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KERR COUNTY COMMISSIONERS COURT
Special Session
Monday, December 15, 2003
9:00 a.m.
Commissioners' Courtroom
Kerr County Courthouse
Kerrville, Texas
PRESENT: PAT TINLEY, Kerr County Judge
H.A."BUSTER" BALDWIN, Commissioner Pct. 1
WILLIAM "BILL" WILLIAMS, Commissioner Pct. 2
JONATHAN LETZ, Commissioner Pct. 3
ABSENT: DAVE NICHOLSON, Commissioner Pct. 4
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2.
I N D E X
December 15, 2003
1.1 Consider and discuss acceptance, rejection or
other appropriate action on Employee Health
Insurance Bids
1.2 Consider and discuss implementing a Burn Ban
for Kerr County
--- Adjourned

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On Monday, December 15, 2GC3, at 9:00 a.m., a special meeti
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 TINLEY: Let me call to order the
special Commissioners Court meeting scheduled for this date,
Monday, December 15, at 9 a.m. It's a few minutes after
9:00 now, and the item on the agenda first is consideration
and discussion of the acceptance, rejection, or other
appropriate action on employee health insurance bids. By
way of -- by way of introduction, we have available to us,
gentlemen, the provisions of Section 262.030 in connection
with bidding of these items, and though we've received the
official bias, we Piave the option to determine which of
those proposals are reasonably susceptible of being selected
for award, and then on that basis, allow the offerors to, on
a fair and equal basis -- give them an opportunity to
discuss and revise their proposals, to the end that each of
them as may be selected as being reasonably susceptible of
being selected for the purpose of their -- submitting their
best and final offer. And so, on that basis, you know,
if -- if there is a thought treat the bids as submitted need
to be first pared down to the proposals which are reasonably
susceptib~e of being selected, that would appear to be the
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first action to take. If -- if the thought of the Court is
that all of the bids as submitted are potentially
susceptible of being selected for award, then we may want to
permit these offerors to go tc work on their best and final
offer. With that, I'll leave it in your able hands.
COMMISSIONER WILLIAMS: How might we compare
them to determine -- other than reading all of that, which I
don't think the members of the Court have all of that to
read, how would we determine whether Submitter A, B, C, D,
or E or whomever is -- has submitted something that is
determined to be reasonably susceptible of being selected
for -- how would we make that determination, Judge?
JUDGE TINLEY: Well, of course, it can be
done from a review of the proposals themselves or from
counsel with persons who are knowledgeable in the industry
or trade.
COMMISSIONER WILLIAMS: Ah.
JUDGE TINLEY: Whatever else that you may
want to do.
COMMISSIONER WILLIAMS: Therein lies the key.
Since we don't have a spreadsheet that depicts exactly what
we have -- I guess I'm only speaking for myself; I'm not
sure I'm speaking fir my two colleagues, but since I don't
have a spreadsheet that currently depicts what we have and
are providing to our employees and the cost associated
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therewith, I don't know how I'm going to make a
determination if A, B, C, D, or E provides the same, equal
to, less than the cost as comparable. I have no ability to
make that decision in front of me this morning. So, then,
it would seem to me we're either going to have that provided
to us -- if we can't get that generated in-house, I don't
know any alternative except we're going to have to go out of
house to get it done.
COMMISSIONER BALDWIN: I agree with almost
everything you said there. You have to have information in
order to make a decision. like this, which we do not have, or
at least I don't have. I don't kncw that I'd understand it
if it was in front of me. I am a huge fan of going outside
and getting outside help. However, seems to me it's a
little bit late to do that on the issue that's before us
today. Personally, what I'd like to see happen today is
that we simply adopt what we have in place today, and then
move forward with finding an expert that will evaluate all
these issues and make sure that we're getting the best bang
fen our buck for our employees. So, that's where I'm at.
COMMISSIONER LETZ: I thought that someone
was reviewing these and was goir_g to give us an analysis of
that. I thought it would be done in-house, I mean, through
either the Treasurer's office or the Auditor's office. I
mean, I thought we referred them to those departments for
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review and recommendation.
COMMISSIONER WILLIAMS: Maybe we should ask,
do we have that?
JUDGE TINLEY: I believe that that was --
MS. NEMEC: Ask and you may receive.
COMMISSIONER LETZ: Ar.d if that's the case,
I'd like ~c hear from one or both of those departments as to
what they, you '.snow, have to say after the review.
JUDGE TINLEY: Ms. Nemec?
MS. NEMEC: I would like to share with you
what I have done. It's not a complete spreadsheet. I do
think that at the end, if you want to compare numbers and
benefits, I would feel more comfortable going out and
getting a consultant who does nothing but this to compare
those numbers. I want tc sYrare with you what we received,
just so that you are aware of what I'm looking at and what
someone else might be looking at. Cindy, if you'll pass
that out tc each one of them, I'll go over it with you all
what I have dcne. I do have four extra copies, and so if
any cf `he brokers that submitted a proposal are here, y'all
may have a copy, and if I don't have enough for everyone
that is here, then I can make copies after the meeting if
y'all want tc fellow alcrry with what I'm presenting. Is
there an extra copy here that Commissioner Nicholson would
have had?

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MS. PIEPER: I have it.
MS. NEMEC: Okay. Is there another broker
that furnished a bid that did not get a copy? No? Okay.
First of all, just so that you can see what it is that we're
dealing with, I'm going to go -- if you -- if you don't
follow along, you'll get in trouble, so you have to go -- be
on the first page. I just want to show you these -- this is
everything that was submitted to the County Clerk's office
in the form cf any type of proposals. These are letters
that were decline letters.
COMMISSIONER LETZ: Decline letters?
MS. NEMEC: Decline letters.
COMMISSIONER TuVILLIAMS: Declining what?
MS. NEMEC: Declining to bid on our
insurance.
COMMISSIONER WILLIAMS: On the entire
MS. NEMEC: Yes. Okay? And the decline
letters are from Wallace and Associates. These were
third-party administrators or any other type of insurance
proposals that he went out to try to get, and these are the
letters that were sent back to him that were declined. Here
I have two dental proposals that were subrt~itted by Wallace
and Associates. Actually, I think it's three, three
different dental proposals that were submitted by Wallace
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and Associates.
COMMISSIONER WILLIAMS: Question.
MS. NEMEC: Yes?
COMMISSIONER WILLIAMS: If Wallace and
Associates declined everything --
MS. NEMEC: No.
COMMISSIONER WILLIAMS: -- in Exhibit 1, how
then does Wallace and Associates --
MS. NEMEC: Wallace and Associates did not
decline. Wallace and Associates is -- is the broker that
went out to get bids, and the decline letters are from those
insurance agencies that declined to give him a bid --
COMMISSIONER WILLIAMS: Okay.
MS. NEMEC: -- on our package.
COMMISSIONER WILLIAMS: Thank you.
MS. NEMEC: Okay? So, these are the dental
plans that he submitted on behalf of other insurance
companies. And I -- I do this so that y'all can see how
much information is here that we're having to look at. The
next one that I have is an AFLAC proposal submitted by
Wallace and Associates.
COMMISSIONER WILLIAMS: What would that
cover?
MS. NEMEC: This is -- we have AFLAC now; our
County employees have AFLAC. If they choose Plan B or C,
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then ~he Ccunty -- the premium for that employee is less
than the -- than the maximum, and they're able to choose any
kind of, like, hospital policy, cancer policy. They just
have a lot of different supplemental insurances that they
can take advantage of.
COMMISSIONER WILLIAMS: Cafeteria-type plan?
MS. PdEMEC: Right. And we have that in place
right now with Bryar_ Finley and Associates.
COMMISSIONER WILLIAMS: Thank you.
MS. NEMEC: Next, here is a proposal that was
turned -- submitted -- Wallace and Associates received this
proposal on our behalf, and it's from Benefit Planners. Due
to a letter that I received from Wallace and Associates, he
turned in three proposals. This was one that he felt would
not benefit as much as another proposal that he turned in,
so I scanned through it, but I did not do an evaluation on
it in order to save time, and taking the recommendation of
Wallace and Associa~es. The same with this one. This is
Group Administrators. This was the second one that he
submitted, and the rates are not as well as the one that I'm
going to show you next. If I -- if I'm presenting something
and it's incorrect and you're the broker, please correct me.
This next one is Mutual of Omaha. This was
presented by Wallace and Associates, and out of the three,
this was the best one to look at. I do have -- and I'm

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going to -- as I -- as I show you these others that were
presented that I did do an evaluation on, I'm going to tell
you what my concerns are on it. My concern on here is the
efficiency of enrollment. The enrollment process would be
done electronically or by fax. Right now, the way we're set
up, our employees go down to our insurance rep's office and
they do all the enrollment. When -- if -- if we just had a
basic plan that this was the plan and this is what you
enroll for, we could do it in our office. We used to do it
before. But now, because we have these different plans and
you can supplement it with AFLAC insurance, we're nom able
to do the enrollment any longer, and so our current rep is
the one that does it in his office. And that would be my
concern with this plan. Another thing --
JUDGE TINLEY: Would it r.ot be possible for
them. to prcvide the personnel to do the enrollment here
locally?
MS. NEMEC: That is not what they submitted.
They said it would have to be done electronically or by fax
if it's something different than we --
MR. MALEK: I'm with Mutual of Omaha. That's
only for subsequent, after you've already enrolled everyone.
You can use that as an option, but it's not -- we typically
go out and do it ourselves.
MS. NEMEC: Okay. But after you enroll --
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and new employees?
MR. MALEK: Right.
MS. NEMEC: How would you do --
MR. MALEK: Well, you have an option to do it
a bunch of different ways. You can either have us come from
time to time and have us --
MS. NEMEC: So you'd be willing to come --
you'd be willing to come once a week to enroll new
employees?
MR. MALEK: Well, probably wouldn't be once a
week. If you don't hire -- if you don't hire anybody in
that week, there probably wouldn't be any reason to come
out.
MS. NEMEC: Well, obviously, but if we do --
MR. MALEK: You just have to let us know when
you hire someone; we'll enroll them.
MS. NEMEC: This is a very big concern of
mine. We would have to have an agreement that they would
come enroll these employees, because of the different types
of insurances that they're able to select.
COMMISSIONER WILLIAMS: They have an office
locally?
MS. NEMEC: No, they don't.
COMMISSIONER WILLIAMS: Nearest office would
be San Antonio?
---_5-03
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MR. WALLACE: I'm in Seguin. I'm Don
Wallace, Wallace and Associates. I have two service reps
that could come cut once a week and enroll.
MS. NEMEC: The other thing that I needed
clarified in this is under Banking and Funding. It said
that checks would be -- or benefit payment referred to the
customer's name, that the benefit payment would be made
payable under the customer -- to the customer's name.
Everywhere else in here, when it refers to customer's name,
it refers -- "customer's name" is referring to Kerr County.
And so I need clarification, when you say customer's name,
are you meaning Kerr County or are you meaning the
individual?
MR. MALEK: Are you talking about the checks?
Where the checks go? The checks go to wherever the provider
-- the provider and/or the employees.
MS. NEMEC: We don't have to do it? You
dent send us -- okay, that's what I needed clarification on
that one. The other thing that I saw in there -- and you
can answer this, too -- is that it had where there were
several employees that were at select risk, and that they
would be need to be evaluated further to see if they would
even be covered under the stop loss. Has -- and I know that
we prcvided some information already on that. Was that put
in there before you received this information, or is there
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stiii going to be further information that's going to be
needed on those employees?
MR. MALEK: We require a disclosure, but we
have all the information we need to accept the risk, so our
rates are firm. We're not going to change them.
COMMISSIONER LETZ: I have a quick question,
just kind of on that point, just iri general. How d~ -- Yiow
are preexisting conditions treated when we change companies?
I mean, do the employees, you know, have to get reexamined,
basically? If they have, like, a heart ailment now, but
they didn't when they started with our current providers, is
that going to be a preexisting condition with the new
provider? Or --
MS. NEMEC: It -- as far as I know, it would
not be a preexisting condition. However, those that are
preexisting conditions and that have high risk is what I'm
asking about there.
MR. MALEK: I think~t has
MS. NEMEC: Some will exclude those, and we
need to make sure that that doesn't happen with any of our
employees, 'cause there's several that are high-risk.
COMMISSIONER WILLIAMS: And the answer is?
MS. NEMEC: Excuse me?
COMMISSIONER WILLIAMS: And the answer is?
MS. NEMEC: The answer is, on his policy, I
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bel~eve is that thewr're all covered with the rates that they
submitted.
MR. MA~EK: Right. We haven't excluded
anybody. We haven't lasered anybody out.
MS. NEMEC: Okay. Okay. The next one that
that they gave a proposal to Bryan Finley and Associates,
and Rhonda Taylor, which is this cne right here. That one
had several things listed on there that concerned me. It
said proposal rates are based on the following: Enrollment
to occur by 12/10/03, offer guaranteed until 12/1/03. And
then it says that the retirees would pay the same as active
employees, regardless of the age. Right now our retirees
pay a -- they have a substantial discount if they're on
Medicare, Medicaid; I get those wrong all the time, but they
only have to pay $105. And with -- from what I read on this
plan, is that they would have to pay the same as if they
were a regular employee, which would be $300, $400. That --
that, to me, I just think the retirees would have a real
hard problem trying to do that. "Decisions made less than
30 days prior to your anniversary date may result in delay
of implementation of benefits." It just pointed that out in
their proposal, and I believe that this would probably be
the same fen any other type of insurance. Being that we're
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in this late date, trying to implement a new policy would
prcbably delay cur benefits for our employees. The next one
is --
MR.. NORWOOD: Barbara, may I comment? I'm
Bill Norwood from the Texas Association of Counties, and our
prcposal on County Choice does have the warning -- I agree
with what you said about if you go past 30 days cn any
carrier, the chance of your drug cards being completely
perfect, all your ID cards being in the hands of the
employees, all the computers perfectly set up so that when
the doctor calls it in -- that's not very likely to happen.
And so we're perfectly willing to enroll up till the end of
the year, as long as the County doesn't mind the -- we have
doctors calling our office and that sort of thing to verify
benefits, because it's ycir.g to be -- with any carrier at
this late date, it's going to be very much a manual process
for a little while.
MS. NEMEC: And we've been through this
before, and is it a nightmare fcr employees as well as our
office.
MR. NORWOOD: It's a nightmare. The only
solution~s,~t has to happen earlier.
MS. NEM~C: Right.
MR. NORWOOD: The other thing is, on the
retirees, this is something that, really, we're talking

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about. We use the same actuarial firm, as the State of
Texas; I have access to the State of Texas claims
information, which uses the same Blue Cross/Blue Shield
network that we do, so when I look at their retirees, I'm
looking at our retirees. And a retiree costs exactly the
same as an active employee, and the reason for that is that
the retirees spend 50 cents out of every dollar on
prescription drugs, whereas your actives, on the average,
only spend about 20 to 22 cents. And so, in the big
picture, looking at the average age employee, in the mid --
early to mid-40's, let's say, and average county, versus
your average retiree, if you're self-funded, you may only be
charging those retirees $105, but the County is picking up
the rest of the cost. And if you only have three or four
retirees, you cou,~d prove my statement right or wrong,
deper.dir_g on what your luck has been, but if you look at a
large number, looking at the state as an example, they cost
the same right now. In the future, if prescription drugs
keep going up mere than medical, they'll cost more. So,
that's why we say the County is welcome to subsidize that.
We don't have tc; charge it to the retirees, because you're
subsidizing it right now.
MS. NEMEC: Right. And -- you're right, and
that was a decision that the Court made. It was just a
benefit to our retirees for working as long as they have.
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And, ycu kncw, once they get to that retiree age and the --
they don't have all the income that a working employee might
have, and that was just a decision the Court made several
years ago, to have that benefit for them.
MR. NORWOOD: And many counties in the state
are doing exactly the same thir_g, and we're happy to
participate with that.
MS. NEMEC: Okay. The next one is Greentree.
This was submitted to us by Bryan Finley and Associates.
That one also -- it has five employees requiring claim
details, which means select risk employees, and I'm
concerned about that, if that's already been done, if the
figures are firm, or is that subject to change based on
further evaluation on our high risk employees?
MR. LINDSEY: Excuse me. That plan is
underwritten by Mutual of Omaha, and there are disclosure
statements. There will be a disclosure statement with
anyone you take that's going to look at these things.
There's no --
BUDGE TINLEY: You'll need to speak up so
that the reporter can hear you and we can hear you up here.
And would you identify yourself, please?
MR.. LINDSEY: I'm Bill Lindsey of Greentree
Administrators. This is a disclosure statement in my
proposal you're 1ook~ng at. That is going to be required,
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and until the quote is firmed, if somebody runs into the
back of a truck between now and the end of the year, you got
a problem. Our --
MR. NORWOOD: Mr. Lindsey, for what it's
worth, Texas Association cf Counties does not have a
statement like that required, because we're a member of a
pool. Ours is fine as it is.
MS. NEMEC: Thank you. Okay. That was the
only question I had or. that one. And, like I say, I'm sure
that if an insurance consultant who does nothing but this
reviews th~s, they'll have many more questions than what I
picked up from them. The next proposal is from Employee
Benefit Administrators. This was submitted to us by Bryan
Finley and Associates. This is our current. plan that we are
with now. Because I'm familiar with it and I -- and I know
how it works, I have no questions cn this one. The last
thing we have here, in cur -- in the bid package that I sent
out, I asked for the brokers that were going to submit
proposals to us to fill out a questionnaire -- broker
questionnaire, so the Last two items that I have here are
the manes that were turned in. One was turned in by Bryan
Finley and Associates, and the other one was by Wallace and
Associates, and those were the only two that I received,
other than the insurance agencies that filled theirs out.
Okay. If you move or_ to the next page, the next page is
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just a table of contents on what's to follow, so you might
want to just turn over to the following page, and I'll let
you know what it is that you're looking at -- or the page
after that. The first stapled page is the proposal
submitted by Mutual of Omaha. Those are the rates there
that you see. On the last four pages, three pages from the
very last or.e, I am real concerned about the co-pay for the
prescription drug. That is a lot higher than what our
employees are paying now. Actually, it's on the -- the
mail-in that I'rn concerned about. And that would just be
for the brand name. If anybody wanted brand name right now,
we pay $40; that one gees u~ to S?0.
JUDGE TINLEY: Show me again where you are
on --
MS. NEMEC: Okay.
JUDGE TINLEY: -- the information.
MS. NEMEC: If you look at this page where it
says Plan Summary, Prescription Drugs.
COMMISSIONER LETZ: Page 23.
MS. NEMEC: Under Brand Name, mail-in order.
JUDGE TINLEY: Can you give me a page number?
COMMISSIONER [niIT~LIAMS: Says 23 on the
bottom, Judge.
JUDGE TINLEY: Okay.
P~1S . NEMEC : Page 4 .
And then, depending on
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what plan you have, it also can go up to $9C for that
name-brand prescription that now we have a benefit of $30.
So, basically, what I'm trying to say is that the
nrescripticn cc-pay concerns me, if our employees will be
able to afford that.
JUDGE TINLEY: What's the difference between
formulary and not formulary?
MS. N~MEC: I believe that drugs are rated at
a different -- I don't know how different -- level, and
there are some that fall into formulary and nonformulary.
Is that -- you want to explain it?
MR. MALEK: That term, "formulary" drugs are
basically a predetermined ]ist that drug companies have
given us lower pricing on, and so you are -- you basically
get a lower co-pay if you use drugs on that list.
Brand-name drugs are just kind of the opposite; there's no
discounts on them, and they cost a lot more, and so the
co-pays on teem are higher. So the idea is, you are -- are
steering people toward using formulary drugs.
JUDGE TINLEY: What would fall under
nonformulary drugs, and what percentage would fall under
that?
MR.. MALEK: An example would be -- like,
Celebrex would be a nonformulary drug. It's -- I think the
prescription on Celebrex is about $90, and there are other
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alternatives teat are similar to Celebrex that you can get
on a formulary that would be significantly less, a lower
cost, that do basically she same thing. So, that's kind of
the -- the theory behind it. Ir_ terms of how many drugs are
formulary versus brand-r_ame drugs, it varies a lot, but I
would say about Yialf of your drugs are going to be formulary
drugs. The rest wi11 be divided between. generic and
brand-name.
COMMISSIONER WILLIAMS: How would the insured
-- the insured's doctors or tre insured's pharmacist know
what's on your formulary or your ncnformulary drug list?
Sounds like a moving target to me.
MR. MALE K.: They all know what it is. It's
all on -- it's all computerized, and they're pretty
standard. I mean, there are some variances between
different companies, but for the most part, most formulary
drugs are the same for just about most prescription drug
cards. They're very similar, so pretty much everyone knows
what they are. It is a little bit of a moving target, but
for the most part, they're the same.
MS. NEMEC: Okay. The next one --
COMMISSIONER LETZ: Barbara?
MS. NEMEC: Yes?
COMMISSIONER LETZ: Could you, or maybe the
Mutua~ of Omaha represer_tative, explain the last page, make
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sure I understand what I'm locking at? This -- going over
the --
MS. NEMEC: Rate summary, stop loss?
COMMISSIONER LETZ: Yeah, just the summary,
the rate summary page. Basically, what it's costing the
County, what we get for that money.
MR. MALEK: Well, basically, it's a summary
of all your costs ccrr.bined together on how much it's going
to cost, your worst-case scenario. And if you look at all
the different -- there's, like, three parts to what you
really pay for. One is what we call fixed costs, and that's
the cost to pay clams, the cost to pay for all the programs
you have. Let's say in our case we have disease management
in t}sere; that's a program that we have that we help control
costs. That's a part of it. The second part of it is in
the stop loss or the reinsurance cost, and there's two parts
to that. The specific reinsurance, that means any claim
that goes over -- and I believe in this case, it's
$40,000 -- is reimbursed by Mutual of Omaha up to a million
dollars, ckay? Sc any claim that goes over $40,000 is
reimbursed by the insurance company. And then, lastly -- or
that second part of that reinsurance is the aggregate. What
we do is we give you factors. In this case, you have three
different plans, so we've divided it into three different
factors. And you total those up, and if your dollar amount
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goes above that -- in this case, about a million, three,
you're talking about -- if -- if your total dollars payout
goes over that million, three, then it's all Mutual of
Omaha's money. That's the most that you can be liable for.
COMMISSIONER WILLIAMS: How does that
compare, for example, agair_st what we're currently liable
for?
MS. NEMEC: Vuell, in -- in reviewing all
these proposals, this is the part where I feel an insurance
consultant could do a spreadsheet to show you all just what
is being proposed and, you know, what is -- what falls under
the aggregate, what falls under the different things that
you're looking at there with one spreadsheet showing
everything. I mean, if it was me, just glancing at the
nurr,bers and ;ust looking at the numbers, to me, Employee
Benefit Administrators' numbers look better than the others.
And I'll elaborate more on that when we get to their plan.
O'.~ay, the next proposal that's stapled there is County
Choice. Again, on that or.e, on the very last page, if
you'll see -- look at the very last page, the mail service
prescription drug card for the nonpreferred brand, that's
$70 co-pay, to where it's -- now the employees are paying
$25.
MR. NORWOOll: Barbara, may I make a comment
on that?
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MS. NEMEC: Yes, sir.
MR. NORWOOD: To help the -- the break-even
for mail-order is about a two times co-pay. In other words,
if you give the employees three months of drugs for one
month's worth of co-pay, the County's really buying another
month. Ar_d so we've structured ours to be break-even for
the Ccunty, and you still give the employee a one-third
discount, as opposed to if they went to the pharmacy.
Because y'all are a self-funded plan, if you want to have it
be structured the same as you have now, that's okay with us,
but our standard offering is one that's cost-mutual to the
cour_ty. As it stands now, every time somebody mail orders,
the County's picking up one month worth of drugs. So, it's
simply a county commissioners court decision, and we'll do
whichever you prefer.
MS. NEMEC: That is correct. And at one
time, I did an evaluation, a survey, whatever you want to
call it, on the amount of money that employees were spending
on prescriptions and the salary that they were receiving and
how much they would end up with at the end of their payday
with what they spent on their prescriptions and what they
received in salary, and it was really surprising to see that
if we raised those rates, ho~,a much take-home pay the
employees would receive. So, that is a court decision.
We've tried to keep it at the rate that we have it for that
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reason. But, like the gentleman said, that can always be
changed, and that is something that the Court could decide
on what to do about that.
JUDGE TINLEY: Do any of these plans that are
not fully insured have a maximum contribution that we've got
to make each month so that we've got a -- we've got more or
less a level cash flow basis? I think there's a term in the
'ndustry; I'm not sure exactly what it is, but --
MS. NEMEC: They all recommend an amount of
what needs to be funded for the plan to be successful. And,
again, that funding level is something the Court could
change also, as far as how much cost goes to the employee
and how much goes to the County.
JUDGE TINLEY: Well, I understand that they
all recommend, but if there's an inordinate amount of claims
in one month, and that's within the -- within the
specific -- there could be a horrendous amount required to
be paid in a single month.
MS. NEMEC: Right.
JUDGE TINLEY: A very short period of time,
without some sort of a -- a cap on that, and do any of these
plans -- and these gentlemen may have to tell us that. I
think there's a term in the industry Ltiat I'm. not familiar
with what it is, but -- but it -- it camas under your --
under your self-insured programs what you've got to pay in
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each month.
MS. NEMEC: Right, that's correct. And that
-- again, this is where a knowledgeable consultant can look
at these plans, can look at these claims and -- and evaluate
if these numbers are going to be true numbers to be able to
fund our plan.
MR. ROTHWELL: Judge, what you're referring
to is a monthly accommodation cap.
JUDGE TINLEY: Is that what we call it?
Okay. Which of these plans, if any, have a monthly
accommodation cap? Blue Cross --
MS. NEMEC: I think they all do.
JUDGE TINLEY: -- Blue Shield? Mutual,
under -- under the Z~Tallace b1 d, and Employee Benefit
Administrators. Those three have a mor_thly accommodation
cap? Okay.
COMMISSIONER WILLIAMS: Question.
		MS. NEMEC:	Yes?	
		COMMISSION	ER WILLIAMS:	The County Choice,
Page 1	states	the various	types of in	surance choice -- 300,
1,100,	1,200	-- and rates	employee, employee and child, so
forth	and so	on. Why do	those -- are	those rates higher
than -	- than	are shown on	Page 2 for	the same thing?
		MR. NORWOO	D: I should	probably answer, since
it's our proposal.		
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MS. NEMEC: Please do.
MR. NORWOOD: We were requested to look at --
MS. NEMEC: This is fully insured?
MR. NORWOOD: On the fully insured, we gave
two sets of rates; they're 2 percent different. One's for
the short year and one's for a full year. I think y'all
wanted to move the anniversary tc 10/1, so we gave you the
choice.
MS. NEMEC: Right. Any other questions on
that proposal?
COMMISSIONER WILLIAMS: Probably about a
hundred or sc, but I don't know them all yet.
MS. NEMEC: Save them. Okay. Now for
Greentree. This was -- okay. Aga~n, just observation, the
prescription card cost doubles or. there. The final page is
the final -- last four pages are frcm Employee Benefit
Administrators, which is our current plan.
COMMISSIONER WILLIAMS: Is that -- are you
going to the last stapled deal?
MS. NEMEC: Last four pages.
COMMISSIONER WILLIAMS: Okay.
MS. NEMEC: And I'm sorry that these are all
in different texts. I just took copies off their proposals,
and that's what I've turned in to ycu. This is what
Employee Benefit Administrators submitted to us. Sometime
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last week -- Thursday, I believe -- I did get a call from
Mr. Bothwell asking -- he had done some more research, and
he was able to adjust the numbers a little bit, so he asked
me to change those numbers.
JUDGE TINLEY: What -- just -- just a moment.
Just a moment. We're looking at the last few pages where
there's a bunch of interlined numbers?
MS. NEMEC: Right.
JUDGE TINLEY: Ckay. And the numbers that
were interlined were not the ones that were submitted to the
original bid?
MS. NEMEC: No, they were not. That's what
I'm explaining. Mr. Bothwell called. He -- there were some
extra funding -- he may be able to explain it.
JUDGE TINLEY: Excuse me. Excuse me, I -- I
don't think we can consider these numbers that have been
interlined since the bids were submitted and opened.
MS. NEMEC: Well, these are Requests for
Proposals, so these numbers can be changed. And so my
explanation to y'al~, as I was saying, was that I got a call
to charge these numbers. I do not change these numbers.
They're submitted by the insurance company or the broker.
So, he came down to the office, took his copy, and these are
the numbers that are reflected on here.
JUDGE TINLEY: Okay.
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MS. NEMEC: I did mot touch these numbers.
JUDGE TINLEY: Your statement is that the
numbers were placed on here by --
MS. NEMEC: Mr. Rcthwell.
JUDGE TINLEY: -- by him, by Mr. Rothwell?
MS. NEMEC: Yes, sir.
JUDGE TINLEY: After the bids were opened --
MS. NEMEC: Yes, sir.
JUDGE TINLEY: -- by this Court?
MS. NEMEC: Yes, sir.
JUDGE TINLEY: Okay.
COMMISSIONER WILLIAMS
Wait a minute. Would
the same -- would the same pri~.-ilege be granted all the
others?
MS. NEMEC: Absolutely. If anyone wants to
change their numbers, this is the time to do it. That's why
we're here. These are requests for proposals.
JUDGE TINLEY: I don't think these other
offerers were given that opportunity, Ms. Nemec, and that's
my whole point here.
MS. NEMEC: Well, this is the process, Judge.
They can change the numbers at any time before we bid on
the -- before we award the -- the insurance.
MR. NORWOOD: 262.030 speaks to negotiating
in secret. If we're going to make any changes, we'd
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probably ratter do it there.
MR. WALLACE: We sent some revised numbers,
and I was told they wouldn't be considered.
JUDGE TINLEY: Yeah, there were some numbers
submitted tc me, and I -- I advised Mr. Wallace that, as we
lay them before the Court here tcday, I -- it would be
impermissible for me L~ do that.
MS. NEMEC: That's --
JUDGE TINLEY: If we got to the point later
on where there were going to be -- once we determined that
we were going to negotiate and attempt to obtain best and
final offers, certainly that would be appropriate. But
insofar as what we're laying out here on the table this
morning, I -- I don't think this is appropriate at all.
MS. NEMEC: Well, look at whatever numbers
ycu want to look at. I did not change them; he asked to
change them. That's what I have submitted to you all. Take
the ones that have been changed or the ones that were typed
in as submitted.
MR. ROTHWELL:	Judge, may I	address	that?
JUDGE TINLEY:	I would like	for you	to,
Mr. Rothwell.
MS. NEMEC: And that's all I have. Thank
you.
MR. ROTHWELL: I work with a lot of RFP's,
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and my understanding of an RFP is, once the bids are opened,
any bidder can change their numbers at any time during that
period. Based on a review of the most current things I see
in your current plan, I felt like the change was justified
based on -- based on claims experience through November, and
hat's the reason I called Barbara and asked if it would be
permissible for me to give her some numbers to replace mine
with. And she told me that I would have to come and
physically do that, so I came and physically changed the
numbers to my -- to my current quote. And if we go into a
negotiation, I may have some more charges on a, quote,
secret negotiation basis. These are just pure numbers that
I could make -- my underwriter agreed with them based on
claims experience through November. That's the reason they
were changed.
COMMISSIONER LETZ: I think that the -- I
mean, I don't know the deta~ls of the law. I don't know if
the County Attorney -- if Mike knows the details, but
clearly, if the Judge told some they couldn't change them
and scree were changed, we have to give everyone the
opportunity to change them, without question.
MR. ROTHWELL: I wo~.ild assume, Commissioner,
that if someone had called Barbara ar.d said we would like to
change our numbers, she would have been very receptive to
that.
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COMMISSIONER LETZ: I'm not saying --
MR. ROTHWELL: She was the contact person for
this RFP, and that's the reason I contacted her. She's
MS. NEMEC; If they were sealed bids, then
no, I would have not said, "Come down to my office, make
your changes." But because it was a request for proposals,
anybody could have called me; I would have said the same
thing to them.
COMMISSIONER LETZ: Either way, I think that
if the Court or representative of the Court gave a different
answer to someone who asked, I think that we have to --
MS. NEMEC: Well, there hasn't been very well
communication in all this, I can say that.
MR. MALEK: The problem with that is we don't
have access to the same information, since he's the current
carrier. If he gets updated claims -- well, we don't have
any of that.
MR. WALLACE; We have no way to be able to do
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JUDGE TINLEY: You were having to rely upon
JUDGE TINLEY: On submission.
MR. MALEK; Based on the information they

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were provided, I'm sure they would agree we provided the
best quote at that time.
MR. NORWOOD: I would agree with the
gentleman from Mutual of Omaha. As a matter of fact, there
are run-out claims from 2002 that are not shown in the
exhibits that were provided us, and we've been unable to
obtain those, and yet the T.P.A., I'm sure, is well aware of
what they are.
MR. ROTHWELL: The run-out claims were
included in the aggregate reports that were provided to
everyone.
MR.. NGRWOOD; They were not; they were on a
12/12 basis. And the claims didn't go to 450,000 this
December down to a tenth of that in one month.
MR.. ROTHWELL: No, they didn't, but they
were --
MR. NORWOOD: They weren't there.
MR. ROTHWELL: Okay.
COMMISSIONER LETZ: A timely time for the
County Attorney to enter.
COMMISSIONER WILLIAMS: Oh, yeah.
COMMISSIONER BALDWIN: So, David, what are
your thoughts about this?
MR. MOTLEY: I haven't got any.
MS. NEMEC: That's all I have, as far as -- I

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had made a list of the proposals that were -- the insurance
agencies or the brokers that picked up proposals, and I've
listed them there, and then the ones that returned them, I
just put down the dates here, how everything occurred, just
to show you that there is just not enough time to look at
all this information. And -- and that's why I didn't even
look at the dental proposals. I mean, you don't even have
enough time to really evaluate the medical proposals
correctly, and so I did not even consider any of the dental
proposals that were submitted. You see a name down there,
Don Gray, with his phone number and address. He is an
insurance consultant who does nothinq but review proposals
and makes recommendations on which is the best proposal to
do. I did talk to him Friday. Fe --
JUDGE TINLEY: Who's he affiliated with?
MS. NEMEC: Tommy, do you know who Don Gray
is with? Is he just --
MR. TOMLINSON: By himself.
MR. ROTHWELL: Don Gray works for himself.
MS. NEMEC: For himself.
COMMISSIONER WILLIAT~S: Didn't he serve this
Court on a previous occasion?
MS. NEMEC: Yes, he did. Yes, he did; he
evaluated some other insurance proposals that we had.
COMMISSIONER WILLIAMS: I thought so.
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MS. NEMEC: And made recommendations to the
Court. I was concerned about the timing in all this. He
did assure me that if I would call him as soon as this
meeting would be over, that he would work us in and look at
the proposals this week ar.d come to the court on Monday with
a recommendation.
CCMMISSICNER WILLlAMS: What would --
JUDGE TINLEY: I -- I think it's -- I realize
we're short of time. We were short of time when we started
this process. And that's unfortunate, but we are where we
are. And I knew that we were short of time, and i
appreciate the cooperation of everyone that bid it. And --
and I don't want to see that process and all the effort
that's gone into it just be thrown on the shelf because
we're short of time. I -- I would like to give everyone who
has submitted a proposal the opportunity to work diligently
at giving us their best and final offer or alternative
offer, and submit that to someone who's an unbiased
third-party, not affiliated with anyone else, to give us
something that we can truly rely upon as learned and
reliable in making a decision, because we're talking about
potentially spending $2 million of the Kerr County
taxpayers' dollars, and I think we need t~ give every
consideration that we can, and not be penny-wise and
pound-foolish. So, this -- this gentleman served the Court
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previously?
MS. NEMEC: Yes, sir.
JUDGE TINLEY: Any of you recall the -- was
it a good experience?
COMMISSIONER BAI,DWIN: Excellent experience.
COMMISSIONER WILLIAMS: Very good experience.
MS. NEMEC: Very good experience.
JUDGE TINLEY: If that gentleman will -- will
make himself available to -- to analyze these proposals, as
well as allowing these other offerors to -- or all of the
offerors, as the case my be, ar_d if there's additional
information. they need because of there not being a level
playing field, as it were, we need to do what we can to get
them that information.
COMMISSIONER BALDWIN: I agree.
JUDGE TINLEY: And -- and let's get this
thing done. That's my thinking.
COMMISSIONER WILLIAMS: Judge, I have just an
observation here. I don't -- I don't know that we're
serving any useful purpose by putting Mr. Gray or any other
consultant under the gun to be ready by next Monday, when in
fact we have more time before the end of the year. If we're
going to do it, I'd like to see us do it right. I'd like to
see that, as you put it, the playing field being level,
giving any and all the other bidders the opportunity to
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refresh their numbers based on any late ,information that
might be available to them. That's my sense of it. Whether
the Court wants to hold it up and get it out on the 22nd or
r.ot is up to the Court to decide. I'm going to make a
motion that Mr. Gray be retained by Kerr County
Commissioners Court to evaluate all of the proposals and
accept late numbers, and that we fund this out of
Professional Services, with a top limit of $5,000. May not
exper_d all that, but put it out there.
MS. NEMEC: He said it would be approximately
$3,000. Of course, you know, that's not looking at what I
have.
BUDGE TINLEY: Be money well spent.
MS. NEMEC: I think so two. And I would
like, once he is hired, to do -- to do this; I would like
anybody who is going to change their numbers to deal
directly with him.
COMMISSIONER WILLIAMS: Absolutely.
COMMISSIONER BALDWIN: But we're still going
to ask him to come back. on -- on this coming Monday, one
week from tcday?
COMMISSIONER WILLIAMS: I think we have to
make that decision. And putting him under the gun, I'm not
in favor of doing.
COMMISSIONER BALDWIN: We11, he's willing to
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do that, though. He's the one that said he's willing to do
JJDGE TINLEY: And these offerors -- they're
already past the time frame tc do a normal enrollment, and
they're going to have to be really busting it if they're
awarded on the 22nd. And the sense I've gotten from them is
that they're willing to make that effort. And there`s going
to be some kinks -- and there's goir_g to be some kinks
anyway, probably, but they're willing to bust it. But let`s
get on down the road, and I think that's what we need to do
at this point.
COMMISSIONER BALDWIN: Second.
JJDGE TINLEY: Motion made and seconded to
employ Mr. Gray out of Professional Services at a cost not
tc exceed $5,000, and have him report back to this Court
with his eva,uation of the proposals and any recommendations
he may have, and that he be authorized to submit late
numbers from any or all of the offerors as to their best and
final offers. Is that it?
COMMISSIONER LETZ: That was the motion.
JJDGE TINLEY: Okay. Any questions or
discussion?
COMMISSIONER LETZ: Yeah, I have a question.
Basically, it's to the -- on revising the numbers, does that
provide the other companies enough time to get the
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information they need tc possibly revise the numbers?
'Cause, I mean, they would have to nave that information.
MR. NORWOOD: If the third-party
administrator will provide --
MR. WALLACE: As long as he provides it to us
immediately.
MR. ROTHtn1ELL: Tf I cats get the e-mail
addresses that -- of those that want to get the numbers,
I'll have them sent to them this afternoon.
MS. NEMEC: And I will call Mr. Gray and see
if he warts me to overnight this to him, or if it`s best
that I drive this down to Austin today. I will do that.
COMMISSIONER WILLIAMS: I have one question
to ask with respect to the product that Mr. Gray will put
together and return to the Court. I assume the assessment
or analysis of all these bidders will include the comparison
against the existing policy and --
MS. NEMEC: Absolutely. Absolutely.
BUDGE TINLEY: We have another question back
here?
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COMMISSIONER WILLIAMS: I think I just said
MR. LINDSEY: I -- if I could make a
suggestion, it's that all quotes should be developed off of
your current benefit structure.
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MR. LINDSEY: That's what you -- basically,
what you just said. On the current benefit structure, no
deviation is one. Number two, we got to have claim
information, not only in the aggregate, but we need the
claims information on -- there's about four or five large
claims, and we need the -- the progress -- diagnosis
prognosis on those claims in order for somebody to -- a
carrier to firm the quotes.
JUDGE TINLEY: I thought that -- that we had
previously directed that on the larger significant
claimants, that the diagnosis prognosis be furnished to all
potential offerors.
MS. NEMEC: And it was. And it was.
JUDGE TINLEY: Okay. Thank you, sir. Any
further questions or discussion?
MR. NORWOOD: Unfortunately, if your
suggestions are followed, that cuts Blue Cross/Blue Shield
out entire~y, because the three-tier benefit structure is
very unusual in county government, and they're not set up to
administer that under current parameters. And being an
independent T.P.A., of r_.ourse, you can do any of that. But
I'm not sure what the point is. Tine three-tier doesn't
really serve the board.
JUDGE TINLEY: I think your point is, let the
consultant evaluate based on what's submitted, and I think,
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you know, he can tell the difference between apples and
other varieties of apples, and oranges and apples. And I --
I think that's the job for the -- for the --
MR. NORWOOD: We're fine with that.
JUDGE TINLEY: -- the consultant. Sure. Any
further questions or discussicn? All in favor of the
motion, signify by raising your right hand.
(The motion carried by unanimous vote.)
JUDGE TINLEY: A11 opposed, same sign.
(No response.)
JUDGE TINLEY: That's where we are, then,
which is nowhere yet.
MR. WALLACE: Thank y'all.
JUDGE TINLEY: Let me -- let me -- I assume
on your participaticn form, Mr. Wallace, we've covered what
ycu needed to do?
MR. WALLACE: Right.
JUDGE TINLEY: I didn't see you doing one of
these for me, so --
MR. WALLACE: We're good to go.
JUDGE TINLEY: Okay. I appreciate all of you
fine folks being here today and participating, and I rea~ize
this -- Lhls appears tc be very late and disorganized, and
unfortunately, for the most part, it is, but we're going to
get there. We appreciate your patience and your efforts.

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At this time, we have with the posting the ability to go
into executive session, and so let us do that. We'll need
the County Attorney and his assistant, and the reporter and
the members of the Court.
(Discussion off the record.)
(The open session was closed at 9:59 a.m.,
and an Executive Session was held, the
transcript of which is contained in a
separate document.)
JliDGE TINLEY: Okay. We'll go -- we'll go
back into -- into -- reconvene into open session again.
It's a couple minutes after 11:00. Does any member of the
Court wish to offer a motion on anything that was discussed
in executive session? Hearing none, we'll go back to the
regular agenda, and the next agenda item is consideration
and discussion of implementing burn ban for Kerr County.
Commissioner Letz, I believe you wanted something on that?
COMMISSIONER LETZ: I just -- something that
I was thinking about over the weekend, and I think I talked
to the papers about it a little bit. This time of year is
when agricultural burning takes place, and it's really --
you know, it's very important for agriculture to take place,
but we're also in conditions cf very bad fire danger, and I
don't know which -- you know, which way is heavier. If you
-- the longer -- at some point, a lot of the agricultural
burning almost has to be done or you create other problems
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possibly next summer or down the road. In prior years, I
believe that -- I don't know if it was last year or the year
before, we had a burn ban in the winter, but we also put an
exclusion or an exemption that could be put in that any
agricultural burning done under a prescribed burn plan r_ould
continue. And I just brought -- I'm bringing it up. I
don't know if we want to maybe revisit the burn ban at our
next meeting and put that in there, if we ought to do a
workshop or get some recommendations from the fire
departments and possibly the Parks and Wildlife or Soil
Conservation people, get their advice or_ it, or just leave
it the way it is. I just kind of bring it because I know --
you know, ~ don't think much is going to happen probably in
the last two weeks of December, but come January and
February, these questions are going to come up quite a bit,
and I think we need to be able to -- you know, we'll have
thought about it and addressed them.
JUDGE TINLEY: Are not these prescribed burns
performed under a plan that is prepared and submitted and
approved by -- what is it, farm service agency? Local farm
service agencies or similar federal agency?
COMMISSIONER LETZ: They don't have --
MS. SOVIL: Soil Conservation.
COMMISSIONER LETZ: I mean, you -- the way it
works, you know, people -- and it's mostly ranchers that do
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prescribed burning. Ycu have a burn plan, and the reason
for it is a liability issue to the person doing the burning.
You know, there's a form that you can get from either Parks
and Wildlife or Soil Conservation as to -- you know, you
fill in the blanks, and if you do those things that are not
negligent and the fire departmer_t's aware, you're not liable
for it. I think the time we did it, we may have had a
requiremer_t that the plans had to be filed with the Soil
Conservation people. I can't remember.
COMMISSIONER BALDWIN: I don't know if it had
to be approved, though.
COMMISSIONER LETZ: Or approved by Joe
Franklin.
COMMISSIONER BALDWIN: Filed with them only,
I think.
COMMISSIONER LETZ: Yeah. But, anyway, it's
just -- I'm bringing it up. I don't remember exactly how we
worked it. It could be that -- you know, and you get into a
situation of people that do prescribed burns, there's not a
-- I rr.ean, ycu kind of have -- you prepare your plan for a
set of conditions to exist. Once they exist, you've got to
burn. You can't decide in the morning you're going to run
to Kerrville grid get permission, and then can't find Joe
Franklin, so you got to be able to be flexible enough that
the plan's on file so that -- and, I mean, I don't know of
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any -- I mean, clearly -- well, I don't -- I won't say --
occasionally, a fire can get away from anybody, you know. I
think Bill Armstrong with Parks and Wildlife would be the
first to say that conditions come in that are not predicted
by }he weather service, and all bets are off as to what's
going to happen with a controlled burn.
COMMISSIONER WILLIAMS: Didn't -- last time,
Jon, didn't we -- didn't we set it up so that if Rancher A
had a -- a plan which was filed with Soil Conservation and
represented that to the Commissioner, that they could waive
or they could suspend it on his behalf? Isn't that how we
did it?
COMMISSIONER LETZ: I don't recall that the
Commissioners suspended it. I think that we gave it -- we
pushed the -- you know, if it was filed in an approved plan,
I think we put it off on the -- Joe Franklin's office, Soil
Conservation office, that you had to file a plan with them.
And if they approved the plan, then you could -- they
could -- the ranchers could do it whenever they wanted to
under that -- on the basis of that plan.
JUDGE TINLEY: So, what you're suggesting is
maybe we need to put it on the agenda for next Monday to
consider exemptions fur prescribed burns and --
COMMISSIONER LETZ: Yeah, and a procedure.
JUDGE TINLEY: And the rules and procedures

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COMMISSIONER LETZ: I'll probably visit with
Joe Franklin between now and then and see what his
recollectior_ is. And the ether part of it is burning
coastal fields, which that's -- I quess that's a prescribed
burn as well, really, sort of dealing with the same -- but I
just think we need tc address this, because if we do go into
a very long, dry winter and spring, at some point, some of
these things need to be done. That's all.
JUDGE TINLEY: Anything else on this item?
Anything else to come before the Court at this time?
Hearing nothing further, I will declare the meeting
adjourned. Thank you.
(Commissioners Court adjcurned at. 11:07 a.m.)
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JANNETT PIEPER, Kerr County Clerk
Kath~~~~~~ik, De ut County Clerk
Y p Y
Certified Shorthand Reporter
STATE OF TEXAS
COLNTY OF KERR I
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 16th day of December,

ORDER NO. 28454
TO EMPLOY DON GRAY TO EVALUATE
EMPLOYEE FIEALTFI INSURANCE BIDS
On this the 15a' day of December, 2003 upon motion made by Commissioner Williams,
Seconded by Commissioner Baldwin the Court unanimously approved a vote 3-0-0 To
employ Mr. Don Gray out of Professional Services at a cost not to exceed $5,000, and
have him report back to this Court with his evaluation of the proposals and any
recommendations he may have, and that he be authorized to submit late numbers from
any or all of the offers as to their best and final offers.