State AG: Council spending illegal

State Sen. Creighton Coleman (right) delivers the news to Council Chairman David Ferguson as Shryll Brown, Clerk, reads along.

FAIRFIELD – As County Council continues to take body blows from the public over their handling of former County Administrator Phil Hinely, another bombshell fell on their doorstep Monday as the State Attorney General issued a damaging opinion regarding the County’s policy of tuition assistance for Council members and their long-standing practice of health insurance reimbursements.

The opinion, dated July 8 and written by Robert D. Cook, Solicitor General, and Harrison D. Bryant, Assistant Attorney General, concludes: “It is our opinion that State law prohibits a county from using public funds to make cash payments directly to individual members of county council who elect not to participate in the group health insurance plan offered by the county in lieu of making payments toward the premiums for such plans on their behalf or as reimbursements for expenses incurred by such non-electing members in obtaining separate insurance. While only a court may so conclude with finality, we believe that such payments are unauthorized and that it is a departure from the law for the country to pay them. We are also of the opinion that State law prohibits county funds from being used to pay for the college tuition of individual council members. The use of public funds for such purposes grants such members extra compensation in violation of Article III, Section 30 of the South Carolina Constitution. Furthermore, the use of county funds for such purposes violates Section 4-9-100 as such expenditures cannot reasonably be construed as reimbursements for ‘actual expenses incurred in the performance of their official duties.’ Both forms of payment, in our opinion, also constitute the use of public funds for private purposes. Should a court determine that these forms of payments are prohibited by law as we believe they are, there may be personal liability for the wrongful receipt or payment of such funds.”

Until a month ago, the County was paying for Councilman Mikel Trapp (District 3) to take business courses at Columbia College, a practice that was in line with the County’s education policies, according to former Administrator Phil Hinely. Trapp has since declined tuition assistance, but not before the County paid $26,806 toward his degree.

“We have a fairly liberal education policy,” Hinely said last month while he was still serving as County Administrator. “If the training benefits the County, the County will pay for it. A Councilman having a degree in business benefits the County. The policy is being used by a small number of County employees.”

In fact, only one employee, Marvin Allen in the County’s IT Department, is currently taking advantage of the tuition assistance program, but that falls outside the scope of the current Attorney General’s opinion.

The practice of paying certain Council members for coverage of their hospitalization insurance is a long and complicated one and dates back to 2009, according to county administrators. Council members are eligible for the County’s insurance policy, unless they are already, through their current or former employer, covered by a state plan, as is the case with Trapp, Chairman David Ferguson (District 5), and, until her retirement from Fairfield Memorial Hospital a few weeks ago, Mary Lynn Kinley (District 6). Because they were covered by a state plan, the County’s hospitalization supplement was not available to them.

Prior to 2009, these Council members, along with all part-time employees, were covered for hospitalization by the Carolina Cares plan, Hinely explained last month. For each of the Council members in question, it was costing the County approximately $877 a month – or $31,560 a year total – to include them on the Carolina Cares plan. As the County worked through attrition to wean part-time employees from the plan, Hinely said they also asked the three Council members to drop the plan and take a direct payout of $475 a month each – or $17,100 a year total – to get their own hospitalization insurance. That practice, also, is under attrition, Hinely said. Once any of the three Council members leave Council, the same payout will not be offered to their replacements.

The Attorney General’s opinion was written in response to a question from State Rep. MaryGail Douglas (D-41), who had the support and assistance from State Sen. Creighton Coleman (D-17) in drafting the letter and getting the response. Douglas said the question about the propriety of the hospitalization insurance payouts had been a concern for years. Finally, as a State representative, she was able to get those questions answered.

“From the first time I saw that in the (County) budget, I thought that was so wrong,” Douglas said. “This is going to inflame County Council, but if we are going to do things the right way, we’ve got to take a stand to do things the right way. This should have been cleared up a long time ago. We never should have had to go to the Attorney General to get clarification on an issue like this. It was brought to their attention many times. I brought that hammer down to them and it fell on deaf ears.”

Coleman presented the opinion to Council during their meeting Monday night.

“There’s one County Council member being sent to school, from what I understand, by county taxpayer money,” Coleman said. “Also there are various members of county council who are receiving insurance reimbursement, and that’s totally improper. If this is a barometer of how we’re spending our county funds in this county, we’re in bad shape.”

Coleman said the opinion suggest Council members may have to pay back years of premiums to the County. Ferguson said he would have to consult with his attorney before cutting any checks.

“This is really a way to stick it to somebody, and it seems like that’s the way it was intended,” Ferguson said. “I don’t know where it’s going to stop. I’m wondering where the Attorney General says anything about the money spent on some Council members and not on others is fair. If they’re spending $680 a month for their insurance and $475 a month for mine, there’s a little about this that doesn’t seem right.”

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