December 30, 2012

Settled lawsuits in Atlantic Beach may cripple town economy

A pair of lawsuits involving the former mayor pro tem in Atlantic Beach were settled at the end of October with hefty payments tied to the town’s budget for the next four years. It’s still not clear how the town with well-known financial woes will make the payments.

A pair of lawsuits involving the former mayor pro tem in Atlantic Beach were settled at the end of October with hefty payments tied to the town’s budget for the next four years. It’s still not clear how the town with well-known financial woes will make the payments.

The settlement involves Councilwoman Carolyn Cole, who was mayor pro tem in Atlantic Beach until Dec. 13, and calls for monthly payments of more than $7,700 over the next four years.

The payments don’t go directly to Cole. Instead, they are to be paid to a trust account of Thomas & Brittain P.A., the firm that handled the case for Cole and Tyson Beach Group.

Cole could not be reached for comment. Neither could Calvin Blanton, the interim town manager who also was placed on leave Dec. 13.

Councilman Jake Evans said he’s not sure Atlantic Beach can afford paying so much each month.

“The town operates on a very small budget, very little money,” he said. “I have no idea where we would get that type of money from per month.”

The first payment, due Nov. 15, was received said Charlie Jordan, with Thomas and Brittain P.A. The second payment, due Dec. 17, had not been received as of 4:30 p.m. Dec. 19. A call for an updated made Dec. 28 was not returned by press time.

Jordan said the firm wouldn’t take any action regarding a late payment until it’s five days overdue in case the mail is in transit. If the payment never arrives, he said the attorneys would likely go to the court to ask a judge order the town to pay.

The town is required to provide Thomas & Brittain P.A. with a copy of each of the next four budgets by July 1 of the corresponding years, according to the settlement. In the case of budget shortfalls the payment of the settlement should take priority “over all other expenses and indebtedness of the town,” except for taxes, employment withholding, existing bonded indebtedness and budgeted payroll.

Evans said that shouldn’t be the case.

“I don’t think it should take precedence over other payments,” he said. “We have some other settlements as well that were there when Carolyn Cole and Windy Price took their seats. If we couldn’t pay the settlements before, it’s not right for Carolyn’s settlement to jump over all those people and [for the town to] start paying her that kind of money.”

Casey Fields, with the municipal association in Columbia, said Atlantic Beach isn’t required to submit budgets or financial documents to the association and hasn’t in several years. She said nobody in the office was familiar enough with the situation to discuss the town’s financial status.

Atlantic Beach is operating without any police officers, though Horry County police are answering 911 calls. Chief Mike Bordner left the town because he wasn’t getting paid, Evans said. He had been the sole remaining police officer in the town after one officer resigned and the other was injured on the job and learned there was no workman’s compensation, Evans said..

“I find that very disturbing because we’ve found money to hire a town prosecutor, we’ve got two judges but the No. 1 thing we’re supposed to have in this town – police coverage – we have no money,” Evans said. “That’s a joke. What are we paying a prosecutor and judges and an attorney for if we don’t have police?”

The settlements

Two separate suits were settled jointly, though there’s still confusion over whether Blanton was given the authority to enter the settlement.

The first is over non-payment for services as town manager. She was hired on a three-year contract in September 2003 for $50,000 a year.

In 2010, Judge Larry B. Hyman Jr. awarded Cole be paid $83,333 plus $38,695.62 in interest. Before the settlement, the town had partially fulfilled the payment, but still owed $90,127.24. Additional interest had been accrued since the judgment.

In 2002, while she was town manager on a volunteer basis, Cole secured a $190,000 loan to the town through the Tyson Beach Group, a landholding company involving Cole, her former husband Gerald Montgomery and Catherine Aldridge. That’s the source of the second settled lawsuit.

The case, which had been pending since March 2008, was for payment of the principal plus 10 percent annual interest that totaled more than $450,000 before the October settlement.

The settlement, regarding the Tyson Beach Group suit, of $266,633.40 saves Atlantic Beach about $225,000 in interest. The breach of contract suit settled for $105,794.36.

Still, that resulted in 48 consecutive monthly payments of $7,763.20 to be paid to a trust account of Thomas & Brittain P.A.

That’s about $93,000 a year for the town that approved a $645,000 budget in August. At the time, the anticipated net income for Atlantic Beach was $147,361 leaving little wiggle room to pay the debt.

It’s not clear why the suits were settled. During a council meeting on Aug. 8, Mayor Retha Pierce and Councilwoman Windy Price said the Town Council directed Blanton on Aug. 6 to move forward in negotiating the settlements with Cole and Tyson Beach Group.

In August, Pierce said Town Council voted for Blanton to work with the lawyers to work out a settlement and that he was supposed to “take care of situations with Ms. Cole.”

During a meeting Thursday, she sang a slightly different tune admitting Blanton was to work with the lawyers, but that the options were to be presented to Town Council for a vote before being settled in a Horry County courtroom.

Recent leadership changes

Town Council members Evans, Pierce and Charlene Taylor voted Dec. 13 to place Blanton on leave with pay pending a hearing. Cole was also removed as mayor pro tem. Blanton and Cole both also were removed as authorized check signers for the town.

Evans said previously it wasn’t about the settlements. But Thursday, Pierce read portions of a letter the Town Council plans to mail to Blanton giving two reasons for the decision. One is a lack of communication with Town Council regarding the resignation of the entire police force in the town. The other was for his role in negotiating settlements with Cole and Tyson Beach Group without proper authority.

In the case of Cole, Evans said it was merely a formality.

“Actually, the law states that we’re supposed to appoint a mayor pro tem after every election,” he said. “We didn’t choose a mayor pro tem after this election so we had to do that.”

The mayor’s seat remains in limbo following the governor-ordered election in May. Evans won with 84 votes to incumbent Pierce’s five and Price’s one.

Both Price and Pierce have filed a series of election appeals and until a judge rules in his favor, Evans can’t take his seat.

Still, he thinks Atlantic Beach may be headed in a better direction soon.

“I’m hoping something good can come of all of this,” he said. “Maybe Atlantic Beach won’t be looked at in such a way if we have sound leadership, somebody that actually has Atlantic Beach at heart.”

He said this has been the ugliest and most difficult year he can remember in his two terms on council, but thinks things could improve once the appeals are over.

“I’m pretty optimistic that we can get a lot of things done once this has taken place,” he said. “You have a lot of people really interested in helping Atlantic Beach. Not just citizens and businesses, but people in the surrounding areas. There are people willing, ready and able to help but they feel a little uncomfortable trying to help because they’ve been attacked.”

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