After a second day of discussions, Horry County and Myrtle Beach officials could not reach an agreement in the dispute over hospitality fees.
“We made some good points today and made some good progress,” Horry County Council Chairman Johnny Gardner said. “As of right now, we are at an impasse.”
City and county officials held the second round of talks Saturday at the Myrtle Beach Convention Center.
The initial Aug. 1 discussion saw both parties talk for more than 12 hours and brought the two sides together for the first time since the city sued the county in March. The city has accused the county of illegally collecting the fee, a 1.5 percent levy on all hotel stays, restaurant meals and admission tickets sold in the city.
Saturday's mediation ended around 7:15 p.m. after about nine hours.
Gardner said he doesn’t expect a third day of mediation, but “there’s nothing that would rule out mediating again if there was an issue that came up or somebody thought that they were getting closer or if new information develops.”
“It’s not unusual to reach an impasse,” he said. “All that means is right now each side has conceded as much as they feel like they can at this point in time.”
For now, the county’s appeal moves forward through the system.
For more than 20 years, the county has collected the hospitality fee countywide, including inside the municipalities. The revenues were used to pay for road projects such as S.C. 31 and S.C. 22. Once the debt for the highways was paid off, county officials planned to use some of the tax revenues to pay for building I-73. They also expected to spend a portion on improving public safety services in unincorporated Horry.
But earlier this year, Myrtle Beach leaders opted to overhaul the hospitality fee structure and install their own tax and fee system. They said they didn’t want to share these revenues with the county. North Myrtle Beach and Surfside Beach officials did the same thing.
In March, Myrtle Beach sued the county, saying in court papers that the county was illegally collecting the hospitality fee because that program was supposed to expire in 2017.
County officials have argued that they voted to extend the fee that year, but city leaders said the county can’t legally do that without their consent.
Myrtle Beach officials asked a judge to issue a temporary injunction barring the county from collecting the hospitality fee in the city while the lawsuit went through the court system. The judge sided with the city and issued his ruling on June 21. The county filed a motion asking the court to reconsider the decision, but the judge declined.
The county also asked the S.C. Court of Appeals to lift the injunction while the lawsuit goes through the appeals process, but on Wednesday the court rejected the county’s request. That means the county cannot collect the fee inside local cities for the time being.
County officials have suggested dedicating $18 million of the hospitality fee revenues each year to build the county’s portion of I-73, a proposed interstate that would connect with I-95.
After the $18 million comes off the top for I-73, county officials recommended dividing the remaining $24.5 million between the county and the municipalities. Under that system, the county would receive $9.8 million and $14.7 million would go to the cities. Any revenues collected above those projections would go to the community where the money was collected.
The county projects the pot of available public dollars would be nearly $14 million richer under that system than if the county's hospitality fee wasn't collected in the incorporated areas and the cities continued with their new fee structure.
City officials had agreed negotiate splitting the hospitality fee revenues, but only behind closed doors. That led to county officials criticizing the city for not being transparent. County leaders refused to meet in secret.
The Aug. 1 meeting was ordered after Horry County Treasurer Angie Jones filed a motion asking the court for a swift mediation to help resolve the situation for area business owners. Some owners have struggled to adjust to the recent tax and fee changes.
After Saturday's mediation, Myrtle Beach City Manager John Pedersen declined to comment on the talks.