Sunday, Mar. 29, 2009

Town's last $225,000 grant vanished in six weeks

On Nov. 20, 2007, a white-haired state senator stood before the Atlantic Beach Town Council to congratulate them on a $225,000 state grant to plan the town's future and market it to others.

The money had already been deposited in the bank the day before, said state Sen. Dick Elliott, holding up a life-size check for the audience to see. Residents stood to praise God for his blessings.

The money was intended for a total revamp of the town's planning and zoning guidelines, creating an ink-on-paper path to a brighter future for Atlantic Beach. But six weeks later, the town's general fund was empty, the grant half spent on planning and half used to keep the struggling town afloat.

Six-week spending spree

When the planning grant was deposited into Atlantic Beach's general fund on Nov. 19, the account was already $3,000 in the red after an overdraft the week before, according to records at NBSC, where the account is held. Over the next six weeks, the town took in about $30,000 in taxes - which combined with the grant put the town's income at more than $250,000 during that time - but by Jan. 4 its checks were bouncing again.

A review of all the checks issued during that time shows more than $100,000 of the money was simply used to sustain the struggling town's operations. The day after the grant deposit, for example, 10 checks were issued from the town's account to a variety of sources: the company creating the town's now-offline Web site, poll managers from the town's recent mayoral election, FedEx and a past-due phone bill. Also issued that day were checks of $14,000 to The Grant Group - headed by town lobbyist Joe Grant - and $5,000 in salary to then-Town Manager Marcia Conner, who could not be reached this week for comment.

Those types of payments would be repeated week-after-week until the coffers were dry again on Jan. 4.

Bounced checks form a dominant feature of the town's bank account during that period. In the five months from the receipt of the grant to Conner's indictment and suspension in late March, the town received a combined $460,000 from the grant and its normal business-license and property-tax collections, but went broke on at least four different occasions.

Although one bounced check was Conner's $200 phone reimbursement, the overdrafts were rarely caused by one-time expenditures or emergencies, but instead by recurring expenses. Both the January and March bounces were from tax and insurance payments to the state of South Carolina, and the original November overdraft had been caused by combination of withdrawals for state payments and employee's salaries.

The payroll account, where withdrawals are automatically made by a payroll company every payday, bounced even more often. In November and January, the town spent $941 in insufficient-fund and overdraft fees in the two accounts.

What it bought

Of the $225,000 grant, $136,000 was spent as intended on a project to rewrite the town's master plan, but that project remains unfinished.

After a series of public forums with residents, property owners, town officials and potential developers in 2006 and 2007, Miami-based Zyscovich Architects drafted a plan that called for a mix of residential and commercial use inside the town and a few large condominium developments near the ocean - all laid out to preserve the view of the ocean down any of the town's four streets. With the grant money in hand, the town paid $106,190 on Dec. 13, bank records show.

Once that master plan was created, the next step was rewriting the town's zoning code to match it, essentially bringing the town's laws in line with its vision. The town hired the Waccamaw Regional Council of Governments, and planners there found the update to the zoning laws long overdue, said Mark Hoeweler, Waccamaw's planning director.

The town paid the council's planners $30,000 on Dec. 20 and they got about halfway through the work before problems arose with the remaining payments, so planners stopped, not wanting to finish work they would never be paid for, Hoeweler said. The work still remains incomplete - rendering the $100,000 master plan useless.

Recent discussions in Atlantic Beach have raised the possibility of resuming the zoning rewrite, or asking Myrtle Beach or Horry County to finish the job with their in-house planning staffs.

Hoeweler said the town still owes Waccamaw money, and that a new set of planners would have to re-learn everything Waccamaw already did, so it might be cheaper just to pay Waccamaw to finish it. If an agreement can be reached, the Zyscovich plan still has the potential to guide the town's growth.

"It's a project we'd love to finish," said Cheryl Jacobs, a Zyscovich spokeswoman. "We'd love to see the area be redeveloped, because it has so much potential."

But for now, the plan is little more than a memory, as officials earlier this month were unable even to locate a copy of it in the town offices.

Voices in opposition

A review of meeting records from November to March shows that while most Town Council members alluded frequently to the town's poor financial condition, they rarely directly questioned Conner about its debts - with the exception of two people.

As early as Jan. 22 - his second meeting as a town councilman - Donnell Thompson began asking about the town's $2,000-per-month contract with lobbyist Joe Grant, and why Grant made no reports to the council. Meanwhile, during at least three town meetings, former town councilman John Sketers asked from the audience what debts the town still owed from the 2006 and 2007 Bikefests. With the pressure from Thompson and Sketers mounting, Conner reported on both topics on March 3. For the Bikefest, she read a list of six outstanding bills from 2006 and 2007 totaling more than $25,000 for toilets, fencing and other items.

Regarding Grant, Conner said November's planning money had been "the result of an intensive lobbying campaign" by him. She said Grant had secured $200,000 in federal funds that the town failed to claim, and also said when the presidential debate headed to Myrtle Beach, Grant "worked with Congressman Clyburn and the Myrtle Beach chamber to secure a role for the town in the event."

Thompson questioned Grant's actual effect on those events, instead pointing to his role in 2006's disastrous fenced-in Bikefest.

"Apparently it was the Senator [Elliott] that got the $225,000 where we thanked him, blessed him and gave him all the cheers in the world for it," Thompson is transcribed as saying that day. "Now, since we are paying Joe, he gets the money."

The back-and-forth continued as Conner and Thompson argued over financial records he had requested from her, until Mayor Irene Armstrong intervened to defend the town manager.

Less than three weeks later, Armstrong and Conner would be indicted on charges of improperly moving money through the town's accounts, and the Town Council would learn that Atlantic Beach's outstanding debts totaled well more than $600,000.