ORDER NO 27847
gPPROVE LEASE AGREEMENT AND ORERATING RGREEMENT
RELATING TO KERB COUNTY JUVENILE DETENTION FRCILITIES PROJECT
On this the 12th day of November-, 20m2, upon motion made by
Commissioner Baldwin, seconded by Commissioner^ Gr^iffin, the
Cour^t unanimously approved by a vote of 4-0-Q, a Lease Rgreement
and an Operating Agreement relating to the Ker^r Coi_inty
Juvenile Detention Facilities F'r•ojectg Consenting to the
execution and delivery by the Hill Country Juvenile Facility
Corporation of a Trust Agreement, a Mortgage, and a Security
Rgreement and to the issuance of bonds by the Corporation to
refinance, and finance improvements to the Ker^r• County
Juvenile Detention Facility; and author^izing other necessar^y
actions relating thereto.
COMMISSIONERS' COURT AGENDA REQUEST
PLEASE FURNISH ONE ORIGINAL AND NINE COPIES OF THIS REQUEST AND DOC[lMENTS TO BE
REVIEWED BY THE COURT.
MADE BY: Fred Herm ~ OFFICE: County Jude
MEETING DATE: November 12, 2002 TIME PREFERRED:
SUBJECT: (PLEASE BE SPECIFIC)
Consider and discuss Order approving a Lease Agreement and an Operating Agreement
relating to the Kerr County, Texas Juvenile Detention Facilities Project; Consenting to the
execution and delivery by the Hill Country Juvenile Facility Corporation of a Trust
Agreement, a Mortgage, and a Security Agreement and to the issuance of bonds by the
Corporation to refmance, and finance improvements to, the Kerr County Juvenile
Detention Facility; and authorizing other necessary actions relating thereto.
EXECUTIVE SESSION REQUESTED: (PLEASE STATE REASON)
NAME OF PERSON ADDRESSING THE COURT:
ESTIMATED LENGTH OF PRESENTATION:
IF PERSONNEL MATTER -NAME OF EMPLOYEE:
County Judge
Time for submitting this request for Court to assure that the matter is posted in accordance with Title 5, Chapter
551 and 552, Government Code, is as follows:
Meeting scheduled for Mondays:
THIS REQUEST RECEIVED BY:
THIS REQUEST RECEIVED ON:
5:00 P.M. previous Tuesday.

All Agenda Requests will be screened by the County Judge's Office to determine ff adequate information has been
prepazed for the Court's formal consideration and action at time of Court Meetings. Your cooperation will be
appreciated and contribute towazds you request being addressed at the eazliest opportunity. See Agenda Request Rules
Adopted by Commissioners' Court.
CERTIFICATE FOR ORDER
I, the undersigned County Clerk ofKeee COUNTY, Texas (the "County"), hereby certify as
follows:
1. The Commissioners Court of the County convened in Regular Meeting on the 12'h day of
November, 2002 at the designated meeting place, and the roll was called of the duly constituted
officers and members of said Commissioners Court, to wit:
Fred Henneke, County Judge Jonathan Letz, Precinct 3
H.A. "Buster Baldwin, Precinct 1 Larry Griffin, Precinct 4
William "Bill" Williams, Precinct 2
and all of said persons were present, except the following absentees: None
thus constituting a quorum. Whereupon, among other business, the following was
transacted at said Meeting: a written
ORDER APPROVING A LEASE AGREEMENT AND AN OPERATING
AGREEMENT RELATING TO THE KERR COUNTY, TEXAS JUVENILE
DETENTION FACILITIES PROJECT; CONSENTING TO THE EXECUTION
AND DELIVERY BY THE HILL COUNTRY JUVENILE FACILITY
CORPORATION OF A TRUST AGREEMENT, A MORTGAGE, AND A
SECURITY AGREEMENT AND TO THE ISSUANCE OF BONDS BY THE
CORPORATION TO REFINANCE AND FINANCE IMPROVEMENTS TO
THE KERR COUNTY JUVENILE DETENTION FACILITY; AND
AUTHORIZING OTHER NECESSARY ACTIONS RELATING THERETO
was duly introduced for the consideration of said Commissioners Court. It was then duly moved and
seconded that said Order be passed; and, after due discussion, said motion, carrying with it the
passage of said Order, prevailed and carried by the following vote:
AYES: 4 NOES: 0 ABSTENTIONS: 0
2. A true, full and correct copy of the aforesaid Order passed at the Meeting described in the
above and foregoing paragraph is attached to and follows this Certificate; said Order has been duly
recorded in said Commissioners Court's minutes of said Meeting; the above and foregoing pazagraph
is a true, full and correct excerpt from said Commissioners Court's minutes of said Meeting
pertaining to the passage of said Order; the persons named in the above and foregoing pazagraph are
the duly chosen, qualified and acting officers and members of said Commissioners Court as indicated
therein; each of the officers and members of said Commissioners Court was duly and sufficiently
notified officially and personally, in advance, of the time, place and purpose of the aforesaid
Meeting, and that said Order would be introduced and considered for passage at said Meeting, and
each of said officers and members consented, in advance, to the holding of said Meeting for such
purpose; and said Meeting was open to the public and public notice of the time, place and purpose
of said Meeting was given, all as required by Texas Government Code, Chapter 551.
SIGNED D the 12"' day of November, 2002.
o~~~gSIOfVERSo
T} ~ ~ C my Clerk, Kerr County,- T
(SEAL) ~ ~
~9A ~~~
ORDER APPROVING A LEASE AGREEMENT AND AN OPERATING
AGREEMENT RELATING TO THE KERR COUNTY, TEXAS JUVENILE
DETENTION FACILITIES PROJECT; CONSENTING TO THE
EXECUTION AND DELIVERY BY THE HILL COUNTRY JUVENILE
FACILITY CORPORATION OF A TRUST AGREEMENT, A MORTGAGE,
AND A SECURITY AGREEMENT AND TO THE ISSUANCE OF BONDS BY
THE CORPORATIONTO REFINANCE,AND FINANCE IMPROVEMENTS
TO, THE KERR COUNTY JUVENILE DETENTION FACILITY; AND
AUTHORIZING OTHER NECESSARY ACTIONS RELATING TIIERETO
*****
STATE OF TEXAS
COUNTY OF KERR
WHEREAS, KERR COUNTY, TEXAS (the "County") Created the HILL COUNTRY JU V ENILE
FACILITY CORPORATION (the °COYpOI'atiOlt"), a5 a nOn-prOfit public faClhty COrpOIahOn pLLISLLHRt
to the provisions of Chapter 303, Texas Local Government Code, as amended, (the "Act"), to assist
the County in financing, refinancing, or providing juvenile detention facilities for the County; and
WHEREAS, the Commissioners Court hereby finds and determines that it is in the best
interest of the County to enter into that certain "Lease Agreement Relating to the Kerr County, Texas
Juvenile Detention Facilities Project," dated as of November 1, 2002 (the "Lease"), pursuant to
which the Corporation will agree to refinance certain juvenile detention facilities located in the
County (which aze further described in a certain Lease-Purchase Agreement, dated March 31, 1994,
as the "Leased Premises") and construct certain improvements to the Leased Premises (herein
referred to collectively, as the "Project") and lease the Project to the County, and the County will
agree to lease the Project from the Corporation pursuant to the terms and conditions of the Lease;
and
WHEREAS, pursuant to Section 142.003, Texas Human Resources Code, the County and
the KERB COUNTY JUVENILE BOARD (the "Juvenile Board") have authority to contract with each
other for "juvenile probation services" (as defined in Section 142.001, Texas Human Resources
Code, which include services related to the operation of a preadjudication or post-adjudication
juvenile facility), and
WHEREAS, under the provisions of the Lease, certain of the obligations and duties of the
County, as Lessee, will be performed by the Juvenile Boazd pursuant to the provisions of an
Operating Agreement,dated November 1, 2002 (the "Operating Agreement"),including the payment
of monthly "Lease Payments" under the Lease; provided, however, that the Juvenile Board's
obligation to pay such Lease Payments is subject to annual appropriation by the Juvenile Boazd; and
WHEREAS, the County hereby finds and determines that it is in the best interest of the
County to enter into the Operating Agreement pursuant to such statutory authority and other
applicable laws of the State of Texas; and
WHEREAS, in connection with the Lease, the Corporation will enter into a "Trust
Agreement Relating to the Kerr County, Texas Juvenile Detention Facilities Project," dated as of
November 1, 2002 (the "Tn~st Agreement"),with The Bank ofNew York Trust Company of Florida,
N.A., as trustee (the "Trustee"), pursuant to which the Corporation will issue up to .55.250,000 in
principal amount of Lease Revenue Bonds, Series 2002 (the "Bonds") for the purpose of financing
the costs of the Project; and
WHEREAS, for so long as the Lease is in effect, the County will be obligated to pay Lease
Payments to the Corporation in an amount sufficient to pay the principal of and interest on the Bonds
when due under the Trust Agreement (which payments are reasonably expected to be made by the
Juvenile Board pursuant to the Operating Agreement); provided, however, that the County's
obligation to pay such Lease Payments is subject to annual appropriation by the Commissioners
Court; and
WHEREAS, the Bonds aze special limited obligations of the Corporation, payable solely
from the "Trust Estate" (as defined in the Trust Agreement), which includes the payments to be
made by the County pursuant to the Lease or the Juvenile Board pursuant to the Operating
Agreement, and shall never constitute an indebtedness or general obligation of the Corporation, the
State of Texas, the County, or any other political subdivision of the State of Texas, within the
meaning of any constitutional provision or statutory limitation whatsoever; and
WHEREAS, to secure its obligations under the Trust Agreement, the Corporation will grant
a first mortgage lien and deed of trust lien on the real property portion of the Project securing the
Bonds and will assign and pledge the Corporation's interest in the leases, rents, issues, profits,
revenues, income, receipts, money, rights, and benefits of and from the Project to a mortgage trustee
for the use and benefit of the Trustee on behalf of the owners of the Bonds, pursuant to a "Deed of
Trust and Assignment of Rents and Leases," dated as of November 1, 2002 (the "Mortgage"); and
WHEREAS, to further secure its obligations under the Trust Agreement, the Corporation will
grant to the Trustee a first priority security interest in the machinery, equipment, furnishings, or other
property acquired by the Corporation with the amounts deposited into the Project Account (as
defined in the Trust Agreement), and substitutions or replacements therefor, in any inventory of the
Corporation now or hereafter located at the Project, and in the accounts, documents, chattel paper,
instruments, and general intangibles arising in any manner from the Corporation's ownership and
operation of the Project, pursuant to a "Security Agreement," dated as of November 1, 2002 (the
"Security Agreement"), between the Corporation and the Trustee; and
WHEREAS, the Bonds are to be initially sold to First Southwest Company (the
"Underwriter") at the price and pursuant to the terms of a Purchase Contract between the
Corporation, the County and the Underwriter; and
WHEREAS, the Lease, the Operating Agreement, the Trust Agreement, the Deed of Trust,
the Security Agreement and the Purchase Contract have been presented to the Commissioners Court
in substantially final form for approval pursuant to this Order; and
WHEREAS, it is hereby further officially found and determined that the meeting at which
this Order was passed was open to the public, and public notice of the time, place and purpose of
said meeting was given, all as required by Chapter 551, Texas Government Code;
NOW, THEREFORE, BE IT ORDERED BY THE COMMISSIONERS COURT OF
KERB COUNTY, TEXAS:
SECTION I. APPROVAL OF THE LEASE AND THE OPERATING AGREEMENT. The Lease and
the Operating Agreement are hereby approved in substantially the form presented at this meeting,
such approval to be evidenced by the signature of the County Judge thereon. The County Clerk of
the County is authorized to attest the County Judge's signature thereon. When the Lease and the
Operating Agreement have been executed and delivered, and when the Lease has been approved by
the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of
the State of Texas, the Lease and Operating Agreement shall become valid and binding obligations
of the County in accordance with their terms.
SECTION 2. APPROVALOFTHESALEOFBONDSANDFINANCINGDOCUMENTS. TheCOUnty
hereby acknowledges, consents to and approves the issuance, sale, execution, and delivery of up to
$5,150, 000 in principal amount of the Bonds by the Corporation to the Underwriter named in the
Purchase Contract in accordance with the terms set forth in the Purchase Contract, which is hereby
approved in substantially final form and which the County Judge and County Clerk may execute on
behalf of the County. The Commissioners Court further acknowledges, consents and approves the
execution and delivery by the Corporation of the Lease, the Trust Agreement, the Deed of Trust, the
Security Agreement, and the Consent and Assignment Agreement, dated as of November 1, 2002
(the "Consent Agreement"), by and among the Corporation, the Juvenile Board, the Kerr County
Juvenile Facility Corporation, and Frankenmuth Mutual Insurance Company (collectively, the
"Financing Documents").
SECTION 3. AUTHORIZATION OF OTHER NECESSARY ACTIONS: SIGNATURES. (a) The
County Judge, County Clerk, County Treasurer, and County Auditor and all other officers,
employees, agents and officials of the County are hereby expressly authorized, empowered and
directed from time to time and at any time to do and perform and to take any and all action necessary
to comply with the terms of the Lease, the Operating Agreement and any other related documents
in order to facilitate the refinancing, design, construction, and operation of the Project by the
Corporation, the sale of the Leased Premises to the Corporation, the leasing of the Project from the
Corporation, and the issuance, sale and delivery of the Bonds by the Corporation, including the
execution of certificates, opinions, and the other documents necessary in connection therewith.
(b) The County Judge, County Clerk, County Treasurer, and County Auditor and all
other officers, employees, and agents of the County, and each ofthem shall be and they are expressly
authorized, empowered, and directed from time to time and at any time to do and perform all such
acts and things and to execute, acknowledge, and deliver in the name and under the corporate seal
and on behalf of the County all such instruments, whether or not herein mentioned, as may be
necessary or desirable in order to carry out the terms and provisions of this Order and the Financine
Documents. In addition, prior to the initial delivery ofthe Financing Documents, the County Judge.
County Clerk, County Treasurer, and County Auditor and all other officers of the County, and Bond
Counsel related to the Bonds are each hereby authorized and directed to approve any technical
changes or corrections to this Order or to any of the instruments authorized and approved by this
Order necessary in order to: (i) correct any ambiguity or mistake, or properly or more completely
document the transactions contemplated and approved by this Order; (ii) obtain the approval of the
Lease, the Operating Agreement, the Bonds or any other Financing Documents by the Attorney
General of Texas, as required by law; (iii) obtain municipal bond insurance for the Bonds, if so
purchased, for which payment of the premium related thereto may be paid with proceeds of the
Bonds); or (iv) obtain the ratings contemplated in the Official Statement.
(c) The County Judge and the County Auditor of the County are each hereby authorized
and designated as a "Lessee Representative" for the purposes of the Lease and the Trust Agreement.
SECTION 4. AUTHORIZATION TO COUNTY AUDITOR. The County Auditor is hereby
authorized to account for the Lease Agreement with the Corporation, the Operating Agreement with
the Juvenile Boazd, the issuance of the Bonds by the Corporation to finance and refinance the
Project, and the Trust Agreement, the Mortgage, and the Security Agreement in connection therewith
in accordance with Generally Accepted Accounting Principles (GAAP) and all applicable laws.
SECTION S. ENFORCEABILITY OF ORDER. If any SeCtlOn, paragraph, clause, OL pLOVlSIOn
of this Order shall be held to be invalid or unenforceable, the invalidity or unenforceability ofsuch
section, paragraph, clause, or provision shall not affect any ofthe remaining provisions of this Order.
In case any obligation of the County authorized or established by this Order or the Financing
Documents is held to be in violation of law as applied to any person or any circumstance, such
obligation shall be deemed to be the obligation of the County to the Fullest extent permitted by law.
SECT[oN 6. INCORPORATION of REC[TALS. The Commissioners Court hereby finds that
the statements set forth in the recitals of this Order aze true and correct, and the Commissioners
Court hereby incorporates such recitals as a part of this Order.
SECT[oN 7. EFFecTtvF DATE. This Order shall become effective immediately upon its
adoption.
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PASSEDAND APPROVED BYTHE COMMISSIONERS COURT OFKERR COUNTY,
TEXAS AT A REGULAR MEETING ON THE 12TH DAY OF NOVEMBER, 2002.
ounty judge, Kerr County, Texas
[SIGNATURE PAGE OF COUNTY ORDER AUTHORIZING FINANCING DOCUMENTS]