City of Myrtle Beach offers broad spending view, but few specifics

The city of Myrtle Beach has "more detail over those [tourism tax] expenditures than probably any other expenditures in the city, except our own," Myrtle Beach City Manager Tom Leath wrote in an email to Myrtle Beach Area Chamber of Commerce President Brad Dean in February.

The Sun News, which obtained the Feb. 8 email exchange through the S.C. Freedom of Information act, filed a follow-up request last month seeking the details Leath mentioned to show how the chamber is spending the tourism-related sales tax that went into effect in 2009.

In response to that request, the city provided four DVD copies of City Council meetings at which Dean and Scott Schult, the chamber's vice president of marketing, spoke about the chamber's expenditures and marketing plans. The city also provided copies of marketing presentations chamber officials showed during some of those meetings.

The city also provided 14 pages of emails from Dean and others in which topics such as hotel rates, expenditures for the Coastal Uncorked festival, results of a chamber-funded study about the chamber's marketing success and complaints about coverage of chamber-related issues by The Sun News were discussed.

The city, in response to The Sun News' request, also provided the chamber's audited financial statements for 2008-10. Those financial statements show general information about revenues and expenses but do not show specifically how the chamber spends sales tax or other public money.

The city did not provide any invoices, billing statements, canceled checks or check registers that would show specifically how the chamber has spent the nearly $24.7 million it says it has received from the sales tax since 2009.

Kruea has said the city believes the chamber is spending public money properly.

"At some point, you need to have a level of trust," Kruea has said.

"Trust is nice, but you can't do business these days based solely on trust," said Richard Eckstrom, the state's comptroller general.

Eckstrom, whose agency serves as a watchdog for transparency and accountability in state government spending, did not speak specifically about the chamber's reports or the city's oversight of public spending, but said most municipalities would want detailed documentation to back up claims of how tax dollars are spent.

"I'm wary of taking the approach that we have been able to trust you in the past so we can trust you in the future," he said. "Even an honest error could occur, and it's public money."

Kruea and council members have said the chamber's quarterly online reports are enough evidence for them to be comfortable with the way public money is being spent.

Those online reports show all expenditures and do not differentiate between what is paid for with public money and what is paid for with private money. That makes it impossible to determine which vendors are getting public funds.

There also are few details about the chamber's expenditures in the quarterly reports. The reports list a vendor's name, a dollar amount that each vendor was paid and a general description of the type of advertising purchased, such as "magazine advertising" or "television advertising."

Dean has said the online reports exceed the requirements for reporting set by state law.

Eckstrom said verification of expenditures is required for those receiving state and federal funds, and most municipalities would want similar documentation for local tax dollars.

"Cities ought to take whatever steps are necessary to make sure public money is being spent appropriately," Eckstrom said.

Jay Bender, a lawyer representing The Sun News and an expert in the state's Freedom of Information Act, said he understands city officials are politically invested in touting the purported success of the tourism tax because they approved it without a referendum and in the face of residents' opposition.

"But I think politically it's going to be worse if the chamber can't show specifically how it spent almost $25 million in public money," Bender said. "The city needs to step up and tell the chamber, 'If you have the documentation, make it available.' "