Category: News

BLYTHEWOOD – During an intense five-hour workshop last Friday, Blythewood Town Council discussed ways to ‘stop the bleeding’ of the Doko Manor, which, all worried aloud, could possibly become too expensive to operate in the not too distant future. A question that popped up again and again was “How long can the Town continue to subsidize the Manor?”

The other big concern was whether to go forward with construction of the Doko restaurant in light of both real and feared financial risks. Councilman Tom Utroska asked, “In a worst case scenario, if the restaurant owner defaulted in the second year and the Town had to pick up the payment for the next eight years, would we (the Town) have enough disposable income to make those payments?”

Mayor J. Michael Ross answered, only half joking, “That depends on how much we’re still losing on the Manor.”

The Manor’s Financial Bind

In October, the Town’s CPA, Kem Smith, reported that the Manor was operating at a deficit of $106,000 ($52,000 in furnishings and $54,000 in operating costs) after the first six months of operation (March to October 2013.) Last month, Smith reported operating losses of almost $23,000 during the first half of fiscal year 2014 (July – December 2013.) She said that the improved picture of the losses resulted from spreading some pre-paid expenses over the 12-month fiscal year. Since Smith’s report did not separate the losses by month during the first half of fiscal year 2014, The Voice has not been able to determine how much of that $23,000 loss was in addition to the $106,000. As of press time, Town Hall has not responded to requests for the information.

Councilman Bob Massa said that since the $52,000 for Manor furnishings was paid out of the general fund, it can’t be paid back with more general fund money. He said if the Town sets up a payment schedule to pay off the $52,000 from another source, such as Hospitality Tax revenue, it will take four and a half years of $1,000 per month payments.

Ross told Council, “The December numbers for the Manor were only down $597. I really think the previous $6,000 (per month loses) are what got us to this.”

Massa told Council that the breakeven point on operating cost for the Manor is about $6,600 a month. “Were putting in about $4,000 a month,” Massa said.

Councilman Bob Mangone had criticism for the former Events and Conference Center (Manor) Director, Martha Jones, for not providing financial projections to Council for the Manor’s losses when requested. “We asked three times for the projections,” Mangone said.

“We may have needed to have a person with more experience and who could look at the numbers,” Ross conceded, “but those numbers were never shared with (her.)”

“With all due respect for Ms. Jones’ competency,” Mangone said, “it doesn’t take a Master’s degree in finance to add up how many events you had, how much was charged and how much the total came out to be.”

“And she did that very well,” Ross countered.

“She never even gave us a first quarter projection,” Mangone said.

“Well,” Ross said, “she isn’t here anymore.” (Jones resigned effective Jan. 29, 2013 to go to work for Richland School District 2).

“But we asked for it three different times,” Mangone said. “And all we ever got was telling us how well we did in December. But how many events do we have scheduled in January, February and March? How much are we charging for them? There. You’ve got the number. It’s not rocket science.” Utroska and Massa agreed.

Jones told Council in October that she had not had access to the monthly financial reports on The Manor. Asked about that, Smith told The Voice she sent the reports every month to the Town Hall. When asked by The Voice whether she had ever asked anyone for those reports, Jones did not answer.

“We were again promised by Ms. Jones that she would have (the projections) to us before this meeting. But still we don’t have them,” Mangone said.

Another sticking point had to do with the Town’s policy of paying the expenses of groups who ‘rented’ the Manor for free. Utroska said he didn’t think the Town should be paying the expenses for such things as air conditioning, heating and the laundering of tablecloths and napkins for groups that are allowed free use of the Manor.

“But this is our Community Center,” Ross said. “I don’t know who ever thought we could break even here. Give it a chance. We’ve raised the fees about 25 percent on the weekends.”

“I think as soon as we said we were going to rent it,” Mangone added, “then it lost the concept of a Community Center. It’s a venue that the community uses.”

Mangone said he didn’t think The Manor would ever break even, “because the 25 percent increase is not going to come close to covering the expenses. We’re going to have to decide how much we are willing to subsidize The Manor.”

“We are not going to break even,” Massa agreed. “We need a minimum charge for use of the building and we (are now paying) for some of the Director’s salary with Hospitality Tax money.”

He told the group that because the budget was more than 5 percent off because of the losses, the law required them to revise it. Ross suggested Massa work with Smith and Meggs to bring some suggestions for that revision to another workshop scheduled for Council on Monday, Feb. 17.

The Manor Punch List

Another item for discussion was the Manor’s ‘punch list’ – items that the contractor is obligated to finish, repair or touch-up by March 12. Utroska, who has assumed oversight of such items from his predecessor on Council, Paul Moscati, said the list includes 16 interior and exterior items ranging from interior doors that need replacing and corrections to the paving to missing ceiling tiles and chipped paint on the pergola. While there is no additional expense for the punch list repairs, Utroska also listed the following necessary items that will be an additional cost to the Town:

A security system for the Manor.

A maintenance reserve account for ongoing wear and tear or for carpet/HVAC replacement.

Final top layer of paving on roads and parking areas.

To set up a reserve or enterprise fund for the Manor, Massa, a CPA, suggested the Town consider setting aside money from the Hospitality Fund, which is a fund derived from a tax collected by the Town’s restaurants, to be used to attract tourists to the town.

“By law we can take $25,000 of this money from the general fund for tourism related items,” Massa said. “We would have to pass a resolution, but then it could be used for the park as well as the Manor.”

Massa told The Voice that the Town’s $2 million reserve fund could not be tapped for the enterprise fund.

Earlier in the meeting, Town Attorney/interim Administrator Jim Meggs said that Larry Sharpe’s last $500,000 payment for the Community Center had been received by the Town and was available for a reserve (maintenance/replacement) fund for the Manor.

But an overall budget recap of the Park and Manor that was presented to Council by former Councilman Moscati on Sept. 16, 2013, and which appeared on the front page of the Sept. 20, 2013 issue of The Voice, showed the entire $1.5 million from the sale of the Community Center property (to Larry Sharpe) is no longer available. According to Moscati, that entire revenue has already been spent and accounted for in the construction of the Manor and park.

Doko Restaurant Status

Mangone reported on his research into the Town’s $900,000 loan from Santee Cooper to build the proposed Doko restaurant. He said the terms of the loan are 2 percent interest the first five years, with payments at $18,000 per year. For years six-10, the loan floats and the interest rate is whatever the one-year treasury bill rate is for that year. Mangone said the contract is between Santee Cooper and the Blythewood Facilities Corporation (BFC), a non-profit corporation created by the town government, that was signed by State Rep. Joe McEachern, the BFC president.

“Those loan payments over a 10-year period,” Mangone said, “will be roughly $220,000 short of the $900,000. But the plan is to rent the restaurant to Jonathan Bazinet, and it’s fair to say that if Mr. Bazinet’s restaurant produces the revenue that he thinks it will, then the Town would bring in between $400,000 and $500,000 just from the 2 percent Hospitality Tax that would be generated from Bazinet’s revenue.

Mangone said it is his understanding from reading the loan contract and a letter former Town Administrator John Perry sent Santee Cooper asking for the loan, that the Town is the guarantor of the loan and that if the restaurant fails, the Town is on the hook to make the payments. Meggs disagreed, saying the Town is not on the hook and is not the guarantor of the loan.

“It is very clear,” Meggs said, “that we (the Town) have the opportunity to non-appropriate (not pay) and the BFC is on the hook, not the Town.”

But both agreed that if the loan is defaulted, Santee Cooper could take over ownership of the restaurant and the land it sits on and the Town’s bond rating would go through the floor.

The Council members said they had little understanding of the BFC and requested that the Town’s bond attorney, Ray Jones of Parker Poe Consulting Firm, and the Town’s CPA explain the functions and financials of the BFC at the Feb. 17 meeting.

Meggs explained that, “The BFC is designed to do one thing – avoid the bonded debt limitation of the Constitution. The lynch pin of all this is the non-appropriation option that the Town has every year, which keeps it out of the full faith and credit and general obligation of the town.”

Meggs added later in the meeting, “the BFC is a way (the Town) got around certain regulations and restrictions.”

While Council expressed their faith in Bazinet’s ability to be successful in the restaurant, “Our decision (on whether to build the restaurant) should not be based on whether Mr. Bazinet will be successful,” said Mangone. “The Town’s responsibility is ‘how can we protect ourselves in a worst case scenario.”

At the end of the workshop, Council voted to go in to executive session to further discuss their proposed contract with Bazinet. No vote was taken following the executive session. Council will hold another meeting at 7 p.m. on Monday, Feb. 17 at the Manor.

BLYTHEWOOD –Town Council announced at its workshop last Friday the preliminary criteria for the desirable candidate for a permanent Town Administrator, and it named a committee of four Blythewood residents to make recommendations for the post.

After a fair amount of wrangling over age, experience, relocation and education, Council settled mainly on criteria suggested by Councilman Bob Massa, who recently retired after nine years as Finance Director for the City of Forest Acres and 17 years in city and county government. Preliminary criteria includes relocation to the Town, four to six years’ experience, a degree in public administration or a related field and a salary range of $70,000 – $90,000 annually.

Councilman Bob Mangone will head up the selection committee, which will rank the applicants and recommend their three or four top choices to Council. Council members agreed they would like to have someone in place by the beginning of the summer.

Each Council member appointed one selection committee member. For the most part they selected from their own neighborhoods. Mayor J. Michael Ross chose Joseph Richardson, a Cobblestone neighbor. Richardson, a newcomer to the town government, is an attorney and manages his family’s construction company. He was recently appointed to the Board of Zoning Appeals. Massa chose Carolyn Taylor, a resident of Oakhurst neighborhood and the only woman on the committee. Tom Utroska of Cobblestone Park chose Malcolm Gordge, a resident of Ashley Oaks and a member of the Town’s Planning Commission. Mangone of Cobblestone Park chose Mike Switzer, also a resident of Cobblestone, who Mangone said he felt was the leader of the Town’s business community as chairman of the Blythewood Chamber of Commerce.

Council members said the job will be posted on several websites including those of the S.C. Municipal Association and the S.C. Association of Counties. Council is expected to finalize the selection criteria at their next meeting at 7 p.m. on Monday, Feb. 17, at the Manor.

Claims Against County Council Members Dismissed

WINNSBORO – A Sixth Circuit Court judge has dismissed lawsuits against three Fairfield County Council members, effectively ending efforts by a citizens activist group to recoup funds paid by the County in lieu of supplemental health insurance, as well as funds expended for tuition reimbursements.

Judge R. Knox McMahon issued his order Jan. 30, dismissing “with prejudice” claims against Council Chairman David Ferguson (District 5), Councilman Mikel Trapp (District 3) and Councilwoman Mary Lynn Kinley (District 6). In his order, Knox wrote that the Court agreed with the contentions of the defendants that the plaintiffs “lack standing to pursue” the claims against the Council members.

Citing the S.C. Supreme Court case Freemantle v. Preston, Knox wrote that the state’s high court explained that a plaintiff may acquire standing in one of three ways: “1) through the rubric of ‘constitutional standing;’ 2) under the ‘public importance’ exception; or 3) by statute.” Since no statute exists to confer standing to the plaintiffs in this case, Knox wrote, that leaves only ‘constitutional’ and ‘public importance’.

For a ‘constitutional standing’, Knox wrote, “a plaintiff must first show that he has suffered an injury in fact – an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical.” Quoting from the State Supreme Court, Knox continued, “a taxpayer lacks constitutional standing when he suffers in some indefinite way in common with people generally.”

“The same reasoning applies here,” Knox wrote. “The alleged injury Plaintiffs complain of – misuse of public funds – (if it occurred and if it is an injury) is common to all citizens and taxpayers of Fairfield County. Plaintiffs cannot show that they have suffered any concrete and particularized injury; at most they have suffered in some indefinite way in common with all people in Fairfield County generally.

The plaintiffs could also not resort to the ‘public importance exception,’ which allows a court to relax standing requirements “when an issue is of such public importance as to require its resolution for future guidance,” Knox wrote. Again referring to the Preston case, Knox wrote that the plaintiffs in this case were “not seeking injunctive relief but rather monetary relief for themselves based on purported causes of action at common law. As the Preston Court held, these types of claims are inconsistent with standing based upon the public importance exception. Moreover the personnel policy of Fairfield County with respect to past health care disbursements made to county council members is not an ‘issue of such public importance as to require resolution for future guidance’.”

Even if the plaintiffs could have demonstrated standing, Knox wrote, the case would have been dismissed on other grounds.

“Plaintiffs’ claims fail as a matter of law because Plaintiffs have not alleged, and cannot allege, the elements necessary for the two claims they assert [unjust enrichment abuse of trust and conversion – i.e., defendants converted money belonging to plaintiffs to their own uses].”

In the matter of unjust enrichment abuse of trust, Knox wrote that since the funds in question were public funds, “any claim for restitution belongs to the County, not to Plaintiffs.” In the matter of conversion, Knox wrote, “Plaintiffs had neither title to nor right to possess the public funds in question, which belonged to Fairfield County. Moreover, Defendants had no obligation to deliver the funds to the Plaintiffs – in fact, the law would have prevented them from doing so.”

Attorney Jonathan M. Goode, of the Goode Law Firm in Winnsboro, filed the lawsuits on Oct. 25, representing State Rep. MaryGail Douglas (D-41) and 15 others as plaintiffs. The Council members were represented by John Carroll Moylan III of Columbia and Wade Stackhouse Kolb III of Greenville. Phone calls to Goode were not returned at press time. Douglas, meanwhile, expressed her disappointment in the outcome.

“I, along with the other plaintiffs have done all we can do to make this situation right,” Douglas said in a written statement Tuesday night. “We took it to the court system.  The court system has spoken and I respect that decision.  The decision rendered was that three County Council members skated on a technicality.  While the court system forgave them on a technicality, the taxpayers in our county will not be so forgiving.  It was wrong for them to accept that money and they know it.  Those who skated on this technicality will have to answer to the taxpayers in Fairfield County.  As disappointing as this is, we will move on.”

The lawsuit came after the S.C. Attorney General’s Office issued an opinion last July that characterized as unconstitutional cash payouts to the three County Council members to cover supplemental health insurance premiums, and likewise tuition reimbursements to Trapp. Shortly after the opinion, the County ended the payouts. Since 2009, Ferguson, Trapp and Kinley were receiving $475 a month from the County to cover their own supplemental hospitalization insurance. Covered by a state plan for their primary health insurance, Ferguson, Trapp and Kinley were therefore not eligible for the County’s supplemental coverage.

WINNSBORO – The S.C. State Ethics Commission handed down 21 counts Jan. 24 of findings for probable cause for a hearing against three County Council members. The findings stem from complaints filed last September by Elizabeth Ann Jenkins of Newberry Road in Winnsboro.

The Ethics Commission issued a notice of hearing to Council Chairman David Ferguson (District 5), Councilman Mikel Trapp (District 3) and Councilwoman Mary Lynn Kinley (District 6), outlining four counts against Ferguson, six counts against Kinley and 11 counts against Trapp.

Ferguson, according to the Ethics Commission, allegedly violated Section 8-13-700(A) of the S.C. Code of Laws “by knowingly using his official office to obtain an economic interest for himself by vacationing in county funded lodging following the conclusion of the S.C. Association of Counties’ summer conference” in July of 2010, 2011, 2012 and 2013.

Kinley is also alleged to have violated the same code over the same dates. Kinley said the conference, which is held on Hilton Head Island at the Marriott Hotel, takes place over four or five days each summer. Kinley said the County has found it less expensive to stay at a nearby condo in Palmetto Dunes for seven days than at the Marriott for four or five days. Last year, Kinley said, was the first year she had gotten a larger condo in order to bring family members along with her, and she said she paid the difference herself.

“I didn’t go down there to party, I didn’t go to the beach,” Kinley said. “If you go to all of those meetings, you’re busy the entire four or five days.”

The Ethics Commission also found probable cause that Kinley failed to disclose on her 2010 and 2012 Statement of Economic Interest form income she had received from the County in the form of disbursements in lieu of health care benefits. Kinley said those failures were “simply a mix-up of figures,” and was something she had already corrected.

“At the time the investigation was done, it was a violation,” she said. “It was a mistake and it’s already been changed.”

Kinley said she hoped to clear the entire matter up with the Ethics Commission with a phone call and be able to forego the May 21 hearing.

Trapp is also alleged to have overstepped boundaries during his stay on Hilton Head in July of 2010, 2011 and 2013, as well as failure to disclose payments made by the County to him in lieu of health benefits on his Statement of Economic Interest forms in 2011, 2012 and 2013. The Ethics Commission also accuses Trapp of “knowingly using his official office to obtain an economic interest for a family member when he voted to allocate” funds “to his sister-in-law’s employer, CIC, Inc.” Trapp’s notice of hearing states that the votes came on July 1, 2011; July 7, 2011; July 10, 2012; and July 15, 2013. The amounts allegedly allocated were: $2,500 on July 1, 2011; $1,234 on July 7, 2012; $3,500 on July 10, 2012; and $2,500 on July 15, 2013.

A review of minutes on the Fairfield County Web site turns up no votes by Council on any matter related to CIC, Inc., and that no meetings were held on July 1, 2011; July 7, 2011; or July 10, 2012. Council did hold a special meeting on July 15, 2013, but only to debate recreation funding. The Ethics Commission clarified this week that those dates reflect when the checks were cut to CIC, Inc., not when the votes were taken to allocate the funds. The Ethics Commission said they did not know when the votes to distribute the funds were held. Phone calls to Trapp were not returned at press time. Ferguson was out of the country at press time and could not be reached by phone.

A hearing on the allegations is scheduled for May 21 at 12:30 p.m. at the Ethics Commission offices, Suite 250, 500 Thurmond Mall, The Pavilion, in Columbia.

BLYTHEWOOD – The Town Council will hold a work session Friday, Feb. 7, from 8 a.m. until 2 p.m., at the Manor. The purpose of the session, according to Mayor J. Michael Ross, is to discuss a wide variety of difficult issues Council is facing, but primarily to look at revising the budget to better reflect the Town’s financial situation. Ross told The Voice that Council will also discuss the selection process for a search committee for a permanent Town Administrator to replace former Administrator John Perry. Ross had previously announced that a search committee would be named at the January Council meeting, but it was not on the agenda.

Other items on the agenda include: FY2014-15 budget preparation process; collateral duties for Council members; goals for 2013, 2014-15 and a roundtable discussion on topics and prioritizations for a March workshop. Other financial issues to be discussed will include monthly reports to Council and how to structure financing for the Doko Restaurant.

Council will discuss negotiations incident to proposed contractual arrangements in executive session.

It is expected Council will spend considerable time discussing ways to stop the financial bleeding of the Manor. Councilman Bob Massa, a CPA, has been working closely with the Town’s CPA, Kem Smith, to look at ways to make the budget more closely mirror the Manor’s financial predicament going forward. In a report to Council on Jan. 27, Smith pointed out that the $20,000 loss budgeted for the entire 2014 fiscal year for the Manor has already been surpassed during the first six months of the fiscal year. Smith told Council that their budget needs to be revised to reflect the prospects of a greater loss.

The work session is a public meeting and the public is invited to attend. An agenda is posted in the post office, on the door of the Manor and on the door of the Town Hall. It is also posted on the Town’s Website.