This past Friday, March 27, 2025, the South Carolina Administrative Law Court issued a ruling in favor of the City of Aiken in the business license tax dispute between Ed Woltz, Holly Woltz, and their real estate company S & C Properties LLC. (The case did not involve Ed Woltz in his capacity as an Aiken City Council member.)
Three background stories leading up to this ruling are as follows:
Ed Woltz’s Business License Citation, which reported on the legal dispute process from a criminal citation in November 2021, to an appeal to Aiken City Council in September 2022.
A Hearing on Business License Taxes, which focused on a June 2023 administrative hearing before the City of Aiken’s designated hearing officer.
Nineteen months after an appeal was filed with the South Carolina Administrative Law Court (ALC) by Ed Woltz, Holly Woltz, and S & C Properties LLC (Petitioners) regarding a business license tax dispute with the City of Aiken, the ALC has finally issued a ruling in favor of the City, and ordered the Petitioners to obtain a business license for all of their real estate rental businesses and pay any back taxes (1) for the years 2017-2021.
The appeal hinged on two contentions by the Petitioners regarding the application of the business license tax Ordinance to rental properties; with the central issue being the differences between owners of a single residential rental property vs owners of multiple residential rental properties. (2)
First, they argued that the Ordinance was unconstitutionally vague and ambiguous “because it fails to define the point at which rental of residential properties constitutes doing business;” and that the breakpoint of property ownership was itself arbitrary.
Secondly, they argued that the City’s “failure to treat them similarly to owners of a single residential property amounts to an (unconstitutional) equal protection violation;” that the City’s policy of allowing one tax-free rental was inconsistent with the actual Ordinance; which draws no distinction between number of rentals.
The City’s defense was that the Ordinance provides for administrative discretion by its Business License Official in the enforcement of the Ordinance. In this case, the City maintains a policy dating to the 1980’s to not mandate a business license for owners of a single residential rental property. The policy is based on the assumption that a single rental, such as an inherited property, does not constitute a business activity.
On the issue of “vagueness,” the Court simply ruled that any reasonable person can discern that a landlord owning more than ten properties, as the Petitioners do, constitutes a business.
On the issue of unequal treatment, the Court applied a more complex “rational basis test” to determine whether the distinction between single-home landlords and multiple-home landlords was rational.
The Court decided that the City’s approach is rational, and that there was no disparate, or unequal, treatment because the Petitioners fell within a different business class than single home landlords. The Court concluded that the Petitioners did not meet the burden of proof showing disparate treatment because a “rational basis review of a government classification does not look for disparate treatment vis-a-vis other classes created by the government’s distinction; rather it examines whether there is a disparate treatment within the designated class.”
More simply put, because there was no disparate treatment within the multiple-homes landlord class, there was no overall disparate treatment and therefore no constitutional violations.
Footnotes
(1) According to court documents, the Petitioners paid $13,086.56 in back taxes and penalties in September 2022, but did so under protest. The next day, an appeal was filed, as allowed by City statute, with the Aiken City Council.
It is unclear whether additional payments are due, but since the Court did state that the Petitioners did not challenge the total tax levied by the City it appears the bill is satisfied.
(2) The appeal also included arguments regarding the levying of business license taxes on properties outside of the City’s jurisdiction. Those contentions went unaddressed in the ruling.
Progress continues on the $20 million downtown “Mixed Use” facility, which the City of Aiken hopes the Savannah River National Laboratory (SRNL) will eventually occupy as a “workforce development facility.” However, two years after the project was announced with great fanfare, there is still no lease agreement with SRNL’s contractor, Battelle Savannah River Alliance (BSRA); deep federal budget cuts could further threaten the viability of any new leases for federal contractors.
Recently, SRNL/BSRA officials were dissuaded by the Department of Energy (DOE) from attending the facility groundbreaking, and were ordered by DOE to have the SRNL logo removed from project signage. Is the City of Aiken creeping towards a misappropriation of the $20 million by constructing what is essentially a “spec” building on behalf of its nonprofit “partner” organization the Aiken Corporation?
Also, at that time, the primary envisioned use for the property was that of workforce development (2) for the SRNL contractor, Battelle Savannah River Site (BSRA).
The great fanfare during the project introduction left no doubt about that intent. The top two floors were to be office space, and the ground floor was to be primarily a showcase for the lab, a place for public interactions where scientific poster sessions would adorn the halls.
That vision faded sometime in the summer of 2023 when the prospect of a long-term lease grew fainter(3). In September 2023, the Aiken Corporation, with an unofficial acquiescence by Aiken City Council, chose to locate a three-story, 36,000-square-foot facility on its own property on Newberry Street–that property was acquired by ACorp in July 2022 for $650,000. A series of emails from the September to November, 2023, time period also showed city officials discussing a building without any committed tenant; one that could be used for an entity other than SRNL.
With the Newberry Street decision made, the City and Aiken Corporation collaborated on moving forward with the design contract. First, the Aiken Corporation hired the architectural firm of Cheatham, Fletcher, and Scott to conduct design work. Then, the City took over the project and hired Cheatham as the City’s contractor. In other words, the City utilized an unofficial, indirect procurement process to hire an architectural firm for a contract exceeding one million dollars.
Between the time of the award of the design contract and the award of a construction contract to the firm of Allen-Batchelor Construction, the City bought the property for $752,230.23; a sum that included two years of interest on the Aiken Corporation loan and city and county taxes for 2022 and 2023. (Figure 1)
Figure 1: Breakdown of costs for purchase of one-acre of property on Newberry Street NW for the purpose of the SRNL/“Mixed Use” Building.
The Groundbreaking
On January 27, 2025, just over two years to the day of the project announcement, a ceremonial groundbreaking took place.
Missing from the groundbreaking festivities were representatives from SRNL. Also missing from the project sign was the SRNL logo. This was not the original intent of SRNL officials, who accepted an invitation to the function on January 10th, 2025. On January 20th, though, an event occurred which changed everything.
That event– a new Presidential administration came into power, and suddenly, federal leases were being canceled, funds were being frozen, and talk of selling off federal buildings was in the air.
On January 24th, SRNL Assistant Director Sharon Mara wrote to city officials that, per DOE guidance, the lab would not have a presence that day (Figure 2); and per DOE order, the lab logo could not adorn the project sign (Figure 3). However, lease discussions could continue.
Figure 2: Notification from Sharon Marra to City officials regarding SRNL absence from the groundbreaking ceremony. (click to enlarge)Figure 3: Notification from Sharon Marra to have SRNL logo removed from the project sign. (click to enlarge)
This is not the first indication that future SRNL occupation of the facility would range from possible to precarious, or maybe not at all. As reported in One-Year Lease after One-Year Lease, as of January 2024, the SRNL contractor only had DOE permission to negotiate one-year leases, not longer-term five or even ten-year leases. In fact, by the time the facility is finished, BSRA’s first five-year contract is due to expire. Although a five-year renewal is expected, a renegotiated lower contract price is quite possible.
Still, eighteen months has passed since the siting decision was made, and there is still no lease or even a memorandum of understanding between the parties. The likelihood of DOE/SRNL permitting BSRA to enter into any new lease agreement may now possibly be fading away.
Who could occupy the facility if SRNL/BSRA does not, and who would own the building?
On February 26, 2024, Aiken City Council approved a “Framework Agreement” for future agreements with the Aiken Corporation regarding the project. This agreement required ACorp to relinquish ownership if SRNL/BSRA was not a tenant. (Pages 202-204)
The anticipated path forward was that the City of Aiken would purchase the Newberry Street property from Aiken Corporation, use the remainder of the $20 million Plutonium Settlement allocation to construct the facility, and then sell the facility and property to a yet-to-be-identified, for-profit subsidiary of the not-for-profit Aiken Corporation. (4)
When the facility is completed, the City will transfer ownership “pursuant to the terms of a subsequent Purchase Sale Agreement…which will, among other terms, specify a deed restriction providing for the return of the subject property to the City should the (Aiken Corporation) no longer desire to own or lease the building to an appropriate tenant.” (emphasis added).
The intent of this latter clause, which appears to dictate that Aiken Corporation will own the building only if SRNL is a tenant, was indicated in City Manager Bedenbaugh’s supporting memorandum that the Aiken Corporation’s “to-be-formed entity will lease the building to SRNL.” (emphasis added.)
At the February 26th meeting, City Manager Stuart Bedenbaugh was asked to define “appropriate tenant.” He did so in a manner that implied some wiggle room, stating:
“There is kind of a clawback, should that not follow through or the mission changes.”
He noted that he would define an appropriate tenant as “based on a mission that is similar to what is stated in the opening paragraph of the National Lab or its successor agency.”
On January 27, 2025, Aiken City Council approved a new agreement, a Memorandum of Understanding (MOU), with Aiken Corporation and its newly formed, for-profit property management company called Aiken Ventures LLC. Just as ACorp’s for-profit property management company, LED Inc., manages the downtown Amentum Building, Aiken Ventures LLC will manage the “Mixed Use” building on behalf of Aiken Corporation and the City of Aiken.
Missing from the January 27th MOU is the clawback provision and any reference to a deed restriction. Instead of Aiken Corporation ownership being contingent upon SRNL’s contractor being a tenant, the language in this agreement appears to provide a loophole:
“Ventures is expected to enter into a lease with SRNL, whereby SRNL will lease the second and third floors of the property on such terms and conditions as may be agreed between Ventures and SRNL.”
There is no contingency plan in the case of the SRNL contractor being unable to obtain DOE permission to obtain a lease.
The original purpose of the $20 million was not to build a private “mixed-use” office building. It was not to further subsidize the City of Aiken nor its private partner the Aiken Corporation with an annual flow of federal funds that could be better put to better use.
The legislative intent was to construct “off-site infrastructure” for an institution whose operating contractor includes the state’s university system as part of the Battelle Savannah River Alliance. The only justification for awarding plutonium settlement funds for use by one of the defendant’s institutions, SRNL, was that the state is committed to an investment in the Battelle-led alliance from its university system. That commitment specifically included a workforce development facility.
If the City of Aiken truly wants the SRNL contractor to have a downtown presence, it would be wise to begin considering the option of deeding the property to one or all three of the State’s three major universities.
Footnotes
(1) The original choice by SRNL was the City’s parking lot property next to the City of Aiken Municipal Building, where a two-story garage topped by an office building was visualized in September 2022.
(2). As reported in The SRNL Project Was a Component of Project Pascalis, the facility constitutes the first stage in a much larger, $120 million state-funded program to Battelle Savannah River Alliance for SRNL workforce development.
(3) As reported in One-Year Lease After One-Year Lease, the prospect of a long-term lease became bleak by January 2024. To this day, there is still no signed lease or even a Memorandum of Understanding between SRNL, Aiken Corporation, and City of Aiken.
(4) The February 2024 “Framework Agreements” states that to pay for the facility, the City “will provide financing to Corporation, which it anticipates providing on an interest-free basis.” Thus, much of the rent proceeds will be used to pay for a building that was already paid for with the plutonium funds.
This provision is absent in the January 2025 MOU, which states that the City will deed the property to Aiken Corporation’s for profit Aiken Ventures LLC; and that if the property is put on the market the City has the right to buy it back for $1.
Recent issues and managerial responses indicate potentially elevated safety risks at SRS facilities handling nuclear materials due to increased human error. This is of public health and safety concern given potential negative impacts to workers, the public, and SRS missions in the event of an accident.
by Don Moniak March 14, 2025
Six months ago, an official from the Savannah River Site’s (SRS) primary operating and management contractor—Savannah River Nuclear Solutions (SRNS)—presented material (2:04:00 of meeting) pertaining to SRS Conduct of Operations (ConOps) to the SRS Citizens Advisory Board (SRS-CAB). Board members were informed of the obvious, though still comforting, fact that SRS operations require executing tasks in a “deliberate and structured manner.”
But at SRS, the term “deliberate” has two meanings. There is work conducted in a deliberate fashion, and there is a “deliberate operations” status. Minimizing the likelihood of a high consequence accident resulting from human and/or system failures can require an additional administrative safety layer known as a deliberate ConOps status. In such an operational status, the pace of site activities is lessened, there is a heightened reliance on management oversight, and only essential and approved activities are ongoing.
The deliberate operations status results when violations of “technical safety requirements” (TSR) have become too common to justify the status quo of normal conduct of operations to continue.
The Defense Nuclear Facilities Safety Board (DNFSB) has described TSRs as “necessary to ensure the safe operation of nuclear facilities, and to reduce the potential risk to the public and workers from uncontrolled releases of radioactive materials or from radiation exposures due to inadvertent criticality.” In its “Implementation Guide for Use in Developing Technical Safety Requirements,” DOE describes TSRs as defining the limitations of its nuclear facilities, as well as constituting the “nuclear safety basis and facility authorization from DOE to the contractor to operate (nuclear) facilities.”
In short, entering into an administrative operations mode known as “deliberate operations” means that all is not as well as SRS officials like to proclaim in public relations announcements–although at the same time it does indicate that senior officials have recognized that additional steps to maintain the site’s safety envelope are necessary and are being taken.
In the past two years, various SRS facilities have been placed in a “deliberate operations” status due to excessive TSR violations; as well as generally inadequate conduct of operations that do not rise to the level of TSR violations.
In September 2023, the Defense Waste Processing Facility (DWPF) entered into a “period of deliberate operations with 24/7 Senior Supervisory Watch…due to the series of conduct of operations (ConOps) issues since February. Most recently, a control room operator (CRO) failed to perform multiple procedure steps including valve alignment when attempting to transfer waste chemicals” from one processing tank to another.
The slower, even more methodical, and heavily supervised deliberate operations status at DWPF continued for one year, finally ending in October 2024; it took one year to improve conduct of operations to an acceptable level.
Figure 1: Report documenting “deliberate operations” status across SRS. (click to enlarge).
More recently, in November 2024, SRNS “placed all their facilities into deliberate operations,” meaning only “essential and approved activities” would be performed, and only then with “additional management oversight.” The already slow and deliberate process of handling tritium gas, plutonium, and other nuclear hazards will become even more deliberate and slower; perhaps better resembling prolonged training exercises than normal production. (Figure 1, above).
In addition, personnel from an “independent evaluation board” has been tasked with conducting “additional oversight and evaluation of personnel performance at SRNS facilities and initiated a common cause analysis focused on the TSR violations across the site,” including operations of the liquid radioactive waste stabilization contractor (which includes DWPF) and the Savannah River National Laboratory.
The incidents of technical safety requirements violations or inadequate conduct of operations that preceded this latest extraordinary management decision included “multiple operations errors” at the tritium processing facilities such as the improper opening of a gas transfer valve; blowing a “protective rupture disk” while operating other valves outside of the approved procedure; and a construction worker “stepping on and breaking a process pipe during glovebox maintenance.”
At the K-Area plutonium processing site, another TSR violation involved workers exceeding allowable plutonium levels in one work module. At H-Canyon, a failure to meet adequate worker staffing constituted another violation. At the Savannah River National Laboratory, an inventory system tracking special nuclear materials was found to have underreported the amount of plutonium in one facility, leading to the discovery that the amount of material at risk was well above the TSR inventory limit.
One contributing cause* for the unusual step of entering into a deliberate operations status could be reduced workforce experience. During the SRNS presentation to the CAB, the change in age and experience in the past decade was highlighted (Figure 2 below). SRS now essentially has a new generation of workers, one that is inherently less experienced and knowledgeable about site facilities. This alone does not equate to a less safe workforce, but it does indicate reduced institutional knowledge, and fewer subject matter experts.
In fact, in early February, the DNFSB reported that a review of 81 work packages in the radioactive liquid waste stabilization program revealed that only half of the “assisted hazards analysis (AHA) had evidence of adequate planner, subject matter expert (SME), and worker walkdown….The review found that the current program relies on experienced work planners and SMEs. However, most of the personnel interviewed had less than five years of experience.”
Figure 2. Workforce experience within the primary SRS contractor, Savannah River Nuclear Solutions.
Footnote:
* SRS contractors have had other spells when consistent compliance with technical safety rules was an issue, most notably in the 2014-2018 time period when workforce experience was higher. During that period the two main SRS contractors reported a collective average of 8 TSR violations per year across 14 nuclear facilities.
According to Technical Safety Requirements Implementation at the Savannah River Site, the causal analysis at that time found only “common themes of less-than-adequate knowledge of TSR controls and their bases, and less-than-adequate rigor with implementation of TSR controls;” while the underlying reasons were diverse enough to complicate the resolution of safety issues. In total, eleven corrective actions were undertaken, and four long-term measures were implemented.
