COASTAL OBSERVER

Six weeks before collections begin on Georgetown County’s 1-cent capital projects sales tax, a lawsuit prompted by a tax that took effect 10 years ago is due to go to trial.

The dispute between the county and the town of Andrews over funds for a new town building dogged the campaign for a new capital projects sales tax this year. State law changed since the first tax was approved in a 2014 referendum and the county adopted procedures to prevent a repeat of the situation with the new tax.

But as the suit heads to trial in Circuit Court this week, the town and the county are accusing each other of breaking the law over the 2014 sales tax. Each side filed a motion for summary judgment, seeking to preempt a trial.

The county “violated laws of this state and have defrauded the taxpayers of Georgetown County, and more particularly to the citizens of the Town of Andrews,” the town said in its latest filing.

The county said it complied with the law “and fully funded the Project as it was contemplated by the voters of Georgetown County in the 2014 Referendum.”

Any claim by the town is either barred by the statute of limitations or precluded “because it acted unfairly and unlawfully,” the county said in its latest filing.

A judge denied motions seeking to end the case from both sides in 2022.

At issue is a project in the 2014 capital project sales tax referendum that provided $1.5 million for an “Andrews Fire/Police Complex.” It was third on the list of five projects totaling $28.2 million that would be raised over four years.

The top project, $6 million to match federal and state funds for dredging the shipping channel through Winyah Bay, was dropped when the estimated project cost jumped from $33 million to $73 million.

The funds for Andrews was also supposed to be matched by state funds. When those didn’t materialize, the county in 2019 increased its allocation from the sales tax to $3 million.

According to court documents, Mayor Frank McClary, who was elected in 2016, signed a contract in March 2020 with GMK Associates of Columbia to design and build a $5.3 million “municipal complex.” 

The town asked the county to pay the additional cost, which had grown to $2.7 million. The county said it would not provide further funding.

Over four years, the sales tax generated $41 million in revenue. Early in 2021, County Council allocated $1 million of the surplus to each of the seven council districts. None of that money went to the town of Andrews, which includes parts of two council districts.

Six months later, the town filed suit, saying the state law required that the sales tax revenue fully fund the projects on the list approved by voters before any surplus funds are spent.

The county argued that it had funded the fire and police complex and that it was not required to fund the municipal complex. It moved to have the suit dismissed.

The town “is attempting to perform a bait and switch,” Tommy Morgan, the assistant county attorney said in the filing. “Have the voters approve $1.5 million in funding for a ‘Fire/Police Complex’ and then switch by claiming it requires $5.7 million in for a ‘Municipal Complex’ and argue that the amount initially proposed ($1.5 million) ‘would never have been feasible.’”

The county also argued that the deadline to challenge the referendum was 30 days following the November 2014 vote.

The town, represented by Eleazer Carter, said it wasn’t challenging the referendum. The county is “bound to the statutory codes and the local ordinances which were enacted to raise local funds,” he said in a motion for summary judgment, adding that it followed them “for a period of time and thereafter they discontinued following the steps and procedures.”

Judge Steven DeBerry denied that motion saying there was nothing in the record to show what the police and fire complex or the municipal complex entailed. “There are these and other genuine issues of material facts that must be clear before a court to enter summary judgment in favor of the Plaintiff,” he wrote.

He also denied the county’s motion to dismiss, saying there were still questions of law and fact “that require further litigation, discovery, et cetera.”

The county made two requests for documents from the town in the following weeks. They went unanswered until the day of a hearing requested by the county to compel the town to respond. An hour before the hearing, the town provided more than 5,000 documents.

The hearing was postponed to give the county time to review the documents. A year later, it said there were still documents missing.

The town pressed to have the case, and its request that the court order the county to fully fund its project, brought to trial.

Carter told the court that “the Defendants have [used the] rule of discovery to abuse the legal system.” He added that despite the “thousands and thousands” of documents and recordings provided, the county wanted material “that is totally irrelevant.”

The county objected.

The town “has undeniably been avoiding its responsibility of engaging in discovery and is seeking to try and conduct a hearing on the merits of this case without allowing Defendants to exercise their rights to engage in both written and oral discovery,” Morgan said in a filing.

He said there were more than 25 witnesses that needed to be deposed in addition to the documents that were needed.

Hearings were scheduled and then rescheduled due to various reasons, including one judge’s illness and another’s decision to recuse himself. One hearing was postponed due to weather.

The issue of documents was resolved last year, but a trial date was missed, with the agreement of both sides, because of Morgan’s duties as the Municipal Court judge for Camden. In November, the trial date was fixed: March 17. The case would be first on the roster.

Last week, the county filed a motion for summary judgment, renewing the claims it made three and a half years ago in its motion to dismiss the suit and adding that “the doctrine of unclean hands” applies to the town’s claims.

The town filed its motion for summary judgment this week, also citing arguments first made in 2021 that the county failed to follow state law. “Further, the Defendants violated the statutory mandates in that they illegally pledged proceeds to other projects before meeting the conditions required,” Carter argued.

Those motions will be heard by Judge Alex Hyman before the trial starts.