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Richland County Council votes for mediation with SC Dept. of Revenue over penny tax spending

Richland County Council agreed to go into mediation with the South Carolina Department of Revenue next week over pending litigation about penny tax funds.

COLUMBIA, S.C. — Richland County Council met Tuesday night and agreed to go into mediation with the South Carolina Department of Revenue next week over pending litigation about penny tax funds. 

The mediation will take place on Monday and two council members, the administrator, attorneys, and finance director will attend, according to Council members during Tuesday's meeting.

This comes after WLTX reported late last year about a South Carolina Department of Revenue (SCDOR) report, which ruled Richand County's penny tax money was misspent by roughly $41 million.

Richland County and the SCDOR have been battling over the County's penny tax spending for years, even going to the state Supreme Court, which ruled Richland County had spent some of the money improperly, giving the SCDOR authority to review other expenditures.

"While I understand, having personally been through multiple mediations in my business career, the need for confidentiality in negotiations, I find it wholly inappropriate for council persons to be directly involved in these negotiations," said Councilman Joe Walker on Tuesday night.

Walker has been openly critical of the penny tax's oversight since last year, when he wrote an open letter calling for audits and other financial documentation to be made public.

"First, if only two council persons are allowed to attend, then only 18% of the county is being represented. Secondly, this is squarely the job of our County Attorney and Administrator. This participation by council persons again suggests subversion of the administrator's authority and a failure to recognize our council to administrator form of government," Walker said about the mediation.

County Administrator Leonardo Brown has been largely quiet on the penny tax issues since December of last year. At the time, Brown read a one-page statement about the SCDOR's audit and left without taking questions.

In mid-March, the SCDOR told WLTX in a statement:

"We presented preliminary audit findings to the County in October 2019, giving them 90 days to provide a response. The County has responded. We are in the process of reviewing the County’s response and the supplemental information provided by the County to determine whether the new information warrants an adjustment to our preliminary findings. Based on our review to date, we anticipate there will be some adjustments to the preliminary findings. We expect to complete our review and finalize our audit report in the next few weeks. We understand Richland County Council recently voted “to resolve fully and finally all outstanding SCDOR claims.” We await a specific response from Richland County."

Since then, new details on the ongoing battle between SCDOR and County have been scarce, until Council approved mediation action Tuesday night.

"In other words, we continue to repeat the same old mistakes over and over again with no concern of the next predicament. Things must change," Walker told WLTX Tuesday night.

Near the end of last year, an 11-page South Carolina Department of Revenue preliminary report ruled  $41.4 million of Richland County's penny tax money was spent on ineligible expenses, according to documents obtained by WLTX.

The report is titled "Richland County Transportation Penny Tax Program Audit May 1, 2013 through May 31, 2018."

Among the money spent the audit found fault with includes $1.2 million on a small business enterprise program, $7 million on a road resurfacing program, and almost $20 million on management fees for the agency hired to run the penny tax. 

The penny tax was approved by voters in 2012, and is only supposed to go to transportation-related projects.

Due to the business involving pending litigation, Monday's mediation would likely be closed to the public and press.

"Most, if not all mediations are mandated to be confidential. However, I believe the results of that mediation, in my opinion, should be made public as soon as they are known and properly available," Walker said.

At least one face on Richland County Council will change after the audit was made public.

Incumbent and current District Two Councilwoman Joyce Dickerson lost her primary last Tuesday to Derrek Pugh by less than a hundred votes.

Four other Council seats, three involving incumbents, will have runoff elections on Tuesday, June 23 after close primary elections last week.

In District 7, incumbent Gwendolyn Kennedy will face off against Gretchen Barron in a Democratic Party runoff.

In District 8, Hamilton Grant and Overture Walker will compete in the Democratic Party runoff for Jim Manning's current seat.

In District 9, incumbent Calvin 'Chip' Jackson will face off against Jonnieka Farr in a Democratic Party runoff.

And in District 10, current Council Vice Chair Dalhi Myers will face off against Cheryl D. English in a Democratic Party runoff.

RELATED: 'Whoever is responsible for that needs to be fired,' lawmaker says on Richland Co. penny tax misspending

RELATED: $41 million of Richland penny tax funds misspent, preliminary report says

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