ORDER NO.28736
Interlocal Agreement
Joint Management of Kerr County/Kerrville Airport
Came to be heard this the 26~' day of July 2004 with a motion made by
Commissioner Williams, Seconded by Commissioner Letz, the Court
unanimously approved by a vote of 3-0-0 the Interlocal Agreement for Joint
Management of Kerr County/Kerrville Airport.
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- INTERLOCAL AGREEMENT FOR JOINT MANAGEMENT OF
KERRVILLE/KERB COUNTY 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 referred to as
"Constituent Agency," or "Party," collectively or individually, on the ~ day of ~ << ,
2004.
i
WHEREAS, County and City jointly own the real property upon which is located the
Kerrville/Kerr County Airport, sometimes referred to as Louis Schreiner Field ("Airport"); and,
WHEREAS, County and City have heretofore, by their actions, jointly managed said
Airport under and 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; and
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 local
governmental entities and provides a statutory framework for an Agreement by which the two
jurisdictions may continue to jointly own and 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 Agreement: 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 owns an equal, undivided interest in certain
owned real property located within the bounds of the Airport, more particularly described in
Exhibit A, and as that prop~rty description may be amended from time to time, 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 subchapters A, B, and
D 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. The Court and Council are hereinafter
sometimes referred to individually or collectively as "Governing Bodies" of the
Constituent Agencies.
(b) Appointment and Terms. The process for appointment and terms of the Constituent
Agency members and at-large members to the Board shall be as designated below for
each:
(1) Constituent A enc~ppointments:
i. The Governing Body of each Party shall appoint from its membership, by
order or resolution, their respective Board member representatives
("Constituent Agency Representative(s)") for a term of two years.
ii. Upon initial appointment by each Constituent Agency, each Constituent
Agency shall appoint one of its members for two years and one of its members
for one year, thereby establishing staggered terms; thereafter, each term shall
be for two years as established in (i), above.
iii. In the event an appointed Constituent Agency Representative leaves or is
suspended and/or 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 Constituent Agency 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 Constituent Agency Representatives may be
accomplished at any time by that Constituent Agency's Governing Body, by a
majority vote of its members, if that Constituent Agency finds such removal
to be appropriate under the circumstances then existing.
JOINT ACTION AGREEMENT - KERRVILLE/KERR COUNTY AIRPORT
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(2) At-large Appointments:
The Constituent Agency 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. It is deemed desirable that the three at-large positions be filled by
persons who will possess and contribute a balance of expertise in business,
financial or management training and experience. Nominees with experience
and/or expertise in the aviation industry, including aircraft owners, may be
given preference over nominees with no such experience and/or 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.
ii. The Constituent Agency 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
Constituent Agency's Governing Body, the Constituent Agency 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
Constituent Agency Representatives, by a majority vote, shall nominate
additional persons for the unfilled positions. Should the Constituent Agencies
not appoint such nomination within 30 days after the second submittal, the
Constituent Agency Representatives shall have the authority to fill such
positions with the nominee(s) of their choice, by majority vote of the
Constituent Agency 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 Constituent
Agency Representatives to the Board, for any reason, but such member may
continue to serve until his replacement has been appointed.
vi. At-large members may be 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.
JOINT ACTION AGREEMENT - KERRVILLE/KERR COUNTY AIRPORT
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(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 Agency and those specifically
provided by the Code, including the power to lease property and facilities. 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 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
Management Contracts with other providers, public or private, 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 appear before and provide quarterly written reports on
the operations of Airport to each Governing Body.
(h) Litigation. The Board shall not enter into litigation of any kind without prior
notification to the Governing Bodies of each Constituent Agency.
5. Burma et. 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 30th of each year for consideration no later than September 30 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.
JOINT ACTION AGREEMENT - KERRVILLE/KERR COUNTY AIRPORT
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(c) Content and Format. The budget shall substantially conform to the format and line
item content as depicted in Exhibit "B".
(d) County and Ci Funding. The formula for annually calculating the funding amount
to be requested from each Constituent Agency, if required, shall be as follows:
(1) Total of all revenues of the Airport, as reflected in the Airport budget, not
including Constituent 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 Constituent 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
Replacement Funds as deemed necessary for future development and
operations of the Airport, subject to the approval of the Constituent
Agencies.
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 Constituent Agencies'
participation amount or returned to that Constituent Agency.
(e) Audit: The Board shall insure that an audit is performed on all Airport funds
annually.
6. Amendment: This Agreement may only be amended by written agreement, approved by
the Governing Bodies, 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 maybe 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 Ownership Upon Early Termination or Failure to Adopt and
Fund a 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 (October 1 through September
JOINT ACTION AGREEMENT - KERRVILLE/KERR COUNTY AIRPORT
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30 of each 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.
(c) Allocation of Real Property:
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, buildings and fixtures, 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 30th of
any year or the failure thereafter to fund the adopted budget on a timely
basis shall constitute a breach of this Agreement. In the event that either
Party fails to adopt a budget on or before September 30th of any year, or in
any year fails to timely fund such adopted budget, and further fails to
remedy such failure within 30 days after receiving written notice from the
other Party, unless a written agreement is made between the Parties for
other disposition of the real estate, the Party which failed to adopt or
thereafter fund such adopted budget on a timely basis shall execute and
deliver a deed on or before December 31St of that same year transferring
all of its interest in the Airport real property, building and fixtures to the
Party continuing to own and operate the Airport, and the breaching Party
shall have no further claim to such real property, buildings or fixtures, or
to any monetary credit or consideration for the value of such real property
or the fixture contained thereon. Upon the execution and delivery of the
deed transferring the property, the members of the Board who represent
the Constituent Agency having divested itself of its interest in the Airport
shall resign from the Board and neither the departing Constituent Agency
nor such resigning Board members shall have any further interest in the
JOINT ACTION AGREEMENT - KERRVILLE/KERR COUNTY AIRPORT
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ownership and/or operation of the Airport, except as expressly provided
for herein.
(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 at the Airport that are owned by lessees, subject to
the provisions of those lease(s). 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), or to any assets
reverting to the Constituent Agencies due to the termination or expiration 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-
terminating Party 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 %2 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.
(g) Adequate Compensation: The Parties hereto agree that the primary value to the
owners of the Kerrville/Kerr County Airport is in its continued operation and growth,
not in the value of the real estate itself. Therefore, the parties specifically agree that
the foregoing negotiated termination provisions, which are designed to allow the
airport to continue to operate without interruption in the case of termination of this
agreement, provide adequate compensation to the terminating party for its interest in
the airport in that case, either in the event of sale to a third party or in the event that
the non-terminating party continues to operate the Airport.
(h) Reformation of the Board: In the event that this Agreement is terminated and the
terminating party's Board members thereafter resign, the non-terminating party shall
have the right to terminate the Board as defined herein, and to either revise and
JOINT ACTION AGREEMENT - KERRVILLE/KERR COUNTY AIRPORT
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reform the Board as it sees fit, or to continue operation of the Airport without the
assistance or participation by a Board in such operation.
(i) No Inadvertent Termination:. In the event that either party gives written notice to the
other of any disagreement with or concern about an issue within the purview of the
Joint Action Agreement, this action alone shall not be considered an event of default
or notice of cancellation unless clearly designated in that initial writing as such
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:
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 A€~xeement: This interlocal Agreement will not become effective unless and
until the approval and completed execution of this Agreement and the Airport Management
Contract by 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 Lan age: 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.
JOINT ACTION AGREEMENT - KERRVILLE/KERR COUNTY AIRPORT
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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.
IN WITI,~ESS WHERE F, the Parties hereto have caused this Agreement to be legally
executed this ~ day of C , , 2004.
CITY OF KE LE
By:
p P. Fine, Mayor
icho
COUNTY OF KERR, TEXAS
_ ~
By:
Pat Ti ey, County Judge
-~ << c
H. . "Bu ter' Baldwin, Commissioner Pct. #1
ill illiams, Commissioner Pct. #2
Jo ath Letz, ommissioner Pct. #3
ATTEST:
2 e"r7~~~ ~ ~ ~c
Brenda G. Crai City Cler -
APPROVED AS TO FORM:
Michael C. Hayes, Ci ttorney
H:1Lega11AIRPORTICONTRACTWirport Joint Action Agreert~ent -Final - 072804.doc
ATTEST:
ssioner Pct. #4
J ett Pieper, County C erk
APPROVED AS TO FORM:
f
Da id . M tley, County Attorney
JOINT ACTION AGREEMENT - KERRVILLE/KERR COUNTY AIRPORT
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