The Dillon County Board of Education filed an amended answer in the Dillon County Treasurer’s complaint regarding the validity of the budget, the distribution of the Local Option Sales Tax funds, and two mills for Northeastern Technical College.
Below is the amended answer:
STATE OF SOUTH CAROLINA
COUNTY OF DILLON
JAMIE CALHOUN ESTES, AS TREASURER OF DILLON COUNTY,
Plaintiff,
v.
RODNEY BERRY, AS ADMINISTRATOR OF DILLON COUNTY AND IN HIS CAPACITY AS THE CHIEF OFFICER OF THE DILLON COUNTY GOVERNMENT; DILLON COUNTY BAORD OF EDUCATION; AND NORTHEASTERN TECHNICAL COLLEGE,
Defendants.
IN THE COURT OF COMMON PLEAS FOR DILLON COUNTY
CIVIL ACTION NUMBER 2017-CP-17-351
C/A No.: 2017-CP-17-351
AMENDED ANSWER OF DILLON COUNTY BOARD OF EDUCATION, CROSSCLAIMS AGAINST DEFENDANT BERRY, AND COUNTERCLAIM AGAINST PLAINTIFF
Defendant Dillon County Board of Education (“Board”) in Answer to paragraphs 1 though 18 of this matter respectfully admits the same in their entirety. Additionally, the Board respectfully asserts the following crossclaims against Defendant Rodney Berry, as Administrator of Dillon County and in his capacity as the Chief Officer of the Dillon County Government and a counterclaim against the Plaintiff:
FACTUAL ALLEGATIONS
1. Dillon County Council voted on September 1, 1995, to present a referendum to the electorate of Dillon County to establish a Local Option Sales Tax (LOST).
2. There, and prior to the referendum, Dillon County agreed to split the county portion of the Lost with the Board.
3. The reason for this division of funds was, upon information and belief, to insure passage of the referendum.
4. Dillon County Council claims it has lost the minutes of its meeting of September 1, 1995.
5. Nevertheless, Lisa Gray (“Gray”), Clerk to Dillon County Council at the time in question, prepared the minutes of the September 1, 1995 meeting, as well as notes for the use in preparing these minutes.
6. Those notes reflect that Defendant Dillon County and the Board agreed that Defendant Dillon County’s portion of the funds would be equally divided with the Board of Education. (Exhibit 1: Clerk Notes).
7. Dillon County ran a public notice, prior to the referendum election, in The Dillon Herald Newspaper featuring a document furnished by the Defendant Dillon County’s Council titled “FACTS ABOUT THE LOCAL OPTION SALES TAX” on November 2, 1995, reminding the citizens of Dillon County of the November 7, 1995 vote, intended to encourage their vote in favor of the referendum, and informing voters of how the LOST money would be used. (Exhibit 2: Referendum Notice).
8. The notice, as relevant, provided:
a. “The county part of the distribution will be divided equally between the County and the County School Board with all proceeds being used for building replacement or repair only.”
b. “The County and Schools will use the funds for buildings only and not for administration or the growth of government.”
9. A majority of the qualified electors of Dillon County, South Carolina voted in favor of the LOST on November 7, 1995.
10. Consistent with the County Clerk’s meeting notes and the notice the County furnished to the Dillon Herald, the Dillon County Audit for the fiscal year ending on June 30, 1997, stated on page 13: “Upon enactment of the Local Option Sales Tax, Dillon County Council reached an agreement with the Dillon County Board of Education to divide the Revenue Fund Local Option Sales Tax Revenue evenly with the County Board of Education.” (Exhibit 3: Audit Excerpts).
11. Plaintiff, the County Treasurer, “is obligated to pay one half of the Local Option Sales Tax funds to Dillon County Board of Education.” (See Complaint paragraph 11).
12. Collection of the LOST revenue began around May 1997.
13. Dillon County, since then, has properly relinquished to the Board its share of LOST funds each year since the referendum’s passage (1997-2016) until present.
14. Defendant Dillon County’s Council attempted to pass a Budget Ordinance on June 30, 2017 providing that no LOST funds would be distributed to the Board; but rather, that all LOST funds were to be paid into the general fund for Defendant Dillon County.
15. Prior to passing the Budget Ordinance, Dillon County Council held a First Reading (by title only) on May 24, 2017, and a Second Reading on June 9, 2017. Council scheduled a Public Hearing and Third Reading for June 28, 2017. Eight persons signed up to speak at the public hearing, but were not allowed public input. Council then tabled the third reading on the stated basis that the budget was changed from the Second Reading and Council needed more time for review.
16. Council then scheduled a Special Meeting for June 30, 2017 for the Third Reading of the Budget Ordinance. There a motion was made to amend the Budget Ordinance by eliminating a line item of $150,000.00 for the Board.
17. The Ordinance is unlawful because (a) no “Public Hearing” as required by statute was held, and (b) there was a motion to make one amendment to the budget presented for the Third Reading, but upon information and belief, there was no motion to make several other changes presented at or following the Second Reading.
18. The Budget Ordinance is also unlawful because Dillon County is obligated to disburse on half of the LOST funds to the Board of Education in accord with the referendum that was passed on November 7, 1995 and cannot legally usurp those funds without another referendum.
19. Defendant Rodney Berry notified Plaintiff, by letter on June 30, 2017, that no LOST funds were to be paid to the Board of Education.
20. Plaintiff, because of Defendant Dillon County’s actions, filed this action seeking a declaratory judgment, to certify among other things, her obligation for the fiscal year of 2017-2018, to pay on half of the LOST funds to the Board of Education.
FIRST CROSSCLAIM AGAINST DEFENDANT BERRY
(Declaratory Judgment as to Invalidity of LOST Fund Diversion)
21. The Board realleges the foregoing, where not inconsistent herewith.
22. The Board as a matter of law is entitled to one half of the LOST funds.
23. Defendant Berry, as Administrator of Dillon County, and in his capacity as Chief Officer of the Dillon County Government, and the Defendant County in general may not divert the one half portion of the LOST funds.
24. Defendant Berry’s actions on and around June 30, 2017 to divert the Board’s portions of LOST funds from the Board violate the law such that a tax levied for a particular purpose may not be diverted to another use before the original purpose has been accomplished and that public funds may be extended only for their designated purpose.
25. Defendant Berry and the County in general lacked the authority to divert LOST funds that the Board is entitled to based on a referendum made pursuant to Act No. 317 of 1990, codified at S.C. Code Ann. section 4-10-10 et. seq. when it instructed Plaintiff not to give a portion of the LOST funds to Board of Education and attempted to pass the Budget Ordinance that excluded funds for the Board of Education.
26. A justiciable controversy exists based on the Defendant Berry’s actions, and the Board is entitled to declaratory and other relief.
27. Such declaratory relief, requested by the Board, is that the Court declare that the Defendant Berry lacks the authority to divert LOST funds, and that the budget ordinance passed by Dillon County Council on June 30, 2017 is unlawful as it regards the diversion of one half of LOST funds from the Board.
SECOND CROSSCLAIM AGAINST DEFENDANT BERRY
(Declaratory Judgment as to the Invalidity of Process for the 2017 Budget Ordinance)
28. The board realleges the foregoing, where not inconsistent herewith.
29. The Board joins in the declaratory relief sought by the Plaintiff against Defendant Berry regarding the invalid process used to pass the June 30, 2017 Budget Ordinance. (Complaint paragraphs 16. Prayer for relief paragraph 3). (paragraph 17 supra).
30. A justiciable controversy exists based on the Defendant Berry’s actions, and the Board is entitled to declaratory and other relief.
31. Such declaratory relief, requested by the Board, is that the Court declare that the process used to pass the 2017 Budget Ordinance by the Dillon County Council, on behalf of Defendant Berry, was unlawful.
THIRD CROSSCLAIM AGAINST DEFENDANT BERRY
(Permanent Injunction)
32. The Board realleges the foregoing, where not inconsistent herewith.
33. Defendant Berry acted in violation of a public referendum passed pursuant to Act No. 317, codified at S.C. Code Ann. section 4-10-10 et. seq., when it instructed Plaintiff not to give a portion of the LOST funds to the Board of Education and attempted to pass the Budget Ordinance that excluded funds for the Board of Education.
34. The Board is being denied the portion of the county funds that the Board has received and relied on since 1997.
35. The Board will suffer irreparable harm if an injunction is not granted to prevent Defendant Dillon County from withholding the funds from the Board of Education.
36. The Board will likely succeed on the merits, as the funds at issued were specified for a particular purpose which has not been fulfilled and remains in perpetuity, and because the tax funds is collected pursuant to referendum for a designated purpose ant those funds may only be extended for that purpose.
37. There is no adequate remedy at law for the Board and this injunction is reasonably necessary to protect the legal rights of the Board at issue in this pending litigation.
38. Therefore, the Board seeks a permanent, prohibitory injunction prohibiting Defendant Berry from diverting the LOST funds at issue until, and only if, a referendum is passed to supersede the 1995 referendum at issue.
FIRST COUNTERCLAIM AGAINST PLAINTIFF
(Declaratory Judgment)
39. The Board realleges the foregoing, where not inconsistent herewith.
40. The Board agrees with Plaintiff that “she is obligated to pay one half of the LOST funds to the Dillon County Board of Education.”
41. A justiciable controversy exists based on the Defendant Berry’s actions and the Plaintiff’s justified caution delaying her distribution of the funds to the Board based on that underlying controversy, and the Board is entitled to declaratory relief from the Court.
42. The Board therefore requests a declaration of the Court that Plaintiff is required to disburse one half of all LOST funds received by the County to the Board until such a time that a superseding referendum is passed.
PRAYER FOR RELIEF
WHEREFORE, the Board of Education prays for the above declaratory, injunctive and equitable relief be awarded by the Court to include specifically a declaration and prohibitory injunction providing that the LOST funds cannot be diverted from the Board of Education until such a time that a superseding referendum is passed.
The Board also seeks the cost and fees associated with this action from the Defendant Berry and any other such relief the Court deems just and necessary.