The doors to Calhoun Falls’ Town Hall closed Wednesday evening.
When they will open again is not certain.
On July 3, Mayor Terrico Holland announced at a special – and hastily conducted – Town Council meeting that the Town Hall building would close as of July 10, until further notice, following the resignations of Town Clerk Wendi Lewis and Utility Billing Clerk Jamie Willoughby just days earlier.
Those resignations followed the resignations of three Calhoun Falls police officers, leaving the town with six officers and not enough staff at Town Hall to receive the public or collect utility bills.
Residents can still drop utility payments in the drop box in front of Town Hall or mail them to the P.O. Box address on their bills while the building is closed.
At the July 3 meeting, Holland said the town would not post for the police jobs, but would post for the clerk jobs.
The Town of Calhoun Falls has been dogged by spiraling debt and accusations of mismanagement over the past 18 months, tracing to management issues that go back at least to 2020. In April, the state Inspector General’s office published a forensic report by the Office of the State Auditor (OSA) that concluded that the town “was mismanaged during Mayor Holland’s tenure.”
Holland did not respond to South Carolina Public Radio for requests for comment.
Holland was elected in 2021, succeeding Chris Cowan. The OSA’s audit also looked at Cowan’s tenure. Financial troubles factor into the tenures of both mayors
The report cited noncompliance with the town’s Code of Ordinances, noncompliance with the South Carolina Constitution for budget adoptions, lack of effective management of the town’s utility system, failure to timely prepare and submit financial statements, and inaccurate financial statements as reasons for the report’s conclusions.
“The Town expended at least $20,000 for expenditures that were considered waste or abuse of public funds,” the audit report states, citing meals and snacks. “Due in part to the Town’s mismanagement and degradation of the Town’s internal controls, the Town is experiencing a significant fiscal deficit. As of June 30, 2024, the Town had accounts payable balances in excess of $600,000 while its available cash was less than $300,000.”
The OSA report also stated that as “the Town’s capital assets have had minimal changes, which indicates that the Town has not purchased or sold significant capital assets,” Calhoun Falls increasingly has had to rely on its general fund to pay utility bills – water, which it buys from Abbeville City, and power, which it buys from Dominion Energy.
This, OSA calculates, has led to Calhoun Falls seeing its utility services debt increase by $842,167 between 2020 and 2024.
The OSA report concluded that the risk of fraud in Calhoun Falls is “high.”
OSA also reported finding that Holland’s administration failed to require supporting documentation for credit card charges, had untimely financial statements, could not reconcile the town’s bank accounts and billing systems, and overall lacked management and oversight of municipal business.
At the July 3 special meeting, Town Councilman R. Viggo Lassen called for Holland’s resignation – not for the first time – and chided the council for not being forthcoming with financial documents.
OSA concluded that the Town Council was not forthcoming with account information.
Calhoun Falls did not pass a formal budget – which is required by state law – for fiscal 2023 or fiscal 2024. It has yet to pass a budget this year. The town also did not conduct any financial statements or audits from 2021 through 2024, according to the report.
Any municipality that receives state aid is required to submit at least a financial statement annually, said Eric Shytle, general counsel for the Municipal Association of South Carolina.
“If [governments] don’t file these, the state can withhold aid payments,” he said.
According to the state Revenue and Fiscal Affairs Office, Calhoun Falls is slated to receive $46,814 in fiscal 2025-26.
Withholding aid – and the state is not doing that at the moment – is, however, about all the state can do in response to financial mismanagement in a local government.
“I get asked a lot – is there a way for the state to step in and put the town in receivership,” said State House Rep. Craig Gagnon (R, Abbeville). “And, no.”
There is no mechanism by which the State of South Carolina can step in to manage a municipal government’s finances. There is a mechanism in North Carolina: the Local Government Commission, or LGC, which “provides assistance to local governments and public authorities” in the state.
LGC was created during the Great Depression and has, according to the North Carolina Treasurer’s office, “provided consistent financial oversight for over 1,100 units of local government” since 1931.
But LCG assistance isn’t commonly used these days. And while Gagnon said he would be open to legislation that would provide for the state to be able to step into local governments in financial crisis, he’s not anticipating action on that front anytime soon.
“The only way for the state to step in [to a local government’s affairs]” Gagnon said, “is if people are charged.”
And that is not out of the question. The South Carolina Law Enforcement Division, or SLED, has an “active and ongoing” investigation into the government of Calhoun Falls, according to SLED public information director Renée Wunderlich.
“SLED was requested on April 21, 2025, by 8th Circuit Solicitor David Stumbo to investigate possible criminal violations committed by public officials within the town of Calhoun Falls,” Wunderlich said in a statement.
If any officials in Calhoun Falls are indicted for a crime, the governor could suspend that official from office. If convicted, that official can be removed from office.
But even then, Shytle said, the state cannot step in and manage the town.
“There would be a mandatory special election to fill the vacant spot,” Shytle wrote in a text. “During the three or four months it takes to get the election noticed, conducted, and certified, the office would be formally vacant. The council would retain control with a smaller body until the replacement official is elected and qualified.”
Something both Gagnon and Shytle emphasized is that Calhoun Falls is not the only municipality in South Carolina that is dealing with poor finances and mismanagement – it’s just the most overt example at the moment.
As local governments get increasingly expensive to run, Shytle said, those towns that once might have been flush with textile mill money (as reported by the Index-Journal in 2017) or other industrial investment are grappling with escalating costs, rotting infrastructure, and deflated populations.
U.S. Census data show that Calhoun Falls lost roughly 375 residents between 2010 and 2023 – almost half the total population loss for Abbeville County in that time.
There are approximately 1,730 residents of Calhoun Falls.
