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KERR COUNTY COMMISSIONERS COURT
Special Session
Wednesday, May 17, 2006
3:00 p.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
DAVE NICHOLSON, Commissioner Pct. 4
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I N D E X	
May 17, 2006	
	PAGE
--- Commissioners' Comments	3
1.1 Consider/discuss, take appropriate action	
to obtain professional accounting and/or	
auditing services to initiate review and	
analysis of current and prior County grade/step	
payroll schedules and other payroll records	
and obtain alternatives and/or recommendations	
to cure or resolve any deficiencies disclosed	
by such analysis	3
--- Adjourned	32
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On Wednesday, May 17, 2006, at 3:00 p.m., a special
meeting of the Kerr County Commissioners Court was held in the
date and time, Wednesday, May 17th of this year, at 3 p.m. We
have only one item on the agenda, but prior to getting to that
item, I think Commissioner Baldwin had some news he wanted to
COMMISSIONER BALDWIN: Yes, sir, I do, and thank you
very much. I just wanted to announce the passing of one of
the great leaders in Kerrville this morning. Ray Crooks was a
battalion chief with the Kerrville Fire Department for over 30
years, and a true servant to our community, and my best friend
for 45 years, and passed away this morning with the cancer
issue. And just -- you know, two young children and cute
little wife. And, so, for you folks that pray, I would ask
you to lift them up in prayer for some peace. Thank you.
JUDGE TINLEY: Thank you. Let's move on with the
item on the agenda. That's consider, discuss, and take
appropriate action to obtain professional accounting and/or
auditing services to initiate review and analysis of current
and prior County grade/step payroll schedules and other
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payroll records and obtain alternatives and/or recommendations
to cure or resolve any deficiencies disclosed by such
chore of trying to put together some requests for
qualifications of professional accounting and/or auditing
firms to see how we go forward on this. What do you have for
us, Commissioner?
COMMISSIONER NICHOLSON: After our meeting last
Friday, I consulted with the County Auditor and we identified
four local accounting firms that we thought probably had the
resources to do this -- this sort of work, and they were
Davidson, Freedle, Espenhover, and Overby -- that's one;
Massey-Itschner, Pressler-Thompson, and Stuart T. Davis. I
also talked with -- and I e-mailed them on Saturday morning
asking about their interest in submitting a proposal, and I
asked for them to submit it by 11 o'clock this morning.
Following that conversation with the County Auditor, I talked
to Commissioner Williams, and we identified one other local
firm that we know quite a bit about their work and thought
they would also be a good candidate for it, and that's William
J. Beltrone, C.P.A. So, I had a conversation with his office,
and forwarded the same e-mail to him that the -- that the
others received. The second part of your package there is the
e-mail I sent, and the third part of the package is a proposal
from William Beltrone for conducting the study that we needed
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done, and that's the only proposal that we received.
about the "whether or not" part too. I've heard -- I've
gotten advice and input from my constituents and leaders in
the community that say, why are you hiring somebody from the
outside? You've got a problem that was created in the
courthouse. Why don't you direct those in the courthouse
to -- to cure the problem?
COMMISSIONER LETZ: I think the answer I have to
that -- and, actually, I have -- most people that I've talked
to think we're going -- should hire an outside firm. I think
the problem with hiring inside, you either have to look at the
Treasurer's office, or I would think the Auditor's office.
And I don't know -- I mean, those are the two financial
offices we have, and both of them -- one points -- I won't say
points the finger at the other. I personally think it's the
responsibility of the Treasurer's Department. The Treasurer
seems to point the finger at the Auditor's office. So, I --
COMMISSIONER NICHOLSON: I don't think the
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COMMISSIONER LETZ: I don't think the Auditor wants
to do it.
COMMISSIONER NICHOLSON: He needs to keep a little
bit of an arm's-length distance on this. But we could refer
it back to the Treasurer's office. This is -- that would be
-- in the public sector, that would be the common thing to do.
You've got a problem; fix it.
COMMISSIONER WILLIAMS: Some of the conversations
I've had about this have been with other agencies who
similarly have step and grade schedules for large blocks of
employees. In those discussions, I learned that those -- they
have the step and grade schedules created by outside
specialists who -- who do that work, so as to avoid this
problem.
COMMISSIONER NICHOLSON: There's reasons to do it
that way. I -- I understand. I just thought it would be one
more path to decide on whether or not we wanted to go outside.
COMMISSIONER LETZ: Our step and grade was created
by an outside source, the Nash --
COMMISSIONER WILLIAMS: I kind of thought it was
originally.
COMMISSIONER LETZ: The Nash folks did it, and we --
we made some adjustments, you know, adding some of the -- the
$1,000 or $1,500 increase, and some of those things were done
outside. But the actual -- our step and grade was prepared
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out of the Nash study.
COMMISSIONER WILLIAMS: And then we put some other
incentive things in place for the law enforcement personnel.
COMMISSIONER LETZ: Right.
COMMISSIONER WILLIAMS: We created a separate step
~ and grade.
COMMISSIONER LETZ: Well, no, they had a separate
step and grade already out of the Nash study, but we just
added the -- and please correct me if -- Auditor or the
Sheriff, if I'm saying this wrong. But then we added -- we
did some $1,000 increases; we did some changes to the basic
step/grade structure for the Sheriff's Department, trying to
increase their salary levels to make them a little bit more
competitive.
COMMISSIONER WILLIAMS: That's right. We're saying
the same thing.
COMMISSIONER LETZ: But the actual step and grade
chart was created out of the Nash study for both -- or all
County employees. Except, you know --
COMMISSIONER BALDWIN: Commissioner, I've got a
question for you. First of all, I -- personally, I think we
need to go to the outside to get someone that just is not
involved in any way with the numbers that float around here,
which are many, and just someone that just doesn't have the
interest like our family does here.
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COMMISSIONER NICHOLSON: Okay.
COMMISSIONER BALDWIN: So -- but my question is, in
your opening comment, you said to look at the Sheriff's
Department numbers. Are we not considering the whole system?
COMMISSIONER WILLIAMS: I think we must.
COMMISSIONER BALDWIN: Well, I thought that's what
we had decided. If -- if we approve -- or ask Mr. Beltrone to
enter an agreement with us, is he going to just look at the
Sheriff's Office, or is he going to look at the whole system?
COMMISSIONER NICHOLSON: The -- it's my
understanding there are five step and grade schedules, one for
deputies and one for jailers and one for nurses and one for
dispatchers, and a fifth one for all other.
JUDGE TINLEY: No, there's not a separate one for
dispatchers.
SHERIFF HIERHOLZER: If I can address part of your
question, it may be answered in this same thing. There are
four step and grade schedules that the Sheriff's Office and
jail use, okay? One is deputies. One is jailers -- jailers
and dispatchers, okay? That's in one step and grade. One is
the nurse -- the nurses. And then one is clerks. If this
order is to look at all the Sheriff's Office, and you look at
the clerks, you are looking at the same step and grade
schedule that the rest of the courthouse uses. So, if you
find errors in the clerk's, which we did not, okay, when we
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looked at them, then at that point the Court may want to come
back and say, all right, we need to look at everything else.
But if you don't find errors in the clerk's step and grade,
you're already looking at the step and grade the rest of the
courthouse is on.
COMMISSIONER BALDWIN: That's pretty wise, I think.
JUDGE TINLEY: Oh, yeah, to at least confirm the
ones that we think are accurate are, in fact, accurate. Yeah,
absolutely.
COMMISSIONER NICHOLSON: That's the point I was
getting to, is that if there are no errors in his "all other"
category -- classification, then there would be no errors in
the rest of it. But there's no reason not to test that and
reconfirm it.
COMMISSIONER WILLIAMS: I agree.
COMMISSIONER BALDWIN: Okay, I'm with you.
COMMISSIONER NICHOLSON: I want to talk about
Mr. Beltrone's proposal. He and his office are known to two
of the Commissioners, so we've got -- got some experience with
him. Is Michael Ketterman here?
MR. KETTERMAN: Right here.
COMMISSIONER NICHOLSON: Okay. Michael Ketterman is
an accountant with the Beltrone firm. And you're prepared to
ask -- or answer any questions. Right, Michael?
MR. KETTERMAN: I have -- I could answer questions,
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and if not, I'll refer them back to Mr. Beltrone, who will be
here in the morning.
COMMISSIONER NICHOLSON: Okay.
MR. KETTERMAN: Okay.
COMMISSIONER NICHOLSON: Thank you for being here.
COMMISSIONER BALDWIN: Wait just a second. Does he
think that we're going to be here in the morning? ~
MR. KETTERMAN: No. I mean, if --
COMMISSIONER BALDWIN: Tell him to come over
Saturday morning.
MR. KETTERMAN: If y'all have questions, I could
~ have Mr. Beltrone get back, either by e-mail or letter, or
contact y'all.
COMMISSIONER NICHOLSON: Aren't you going to be
here, Commissioner?
COMMISSIONER BALDWIN: No.
COMMISSIONER NICHOLSON: Must be a track meet going
on somewhere. The proposal outlines the qualifications. And,
again, we have some experience with him and we know him, and
the qualifications are good. I'm going to turn over to Page
3, Scope of Services. It's my understanding that this study
is -- is not a traditional audit; that the first process would
be to -- to identify -- let me just read that first sentence.
We will perform agreed upon procedures as determined by the
responsible parties. Our procedures will be conducted in
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accordance with agreed upon procedures (AUP). So, the first
step, I think, would be this firm, working with County
officials, would establish agreed upon procedures, methodology
for going about the study. And then, once that's done, they
would get into the details of collecting the information and
using those agreed upon procedures to -- to produce the
product we're looking for. Turn to the next page.
COMMISSIONER BALDWIN: The agreed -- the AUP, those
are just --
COMMISSIONER LETZ: Standard.
COMMISSIONER BALDWIN: He's saying standard
procedures that everybody uses across the great land?
MR. KETTERMAN: Correct. Your agreed upon
procedures are a part of an attestation. You have an audit,
you have agreed upon procedures, but an audit is more
full-blown, where agreed upon procedures, we're specifically
going to look at what y'all want to address, which is the --
the payroll records.
COMMISSIONER BALDWIN: Okay.
MR. KETTERMAN: Okay. It's narrow -- more narrow in
scope, and it's not as costly as an audit, okay? We can agree
upon what y'all want to look at --
COMMISSIONER BALDWIN: Okay.
MR. KETTERMAN: -- specifically and test that, which
will be the step and grade schedules, and then the payroll
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from there.
COMMISSIONER NICHOLSON: I think I'm going to get
around to a proposal, Commissioner, that the first step in
this would be a meeting between the accounting firm, the
Sheriff, the Auditor, the Treasurer, and a representative of
this Court, to make sure that those agreed upon procedures
produce a product that we desire.
COMMISSIONER BALDWIN: Can I nominate Commissioner 4
before we get too far in this thing?
COMMISSIONER WILLIAMS: I'll second the nomination.
COMMISSIONER BALDWIN: It's done.
COMMISSIONER NICHOLSON: We'd better get it done
before Saturday, 'cause I have to go to one of my risk
management seminars.
COMMISSIONER BALDWIN: Oh, yeah.
COMMISSIONER NICHOLSON: This one's being held in
the Dominican Republic.
COMMISSIONER WILLIAMS: I see. (Laughter.)
COMMISSIONER NICHOLSON: Turn to Page 4. And here
is a -- I want to talk about what we can do to get this done
in a way that produces the product we want. And I think we
need to be sensitive to the fact that we can be helpful or we
can make the study go -- make the study be very difficult.
Top of Page 4 says, "You're responsible for making all
financial records and related information available to me."
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That's the accounting firm. Then the second paragraph, "We
documents selected by us for testing." Then the next
paragraph, they say they can begin next Monday, and have some
confidence that they can have it completed by no later than
June 1st. And then they go on to say, "These dates are
contingent upon full availability of documentation required to
perform the AUP, as well as the cooperation of all personnel
involved." I think that's the key. I think if we get a good
AUP, and that everybody that can provide -- everybody that
must provide information to them does that in a very timely
and diligent manner, then we'll get the product we desire.
COMMISSIONER BALDWIN: When you have your meeting --
your little group meeting, you'll come out of there knowing
what information they need to round up?
COMMISSIONER NICHOLSON: Yes.
COMMISSIONER LETZ: I think -- I mean, I have no
is. I mean, the first step, as I see it, is basically turn
over the payroll records and the timesheet-type things from
the Sheriff's Department. First step is to get the step and
grades and just do the calculations to make them all right.
You know, and then compare that to what was paid. And that's
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all we need to do.
COMMISSIONER NICHOLSON: That's the whole project.
COMMISSIONER LETZ: And then, at some point during
that process, we need to get the payroll records from the
Sheriff's Department, either from the Treasurer or from the
Sheriff, and address the overtime issue. That's --
COMMISSIONER NICHOLSON: You have described the
project.
COMMISSIONER LETZ: Okay. I wanted to make sure we
I were all --
COMMISSIONER NICHOLSON: And the -- the agreed upon
procedures will have to do with who's going to turn over what
records and when, and who's going to be available to answer
questions, that sort of thing. And I think there's some
reason for us to be very -- very cautious on that, make very
sure everybody knows what their role is. Sheriff's got a
role. The Treasurer's got a role.
COMMISSIONER LETZ: I mean, the Sheriff has all of
the timesheet-type records that you will -- that will be
needed for the second phase of this. And the -- the Sheriff
clearly has -- or the Treasurer; I mean, several people in the
County have the step and grade schedules. We need to make
sure we're working off the correct ones. And then what was
paid out needs to come out of the Treasurer's office. They're
the ones that know what the actual paychecks that were paid.
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And that's --
COMMISSIONER NICHOLSON: You're right. And the step
and grade schedules that are coming out of there, 'cause she's
the only one that's got it on the computer.
COMMISSIONER LETZ: Okay.
SHERIFF HIERHOLZER: Not any more, but --
COMMISSIONER NICHOLSON: Oh, you got it. That's
right, you did burn it.
COMMISSIONER WILLIAMS: I think, in our minds, we
have to confirm that it was three years ago that the error
took place.
COMMISSIONER NICHOLSON: The first -- I think we
know for certain that the first bad paycheck was -- was
delivered on October 15th, '03.
COMMISSIONER WILLIAMS: Okay. If we know that's the
case, that's fine.
COMMISSIONER NICHOLSON: Yeah. We want to check
I that.
COMMISSIONER WILLIAMS: That's just one more thing
to check, that's all.
COMMISSIONER NICHOLSON: Mr. Auditor?
MR. TOMLINSON: Well, I think that the firm needs to
have the court records that indicate what COLA's were given
from day one through current so they'll have a number that
they can -- can work off of. So, I think we do need to
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furnish them those records.
SHERIFF HIERHOLZER: And I have copies of those
already.
COMMISSIONER NICHOLSON: Do you?
SHERIFF HIERHOLZER: Yes, I have a copy of the --
prior to, I guess, '03-'04, there's actually a court order
that says what the COLA was and what the deputies got and what
the jailers got as far as raises. After '03-'04, it's all
just in the court minutes in the adoption of the budget and
the budget process. But I also have those court minutes, as
many as we could get, and I'll probably get the rest of them
that would spell out all that. And --
COMMISSIONER NICHOLSON: Sheriff, are there any
records that are needed that you don't have?
SHERIFF HIERHOLZER: I hope not. Okay? I tried to
get everything before I even brought this to the Court's
attention. I do believe we got everything. The only things I
do not have just at my fingertips -- and they're probably in
the file; we normally keep a copy of everything. Whenever we
sent over the letter for overtime pay, okay, my personnel
clerk would send over a letter saying this deputy needs to be
paid this many hours overtime, and this many of it will be at
time and a half and this much of it will be at straight time.
Either we will have a copy of those actual letters in their
file, or Barbara will have the original letters that were sent
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to back up. But the timesheets -- the actual monthly
timesheets, 28-day period timesheet and the actual overtime
slips and that calculation, I will have all of that for the
last three years.
COMMISSIONER NICHOLSON: So, if Mr. Beltrone and
Mr. Ketterman have your cooperation, we're about 99 percent of
the way there?
SHERIFF HIERHOLZER: Yes, I -- I believe. And we're
going to -- you know, I'll cooperate with them in any way.
This thing needs to be solved.
COMMISSIONER LETZ: The only thing you probably
don't have is the actual disbursements from the Treasurer's
office. You have a record of all those?
SHERIFF HIERHOLZER: I do not have all of those. We
do have some, because we get a record, once a payroll goes on,
on what was paid. We started doing that, but it's not -- it's
not that old. So, most of that can come out of the computer
system on the payroll report, which shows what they were paid
and what was taken out.
COMMISSIONER WILLIAMS: Tommy, isn't there a
green-bar printout on payroll every two weeks?
MR. TOMLINSON: Yeah.
COMMISSIONER WILLIAMS: Just go back to the
green-bar printout.
SHERIFF HIERHOLZER: Yeah. That's what we're -- so
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it shouldn't be all that difficult to get them all the
information they need.
COMMISSIONER NICHOLSON: So, you may have all of the
information, then.
SHERIFF HIERHOLZER: I may have most of the
information, except copies of the actual checks, which I don't
know if anybody does. Only thing is, I will -- we have, as
the Court knows, some prior commitments Friday afternoon, and
after those commitments I won't be available. Of course,
it'll already be 4:00 or 5 o'clock Friday, and I'll be out
till Monday.
COMMISSIONER LETZ: Another question -- I have no
problem with going with Mr. Beltrone, but did you have any
communication from the other firms?
COMMISSIONER NICHOLSON: I had one e-mail me back
and say he wasn't interested, or couldn't do it.
COMMISSIONER LETZ: Right.
COMMISSIONER NICHOLSON: And I didn't hear from the
other three.
COMMISSIONER LETZ: And where's the --
COMMISSIONER BALDWIN: Money come from?
COMMISSIONER LETZ: -- money coming from?
COMMISSIONER WILLIAMS: Good question.
COMMISSIONER NICHOLSON: I just deal with the
difficult issues.
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COMMISSIONER BALDWIN: I know our Professional
Services is --
COMMISSIONER LETZ: Gone.
COMMISSIONER BALDWIN: -- kaput. But we can get it
out of Tommy's salary or something, maybe.
SHERIFF HIERHOLZER: If I can make a --
COMMISSIONER BALDWIN: Or the Sheriff's salary.
Sheriff's salary.
SHERIFF HIERHOLZER: If I can make a suggestion,
'cause there is a budget amendment coming up at your next
Commissioners Court.
COMMISSIONER BALDWIN: Oh, lord.
SHERIFF HIERHOLZER: Some overtime -- or vehicle
maintenance on the jail side. But this year, we budgeted for
computer software and maintenance in the jail side, $23,000,
which was the projected software maintenance from Software
Group, and as of date, we haven't spent any. And I know
they're making some budget amendments coming out of that
budget line because of the availability of those funds. And
with the new computer system, I'm not sure if we will have
anything come out of that.
MR. TOMLINSON: We shouldn't for the rest of this
year.
SHERIFF HIERHOLZER: So, there should be -- this
type of bill, if it runs along those estimates -- I'm going to
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have to take jail overtime out of that too later on through
the budget year, this current year, but there should be enough
in that line item to make a budget amendment with software
maintenance from the jail.
COMMISSIONER BALDWIN: The court order would read
"up to 9,300"?
COMMISSIONER WILLIAMS: Yeah, 'cause he says not to
exceed 43.
COMMISSIONER NICHOLSON: I'll make a motion that
we --
SHERIFF HIERHOLZER: There is another deal on top of
that 4,300, if you actually look at the paragraph.
MR. TOMLINSON: Out-of-pocket expenses are not
included in the 4,300.
MR. KETTERMAN: Can I make a statement, please? I'm
Mike Ketterman. The out-of-pocket expenses, I don't think he
usually -- that's just to cover in case something
extraordinary comes out. And if you look before where he puts
3,800 to 4,300, he says that what we're going to charge is on
an hourly basis, okay? So, it could be a lot less than that.
By the way the Sheriff sounds, if all y'all's records are
intact and we don't have to do a lot of that, it's going to go
back to what Commissioner Loetz -- is that --
COMMISSIONER LETZ: Letz.
MR. KETTERMAN: Letz, I'm sorry. It's just going to
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be a matter of seeing that the pay scales are correct,
recalculating, and then comparing them to what was paid
originally, so it could be a little bit less than that also.
I don't want to say it is, but he did say it's going to be
based on an hourly rate, not a -- not to exceed 9,300. So, it
could come in -- if everything's looking good and we only have
to spend 25 hours on it, then it could be less than that,
okay?
COMMISSIONER LETZ: Don't get our hopes up.
MR. KETTERMAN: Well, I just wanted to let you -- it
could -- you know, that's -- he's going to just do it on how
many hours we actually work on the audit.
COMMISSIONER WILLIAMS: You need to take the outside
number.
COMMISSIONER NICHOLSON: I'm going to make a motion
that we enter into an agreement with William J. Beltrone,
certified public accounting firm, to conduct an audit of the
Kerr County Sheriff's Office payroll going back to October 1,
2003, and authorize -- and the cost of that audit will be no
more than $4,300 plus incidental expenses limited to a maximum
of $200, and that we authorize the County Judge to sign that
agreement, and that we direct the Sheriff and the Treasurer to
cooperate in the study to make sure it's done expeditiously.
COMMISSIONER LETZ: And that yourself be the
representative from the Commissioners Court?
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COMMISSIONER NICHOLSON: Yes, I'll be that.
COMMISSIONER LETZ: Second.
JUDGE TINLEY: And those same individuals to -- to
establish the agreed upon procedures.
MR. TOMLINSON: Right, that's what my comment was
going to be.
JUDGE TINLEY: Along with the -- along with the --
COMMISSIONER WILLIAMS: Auditor.
COMMISSIONER NICHOLSON: With the assistance of the
County Auditor.
JUDGE TINLEY: Okay.
SHERIFF HIERHOLZER: He's going to be part of that.
MR. TOMLINSON: "Audit" gives it a little more
different connotation than what we're really doing, so "agreed
upon procedures" I think is a good -- good term.
JUDGE TINLEY: Yeah. I have a motion and a second.
Have we got everything included in there that needs to be?
COMMISSIONER BALDWIN: Yes, sir. I've got a
question before the actual agreement. Are you going to
include the County Attorney in this meeting?
COMMISSIONER NICHOLSON: Let's -- yeah.
COMMISSIONER BALDWIN: To draw up an agreement?
COMMISSIONER NICHOLSON: Let's make the agreement
subject to the approval in form of the County Attorney.
Though I would like to have the County Attorney present.
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COMMISSIONER BALDWIN: So he's going to actually
write the -- write an agreement of some sort?
COMMISSIONER NICHOLSON: It's written here. He's
going to approve it.
COMMISSIONER BALDWIN: Okay, I'm with you.
COMMISSIONER WILLIAMS: Or you may amend it
slightly, but --
COMMISSIONER BALDWIN: Okay.
COMMISSIONER LETZ: Once the --
JUDGE TINLEY: Essentially, the agreement is the
proposal which is made here that we have before us.
COMMISSIONER BALDWIN: I'm with you.
COMMISSIONER NICHOLSON: He's already had it since
1:30, so he may have already completed his review.
JUDGE TINLEY: Okay. Anything further? Any other
questions or discussion on the motion? All in favor of the
motion, signify by raising your right hand.
(The motion carried by unanimous vote.)
JUDGE TINLEY: All opposed, same sign.
(No response.)
JUDGE TINLEY: The motion does carry. Is that it,
gentlemen?
COMMISSIONER LETZ: No. The question I have is,
this answers this part of it.
JUDGE TINLEY: Okay.
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COMMISSIONER LETZ: But we talked about, at the last
meeting, that -- possibly looking at the whole payroll
function a little bit more in-depth as to who does it and how
we're going to do it in the future in the county, 'cause we've
had a lot of problems for the last year. I think we all
probably received -- well, did everyone get the copy of ail
the Attorney General opinions?
COMMISSIONER WILLIAMS: I did.
COMMISSIONER LETZ: There are several of them. I
asked Rex to look into it. He looked into several opinions,
and it's very clear that the -- as I read them -- please --
I'll ask Rex to stand up in just a second. As 2 read them,
i the Treasurer is responsible for disbursement of payroll
i funds, period. There's no discretion there. However, there
is some discretion as to who kind of gets you from the point
of the work being done and the checks being cut, and there is
-- we -- the Court does have some discretion to have some of
that function done somewhere else, as long as the disbursement
goes back to the Treasurer's department. Is that -- did I
read through all those opinions correctly? Or I should say
the summaries of all those opinions correctly?
MR. EMERSON: That's a pretty good summary.
COMMISSIONER NICHOLSON: And? You've got some more
recent information?
MR. EMERSON; Well, there's a Texas Supreme Court
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case that supplements the Attorney General opinions. It's the
Commissioners Court of Titus County versus A an, A-g-a-n, at
i 940 SW 2d 77, and it essentially says what you just did. It
overrules a couple of the Attorney General opinions that are
in this packet, and affirms the others.
COMMISSIONER LETZ: So, what I'm -- I guess what I'm
getting at, one of things I'd like to look at is hiring an
I outside company to do a lot of this payroll function. I think
there are a lot of -- many companies in the private sector
that do that for businesses, and do all of the state and I
federal filings and do everything, basically get it all
together, figure out the numbers. And then the disk, so to
speak, wi71 be transferred to the Treasurer, and checks
disbursed. And I think we have the authority to do that, as I
read the opinions. And I'd like to look into it, find out
what the cost is to do that. It may be cost prohibitive, and
it may be a big benefit. If it is, you know, beneficial from
a payroll -- I mean from a dollar standpoint to the County,
I'd certainly be in favor of doing it. And I suspect it's
going to be cheaper than having the staffing level we
currently have in the Treasurer's office.
COMMISSIONER NICHOLSON: I would like to look at
that further, I agree. That's -- that may be another option
to decide that.
COMMISSIONER LETZ: And that may be -- I mean,
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that's just -- I don't see the real benefit, in my mind, of --
of moving that function -- well, I don't even -- moving it to
another department; I don't want to start more county
government. I'd rather privatize part of that, if we could.
COMMISSIONER BALDWIN: But you could either
privatize it outside or move it to the Maintenance Department
if you wanted to. I mean, you could.
COMMISSIONER LETZ: Could. Maybe it fits there.
But I don't think so.
COMMISSIONER BALDWIN: No, I wouldn't want to do
that either.
COMMISSIONER LETZ: I'd like --
COMMISSIONER BALDWIN: You know, I'm -- the check in
my mind is about -- you know, and I haven't read that stuff --
the legalities of moving some of it around, moving it outside
and those kind of things. I hope we can. I hope we can take
a look at that, and those other functions that we've put down
there as well.
COMMISSIONER LETZ: Right.
COMMISSIONER WILLIAMS: I'm glad you mentioned that,
'cause I'd like to take a look at the whole human resource
package.
COMMISSIONER LETZ: I think we -- and you may -- you
j may be able to outsource the entire human resource package, or
you may be able -- you can have some check inside. And I
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think those companies that do that payroll function probably
do the other function as well. But I know there's a lot of
companies out there that do the payroll function alone, and
for small businesses, it's -- I know a lot of times, it's very
economical to do it that way. And I would classify it, from
the size, county government is a small business.
COMMISSIONER BALDWIN: Yeah, maybe.
COMMISSIONER LETZ: Maybe not run that way
sometimes, but --
COMMISSIONER NICHOLSON: Small business with a lot
of people.
COMMISSIONER WILLIAMS: Yeah, 300 employees is not
exactly small business.
i COMMISSIONER BALDWIN: Well, I'm excited about that,
Commissioner.
COMMISSIONER LETZ: So, how do we -- Tommy, how do
we get -- how would you recommend we get from a concept to
getting a proposal? I mean, how do we find out whether -- who
does that function? Or you may not even know the answer.
MR. TOMLINSON: Well, I read the A.G.'s opinions and
the -- to read that the Commissioners Court can assign the
duties to another -- to another officer, but it's silent as to
whether or not you can contract it to a third-party. I have
not seen any -- any opinion or statute that says that you can
or can't contract with -- with a third-party.
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COMMISSIONER WILLIAMS: I'll bet we can get hold of
Texas Association of Counties and find out pretty quick.
MR. TOMLINSON: Now, we do contract the -- you know,
our health insurance administration to a third-party. I don't
know if that's the -- if that's the same thing or not. So, I
think I'd want to make sure that we have the legal authority
to actually contract with a third-party.
COMMISSIONER LETZ: I think you still -- even if you
contract it, there has to be a responsible party in the county
who's accountable for it. I mean, you can't just -- you
can't -- I agree, you certainly can't -- I don't think you can
assign it all out.
COMMISSIONER WILLIAMS: Well, the constitutional
responsibility talks about disbursement of funds as being --
being the constitutional responsibility of the Treasurer.
COMMISSIONER LETZ: Correct.
COMMISSIONER WILLIAMS: So, at some point in time,
if we're going to follow through with what you're talking
about, we got to figure out where you draw the line in terms
of preparation for the disbursement of funds and the actual
disbursement of funds, and that's what you're talking about.
There is a line of demarcation there. What is it?
MR. TOMLINSON: Well, I think -- I think that the
Commissioners Court can determine what part of the process
they want to contract out or -- or delegate. My thought is
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whether or not you have the authority to contract or not.
COMMISSIONER WILLIAMS: Okay.
COMMISSIONER BALDWIN: That's what I'm wondering
about as well.
MR. TOMLINSON: See, I can't -- I've never read
anything that addresses that, and so I --
COMMISSIONER LETZ: Well, Rex, you have a new
question. 'Cause I think we ought to find out -- try to get
an answer to that, if we can contract the function out, before
we go out for -- waste a lot of time.
MR. EMERSON: I need to do some more research. I'm
kind of like Tommy. In my research on this issue so far, I
haven't seen anything that addresses that particular point.
There's plenty of cases and A.G. opinions that say that the
Court has the authority to authorize a, quote, official of a
county to handle it. You know, and there's implied authority
of y'all to hire experts to perform your duties. But I don't
know about actually hiring out the preparation, as such.
COMMISSIONER BALDWIN: Tommy, what is -- what is
your office function as far as getting the check out the door
and preparation?
MR. TOMLINSON: As far as our -- I mean, the way I
look at our function as the payroll goes is on the -- on the
other end of the process. My -- our interest is to determine
whether or not what's being paid has actually been budgeted.
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In other words, that's what we do, is we -- we randomly pick
individuals from the system and determine whether or not their
paycheck equals what the budget approved. And we test -- you
know, we test that to determine if the retirement percentage
is correct or if, you know, the FICA's correct, and virtually
dissect that individual's record to see if -- if everything is
correct on that particular paycheck. And then -- and then
during the year, I do an analysis on every department's budget
as a whole to see if what's being -- the total of what's being
paid equals what's budgeted for that department. And
that's -- I call it an analytical review of the payroll in a
department. So, I think that's our function, is to see
whether or not we're doing what we said we'd do as far as the
budget's concerned.
COMMISSIONER BALDWIN: That's a good check and
balance between you and the Treasurer's office. That's a good
check and balance, I think. But your signature goes out on
the checks, do they not?
MR. TOMLINSON: They do on all checks.
COMMISSIONER BALDWIN: On all checks. Now, if we --
if we changed the system like what we're talking about, would
that affect anything that you do, including check signing?
MR. TOMLINSON: No. I think it would -- if you did
this with a third-party, there would have to be some -- some
communication electronically between our offices and the
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processor. Once the processing is done, then, in my mind,
they would -- they would transmit that process back to us.
COMMISSIONER BALDWIN: Mm-hmm.
MR. TOMLINSON: We would approve it and then attach
our signatures to -- to the check.
COMMISSIONER LETZ: That's how I see it. So, they
send it all back, and then it's still the County's
responsibility to --
COMMISSIONER NICHOLSON: Yeah.
COMMISSIONER LETZ: -- look at it, make sure that it
looks right and do some checks on it, and then disburse the
funds.
COMMISSIONER WILLIAMS: In doing random checks of
employees, or tests of employees for accuracy and payroll
payment accuracy -- you did say you did that?
MR. TOMLINSON: Yes.
COMMISSIONER WILLIAMS: Does your office also test
the step and grade schedule?
MR. TOMLINSON: No, we have not tested it. We --
our -- our emphasis is on what's actually paid as in relation
to budget. You know, our function is more related to what's
been authorized on the other end of the transaction.
COMMISSIONER WILLIAMS: Okay.
COMMISSIONER BALDWIN: That's a good process. I
like it.
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JUDGE TINLEY: Anything else, gentlemen?
COMMISSIONER NICHOLSON: Just a request.
Mr. Ketterman, could you stick around for a couple of minutes?
And the Sheriff, Auditor and Attorney.
COMMISSIONER BALDWIN: Wait, does that 200 bucks a
day start rolling then?
COMMISSIONER NICHOLSON: Yeah.
JUDGE TINLEY: Yeah.
MR. KETTERMAN: I don't think it starts today.
COMMISSIONER BALDWIN: Okay.
COMMISSIONER NICHOLSON: Time's already running.
COMMISSIONER LETZ: And I'll just put this item back
on the agenda -- something similar to this, anyway, so we can
discuss the issue of finding out if we can contract it out or
other options.
JUDGE TINLEY: Anything else, gentlemen? We stand
~ adjourned.
(Commissioners Court adjourned at 3:40 p.m.)
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33
STATE OF TEXAS ~
COUNTY OF KERR ~
The above and foregoing is a true and complete
transcription of my stenotype notes taken in my capacity as
County Clerk of the Commissioners Court of Kerr County,
Texas, at the time and place heretofore set forth.
DATED at Kerrville, Texas, this 18th day of May, 2006.
JANNETT PIEPER, Kerr County Clerk
BY: _L~~fd~~
Kathy a ik, Deputy County Clerk
Certified Shorthand Reporter
5-17 06
ORDER NO. 29690
OBTAIN PROFESSIONAL ACCOUNTING AND/OR AUDITING
SERVICES TO REVIEW AND ANALYZE CURRENT AND PRIOR
COUNTY GRADE/STEP PAYROLL SCHEDULES AND OTHER
PAYROLL RECORDS
Came to be heard this the 17th day of May, 2006, with a motion made by
Commissioner Nicholson seconded by Commissioner Letz. The Court
unanimously approved by vote of 4-0-0 to:
Enter into an Agreement with William J. Beltrone, Certified Public
Accounting Firm to conduct an audit of the Kerr County Sheriffs Office
..- payroll going back to 10-01-2003 and authorize the cost of the audit to be no
more than $4,300 plus incidental expenses limited to a maximum of $200,
authorize County Judge to sign that Agreement, and that we direct the
Sheriff and the Treasurer to cooperate in the study to make sure it is done
expeditiously. Also, to appoint Commissioner Nicholson to be the
representative from the Commissioner's Court, along with the assistance of
the County Auditor. The Agreement is subject to the approval, in form, of
the County Attorney.