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KERR COUNTY COMMISSIONERS COURT
Special Session
Monday, December 31, 2001
9:00 a.m.
Commissioners' Courtroom
Kerr County Courthouse
Kerrville, Texas
Law Enforcement Insurance Coverage for 2002
PRESENT: FREDERICK L. HENNEKE, Kerr County Judge
H.A. "BUSTER" BALDWIN, Commissioner Pct. 1
WILLIAM "BILL" WILLIAMS, Commissioner Pct. 2
JONATHAN LETZ, Commissioner Pct. 3
LARRY GRIFFIN, Commissioner Pct. 4
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On Monday, December 31, 2001, at 9:00 a.m., a special
meeting of the Kerr County Commissioners Court was held in
the Commissioners' Courtroom, Kerr County Courthouse,
Kerrville, Texas, and the following proceedings were had in
open court:
P R O C E E D I N G S
JUDGE HENNEKE: Good morning, everybody.
It's 9 o'clock on Friday, December 31st, Year 2001. We've
gathered together one more time.
COMMISSIONER WILLIAMS: Monday, the 31st.
JUDGE HENNEKE: On Monday, the 31st, okay.
Only item of business today is consider and discuss contract
for law enforcement liability insurance for 2002. Tommy'?
COMMISSIONER BALDWIN: Judge, before we get
into that, I have an announcement I'd like to make. Did you
-- were you going to say something too?
(Commissioner Griffin nodded.)
COMMISSIONER BALDWIN: Mine is simply that
Major Applewhite found Bin Ladin, and he's cured cancer.
(Laughter.)
COMMISSIONER WILLIAMS: Same evening?
COMMISSIONER BALDWIN: Same day.
MR. TOMLINSON: I heard that they found Bin
Ladin. He's working in a convenience store in Miami.
(Laughter.)
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COMMISSIONER GRIFFIN: Mine's a little more
serious. I was going to say we've got these precinct maps
-- voting maps are available now in a digital form, and I'll
get with Shaun as soon as I can and see about getting those
on the web site. We'll probably have to put them on as
individual pages for each voting precinct, to have the scale
large enough to see anything. But, we need to get that word
out as quick as we can, because, obviously, tomorrow they're
effective and people are going to start asking questions,
and rightly so. We'll get that up as soon as we can. Thank
you. That means as well as however else we publicize it.
COMMISSIONER LETZ: Want to make sure that
before they publicize this, that it's on the web page.
COMMISSIONER GRIFFIN: Yeah, that might be a
good idea.
MS. LAVENDER: I'm just going to say soon.
COMMISSIONER GRIFFIN: Soon, yeah. Okay,
that's it.
JUDGE HENNEKE: I'd also remind everyone of
the evaluations that we'd like to have in today, if
possible.
COMMISSIONER LETZ: You're looking at me.
How about -- how about Wednesday?
COMMISSIONER BALDWIN: And back to the maps,
I have a copy of the -- hard copy, and who wants it next?
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It's for to us pass around, just go on down the line.
COMMISSIONER WILLIAMS: Any chance we can all
get a copy? It's expensive?
COMMISSIONER BALDWIN: Pretty good size
document. I'll pass it to you, then you figure out what you
want to do with it.
(Discussion off the record.)
SHERIFF HIERHOLZER: While they're doing
that, I have one change coming to y'all with our monthly
report I'd like to mention to you. You know how the
Sheriff's Office, their reports have always been two or
three months behind, I guess, a lot of times. The -- now
that we're using the computer system more and more, it does
monthly reports, lets you know exactly how many people we've
packed in the jail, how many have been released from jail,
what our civil accounts are like -- I mean civil papers
received and served and money from that, commissary account,
shows exactly what's been spent and inventoried, and current
balances and everything. So, we're going to start going to
that. How many calls the Department's had during the month,
and then we can even do an end-of-the-year one. The only
problem I have with that, your monthly report will be
several hundred pages long, at least a hundred pages,
because of the way that prints out, and I do not want to
have to make -- how many copies? If we make one main copy
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that will be bound for the Commissioners Court, I think it
will be ten times more accurate, probably, than anything --
anything that the Sheriff's Department's ever done, and
actually shows you in real terms what's going on out there.
And we're going to start that January 1.
JUDGE HENNEKE: What's your population today?
SHERIFF HIERHOLZER: I didn't run one first
thing this morning. I know this weekend, Saturday -- this
Saturday night, they booked in 16. Friday night, they
booked in 11. I don't know how many of those actually got
back out, but I'm sure it's over 150. And i£ we stay within
the 80 percent, that's 153. So, we've been running that.
COMMISSIONER LETZ: Can you put together,
like, a summary sheet of some of the -- look maybe at the
new format and then put, like, a one-page summary of some of
the key -- I mean, I think --
SHERIFF HIERHOLZER: You don't want to look
at my report?
COMMISSIONER LETZ: I don't want to look at a
hundred pages of report.
SHERIFF HIERHOLZER: There's a bottom on each
section, and it will be divided into sections. The last
paper on each section is a summary sheet on it. It also --
we have the capability of printing out statistics for the
year, what our crime rates have been, what offenses have
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gone up and down and things like that, so we'll be doing
that, and then a total end-of-the-year report. This is not
new stuff that we're buying in the computer. It's just the
more and more we get computerized out there and get people
trained to use it, and it actually compiles it all.
COMMISSIONER GRIFFIN: I would suggest that
perhaps we can look at the first report, and then we may be
able to come up with some -- maybe even Shaun could do it,
to rearrange some of the formatting to come up with --
COMMISSIONER LETZ: One- or two-page summary
of --
COMMISSIONER GRIFFIN: It would just be on
the top of it. File one big report and have a couple pages
summary, maybe, on the top.
SHERIFF HIERHOLZER: I think you'll find it a
lot more informative than what y'all have gotten in the
past. One thing it does not show is mileage driven, because
there's just not a format in there, unless we go to the
fleet management part of that computer system, which we
don't have right now. But one of those things I'd like to
mention is, just looking last week, our main transport
officer, Carl Schultz, in transports alone for the year
2001, he drove 72,000 miles, just hauling prisoners back and
forth. So, things have been extremely busy out there, going
back over it, but I'll get that to y'a11 starting the 1st.

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JUDGE HENNEKE: Okay. Thank you, Sheriff.
Tommy, you ready?
MR. TOMLINSON: Yeah, I'm ready.
JUDGE HENNEKE: Okay.
MR. TOMLINSON: I want to go ahead and let
Jack Furman come up and address the Court about -- about the
quotes he has of the law enforcement liability for the jail,
as well as -- as the detention facility. First off, the --
you know, we've gone through the differences in -- in the
types of -- in the types of coverage or types of policies.
The quote we got from Texas Association of Counties is for
claims made, and that -- that quote was $49,114.
JUDGE HENNEKE: That was for both the
facilities?
MR. TOMLINSON: That's for both, yes. Jack's
going to tell you what he has now for -- for changing --
either staying with the occurrence policy for both, or
changing to a claims made policy, which would be the same
as -- as what TAC proposed.
(Discussion off the record.)
COMMISSIONER BALDWIN: Would that be former
mayor Jack?
MR. FURMAN: Heavy on the "former." I don't
know the protocol. Am I supposed to give my name and
address and stuff? I'm Jack Furman, 141 Saint Andrews Loop,
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Kerrville. This is hot off the presses, and so I'm usually
lack of polish. The claims made coverage we can talk about,
if you'd like to, as opposed to the occurrence coverage. In
my opinion, occurrence is -- is a safety net always to have,
but it always costs more. On the first year, because on the
first year, really not much is being covered under a claims
made policy, usually on a claims made policy there's a
retroactive date, which is the inception date of the policy,
and in order for a claim to be covered, the claim has to be
made during that policy period.
And, what happens with the kind of things
that -- that Rusty's privileged to get in the way of claims,
is they have fairly long tails, and so the things that are
pending now, and even things that were reported during the
past year, didn't occur during the past year, but in the
previous year. So, what happens with claims made policies
is that the first year, there may be claims, but it's pretty
rare. The second year, there's a greater likelihood, and
the third and fourth year, it's gotten mature. Most
companies -- I don't know how TAC does it, but most -- most
companies rate claims made policies by using a percentage of
the occurrence, or a percentage of the mature premium, so
most companies will use 65 or 70 percent the first year of a
mature premium, or an occurrence premium.
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With that, let me give you the premiums. The
occurrence premium for -- and fees for the Sheriff's Office,
for the law enforcement liability of the Sheriff's Office,
would be $53,819. For the juvenile facility, $10,974. If
you elect to go to a claims made form, the claims made form
for the Sheriff's Office, bottom line would be $38,453, and
for the juvenile facility, $8,005.
COMMISSIONER WILLIAMS: What was that first
number, Jack?
MR. FURMAN: The first number on the claims
made?
COMMISSIONER WILLIAMS: Of the two you just
gave, yes.
MR. FURMAN: $38,953.
COMMISSIONER WILLIAMS: Thank you.
MR. FURMAN: And on the juvenile facility,
$8,005. That would be a total of $46,458. And I think that
pretty well illustrates the difference between claims made
and occurrence.
COMMISSIONER GRIFFIN: Now, you're saying
that, like, out somewhere around the third year or so, the
premium for the claims made would be about the same as this
occurrence being quoted today?
MR. FURMAN: Yes, sir.
SHERIFF HIERHOLZER: Then there's a
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difficulty going back to the occurrence from a claims made,
isn't there?
MR. FURMAN: Well, the -- the present policy,
the County had claims made policies because that was all
that was available for a number of years, and the current
policy has a retroactive date -- let me back off of that.
The current policy is an occurrence policy, the one that's
expiring at midnight tonight. When it changed -- when that
form changed from the claims made form to an occurrence
form, we were concerned about things that may have happened
back in the claims made time, so we had them attach an
endorsement, which is still there, which covers claims that
are -- that occurred back to that retroactive date, which I
believe is in 1986. So, it has quite a long -- that would
be perpetuated under the -- under the occurrence form, so
that has a long tail on it, that -- that cover claims.
Should you go to a claims made policy, that means that if it
didn't occur in the last three or so years that we've had
the occurrence form, that there wouldn't be any coverage.
If I've totally confused you, I apologize.
COMMISSIONER BALDWIN: We now have the
occurrence form of insurance?
MR. FURMAN: That's correct.
COMMISSIONER BALDWIN: And if we changed over
to the claims made program, and the claims made program came
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into effect midnight tonight, then some kind of occurrence
that Rusty deals with daily that happened last year would
not be covered?
MR. FURMAN: No, last year it wou]d be
covered, because there was an occurrence form.
COMMISSIONER BALDWIN: Okay. What about the
year before'?
MR. FURMAN: I --
COMMISSIONER BALDWIN: I don't know if they
drag out two or three years.
MR. FURMAN: Commissioner Baldwin, I
apologize, but I don't -- I apologize for not being as
prepared as I could be, but this is -- I got this at 14
minutes before the hour, so I didn't have time to put much
together. I can't remember if the occurrence form has been
going for three or four years.
COMMISSIONER BALDWIN: I'm just trying to
see --
MR. TOMLINSON: I think it's three, Jack. I
think this will be the beginning of the fourth year.
MR. FURMAN: Okay. The current form, then,
has been in force for three years, so 2001, 2000, and 1999.
So, anything -- if a claim were reported in January, let's
say, that happened in 1998 --
COMMISSIONER GRIFFIN: Wouldn't be covered.
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MR. FURMAN: -- it wouldn't be covered under
a claims made form. If you perpetuate the occurrence form,
it would be, because they're holding that retroactive date
of '86.
COMMISSIONER BALDWIN: Yeah.
COMMISSIONER WILLIAMS: Sut if you switch
from occurrence to claims made, there is a potential for a
gap in coverage; is that correct?
MR. FURMAN: Yeah. And -- and, Commissioner
Williams, what it would really amount to, in my opinion --
and I'm not -- I'm not in the business of legal opinions.
Maybe the Judge is, but it would amount to a statute of
limitations. I know there's some ways around it, because
we've experienced that in our own business, but that's all I
know. The statute of limitations, I believe, is normally
two years. Is that right, Judge?
JUDGE HENNEKE: Depends on what the -- what
the claim would be.
MR. FURMAN: Well, if you've got a juvenile,
it's -- yes, it does sometimes depend on what the claim is.
JUDGE HENNEKE: And I know the statute runs
from the time when the person knows or should have known, as
a Leasonable man, about the claim.
MR. FURMAN: Yeah. So, in my opinion, your
decision is, do we want to stay with the claims made -- I
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mean, do we want to start a claims made or do we want to
stay with the occurrence form, which protects you back to
~80~
COMMISSIONER GRIFFIN: It's like all
insuranoe, I would think. That, you know, if -- you could
go the lower rate and go to claims made, but you're taking a
risk that -- and one claim can break the bank. I mean,
it's -- that's the dilemma.
JUDGE HENNEKE: Sheriff?
SHERIFF HIERHOLZER: As far as the claims
that I currently know about, the question 1 have, one of
those has already been thrown out by federal court, but it
was a '98 claim, I believe, and there was a Notice of Appeal
on the federal court decision. Now, would that one be
covered?
MR. EURMAN: Yes, I think it -- yes. Yes, it
would, because that is an ongoing claim, and until it's --
until it's finally adjudicated, yes, it would.
SHERIFF HIERHOLZER: The other question I
have -- and maybe Tommy can answer this -- with the TAC
coverage, is -- and this is just rumor I heard, is that the
TAC coverage does not necessarily cover attorney expenses.
It covers the claims, but not necessarily the attorney.
MR. TOMLINSON: Well, that's -- that's
optional with the coverage.
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SHERIFF HIEIZHOLZER: And then my last
question, I know the representation the County's had over
the last several years, and the -- the normal attorney or
law firm that the insurance company uses has represented
this County extremely well. In fact, I have a meeting with
the attorneys on Thursday over another claim that occurred
back in 1999 that is still pending. Now, I would hate to
see us go to a less expensive policy, but at the same time
jeopardize Lhe excellent representation that the County's
gotten in these lawsuits, 'cause they all start out, of
course, with millions of dollars, and we've got an attorney
that -- or a law firm that specializes in law enforcement
and takes cane of that claim extremely well. The last one
we had, like I said the other day, went all the way to
federal court, started a jury trial a few months ago, and
when they broke for lunch, the federal judge threw it out.
And I czedit that with the attorney and the law firm that
represented the County. And I would hate to -- to go to an
unknown right now in what kind of representation we're going
to get, when we know what kind we're having now,
COMMISSIONER LETZ: Well, I mean, but either
'cause your claim is cheaper than TAC's claim.
MR. FURMAN: Yes, it is a little bit.
COMMISSIONER LETZ: I don't think that would
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be as much of an issue as representation, so I -- the
question I do have, Jack, is this issue, the claims made
would be 546,458. Next year it's going to likely go up?
MR. FURMAN: Next year -- no, its not going
to "likely" go up.
COMMISSIONER LETZ: It is going up.
MR. E'URMAN: And there's more than one thing
at work there.
COMMISSIONER LETZ: Right. But in two years,
it's going to be the same amount as the $63,000-plus?
MR. FURMAN: Probably -- well --
COMMISSIONER LETZ: So, it's basically --
MR. FURMAN; On a relative scale, probably,
yes.
COMMISSIONER LETZ: So, its basically --
we're looking at a -- a one- to maybe a two-year savings,
and then the premium's going to be the same anyway, and for
that difference we're getting the risk from some old
lawsuits, basically. I mean --
COMMISSIONER GRIFFIN: Right. And that's --
COMMISSIONER LETZ: The savings isn't that
good. I mean, it's not as good when you start -- it's not
rea"Lly savings; it's a very temporary savings.
MR. FURMAN: It's a bird in the hand that may
fly out of the bush a little bit later.
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COMMISSIONER WILLIAMS: It could be a
penny-wise, pound-foolish situation. Potential for it.
MR. TOMLINSON: But, as far as the budget
issue, the Detention Center part of it can be handled, of
course, directly by -- by the Detention Center revenue, so
that part of it's not an issue with -- with the budget, as
far as General Fund goes. It is -- it is slightly more
than -- than we have in the budget, but that may be true
with -- with any kind of -- of our insurance premium that we
may pay this year, because -- just because of the market.
COMMISSIONER WILLIAMS: How much did you lay
in the budget for this item?
MR. TOMLINSON: I think it's $48,000.
MR. FURMAN: I think it's probably a little
more than that, if you -- if you did last year's.
MR. TOMLINSON: Well, I don't -- that's just
from my memory, but that's close.
MR. FURMAN: There's one other thing, in
fairness, I need to mention that I have not -- I'm not sure
how much Rusty knows, but both of these things include
National Sheriff's Association fee. In other words, the
Sheriff's Department joins the National Sheriff's
Association, and there are benefits involved in that to the
Sheriff's Department, and also to the Sheriff and to the
deputies. There's an accidental death benefit, for example,
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and I'm not sure what all the benefits are, but there are
some benefits involved.
COMMISSIONER GRIFFIN: That's in both?
MR. FURMAN: Yes. That's in both, yes.
COMMISSIONER WILLIAMS: Rusty, I'm a little
bit confused by your question about legal coverage -- legal
services under our existing coverage. Are you suggesting we
don't have the legal services under the existing coverage?
SHERIFF HIERHOLZER: Under the existing
coverage, I'm saying that we have excellent representation.
COMMISSIONER WILLIAMS: Okay.
SHERIFF HIERHOLZER: Okay? If we change that
coverage, you know, to TAC or something, I'm just concerned
about the representation that we have. I don't -- and I
don't know who TAC would use for law firms and that. I just
know the current one that we have that end up with anything
major are -- primarily represent law enforcement agencies.
They know exactly what they're doing. They do an excellent
job. They come up -- the attorney and his assistant come
up, spend time with us going over the case, going over all
the documentation, and spend a lot of time on it. I know
what type we're getting now, and I have no complaints about
what we're getting now.
COMMISSIONER WILLIAMS: Okay. So, you're
talking about, you know, the level of service, but you're
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not suggesting if a change is made, that there wouldn't be
attorney service, because somebody has to defend the
insurance company. It's not going to be us.
SHERIFF HIERHOLZER: I just don't have an
idea if they would use the same pool of law firms or not, or
what. I'm just kind of concerned on that part.
COMMISSIONER WILLIAMS: Okay.
SHERIFF HIERHOLZER: I know what we have now.
COMMISSIONER LETZ: I've heard enough, in my
opinion. I'll make a motion that we go with the occurrence
-- continue with an occurrence policy through Jack Furman's
agency.
COMMISSIONER GRIFFIN: Second.
COMMISSIONER BALDWIN: Third.
JUDGE HENNEKE: Motion by Commissioner Letz,
second by Commissioner Griffin, that the Commissioners Court
renew the occurrence law enforcement liability insurance
policy offered through Jack Furman's insurance agency.
What's the carrier, Jack?
MR. FURMAN: Beg pardon?
JUDGE HENNEKE: What's the carrier?
MR. FURMAN: The carrier is C.N.A.
JODGE HENNEKE: Offered by C.N.A. insurance
carrier. Any further questions or comments? If not, all in
favor, raise your right hand.
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(The motion carried by unanimous vote.)
JUDGE HENNEKE: Opposed, same sign.
(No response.)
JUDGE HENNEKE: Motion carries.
MR. FURMAN: Thank you, gentlemen.
JUDGE HENNEKE: Thank you, Jack.
MR. FURMAN: I'm going to go back and get you
a binder.
JUDGE HENNEKE: Anything else? Go for it.
Happy New Year. We're adjourned.
(Commissioners Court adjourned at 9:25 a.m.)
STATE OF TEXAS
COUNTY OF KERR
The above and foregoing is a true and complete
transcription of my stenotype notes taken in my capacity as
County Clerk of the Commissioners Court of Kerr County,
Texas, at the time and place heretofore set forth.
DATED at Kerrville, Texas, this 31st day of December,
2001.
JANNETT PIEPER, Kerr County Clerk
Kathy B nik, Deputy County Clerk
Certified Shorthand Reporter
DRDEFd iVD. ,"-_'73''8
LAW ENFDRCENENI' INS'IJRANCE CDVCRGIGE
FOR c:Lnl?Ic
Dn tni the 31st day of Decembatr "r".0N1, ~_ipon motion made 6y
Commissioner Let-, seconded by Cnounissioner Grif-'fin, the Co~_ir-t
~.inanimously approved by a vote of 4-0-0, to renew the
ocr_~_irrence law enforr_emen't liability in=;uran~_~e polir_y of'Fered
tFn•o~_~yh Jack F~_irman' s ins~.irance ayenc:y C. N. R. .