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KERR COUNTY COMMISSIONERS COURT
Special Session (Reconvened)
Tuesday, November 28, 2006
10:30 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
DAVE NICHOLSON, Commissioner Pct. 4

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z
I N D E X
November 28, 2006
PAGE
November 27, 2006 Special Session Reconvened
1.7 Receipt of responses from County Treasurer with
respect to various IRS issues as set forth in
memos from County Judge to County Treasurer
dated September 18, 2006, October 27, 2006, i
and November 2, 2006, and appropriate action
concerning such responses 3
1.8 Consider, discuss and take appropriate action
to set amount of Kerr County Treasurer's official
bond, effective January 1, 2007, in accordance with
provisions of ~ 83.002, Texas Local Government Code 18
--- Adjourned 36
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On Tuesday, November 28, 2006, at 10:30 a.m., the
special meeting of the Kerr County Commissioners Court held on
Monday, November 27, 2006, was reconvened 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: Okay. Let's come back to order. We
were in recess at approximately 12:30 yesterday afternoon,
scheduled to resume today at 10:30; it's a bit past that now,
on our -- the remaining items that were not fully addressed on
our regular agenda of yesterday, Monday, November the 27th,
2006. Let's go to Item 7, if we might recall that item.
Receipt of various -- of responses from County Treasurer with
respect to various I.R.S. issues, as set forth in memos from
II County Judge to County Treasurer dated September 18, 2006,
October 27, 2006, and November 2, 2006, and appropriate action
concerning such responses. Ms. Nemec, do you have responses
to the memos that are listed in the agenda item?
MS. NEMEC: As I promised, yes, I do.
COMMISSIONER BALDWIN: Thank you.
MS. NEMEC: I had my assistant stapling these
together this morning, so I just want to make sure -- I'll go
real slow to make sure that all these are in order. I was
talking to a representative from I.R.S. last night and trying
to get some explanation on the memos that Judge Tinley had
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been sending me. And my first paragraph, the November 2nd
memo, if you'll turn to the first page -- do you have the
November 2nd memo on the second page?
COMMISSIONER LETZ: Yes.
MS. NEMEC: Okay. On this memo here, I'm awaiting a
phone call from them back this morning. They were doing some
research on it. So, I just want to mention that to you all,
that I don't have an explanation on that this morning. So, I
will be getting something this morning on that, and I'll let
you know as soon as possible on that first memo. But all the
other memos, I do have an explanation on them. Okay. We'll
go down to the October 27th memo, which is on the following
page. The October 27th memo and the October 9th memo -- let's
'I see here. The October 9th memo and the May 8th memo, which
makes reference to a levy for 527.01, and then the May 18th
memo from Judge Tinley, those three memos are all talking
about the same thing.
So, if you'll look at the October 27th memo on the
next page, and then you'll see the October 9th letter from the
I.R.S. for the 974.95 overpayment. And then on the
September 18th memo, that number one, that makes reference to
the May 18th levy for 527. I was talking to Mr. Wackowski
with I.R.S. last night. His employee number is 1605630. What
he was telling me was that they had initially charged us a
$527 tax and penalty, and when they reviewed their -- I
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questioned it and I sent them a letter, and when they reviewed
my letter, they realized that they had made an error, so they
sent us a refund for the 974.95. That was what -- that was
the 527.01 that they had initially charged us plus interest,
so those are the three memos combined. So, that takes care of
those three memos that I just made reference to.
COMMISSIONER BALDWIN: Are you telling me that they
paid us -- they made a mistake and they paid us back the
527.01, plus the interest that accrued during their mistake?
MS. NEMEC: Right. So they do make mistakes.
JUDGE TINLEY: Ms. Nemec, my recollection as to the
May 8th, 2006 levy for the $527.01 amount, that you indicated
in open court in response to, I believe, a question from
Commissioner Nicholson, when you indicated that that matter
had been resolved, and he asked you how was it resolved, and
you said it was paid. That's my clear recollection of that
discussion in open court. From what I understood from you
just moments ago, that 527.01 never was paid. Is that --
which is correct?
MS. NEMEC: It was paid, and then they researched it
and they sent us the money back.
JUDGE TINLEY: Okay.
MS. NEMEC: So when I said it was paid, it was paid.
JUDGE TINLEY: Okay. Let's talk about the levy that
I.R.S. issued under date of August 30, 2006. That levy was
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for a total amount of $6,572.84. You provided us, I believe
on September 15th of this year, in open court, a release of
that levy. Do you recall that?
MS. NEMEC: That's in my last paragraph; I'm getting
to that.
JUDGE TINLEY: Okay.
MS. NEMEC: So, I've resolved all the other memos
that we have been talking about. Now, the last -- on the last
paragraph, I have -- memo dated September 18th, there were no
penalties, no interest or taxes expended, as Judge Tinley had
been asking on his last memo dated September 18th on Number 2.
I.R.S. levy dated August 30th for 6,572.89, I had provided a
release of lien, and his question was if there were any
penalties, interest, or taxes expended on that. There were
not. And then also his question was, did I have any copies
of -- any copies of any revised documents. My answer is no, I
do not have any copies of any revised documents. And when
I.R.S. calls me back this morning, that's another question
I'll be asking, is do they have any copies of any revisions
that they made. I know when I went to the I.R.S., there were
many things that we discussed as far as why the taxes were --
what the problems were and things like that. I know that they
were in the computer looking at some things. I never -- I
never got anything back from them. All I know is that they
gave me a -- a release of -- a release of lien, and that's all
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I got from them. If they actually did anything to our taxes
or anything like that, if they changed anything, I don't know
that. But I will be asking for copies of if they actually did
anything else or not. So, that's all I know at this point.
JUDGE TINLEY: Then I gather your answer to my
question in that memo, "What was the consideration for I.R.S.
executing the release of levy to you?" That was done when you
were at the San Antonio office on the 13th day of September of
this year; is that correct?
MS. NEMEC: If that was the date that I went. I
don't know that that was the date.
JUDGE TINLEY: That's the date on the release.
MS. NEMEC: Okay. Then, yes, that was the date.
JUDGE TINLEY: You received no indication or
explanation of why they were executing the release? They just
said, "Here, here's a release"?
MS. NEMEC: I don't remember.
COMMISSIONER LETZ: Barbara --
JUDGE TINLEY: But no funds were paid --
MS. NEMEC: No.
JUDGE TINLEY: -- to I.R.S. at that time?
MS. NEMEC: Never.
JUDGE TINLEY: This was at the San Antonio office
that you got the release of levy for what was -- of
October 30, which indicated some significant penalties and
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interest, correct?
MS. NEMEC: There were no funds paid at that time or
at any other time for that particular time -- time period, for
that.
JUDGE TINLEY: And this -- this release of levy you
got at the San Antonio office?
MS. NEMEC: Yes, while I was there.
JUDGE TINLEY: And that was the same San Antonio
office that you and Ms. Hyde and Ms. Magenheimer went to here
just a few weeks ago concerning the assessment of penalty of
12,000, mas or menos, correct?
MS. NEMEC: Correct.
JUDGE TINLEY: And were told when you went this most
recent time that that office had no authority --
MS. NEMEC: That is correct.
JUDGE TINLEY: -- to -- to adjudicate those things
or to otherwise take any action on them?
MS. NEMEC: That's correct.
JUDGE TINLEY: When you were in San Antonio at that
office most recently with Ms. Hyde and Ms. Magenheimer, did
you happen to mention to the folks there that -- when they
told you they had no authority to do that there, that that was
kind of strange, because when you were down there just a month
or two before, that they they'd taken pretty prompt and
summary action in giving you a release of levy?
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MS. NEMEC: No, I didn't.
DODGE TINLEY: Okay.
MS. NEMEC: It's always the individual you talk to
with I.R.S.
COMMISSIONER LETZ: The -- this is -- I don't know
if this is really to you, Barbara, or possibly the Judge.
I've become very confused about the number of -- about the
whole history. And, granted, my personal finances have
nothing -- are nowhere even close to county finances, but I
know from the I.R.S., you can get a -- basically, a journal
page of everything that goes on on your accounts. Can we get
that?
MS. NEMEC: Sure.
COMMISSIONER LETZ: So that we can look and see what
payments were made, what penalties were assessed by that, and
they could break it up by category, I believe. I mean, I --
I'm just confused. You know, seems like everything's been
taken care of, but it's hard to understand exactly how it's
taken care of, what was taken care of. You know, different
offices, you talk to different people. But if we can get a
copy of our journal -- I would think they would give it to
us -- that would, in my mind, clear it up. So, in your
conversation with them, maybe you could ask for that.
MS. NEMEC: I'll get one. I've requested it in the
past. I mean, you know, this is things that you deal with
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I.R.S. all the time. You just go back and forth with them,
COMMISSIONER LETZ: But the difference is, we're
knowledge, we weren't receiving those until about two years
ago, a year ago, something like that -- about a year ago.
That's, you know, what has brought it to the Court, anyway, is
because, you know, obviously -- I mean, I -- you know,
everyone deals with I.R.S., and yes, they do make mistakes,
but it's relatively -- it takes a -- it's a lot of work to get
to the point they're doing levies. That doesn't happen
without a whole lot of things not being done prior to that
point. So that's why I think there are concerns here, at
least my concerns.
MS. NEMEC: The CPA's have meetings on -- I don't
account, you ought to go to the meetings that CPA's have in
the morning at Inn of the Hills, and you'll hear shocking
stories about what goes on with Internal Revenue. And, you
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they could sympathize with what we're going through, because
they go through it all the time with their clients.
COMMISSIONER WILLIAMS: I'm sure that's true.
Barbara, I have a couple questions. First I'll take the most
recent, I think, first. What is the status of the levy for
which we authorized payment of $12,000?
MS. NEMEC: We haven't heard back. It will be six
weeks before we hear back on that.
COMMISSIONER WILLIAMS: Okay. And in the documents
that were a part of the agenda item backup material is a copy
of a notice dated October 30, in which the caption says, "We
changed your tax return because we found a calculation error."
Can you expound on that and tell us what that's all about?
MS. NEMEC: October 30th, that is the one that I'm
waiting to hear back from them on. That was the memo dated
November the 2nd.
COMMISSIONER WILLIAMS: Well, I don't know about the
I memo.
MS. NEMEC: That's on the first page that I attached
to the memo, today's memo -- today's letter.
COMMISSIONER WILLIAMS: Okay.
MS. NEMEC: Also mentioned on that 12,000, at last
I week's meeting with the CPA's, one CPA -- it took them
three -- three letters before they got their money back. So,
we're not going to -- we're not going to just drop it. If
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they send us a letter back saying no, they're not going to
refund us the 12,000, you know, we're going to send them back
another memo and try again. You just don't stop at the first
letter; you just keep trying.
COMMISSIONER WILLIAMS: Okay, I understand that. I
do have one other question, though. At the last meeting, I
believe it was, the Court authorized this $12,000, which was a
payment to stem any further action, we thought, on the part of
the I.R.S., but for us it was a special tax payment. It
wasn't a routine tax payment.
MS. NEMEC: Right.
COMMISSIONER WILLIAMS: Earlier -- I'm looking at
the memo from the Judge to you dated October 27th, and that
memo talks about a tax deposit in the amount of 7,232.65. Was
that not out of the routine, just as the 12,000 would have
been out of the routine, requiring Commissioners Court to know
what that was all about?
MS. NEMEC: That -- again, that's the one that I'm
telling you there was an I.R.S. error, and that's the one that
I said that I talked to Mr. Wackowski about last night, where
they made an error and they charged us the $527.01 as a -- as
a tax penalty. And then they reviewed their records and they
sent us -- if you'll look at your -- the next page, the next
page shows that 7,232.65 -- a memo from I.R.S., it shows that
7,232.65, and then it shows where there was an overpayment of
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974.95; that they refunded us that amount. Amount of refund
up at the top, 974.95.
COMMISSIONER WILLIAMS: I see that, but my question
goes to -- to the authorization for the 7,232.65. Does that
fall under the same category as the Court authorizing the
payment of the 12,000? And if it does, my second part of my
question is, why is the Court just now learning about that?
Would we not have had to authorize that as well?
MS. NEMEC: No, this is an adjustment from the
I.R.S. that they made.
COMMISSIONER BALDWIN: The words, "penalty
decrease," is that the magic words here?
COMMISSIONER WILLIAMS: They put that as a credit to
our account? We did not make that as a tax payment?
MS. NEMEC: Right. Right.
COMMISSIONER WILLIAMS: Thank you for the
explanation.
JUDGE TINLEY: So, the statement, "Penalty
decrease - federal tax deposit," your statement today is that
federal tax deposit portion is incorrect? There was no such
deposit?
MS. NEMEC: Right.
JUDGE TINLEY: Okay. Ms. Nemec, Commissioner Letz
asked if you could obtain a journal of the various payments
and the chronological history of payments, and you indicated
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that you could obtain that.
MS. NEMEC: Mm-hmm.
JUDGE TINLEY: If you would, please, go back to 2002
and bring that forward from January 2002. Could you do that?
MS. NEMEC: 2002?
JUDGE TINLEY: Yeah. January 1, 2002, forward.
MS. NEMEC: Okay.
JUDGE TINLEY: All right? The -- I'm not sure if
~ I -- if you've answered this question or not. I apologize if
you have. In the -- in the earlier memo, I also inquired, at
the time you went to San Antonio on September the 13th and got
the release of levy, did you provide any additional documents
to the I.R.S. at that time or shortly before, or amend any of
the documents that had previously been provided to I.R.S. in
order to facilitate getting that release of levy?
MS. NEMEC: All I took them was my 941 report that I
had already submitted to them.
JUDGE TINLEY: Okay. Had you completed a new
Schedule B?
MS. NEMEC: I took them the -- the Schedule B that I
had already provided to them.
JUDGE TINLEY: Okay. Did they indicate to you at
that time that the problem was that they did not have a
Schedule B, on your initial submission of the 941?
MS. NEMEC: Not that I remember. I don't know.
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JUDGE TINLEY: But you provided them with --
MS. NEMEC: A copy.
JUDGE TINLEY: You carried those documents with you
and exhibited those to them?
MS. NEMEC: Right.
JUDGE TINLEY: Did they make any copies of those
I' documents at that time?
MS. NEMEC: I don't remember.
JUDGE TINLEY: Okay.
MS. NEMEC: They may have.
JUDGE TINLEY: Okay. There was another attachment
along with the -- there were two different correspondences
that came in on -- on October the 30th, as I'm sure you
recall -- or that date, actually. There was also a letter
from the -- from them concerning the first quarter of 2006.
That would be the quarter ending March 31. Do you recall
receiving that letter? I think it was attached to the -- to
one of those memos.
MS. NEMEC: I don't know. I'd have to look; I don't
I know.
JUDGE TINLEY: Okay. Probably would have been
attached to the November 2 memo. It's referred to in the
second paragraph of the November 2 memo, a letter from I.R.S.
dated October the 30th. Do you recall receiving that?
MS. NEMEC: Not without looking at it.
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JUDGE TINLEY: Okay. I would represent to you it
was attached to the November 2, 2006 memo, because it was
attached to that and indicated --
MS. NEMEC: I'd have to look at it. I don't know.
I have a lot of memos.
JUDGE TINLEY: Do you not have that with you today?
MS. NEMEC: No.
JUDGE TINLEY: I'll be happy to give you one here to
review, if you'd like.
(Judge Tinley handed a document to Ms. Nemec.)
MS. NEMEC: Oh, okay. Yeah, this is the one I'm...
JUDGE TINLEY: Okay, thank you. You recall that
letter starts off by saying, "You must reply. We're proposing
a federal tax deposit penalty"?
MS. NEMEC: Mm-hmm. That's for the March 2006 that
I'm awaiting a phone call back on.
JUDGE TINLEY: Mm-hmm. That's different from the
$12,000 penalty that's been imposed, which relates to the
second quarter of 2006?
MS. NEMEC: Right.
JUDGE TINLEY: Okay. The second full paragraph
says, "Please complete the enclosed Schedule B to 941."
MS. NEMEC: I've already -- they have the --
JUDGE TINLEY: Did you do that?
MS. NEMEC: They have the Schedule B. Yeah, I
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talked to them last night. They have the Schedule B.
JUDGE TINLEY: My question to you is, in response to
the October 30, 2006 letter that you just reviewed, in which
they asked you to complete the enclosed Schedule B, did you do
that?
MS. NEMEC: For what period?
JUDGE TINLEY: March 31, 2006. Did you -- did you
respond to this letter by completing the enclosed Schedule B
and forwarding that to the Internal Revenue Service?
MS. NEMEC: Yes. And if you remember, you came and
got a copy of the March 2006 991, and you have a copy of the
Schedule B.
JUDGE TINLEY: I have a copy of -- of what you
showed out of your file. I'm asking you if you complied with
the request of I.R.S. in this October 30 letter to please
complete the enclosed Schedule B.
MS. NEMEC: Yes. Yes, of which have you a copy of.
JUDGE TINLEY: Okay. And did you send that in to
the Internal Revenue Service?
MS. NEMEC: Yes.
JUDGE TINLEY: Okay, thank you.
COMMISSIONER LETZ: Do -- are all of the, I guess,
notifications we received from the I.R.S., whether it be of
any type, have they all been taken care of up to this point?
MS. NEMEC: Yes.
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COMMISSIONER LETZ: Do you know of any others that
we're going to be -- or that are coming down the road? 'Cause
I know there was a timeline --
MS. NEMEC: No.
COMMISSIONER LETZ: Okay.
JUDGE TINLEY: Anything further?
COMMISSIONER BALDWIN: No, sir. Seemed to be a
satisfactory report to me.
COMMISSIONER WILLIAMS: I'm all right.
JUDGE TINLEY: Thank you.
MS. NEMEC: Thank you.
JUDGE TINLEY: Anybody on the Court have anything
further to offer with regard to Agenda Item Number 7? Let's
move on, then, to Agenda Item Number 8. Consider, discuss,
and take appropriate action to set amount of Kerr County
Treasurer's official bond effective January 1, 2007, in
accordance with provisions of Section 83.002 of the Texas
Local Government Code. The matter was considered yesterday,
and deferred action primarily, according to my understanding,
to ascertain what the bonding cost would be. As of my last
report from Ms. Mitchell, we've not gotten a response from
First Insurance Agency. However, with another general
agent -- independent agent, it was indicated that the bond
cost is $5 -- the premium is $5 per $1,000 of coverage per
year, which, roughly translated, means that a $50,000 bond
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would be $250 a year. A $65,000 bond would be $325, and a
$75,000 bond would be $375 per year.
COMMISSIONER WILLIAMS: Times the number of years?
Times the number of years, right?
JUDGE TINLEY: Yeah, that's per year. That's a
per-annum cost.
COMMISSIONER LETZ: Judge, maybe y'all went over
this yesterday, and I apologize. The -- this is probably a
really stupid question. I've been on the Court for going on
11 years. What's the purpose of the bond?
COMMISSIONER BALDWIN: I asked the same question
yesterday.
	COMMISSIONER	WILLIAMS: The purpose --	
	COMMISSIONER	BALDWIN: I've been here	15 years.
	COMMISSIONER	WILLIAMS: The purpose of	the increase?
	COMMISSIONER	LETZ: Well, the purpose	of the bond.
What are	we bonding?		
	COMMISSIONER	NICHOLSON: I think it's	insurance.
	JUDGE TINLEY:	Mm-hmm.	
	COMMISSIONER	NICHOLSON: We're insurin	g against
claims.	So, if I make	a mistake, the County can	ask my -- and
it costs	the County mon	ey, the County can ask my	bonder to pay
the costs	of my mistake	.	
	COMMISSIONER	WILLIAMS: Or if there's	a criminal
action in	which money i	s absconded with.	
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COMMISSIONER LETZ: So, as it relates to the
or 80,000 by some formula.
JUDGE TINLEY: Almost 80,000.
COMMISSIONER NICHOLSON: But if we haven't made a
by buying a larger bond?
COMMISSIONER WILLIAMS: Frankly, I don't see we gain
anything except spending money unnecessarily.
COMMISSIONER LETZ: I mean, I tend to agree. I
mean, I don't -- you know, I'm -- while there's certainly been
a lot of problems, they're -- they all seem to be being
resolved. And -- you know, so, I mean, I kind of tend to
agree. I mean, I don't want to waste taxpayers' money on
increasing the bond when it really doesn't -- isn't
benefitting the taxpayers. And I think that we're in a
position that we have taken a lot of measures in the county
to, you know, I guess reduce the risks that we were having
previously. I believe we ought to leave the bond where it is.
JUDGE TINLEY: All I can say, gentlemen, is that
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there's a lot of money that goes through that office. That
office will continue to handle the I.R.S. reporting, which,
over the past year and a half, there have been considerable
difficulties; by my count, four I.R.S. levies. That should be
a significant red flag. We've made no claim against the
existing bond. I had asked the Court to allow me to proceed
to do that with regard to a $2,500 issue. That was averted by
virtue of the Treasurer stepping forward and reimbursing the
County personally for that loss, and but for that, I would
have continued to ask that we be allowed to assert a claim on
her bond. I think there's some performance issues that
have -- that have been -- that have demonstrated themselves
that -- you know, the phrase that comes to mind is "penny wise
and pound foolish." But it's your call.
COMMISSIONER LETZ: I'm only 20 percent of the call.
JUDGE TINLEY: I assure you that if we revisit the
issue, we may have to go back and look at this discussion.
COMMISSIONER LETZ: What's your recommendation?
JUDGE TINLEY: I made a recommendation yesterday of
$65,000 to $75,000.
COMMISSIONER BALDWIN: That's a $325 --
JUDGE TINLEY: To 375.
COMMISSIONER BALDWIN: And I apologize; I didn't
bring my notes from yesterday, and I kind of was hung in
there. That's a -- that's kind of a medium point between --
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from where we're at to the max -- the cap that the law allows
us. It's kind of in the middle there somewhere.
COMMISSIONER NICHOLSON: I think that formula allows
something like $75,000 or $80,000.
COMMISSIONER BALDWIN: 79.
DODGE TINLEY: Just under 80.
COMMISSIONER NICHOLSON: Yeah, cap.
JUDGE TINLEY: According to my calculations, right.
COMMISSIONER LETZ: And -- on that. So, what the
law says is that if -- I don't know that -- if there's an
error made in excess of 80,000, it's just not bonded?
JUDGE TINLEY: That's correct. Yeah, the maximum
liability as a surety on the bond is the --
COMMISSIONER WILLIAMS: Face value of the bond.
JUDGE TINLEY: Yeah. And that's not -- I don't --
I'm not -- I'm not sure that's per claim. I think that's --
COMMISSIONER LETZ: I agree.
JUDGE TINLEY: -- that's an aggregate.
COMMISSIONER WILLIAMS: That's the limit of their
~ exposure.
JUDGE TINLEY: Mm-hmm.
COMMISSIONER LETZ: Mr. Pearson has a comment.
MR. PEARSON: What's the annual amount of negotiable
securities that go through that office? Cash collected plus
negotiable securities? In other words, you invest in --
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COMMISSIONER LETZ: Coming and going?
MR. PEARSON: Yeah. In other words, what's --
COMMISSIONER LETZ: Be our budget. Be our annual
budget.
COMMISSIONER WILLIAMS: Annual budget.
COMMISSIONER LETZ: Annual budget, about 18 million..
So, I mean --
MR. PEARSON: We're talking about --
COMMISSIONER LETZ: -- so double that, 'cause it's
coming in, then it's going out.
MR. PEARSON: You're talking about 65,000.
COMMISSIONER LETZ: That's what I'm saying. But the
maximum the law allows is 80,000.
MR. PEARSON: I understand. I understand. I think
that's kind of a difference. Most businesses I've ever been
in, you bond in excess of the amount that -- that you
anticipate an individual handling or having access to.
COMMISSIONER LETZ: I would agree, but that's on
the --
COMMISSIONER WILLIAMS: The law caps it.
MR. PEARSON: I understand that. I understand that.
COMMISSIONER WILLIAMS: At 1 percent.
COMMISSIONER BALDWIN: So, if you need --
MR. PEARSON: I think that the $65,000 would be a
very good identity.
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COMMISSIONER BALDWIN: If you read this in there in
your packet, it kind of -- it will kind of clear it up a
little bit, just three or four lines. It does kind of clear
it up for you.
COMMISSIONER LETZ: I understand, but it's a --
seems like it's an antiquated law. But, anyway --
COMMISSIONER BALDWIN: Well, it's my opinion that
it -- I don't think it would hurt anything to increase the
bond some. And we actually probably need to take a look at
several offices around the county family, but I still don't
know how much it should be increased.
COMMISSIONER NICHOLSON: Well, if we're looking at
the issue of simply buying insurance, I'm okay with that too.
We're going to pay $200 to $300 for an extra $60,000 worth of
insurance or something. But if we have some expectation that
it's going to motivate the County Treasurer to perform
differently in the future, I don't see that happening. Only
one who has any control over that is the County Treasurer.
COMMISSIONER BALDWIN: I don't have that in my mind
at all. I'm looking at it strictly from the insurance point
of view.
COMMISSIONER WILLIAMS: Well, I think the point you
made a minute ago was valid. If you're going to increase it,
any -- any elected official who's responsible for the handling
of money, we may want to consider doing it on all cases.
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COMMISSIONER NICHOLSON: Let me make a motion and we
can get it on it table. I'll move that we increase the bond
required by the County Treasurer to $75,000 for the year 2007.
COMMISSIONER BALDWIN: I second that motion, but
I've got some questions about it. I could come back and vote
against this thing.
JUDGE TINLEY: We have a motion and a second. Any
question or discussion?
COMMISSIONER BALDWIN: 75,000 would cost $375 per
year?
JUDGE TINLEY: That's according to the formula that
was given to me by an independent agent that writes bonds.
COMMISSIONER BALDWIN: And we -- today, we have a
$15,000 bond. We pay how much?
JUDGE TINLEY: I don't know. What I can tell you is
that --
COMMISSIONER BALDWIN: Well, the Treasurer can tell
us. How much does your bond cost?
MS. NEMEC: I believe it's 150, or 100.
~I~ COMMISSIONER BALDWIN: So, we're quadrupling the
amount of insurance.
JUDGE TINLEY: Mm-hmm.
COMMISSIONER BALDWIN: And doubling the pay.
JUDGE TINLEY: Tripling, probably.
COMMISSIONER BALDWIN: Tripling.
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JUDGE TINLEY: Yeah.
COMMISSIONER BALDWIN: Probably not a bad
investment.
COMMISSIONER LETZ: Why don't -- we can go ahead and
go out for the amount, so we're not guessing on how much it's
going to cost, and do it at our next meeting.
COMMISSIONER BALDWIN: We could.
COMMISSIONER LETZ: 'Cause we don't know what it's
going to cost to do a $75,000 bond, or where the money's going
to come from out of her budget. I presume from Contingency.
COMMISSIONER NICHOLSON: Good point.
COMMISSIONER WILLIAMS: I think if we're going to
increase the bond, we ought to increase it to all elected
officials that handle money, all the way across the board.
COMMISSIONER BALDWIN: That's probably true.
JUDGE TINLEY: Some of them are -- some of them are
fee officers; the County Clerk, the District Clerk, the Tax
Assessor. They have a different formula for theirs. And in
most cases, in addition, there are insurance requirements on
top of the bonding requirements.
COMMISSIONER LETZ: What would be the distinction in
that?
JUDGE TINLEY: Well --
COMMISSIONER WILLIAMS: Insurance on top of bonding?
JUDGE TINLEY: I just see it as excess coverage,
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essentially, is what I see it as. Except --
MR. PEARSON: Umbrella policy.
JUDGE TINLEY: You know, it's all spelled out in
this handy dandy pamphlet that we've got here. And I would
invite you to take a look. I've looked at some of it. But in
-- for example, the County Clerk, there's bond requirements.
There are insurance requirements. Some of the deputies in the
office are required to have that. The Tax Assessor, there are
bond requirements.
COMMISSIONER LETZ: Judge, on the --
JUDGE TINLEY: Lots of different --
COMMISSIONER LETZ: -- on the issue of bonding,
which is related in my mind, what does our personnel policy
say about -- about non -- well, I guess the deputy, the other
people in the Treasurer's office, from the standpoint of
background checks and -- you know, and all that? Not just
really the Treasurer's office; anyone that handles money. I
have not looked at our personnel policy in that light in some
time, but I think that's probably a more important issue than
the elected official or the department head, is everybody else
in the office, what our -- what we're requiring.
JUDGE TINLEY: I would agree. And I've had that
discussion with Ms. Hyde. As you know, she is -- one of her
pet projects is developing a brand-new policy to circulate
among the various elected officials and department heads, and
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coming back to this Court with a new personnel policy,
financial policies and so forth, after developing those in
coordination with those that are directly involved with it.
So, I -- we've talked about the fact of background checks and
-- and certain criteria that need to be in place for those
kind of people, and I think --
COMMISSIONER LETZ: The County Attorney's going to
say we're going astray.
JUDGE TINLEY: Okay, I'm sorry.
COMMISSIONER LETZ: My fault. I led us astray.
JUDGE TINLEY: Okay. Mr. Trigo?
MR. TRIGO: Yes. I sit here and I hear especially
you, Tinley, always talking about saving taxpayers money, and
yet here you are trying to spend more of the taxpayers' money.
I don't get it. Where are you trying to save taxpayers'
money? I'd like to ask you a question. Didn't this vendetta
towards the County Treasurer start way back when you asked the
County Treasurer to move some county money into the Juvenile
Detention Center, and she refused, and ever since then you've
I had a vendetta towards the County Treasurer?
JUDGE TINLEY: Is that your question to me,
Mr. Trigo?
MR. TRIGO: Yes.
JUDGE TINLEY: Number one, I've never had a vendetta
against the County Treasurer.
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MR. TRIGO: It sure looks that way.
JUDGE TINLEY: I've had some very, very serious
performance issues with the County Treasurer. The second part
to your question is, I've never asked the County Treasurer to
transfer a dime to Juvenile Detention.
MR. TRIGO: We have witnesses.
JUDGE TINLEY: Well, that's fine, sir.
MR. TRIGO: We have witnesses. How can you say --
JUDGE TINLEY: You can have that dialogue later.
MR. TRIGO: How can you say that?
COMMISSIONER LETZ: The County Attorney's --
MR. TRIGO: And --
JUDGE TINLEY: Mr. Trigo, I can sit here and say
that, because I just did. And what I'm telling you is the
truth, and your daughter, for whatever reason, has told you a
falsehood if she's told you otherwise.
MR. TRIGO: In other words, you're calling her a
I liar?
JUDGE TINLEY: If you want to characterize it that
way, you're certainly welcome to do so, sir.
MR. TRIGO: Well, you know --
COMMISSIONER LETZ: Judge, I don't mean to
interrupt, but we're way beyond the scope of this.
JUDGE TINLEY: We are. We're outside the agenda
item. Have a seat, Mr. Trigo.
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AUDIENCE: Out of order.
MR. TRIGO: Okay, I'll have a seat, but I just want
the public to understand what's going on.
JUDGE TINLEY: Have a seat, Mr. Trigo. Now, where
~ were you?
COMMISSIONER LETZ: I was just trying to get us back
on the agenda item. I'm the one that led us astray.
COMMISSIONER WILLIAMS: I'd like to offer a
suggestion, Judge. Rather than take an action today on one
elected official, to the exclusion of all others, I think,
picking up on what Commissioner Letz said about others who
handle money, why don't we have a really quick assessment of
who handles money, of what kind of bonds are in place, and
then the Court take a look at the entire picture and determine
what's necessary to do. We can do that by first meeting in
December.
COMMISSIONER LETZ: You know, I -- I agree with
that, but I also -- I do also agree that under the Treasurer's
situation, that I don't think you can necessarily look -- you
look at performance, and there have been issues. The
Treasurer has paid money out of her own personal pocket to
avoid some of these that would have been a possible claim
against her bond, so I think that just -- I have no problem
looking at them all together, but I also don't think you look
at all as one item, because performance and past history is an
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issue, and there is an issue on the -- with the I.R.S. and
levies for the last couple years.
COMMISSIONER WILLIAMS: I don't disagree with you --
with your comment, but when we take a look at the entire
package, --
COMMISSIONER LETZ: Right.
COMMISSIONER WILLIAMS: -- we'll make a judgment
call based on performance and other factors.
COMMISSIONER LETZ: Okay.
COMMISSIONER WILLIAMS: In terms of each individual
or category.
I
JUDGE TINLEY: Not a bad idea at all. i
COMMISSIONER BALDWIN; No, that's a great idea.
It's a good idea.
JUDGE TINLEY: We need to move that way anyway, and
that's, of course, what Ms. Hyde wants to do.
COMMISSIONER BALDWIN: I'd really like us to see --
I'm going to withdraw my second. I'd like us to see Ms. Hyde
come forward with that -- at least that part of the policy of
bonding everybody that handles money. We do not do that. And
I've had some discussions with her -- I know I'm outside, but
it -- that needs to be done at the same time, in my opinion.
COMMISSIONER LETZ; Right.
COMMISSIONER WILLIAMS: Yeah.
COMMISSIONER BALDWIN: Let's do it all at one time.
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COMMISSIONER WILLIAMS: That's my point.
COMMISSIONER BALDWIN: Can we do that by the first
meeting in December?
COMMISSIONER WILLIAMS: I don't know why we can't.
COMMISSIONER BALDWIN: I don't either.
COMMISSIONER NICHOLSON: I'll withdraw my motion.
MS. NEMEC: Judge, I have a comment. Judge? I have
a comment, please.
JUDGE TINLEY: Yes, ma'am?
MS. NEMEC: I just want to let y'all know that my
deputy is bonded, so there is a background check. Any time
you bond somebody, there is a background check. And so, just
i so you know that there -- she is bonded, and so there is a
background check involved as far as my employee goes.
COMMISSIONER LETZ: Okay.
MS. NEMEC: The other thing is, I don't think I'm
out of line in saying what I'm about to say, because it has
i been discussed in open court. And the Judge brought it up
yesterday on the $12,000 penalty that was paid to I.R.S., and
I have every confidence that it is going to be reimbursed.
But the Judge had brought up yesterday that it would go
against my bond if we had to, indeed, have to pay for it. I
don't believe that it would be true that it would be against
my bond. That was an error made on my former deputy, and I
know that she said in court that it was not her; that she had
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never done it before, but I did obtain bank records, and she,
indeed, was the person that was handling that function in my
office ever since we started handling it. I have bank records
to prove it. Her pass -- her password and -- she was handling
that from the time that we started handling it up until the
time that the error was made, and then she no longer handled
it after that. So, I just wanted to let you know that. I
have kept her bond open, because I was feeling that that was
going to be the case, and I didn't want to terminate her bond
and then not be able to file against it, and so her bond is
still in place up until the end of this year. So, I just
wanted to let y'all know that. Thank you.
JUDGE TINLEY: Ms. Nemec, in regard to the issue of
your bond, then it's your statement to the Court that there's
no need to increase your bond because any missteps that may be
taken in your office, or any lack of performance in your
i office are -- are things that are occasioned by others in your
I
office and for which you're not responsible? Is that what
I
i you're telling this Court?
MS. NEMEC: That's -- no, that's not what I'm
telling you. I'm just saying my deputies are bonded in case
that the errors do occur on their -- on -- occur on their
behalf also.
JUDGE TINLEY: Are you responsible for all actions
that occur in your office?
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MS. NEMEC: I am also responsible. But they are
bonded too, in case that they make the error too. Thank you.
JUDGE TINLEY: Thank you. Okay. I guess we want to
defer on this issue, hopefully to get things put into place on
a more comprehensive and -- and complete basis.
COMMISSIONER BALDWIN: This -- this particular one, i
taking a look at all people that handle money.
' JUDGE TINLEY: Mm-hmm.
COMMISSIONER BALDWIN; And the policy of bonding
everybody that handles money.
JUDGE TINLEY: Okay.
COMMISSIONER LETZ: Or beyond -- just policy,
period, about everyone that handles money.
COMMISSIONER BALDWIN: Yeah.
COMMISSIONER LETZ: Judge, if we could also, on that
backup, I guess, get the schedule for the cost of the bond,
you know, from -- maybe $10,000, something like that, so we
can get some dollars, 'cause it will be a budget amendment if
we do increase any bonds.
JUDGE TINLEY: Okay.
COMMISSIONER BALDWIN: One of my concerns is the
state law. I mean, I don't have a concern with the law, but
I'm wondering when -- Rex, when I look at this and I see it's
repealed May 19, 1993, does that mean -- is that when this law
went into effect, this particular one?
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MR. EMERSON: Where are you looking? The top of the
page?
COMMISSIONER BALDWIN; I'm just talking about this
law. When did this law go into effect, dealing with --
MR. EMERSON: Initially 1987, and the last revision
was September 1, 2005.
COMMISSIONER BALDWIN: 2005?
MR. EMERSON: Correct.
COMMISSIONER BALDWIN: So that's fairly new. That's
fairly new stuff.
MR. EMERSON: Well, no, its been in existence since
'87. It's just in 19 -- September 1, 19 -- or 2005, they made i
some revision somewhere in that statute.
COMMISSIONER LETZ: They looked at it recently.
COMMISSIONER BALDWIN: Yeah. Well, and it could be
some of these things that we're talking about. We don't know
exactly what the revisions were. My point is -- is that,
obviously, this piece of legislation is important, and the
Treasurer's bonding issue, in my mind, is equally as
important. For all people that handle money, not just the
Treasurer. So, I just -- I think it -- I think it rises above
the level of taking a peek at it. I think it's serious
business, and the Legislature thought that it was serious
business as well, recently. So, I think we need to --
COMMISSIONER WILLIAMS: I think you're doing the
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36
right thing. We'll look at it.
COMMISSIONER HALDWIN: I don't know what the hell
all that meant, but --
COMMISSIONER LETZ: Sounded good.
COMMISSIONER WILLIAMS: Well said. What did you
~ say?
COMMISSIONER BALDWIN: I don't know. We need to get
I to it.
JUDGE TINLEY: Anything else on those items, or any
other matters on the agenda that were not fully taken care of
yesterday that need to come before the Court at this time? If
I
I not, we will stand adjourned.
~ (Commissioners Court adjourned at 11:29 a.m.)
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37
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 lst day of
December, 2006.
JANNETT PIEPER, Kerr County Clerk
Kathy nik, Deputy County Clerk
Certified Shorthand Reporter
11-28-06