ORDER NO. 28708 INTERLOCAL AGREEMENT KERR COUNTY/KERRVILLE AIRPORT Came to be heard this the 12~' day of July 2004 with a motion made by Commissioner Letz, Seconded by Commissioner Williams, the Court unanimously approved by a vote of 4-0-0, the Joint Action Agreement in substance, and direct the City/County committee to revise language appropriately, obtain form approvals, and re-present this for final approval at our second Commissioners Court meeting in July, subject to the County Attorneys approval. .~ ,~~ .7~-. '~- .~ COMMISSIONERS' COURT AGENDA REQUEST PLEASE FURNISH ONE ORIGINAL AND NINE COPIES OF THIS REQUEST AND DOCUMENTS TO BE REVIEWED BY THE COURT. MADE BY: William H. Williams OFFICE: Commissioner, Pct. 2 Commissioner, Pct. 3 MEETING DATE: July 12, 2004 TIME PREFERRED: SUBJECT: (Please be specific). Consider, discuss, and take appropriate action on Interlocal Agreement for Joint Management of Kerr County/Kerrville Airport. "Joint Action Agreement." EXECUTIVE SESSION REQUESTED: NAME OF PERSON(S) ADDRESSING THE COURT: Commissioner Williams, Commissioner Letz. ESTIMATED LENGTH OF PRESENTATION: 15 Minutes 1F PERSONNEL MATTER-NAME OF EMPLOYEE: 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: 5:00 P.M. previous Tuesday THIS REQUEST RECEIVED BY: THIS REQUEST RECEIVED ON: All Agenda Requests will be screened by the County Judge's Office to determine if adequate information has been prepared for the Court's formal consideration and action at time of Court meetings. Your cooperation is appreciated and contributes toward your request being addressed at the earliest opportunity. See Agenda Request Rule adopted by Commissioners Court. Draft #7 -June 29, 2004 INTERLOCAL AGREEMENT FOR JOINT MANAGEMENT OF KERR COUNTY/KERRVILLE AIRPORT "JOINT ACTION AGREEMENT" This agreement is made by and entered into between Kerr County, Texas (hereinafter "County") and the City of Kerrville (hereinafter "City"), hereinafter sometimes jointly referred to as "Governing Bodies," on the day of , 2004. WHEREAS, County and City jointly own the real property upon which is located the KerrvillelKerr County Airport ("Airport"); and, WHEREAS, County and City have heretofore, by their actions, jointly managed said Airport by virtue of Tex. Rev. Civ. Stat. Ann. Art 46d, Municipal Airport Act ("Act"), the statutory predecessor to Chapter 22 of the Transportation Code ("Code"); and WHEREAS, said management practice has been in effect for over 33 years without amendment or modification, and it appears to both parties that said practice therefore needs to be updated and formalized to bring it into compliance with the terms of the current Code; WHEREAS, County and City find that it is in the best interests of the citizens of County and City at this time for the Airport to continue to be managed on a joint basis; and WHEREAS, the Code contemplates joint operation of Airport facilities by two governmental entities and provides a statutory framework for an agreement by which the two jurisdictions may continue to jointly manage the Airport; NOW, THEREFORE, in consideration of the promises, covenants and agreements contained herein, the parties hereto mutually agree as follows: 1. Statutory Basis for Agreement: This agreement is made based upon and pursuant Subchapters A, B, and D of the Code, as currently in effect and as it may hereafter be amended. 2. Duration of A~-eement: This agreement shall be effective on the date it is fully executed by the parties hereto, and shall terminate on September 30, 2044. Thereafter, this agreement shall automatically be renewed for additional successive 40-year terms, unless terminated earlier as provided for herein. 3. Proportionate Interest: Each party hereto own an equal, undivided interest in certain owned real property located within the bounds of the Airport, and in the fixtures located on such property. Based on such equal ownership interest, each party shall have an equal right to development and approval of a management contract for services related to managing the day-to- day operations of the Airport and shall share equally in all of the costs, expenses and revenues associated with operating, regulating, improving, equipping, and protecting the Airport. 4. Joint Board: Upon execution of this agreement the existing Joint Airport Advisory Board previously established under the Act is hereby permanently dissolved and a new Joint Airport Board ("Board") is established under the applicable provisions of Chapter 22 of the Code. (a) Composition. The Board shall be composed of two members of the County Commissioners Court ("Court"), two members of the Kerrville City Council ("Council"), and three at-large members. (b) Appointment and Terms. The process for appointment and terms of the Governing Body and at-large members shall be as designated below for each: 1. Governing Body Appointments: i. The Governing Body of each party shall appoint from their membership, by order or resolution, their respective Board member representatives ("Governing Body Representatives") for a term of two years. ' ii. Upon initial appointment by each of the governing bodies each shall appoint one member for two years and one member for one year establishing staggered terms; thereafter, each term shall be for two years as established in (i), above. iii. In the event an appointed Governing Body Representative leaves or is suspended/removed from office on the Court or Council for any reason such Board member's term shall immediately terminate on the Board. iv. Replacement of Governing Body Representatives shall be in the same manner and under the same qualification as described above with such replacement being appointed to fulfill only that portion of the remaining term with full term appointments occurring at the time a full two year term would have otherwise ended. v. Removal of one or both Governing Body Appointments may be accomplished at any time by that member's Governing Body, by a majority vote of its members, if that Governing Body finds such removal to be appropriate under the circumstances then existing. 2. At-large Appointments: i. The Governing Body Representatives, by a majority vote, shall submit a nomination for each of the three at-large positions to the governing bodies of the City and County for consideration and approval, by concurrent order or resolution. Nominees with experience/expertise in the aviation industry, including aircraft owners, may be given preference over nominees with no such experience/expertise. The approval of both governing bodies is required to constitute appointment to the Board as an at-large member. Necessary appointments shall be made on or before June 1 of each year and shall be for a term of three years, except that the initial appointments shall be as provided for in ii, below. JOINT ACTION AGREEMENT - KERRVILLE/KERR COUNTY AIRPORT Page 2 of 2 ii. The Governing Body Representatives' initial submission to the governing bodies shall recommend appointment of one at-large member for one year, one at-large member for two years, and one at- large member for three years, thereby establishing staggered terms. Approval of each Governing Body for the initial at-large appointments shall include provision for such staggered terms. Future terms for all at-large appointees shall be for three years each. iii. Upon receipt of the list of recommended at-large members by each Governing Body, the Governing Body has 30 days within which to approve the recommended list of at-large appointees. If any recommended at-large appointee is either rejected or not voted on within the 30-day period, this nomination shall be considered rejected, and the Governing Body Representatives, by a majority vote, shall nominate additional persons for the unfilled positions. Should the governing bodies not appoint such nomination within 30 days after the second submittal, the Governing Body Representatives shall have the authority to fill such positions with the nominee(s) of their choice, by majority vote of the Governing Body Representatives, whose decision will be final. iv. Replacement of at-large members shall be in the same manner and under the same qualification as described above with such replacement being appointed to fulfill only that portion of the remaining term with full term appointments occurring at the time a full three year term would have otherwise ended. v. At-large members may be removed by a majority vote of the Governing Body Representatives to the Board, for any reason, but such member may continue to serve until his replacement has been appointed. vi. At-large members maybe appointed for no more than two consecutive full three-year terms. Such member shall be eligible for reappointment as an at-large member again after an absence of one calendar year from the board. (c) Officers. The Board shall have a President and Vice President who shall be selected from the Board's membership, and shall be appointed by a majority vote of all the members of the Board. The term for each position shall be for two years and no member may serve more than two consecutive terms in the same office. (d) Compensation. Service on the Board is without compensation. (e) Powers and Authority. In pursuing its duties, the Board may exercise on behalf of the Owners any power possessed by either constituent entity and those specifically provided by the Code, including the power to lease property and facilities and to institute or defend legal actions. However, in no case shall the Board be authorized to impose a property tax (fees exempted), sell bonds or otherwise enter into other debt instruments, dispose of Airport property, or exercise the power of eminent domain JOINT ACTION AGREEMENT - KERRVILLE/KERR COUNTY AIRPORT Page 3 of 3 without the prior written consent of the governing bodies. All rules and regulations adopted for the proper operation of the Airport are subject to the approval of the governing bodies. In order to carry out the day-to-day management of the Airport, the Board is hereby authorized to enter into a Management Contract with other Local Governments, as that term is defined in the Code, to manage the day-to-day operations of the Airport as its agent. Such Management Contract shall not be effective unless and until it is approved by the governing bodies of the County and the City as is contemplated in paragraph 3 of this agreement. (f) Meetings. The Board shall meet on dates and times as agreed upon by the Board members, which schedule may be changed from time to time; however in no event shall the Board meet less frequently than once per calendar quarter. All such meetings of the Board shall be held in accordance with the Texas Open Meetings Act. (g) Reporting. The Board shall quarterly report on the operations of Airport to the Governing Bodies. 5. Budget. The Board shall annually develop, through its Management Contract provider, and approve a budget for Airport operations for submission to the Court and the Council for approval. (a) Submission Required. Such budget must be submitted to both governing bodies not later than July 30~' of each for approval no later than September 31 of each year. (b) Joint Fund. The budget shall establish a fund to be maintained for the purpose of depositing all revenues of the Airport, including each agency's share of the operating costs. This fund shall be kept and managed by the Management Contractor. (c) Content and Format. The budget shall substantially conform to the format and line item content as depicted in Exhibit "A". (d) County and City Funding. The formula for annually calculating the funding amount to be requested from each agency, if required, shall be as follows: (1) Total of all revenues of the Airport, as reflected in the Airport budget, not including participating agency contributions; (2) Less total expenses, including the cost of grant match requirements and Management Contract. (3) Should a negative sum occur one-half of such sum shall be the funding amount requested from each participating agency. i. Should a positive balance occur the Board may, with approval of the governing bodies, establish a Fund Balance with a maximum balance of 5% of the total expenditure budget for any given fiscal year with a maximum cap of $500,000. Should the Fund Balance exceed 5% or $500,000 the Board may also establish Capital Improvement and/or JOINT ACTION AGREEMENT - KERRVILLE/KERR COUNTY AIRPORT Page 4 of 4 Replacement Funds as deemed necessary for future development and operations of the Airport, subject to the approval of the Governing Bodies. ii. Should a Fund Balance not be utilized by the Board or approved by the governing bodies such Fund Balance shall, at the discretion of the governing body, either be credited to the participating agencies participation amount or returned to the agency 6. Amendment: This agreement may only be amended by written agreement, approved by the governing bodies of each "Constituent Agency", as defined in Section 22.071 of the Code, and filed among the official records of such party. 7. Termination of Agreement Prior to Expiration: This agreement may be terminated at any time by either party upon written notice given at least 90 days prior to the date of termination. 8. Allocation of Costs and Ownershipp Upon EarlyTermination or Failure to Adopt Budget: a_ Allocation of Funds: In the event of the termination of this agreement by either party prior to its expiration date, the terminating party shall be responsible to the other party for its full share of the operating expenses of the Airport, as approved in the Airport budget, for the remainder of the fiscal year in which the agreement is terminated, regardless of the actual effective date of the termination. In the absence of other evidence to establish the amount that the terminating party will be required to pay in such event, the amount remaining they would otherwise be responsible for in the approved annual Airport budget at the time of termination shall be considered the amount due under this provision. b. Allocation of Assets: In the event of the termination of this Agreement by either party prior to its expiration date, unless a written agreement is made between the parties for other allocation of assets, the terminating party shall have 30 days within which to remove its personal property from the Airport premises, but all buildings and fixtures shall remain, and the terminating party shall have no further claim to such buildings and fixtures or to any monetary credit or consideration for the value of any or all of such fixtures. Allocation of Real Property: i. In the event of the termination of this Agreement by either party prior to its expiration date, unless a written agreement is made between the parties for other disposition of the real estate, the terminating party shall execute a deed within 90 days after the date of termination transferring all of its interest in the Airport real property to the party continuing to own and operate the Airport, and the terminating party shall have no further claim to such real property or to any monetary credit or consideration for the value of such real property or the fixtures contained thereon. ii. Failure by either party to adopt a budget on or before September 30 of any year shall constitute a breach of this agreement. In the event that either party fails to adopt a budget on or before September 30 of any year, and further fails to remedy such failure within 30 days after receiving written JOINT ACTION AGREEMENT - KERRVILLE/KERR COUNTY AIRPORT Page 5 of 5 .* notice from the other party, unless a written agreement is made between the parties for other disposition of the real estate, the party that failed to adopt a budget shall execute a deed on or before December 31 of that same year transferring all of its interest in the Airport real property to the party continuing to own an operate the Airport, and the breaching party shall have no further claim to such real property or to any monetary credit or consideration for the value of such real property or the fixture contained thereon. d. Existing Leases and Non-owned Buildings and Fixtures: The parties hereto acknowledge that at the time of execution of this agreement, there are existing leases and buildings and fixtures located on the property that are owned by lessees. Any allocation or division of assets made pursuant to the provisions set out above shall not affect these or future leases, or ownership of buildings or fixtures by such lessees. Any lease agreements in existence at the time of any termination contemplated herein shall continue in full force and effect, as between such lessee(s) and the party continuing to own and operate the Airport. The terminating or breaching party shall have no further claim to such lease(s) or to any monetary credit or consideration for the value of such lease(s). e. Damages for Failure to Comply with Termination Provisions: In the event that the terminating party fails or refuses to comply with its duties under the foregoing provisions regarding allocation of costs and ownership within the time frame(s) allowed, such terminating party shall become liable to the non-terminating party for all damages, costs and expenses, including attorney fees, incurred by the non- terminatingparty in securing compliance with said terms. f. Sale by Non-Terminating Party: If the party retaining possession and ownership of the airport after termination of this agreement sells any or all of the airport property within 5 years after the date of the termination of this agreement, that party shall reimburse the other former owner/party for its fair share of the proceeds of the sale. Such fair share of sale proceeds shall be determined as follows: The share of sale proceeds due to the former owner/party shall be equal to % of the sale proceeds, minus the annual budget amount for operational expenses and the cost of any and all capital improvements made on the airport property each of the years during the 5 year term by the remaining owner. Should the sale be made after the 5-year term all proceeds from the sale shall be solely that of the remaining owner. 9. Notices: Any notice required or permitted to be given hereunder or under the laws of this state shall be given in writing and may be given via the United States Postal Service, certified mail, or commercial courier service, addressed to the applicable party at the address set forth below: JOINT ACTION AGREEMENT - KERRVILLE/KERR COUNTY AIRPORT Page 6 of 6 City: City of Kerrville Attention: City Manager 800 Junction Highway Kerrville, Texas 78028 County: Kerr County, Texas Attention: County Judge Kerr County Courthouse 700 Main Street Kerrville, Texas 78028 10. Approval of Agreement: This interlocal agreement will become effective upon the approval and execution of both governing bodies, in accordance with Texas law. 11. Governing Law and Venue: This Agreement and all of the transactions contemplated herein shall be governed by and construed in accordance with the laws of the State of Texas. Venue for any cause of action shall be in a court of competent jurisdiction in Kerr County, Texas. 12. Severability: If any provision of this Agreement is invalid or unenforceable, this Agreement shall be considered severable as to such provision, and the remainder of this Agreement shall remain valid and binding as though such invalid or unenforceable provision were not included herein. 13. Captions: Section headings are inserted herein only as a matter of convenience and for reference, and in no way defines, limits or describes the scope or intent to any provision herein. 14. Use of Language: Words of any gender used in this Agreement shall be held and construed to include any other gender, and words in the singular shall be held to include the plural, unless the context otherwise requires. 15. Entire Agreement: This Agreement embodies the entire agreement between the Parties, and supersedes all prior agreements and understandings, whether written or oral, and all contemporaneous oral agreements and understandings relating to the subject matter hereof. This Agreement shall not be changed, modified, discharged or extended, except by written instrument duly executed by the Parties. The parties agree that no representations or warranties shall be binding upon either party unless expressed in writing in the aforesaid Agreement. This agreement may be executed in multiple counterparts, each of which constitutes an original. JOINT ACTION AGREEMENT - KERRVILLE/KERR COUNTY AIRPORT Page 7 of 7 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be legally executed this day of , 2004. CITY OF KERRVILLE Bv: Stephen P. Fine, Mayor ATTEST: Brenda G. Craig, City Clerk COUNTY OF KERR, TEXAS By: Pat Tinley, County Judge H. A. "Buster" Baldwin, Commissioner Pct. #1 William H. Williams, Commissioner Pct. #2 Jonathan Letz, Commissioner Pct. #3 Dave Nicholson, Commissioner Pct. #4 ATTEST: Jannett Pieper, County Clerk APPROVED AS TO FORM: Michael C. Hayes, City Attorney APPROVED AS TO FORM: David M. Motley, County Attorney JOINT ACTION AGREEMENT - KERRVILLE/KERR COUNTY AIRPORT Page 8 of 8 THE STATE OF TEXAS § COUNTY OF KERR § This instrument was acknowledged before me on this day of 2004 by PAT TINLEY, County Judge, for COUNTY OF KERR, TEXAS, on behalf of said COUNTY OF KERB, TEXAS. Notary Public, State of Texas THE STATE OF TEXAS § COUNTY OF KERR § This instrument was acknowledged before me on this day of 2004 by H. A. "BUSTER" BALDWIN, Kerr County Commissioner, Precinct #1, for COUNTY OF KERB, TEXAS, on behalf of said COUNTY OF KERR, TEXAS. Notary Public, State of Texas THE STATE OF TEXAS § COUNTY OF KERB § This instrument was acknowledged before me on this day of 2004 by WILLIAM H. WILLIAMS, Kerr County Commissioner, Precinct #2, for COUNTY OF KERB, TEXAS, on behalf of said COUNTY OF KERR, TEXAS. Notary Public, State of Texas THE STATE OF TEXAS § COUNTY OF KERR § This instrument was acknowledged before me on this day of 2004 by JONATHAN LETZ, Kerr County Commissioner, Precinct #3, for COUNTY OF KERR, TEXAS, on behalf of said COUNTY OF KERB, TEXAS. Notary Public, State of Texas JOINT ACTION AGREEMENT - KERRVILLE/KERR COUNTY AIRPORT Page 9 of 9 THE STATE OF TEXAS § COUNTY OF KERB § This instrument was acknowledged before me on this day of .2004 by DAVE NICHOLSON, Kerr County Commissioner, Precinct #4, for COUNTY OF KERR, TEXAS, on behalf of said COUNTY OF KERB, TEXAS. Notary Public, State of Texas THE STATE OF TEXAS § COUNTY OF KERR § This instrument was acknowledged before me on this day of .2004 by STEPHEN P. FINE, Mayor of the CITY OF KERRVILLE, TEXAS, on behalf of said CITY OF KERRVILLE, TEXAS. Notary Public, State of Texas JOINT ACTION AGREEMENT - KERRVILLE/KERR COUNTY AIRPORT Page 10 of 10