’m supposed to be having a conference call with Elaine Chao here in the next couple of days with the governor and both senators on the phone and they’re all pitching for us,” he said. “When’s the last time that happened? And here we’re going to have local squabbles between the county and Myrtle Beach threaten to derail that. It just boggles the mind.”
Rice said this round of federal grants should be awarded sometime in the next two months. He called the dispute between the county and the cities shortsighted and said the two sides need to negotiate.
City officials have said they will not discuss hospitality fees in public because of concerns about those conversations impacting pending litigation with the county. County council members have criticized the city’s lack of transparency and said they want an open dialogue, nothing behind closed doors.
“That’s absolute nonsense,” Rice said. “There hasn’t been a lawsuit in history where both sides couldn’t talk to each other and try to resolve [the dispute].”
The congressman said he doesn’t care which side has the legally correct argument. He just doesn’t want this fight to hurt efforts to fund I-73.
“One side and the other says, ‘We’re right. We’re right,’” he said. “Well, guess what? You can be right. … We’re going to cost ourselves far more than we gain out of these petty squabbles.”