1 2 3 4 5 6 7 8 KERR COUNTY COMMISSIONERS COURT 9 Special Session 10 Friday, May 12, 2006 11 2:00 p.m. 12 Commissioners' Courtroom 13 Kerr County Courthouse 14 Kerrville, Texas 15 16 17 18 19 20 21 22 23 PRESENT: PAT TINLEY, Kerr County Judge H. A. "BUSTER" BALDWIN, Commissioner Pct. 1 24 WILLIAM "BILL" WILLIAMS, Commissioner Pct. 2 JONATHAN LETZ, Commissioner Pct. 3 25 DAVE NICHOLSON, Commissioner Pct. 4 2 1 I N D E X May 12, 2006 2 PAGE 3 1.1 Consider, discuss, and take appropriate action to initiate review and analysis of current and 4 prior county grade/step payroll schedules and other payroll records and obtain alternatives 5 and/or recommendation(s) to cure or resolve any deficiencies disclosed by such analysis 3 6 --- Adjourned 36 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3 1 On Friday, May 12, 2006, at 2:00 p.m., a special meeting 2 of the Kerr County Commissioners Court was held in the 3 Commissioners' Courtroom, Kerr County Courthouse, Kerrville, 4 Texas, and the following proceedings were had in open court: 5 P R O C E E D I N G S 6 JUDGE TINLEY: Let me call to order this special 7 meeting of the Kerr County Commissioners Court posted for this 8 date and time, Friday, May the 12th, 2006, at 2 p.m. The item 9 on the agenda is to consider, discuss, and take appropriate 10 action to initiate review and analysis of current and prior 11 county grade/step payroll schedules and other payroll records, 12 and obtain alternatives and/or recommendations to cure or 13 resolve any deficiencies disclosed by such analysis. I was 14 contacted by the Sheriff, who indicated that he had found some 15 discrepancies in the grade and step payroll schedules that 16 some of his employees of his department were paid, and he 17 thought it was a matter that needed to be brought to the 18 Court's attention, as did I, and so this meeting was scheduled 19 accordingly. Sheriff? 20 SHERIFF HIERHOLZER: Well, a little bit of history, 21 first. The way this came up and the way it was discovered, my 22 secretary, in our starting to prepare for our budget process 23 for this coming year -- and the budget, of course, is due 24 Monday. Mine won't be there; you'll have to wait a few more 25 days. But in trying to prepare it, since deputies and -- or 5-12-06 4 1 since employees do get longevity increases, which are one-step 2 increases, on anniversary dates, and deputies get their 3 educational ones on the day they get their educational 4 certificate, in order to prepare the budget and come a lot 5 more -- have a lot more accuracy, you might say, in the final 6 line, what it's going to take for deputy's salaries for the 7 next year, then I need to figure in the step and grades and 8 not just the overall grade that they're in, or the current 9 step that they were in at that time. And when Nancy started 10 figuring that, she came to me. One of our deputies is 11 actually off the scale; is a 13, where it only goes up to 12 14's, so you have to actually calculate the 2.5 percent step. 13 And in doing that, we came up that the 2.5 percent didn't 14 match a lot of the other 2.5 percents that were in our current 15 step and grade. 16 She brought it to me and refigured it in front of 17 me, and we're multiplying each step by the -- the 1.025 to get 18 the 2.5 percent, and it doesn't match. We're coming up with 19 different ranges, anywhere from one officer may be $63 a year 20 short to another one may be $700 a year short. And, you know, 21 some of them we find out are -- are even more than that. So, 22 I tried to figure up where the error occurred, and going back 23 finally to the 2002-2003 step and grade, we came up with the 24 step and grade that was not messed up. Everything after 25 2002-2003, being the 2003-'4, '4-'5, and '5-'6, step and 5-12-06 5 1 grades for our department are messed up. And what that is, is 2 our department operates off four separate step and grades. 3 One of those is the step and grade scale that the jailers and 4 dispatchers are on. That's one separate one. One is the step 5 and grade scale that the deputies are on. One is the one that 6 the nurses are on, and then the last one is the one the 7 secretaries and clerks are on. 8 Now, the secretary and clerks, as best as I know, 9 are also on the same one the courthouse employees are on, and 10 that one I found no errors in. And finding no errors in that 11 one, I thought, well, when did ours start getting messed up? 12 And I think it goes back to the first time that the large -- 13 large raises -- the nice raises were given to deputies and 14 jailers and dispatchers and that, when they figured in the new 15 step and grade. 'Cause before that, in 2002-'3, the nurses, 16 jailers, and deputies were all on the same step and grade 17 scale, okay? And because of the difference in the raises, the 18 jailers got 3,000 that year on top of everything. Deputies 19 got 1,500. It changed all that, and they had to be separated 20 out and put on different step and grades, and that's where the 21 problem came. 22 In trying to find out exactly what caused the 23 problem, I was reminded by my patrol sergeant and trainer, 24 Michael Earney, that he had come down here about two years ago 25 and got a copy of the step and grade on disk. He got that 5-12-06 6 1 copy off Barbara Nemec's computer, because she had it at that 2 time and we needed a copy, and she didn't know how to download 3 it onto a disk. So, he came down here and downloaded a copy 4 of it himself onto a disk. Well, we still have that disk. We 5 were able to pull it back up. So, in analyzing it, the first 6 thing I came up with, in going into the properties of what the 7 disk were, is -- and it's hard to see. The very first page -- 8 these get very cumbersome, but the first page is what you -- 9 you're looking at. And if you look at that printout, about 10 three-quarters of the way down, it says "Date Created." 11 That's the highlighted one. That disk was created June the 12 26th, 1997, at 1:57 p.m. The author of that disk at that time 13 was Thea Sovil, okay? In visiting with Thea, when she left -- 14 or right before she left, even, all those -- the disk and 15 everything was transferred down to Barbara and put on her 16 computer. 17 Okay. Now, the second page that you're looking at, 18 if you will look on that, it is just a snapshot of a -- the 19 step and grade that was on that disk. One of them, okay? 20 2004-2005 deputies is what it was set at. And it is in an 21 Excel program, and right now in the screen, and even on 22 your -- your handout, the 14, Step 2 is this one that is 23 highlighted, okay? And that 14, Step 2 is at 24,527, as you 24 can see in your handout. If you go up above that, just up 25 above the alphabet where it says the D letter, you will see 5-12-06 7 1 how that Step 2 was acquired. That Step 2 was acquired by the 2 sum of 22,842, times 0.03. That year, we were given a 3 3 percent raise. Then those two sums were added into the 4 original 22,842, and on top of that was added $1,000 to give 5 you the $1,000 raise the deputies got that year, okay? What 6 you end up with on it, the 22,842 goes back one year to what a 7 step and grade was the year before at that level. That's 8 where it started from, okay? This is '04-'05 you're looking 9 at, so in the '03-'04 step and grade, a 14-2 was 22,842. And 10 then they added in the 3 percent, and then added all that 11 together and then added the 1,000. 12 In an Excel program, the problem they had with it, 13 they're adding each individual column. When they're adding 14 each individual column, it messes up the difference in between 15 the two columns, and they don't stay at a 2.5 percent step, 16 and so it ended up changing all the steps. 17 COMMISSIONER WILLIAMS: Is this an automatic 18 calculation -- 19 SHERIFF HIERHOLZER: The -- 20 COMMISSIONER WILLIAMS: -- by Excel, or was this a 21 manual calculation? 22 SHERIFF HIERHOLZER: They did it -- the monthly, 23 semimonthly, and hourly was automatic, right down below that 24 24,527. 25 COMMISSIONER WILLIAMS: Mm-hmm. 5-12-06 8 1 SHERIFF HIERHOLZER: But they did the -- the yearly 2 part of it manually by going into this Excel, okay, and having 3 the Excel program figure the 22,842 times 3 percent, and then 4 add it back into it and then add the 1,000. That's on that 5 top line. And it compounds it and does everything differently 6 than -- than the way I believe that it should have been done, 7 or definitely should have been done. The other problem with 8 that, you're going into each step and having to reenter that 9 salary. If you go to your next page, you will look -- that's 10 actually on a 23 -- 11 COMMISSIONER LETZ: Rusty, can I ask you a question? 12 SHERIFF HIERHOLZER: Yes. 13 COMMISSIONER LETZ: To make sure I understand this. 14 So, the way it was done on this printed sheet, it was done 15 every cell? 16 SHERIFF HIERHOLZER: Every cell was done 17 individually. 18 COMMISSIONER LETZ: And the other way to do it would 19 have been to do the step -- the first cell, and then multiply 20 each one after that by 2 and a half percent. 21 SHERIFF HIERHOLZER: That's exactly what I went back 22 and did for the last three years. You'll see those in there. 23 COMMISSIONER WILLIAMS: Why wouldn't it start on 24 Step 1, 23,991? 25 SHERIFF HIERHOLZER: I can't answer that question. 5-12-06 9 1 I don't know, okay? I don't know. Okay. On the next page, 2 the -- and the problem with entering each individual one of 3 those, that one I actually have highlighted is a 23-2. The 4 23-2 up at the top, where it equals -- it says that that is 5 the sum of 34,184, times the 3 percent, then add back the 6 3 percent back into it and add the 1,000. And it would take 7 me going back to the '03-'04. I didn't have time to actually 8 give you -- if you will go over in your handbook, starting at 9 the blue tab, count that as one page. Two, three -- the 10 fourth page, it has handwritten on the top of it, "Patrol." 11 COMMISSIONER LETZ: The first page after the blue 12 tab? 13 SHERIFF HIERHOLZER: No, four pages after the -- 14 counting the blue tab. And there right on the top of the 15 page, Jonathan, it says "Patrol." 16 COMMISSIONER LETZ: Okay. 17 SHERIFF HIERHOLZER: Hand-written, okay? That's the 18 year before's step and grade that they were working off of. 19 So, the figure that should have been put in that second deal, 20 where it says the sum, was actually -- it's -- it goes on the 21 next one, 'cause you're on Line 23 -- Position 23, so you're 22 on the next page from where it says "Patrol," is 34,784. 23 COMMISSIONER WILLIAMS: Step 2, Grade 23? 24 SHERIFF HIERHOLZER: Yes. And in a mis -- typo, 25 because they were doing each cell through that Excel, they 5-12-06 10 1 typed in 34,184, a $600 difference, which threw off everything 2 again. 3 COMMISSIONER WILLIAMS: Where do you see that? 4 SHERIFF HIERHOLZER: Look at your -- on that page 5 where it did your patrol, which I've got the 34,784. Okay. 6 Now go back to your second page where I took a snapshot of the 7 program that they used and how they used it. 8 COMMISSIONER WILLIAMS: 34,184 up above. 9 SHERIFF HIERHOLZER: Right. That should have been 10 34,784. It's the year before that they took to add into that, 11 calculated with the 3 percent. That has thrown off all our 12 calculations, okay? To try and keep this as short as 13 possible, all -- most of all the other pages you have in your 14 handout start out with the wrong step and grade, which is also 15 the ones we were using, okay? Up till this date. They're 16 using them. And each section -- behind the blue tab is all 17 the ones for the deputies, behind the red tab is the ones for 18 the jailers and dispatchers, and behind the yellow tab is the 19 ones that they were using for the nurses. Now, one other 20 problem that you have is that the one that we were on that 21 said patrol on the top of it, if you looked off on the 22 right-hand side of it, you also saw where it said, "Revised 23 11-1 of '03." The budget went into effect October 1 of '03. 24 The ones directly before that, if you go two, three, 25 pages before that, you will see at the top where we wrote 5-12-06 11 1 "incorrect," and 9-29-03. That's the one they adopted. Then 2 they came back, 11-1 of '03 and revised it, because it was 3 wrong. Now, our department wasn't made aware of the revision 4 until January of '03. Now, when did it go into effect? Did 5 they go back to October and change the officers' salaries 6 since they revised it? Or did they change them 11-1? Or did 7 they change them in January when we were advised? I don't 8 know. All I know is it's messed up. 9 COMMISSIONER WILLIAMS: Let me be sure I understand 10 what you're saying here. On this page, where you talk about 11 the sum of 34,184 plus 3 percent plus 1,000, that's correct? 12 The sum is correct; is that right? 13 SHERIFF HIERHOLZER: No. 14 COMMISSIONER WILLIAMS: 34,184 is correct or is 15 incorrect? 16 SHERIFF HIERHOLZER: No, 34,184 is incorrect. It 17 should have been, by what they were using -- 18 COMMISSIONER WILLIAMS: That's what I wanted to be 19 sure I understood. In whose favor was the error? 20 SHERIFF HIERHOLZER: Should been 34 -- in the 21 County's favor, not in that officer's favor. He lost $600, 22 okay? Plus that whole schedule they were using, they had 23 originally figured it wrong, so it would have been more than 24 that 600. And then it's a snowball effect. They've got three 25 years of bad step and grades. You can go -- Michael, will you 5-12-06 12 1 add onto the -- do your calculator on that? Take step -- 2 whatever we're at there. Take Step 20 and just go to the G 3 column, which would be Step 5. 34,379. What he's doing is, 4 he's taking -- I just told him to pick one. Step 20 -- or 5 Grade 20, and this is a Step 5. So, he's putting in the 34 -- 6 this is the schedule they were using. He's putting in the 7 34,379. Now, multiply that by 1.025. That should give you 8 your next step, and you round off the fractions. 35,238, but 9 our guys get paid 35,174. The nightmare this causes me -- and 10 you have corrected ones in there. If you look at the ones 11 that are labeled either -- you know, they -- we start all the 12 way back '03-'04, '04-'05, and '05-'06 corrected jailers, 13 corrected deputies, and corrected nurses. We stayed up till 14 well after midnight last night refiguring these. And, 15 Michael, can you pull up one of those? 16 MR. EARNEY: This one, or the corrected -- corrected 17 steps? 18 SHERIFF HIERHOLZER: Is that the corrected deputies? 19 MR. EARNEY: '03-'04. 20 SHERIFF HIERHOLZER: All right. Click onto the 21 22,321, the 14-1. The way I figured this, is what I 22 believe -- and in visiting with everybody that I could visit 23 with telling me, we took the 20,313, which was the year 24 before's 14-1, okay? This is the year that the deputies got a 25 $1,500 raise. Y'all had stated in that Commissioners Court 5-12-06 13 1 meeting to -- to do the COLA first and then add the raise in 2 after the COLA. So, what I did is the 20,313 times 1.025, 3 'cause that was the COLA that year, okay? And then added the 4 1,500, and what you get is the 22,321, okay? That's your 5 base, your starting step. If you go to Step 2 -- now, 6 Michael, click on Step 2. What this means is C-4 times 1.025. 7 C-4 is the Step 2. You're taking this prior number that -- 8 your base number that you got, and you're automatically 9 multiplying it by 1.025, giving your 2 and a half percent step 10 increase, okay? And you come up with 22,879. If you go over 11 to 3, it's D-4 times 1.025. It's a very simple calculation, 12 and the computer actually does it all, and I didn't stand 13 there and figure it. The only one I had to figure was this 14 very first one. You click on it, and all the rest of them 15 fill in; they're all 2.5 percent different, and everybody's 16 treated fairly. That's the way all the corrected schedules 17 are done for the last three years that we corrected last 18 night. The very last page of this presentation -- or last two 19 pages -- 20 COMMISSIONER WILLIAMS: Which tab? 21 SHERIFF HIERHOLZER: The very last. At the very 22 end, the very last two pages in the whole deal. I did not 23 have time today, and it took us the last two and a half weeks 24 to try and figure out where all this was. I didn't have time, 25 and I don't even know really how to start to go back and 5-12-06 14 1 correct three years. What you're seeing on the last two 2 pages, the list of all my officers, the first salary with 3 dollar figures in it is what their current pay is right now, 4 based on the step and grade that we're acting under. The 5 second line is the correct salary that these officers should 6 be getting this year alone. This only addresses '06 -- 7 '05-'06. And it addresses it as if we were going all the way 8 through October. This is a full year, okay? The second 9 page -- this is on dispatchers and deputies. And the second 10 page, down at the bottom in the green, you will see the total 11 loss in this one year alone was $14,632. 12 Now, my problem is, some of these, if you go back 13 through and start comparing old step and grades to the new 14 ones, some of it changes my officers' hourly rates by as much 15 as 20, 30 cents an hour. Some of it by 5 cents. But the 16 problem is, in law enforcement, our overtime is figured 17 totally different than any other people. Law enforcement and 18 firemen are figured different. Where most people work 160 19 hours a month, if you work more than 160 hours, over 40 hours 20 a week, you get time and a half pay. It doesn't work that way 21 for law enforcement, which is jailers and deputies. What it 22 does with jailers and deputies, the first 11 hours of that 23 overtime is at straight time. It's only after that 11 hours 24 that it becomes time and a half. And that's in a 28-day pay 25 schedule. So, now I have to go back to get this straight, and 5-12-06 15 1 go back three years through every single officer and jailer 2 and dispatcher and nurse I've had or have, and look at all 3 their overtime sheets, all their monthly work schedules, their 4 hourly schedules, which we do have those records, and 5 recalculate every bit of it, sometimes twice, 'cause you don't 6 know if you're going to be in the 11-hour or in the after 7 11-hour, if you're straight time or you're time and a half. 8 And I've got -- this affects the current employees -- how many 9 clerks do we have? 10 MS. ROBISON: About eight clerks. 11 SHERIFF HIERHOLZER: Eight clerks, 94 employees. 12 So, you're talking 70 -- or 87 employees, current employees. 13 COMMISSIONER NICHOLSON: I don't see jailers in 14 this. 15 SHERIFF HIERHOLZER: Jailers weren't even in that -- 16 I haven't even figured the jailers. That's only one year. I 17 didn't have time to figure -- the jailers or nurses aren't in 18 that, okay? In that corrected are what it would cost this one 19 year. 20 COMMISSIONER WILLIAMS: That's a one-year 21 correction? 22 SHERIFF HIERHOLZER: This is just this current year. 23 COMMISSIONER WILLIAMS: That doesn't go back to the 24 previous year? 25 SHERIFF HIERHOLZER: No. That 14,682 is just this 5-12-06 16 1 current year we're in, not including any overtime 2 recalculations or anything else. It -- and it does not 3 include nurses, does not include jailers. It only includes 4 deputies and dispatchers for one year. 5 COMMISSIONER BALDWIN: Are you about through? Can I 6 talk? 7 SHERIFF HIERHOLZER: Sure, I'm through. I've had 8 it. 9 COMMISSIONER BALDWIN: Well, I certainly would never 10 question Rusty's mathematical skills at all -- or I would his, 11 but I wouldn't question Nancy's. So, you know, we -- in 12 reality, we really don't know what kind of problem we have. 13 If there is a problem, if you're absolutely sure -- looks like 14 there is, so we have to -- we have to get an outside auditor 15 to do this thing and do it right, go through the numbers and 16 go through the employees and do all those things that Rusty's 17 not wanting to do, and he should not do. But, you know, 18 that's what -- that's the way I see our agenda set up, is to 19 do that. And I think we -- you know, in short order here, we 20 can select an outside auditor, and I think that we need -- 21 they need to let us know how much this thing's going to cost 22 and set a time frame on it. 23 JUDGE TINLEY: Let me offer one comment along that 24 same line. But the -- the accounting cost in this thing could 25 get to be pretty horrendous, as I'm sure everybody's come to 5-12-06 17 1 that conclusion by now. We may want to issue a call for some 2 of our good citizens with all this expertise that are in a 3 retired status that might be willing to help us, that have 4 accounting backgrounds, and might be willing to come in and 5 give us some assistance there. I -- I note that there was a 6 letter in the newspaper the other day that we've got all 7 these -- 8 AUDIENCE: Would you speak up so we can hear you? 9 JUDGE TINLEY: -- wonderful folks that -- that have 10 moved to our community with these skills, and I'm just 11 throwing that out as an option. Obviously, we need somebody 12 that has the skills. I'm just concerned about the cost. And 13 if we can get -- if we can get some qualified folks that are 14 willing to work on this thing for us, I think it would be a 15 great thing. 16 COMMISSIONER BALDWIN: I agree with you 100 percent. 17 I would hope that they would be licensed or blessed or 18 whatever kind of people you get. 19 COMMISSIONER LETZ: I kind of disagree. I think 20 this is a -- 21 COMMISSIONER BALDWIN: I'm surprised by that. 22 COMMISSIONER LETZ: I'm so easy to get along with. 23 I think this is a very important thing; has some very severe 24 legal implications to the County. And not only financial, 25 because there's so many things -- I don't know what all can go 5-12-06 18 1 on about paying people incorrectly. I think we need to get a 2 licensed -- currently licensed accounting firm to do the 3 audit, and with -- there's no agendas; they're just doing it. 4 It's just a straight professional service. I would love to -- 5 I think I like the idea of using volunteers, but on something 6 that is as critical as this, it may have some pretty 7 far-reaching implications. I want us to have data that is 8 coming from a licensed C.P.A. firm, and then they -- we can 9 hold them accountable for their audit. 10 COMMISSIONER NICHOLSON: I want to hear from the -- 11 the Auditor. 12 MR. TOMLINSON: I totally agree. 13 COMMISSIONER NICHOLSON: Do we need an outside firm? 14 MR. TOMLINSON: Yeah, I think we do. 15 COMMISSIONER NICHOLSON: Okay. 16 COMMISSIONER BALDWIN: My question would be, do we 17 use the same outside firm that we always -- where is Tommy? 18 MR. TOMLINSON: Right here. 19 COMMISSIONER BALDWIN: That we always use? And if 20 you say yes, then I'm going to ask you, why didn't they catch 21 -- why didn't they catch this before? So, should we use the 22 same firm that we always use? 23 MR. TOMLINSON: I think what you ought to do is -- 24 COMMISSIONER WILLIAMS: Tommy, I can't hear you. 25 MR. TOMLINSON: I think what you need to do is -- is 5-12-06 19 1 ask for some quotes. You can't get a bid, because it's 2 against the law. I mean, you can't bid a service contract. 3 So, I would make some calls and tell them -- give them the -- 4 what data you have, and give -- have them give you an 5 estimate. And then you negotiate with, you know, whoever you 6 think has the best qualifications, and tied to whatever time 7 element that's involved, you know, how many people they have 8 to get the work done, those kinds of issues. 'Cause, you 9 know, I think we need to get this done A.S.A.P. So, you know, 10 if a firm doesn't have, you know, the people to do it, then -- 11 then that might not be the best choice. 12 COMMISSIONER NICHOLSON: Is that something you can 13 do for us? 14 MR. TOMLINSON: I can do it, but I prefer not to do 15 it, because I'm too close to the situation. And, you know, I 16 don't -- I don't want to be in any way -- even for anybody to 17 even think that I'd do that and have an agenda connected 18 with -- with that calculation. 19 COMMISSIONER BALDWIN: So, we hire somebody to hire 20 somebody? 21 COMMISSIONER LETZ: I think we -- I think, to get it 22 done, I think -- 23 COMMISSIONER BALDWIN: Get it in here? 24 COMMISSIONER LETZ: I think some member of the 25 Court -- personally, I think Dave Nicholson, with his 5-12-06 20 1 background in business, is qualified to do it, with his human 2 resources background, to talk to the people -- accounting 3 firm, to get the prices, bring the prices, and he can get with 4 the Sheriff and put some kind of proposal together. And I 5 really -- maybe the Sheriff -- I don't know if the Sheriff 6 should be involved or not in that. But I just think that -- 7 you know, it doesn't have to be Dave; it can be anybody, but 8 he seems to have the knowledge from his business experience to 9 do such a -- make inquiries, anyway. 10 COMMISSIONER NICHOLSON: I'll talk with -- if Tommy 11 would give me the list of potential candidates, I'd be -- I'll 12 be the contact person. 13 MR. TOMLINSON: Another reason that -- that I prefer 14 to do it this way is that we are currently nursing a brand-new 15 financial software package, and we are learning by the day, or 16 by the hour. And, so, to make -- for us to get that software 17 to where we like it and we know what we're doing, I don't 18 think we have the real time to devote to it that we need to. 19 COMMISSIONER NICHOLSON: I want to say a couple 20 things. To begin with, these people who have been underpaid, 21 I want to set a deadline, a time that they're going to be paid 22 correctly, and I'd suggest that should be June 1. I don't 23 know how -- I don't see this as a big accounting job, as maybe 24 some others do. It's probably going to take a number of 25 eight-hour days going through records, plugging stuff into the 5-12-06 21 1 computer, and generating a report for each one of these 2 employees that's been underpaid. I also think that the legal 3 issue -- no, the tax issues will wash out. The feds don't 4 care if we paid people what we promised to pay them; they just 5 care that we deduct the right FICA and withholding on the 6 amount that we do pay them. Now, it could be a legal issue. 7 I promise I won't practice law, Mr. Attorney. If we don't -- 8 if we made a promise to pay a certain amount and we failed to 9 pay that, then that might be an issue for the courts to 10 decide. It's not going to get to that, but anyhow, when we 11 decide our process for making this right, I'd sure like to set 12 a deadline. I'd like to get this money in the hands of our 13 employees as soon as we possibly can. 14 COMMISSIONER WILLIAMS: I don't disagree with you, 15 Commissioner. I think we should, and I think we should do the 16 audit or cause an audit to be done. By which firm, I don't 17 know. I'm not sure whether I understand whether Tommy's 18 suggesting that the accounting firm that we typically use for 19 our outside audit -- you're suggesting not to use that one? 20 MR. TOMLINSON: No, I'm -- I'm suggesting that you 21 -- you include anybody that you want to include. I mean, they 22 can -- there may be firms that choose not to do it. 23 COMMISSIONER WILLIAMS: Well, that could be the 24 case. But -- 25 MR. TOMLINSON: And so, I mean, you have a limited 5-12-06 22 1 number that you have to choose from. 2 SHERIFF HIERHOLZER: Can I make one -- 3 COMMISSIONER WILLIAMS: I just want to finish my 4 statement. 5 SHERIFF HIERHOLZER: Okay. 6 COMMISSIONER WILLIAMS: I think it should be done, 7 should be done A.S.A.P. And if we can accomplish it by June 8 1, that's fine. I agree with you on the tax aspects of it. 9 If they're underpaid, they're going to be paid what they're 10 supposed to get correctly; the taxes will be deducted from 11 that, and the federal government's going to -- going to end up 12 getting what's it's entitled to get. I'm just wondering if 13 it's a bit more complicated than what -- what appears on the 14 surface because of the overtime factor, the way they do their 15 overtime, their shift involvement, not only the step and 16 grade, but the educational component, as well as the -- as the 17 time in grade. All of these things add up to a good bit of 18 work. But -- so I -- let's do it. Let's get it done. I 19 don't know -- I don't hold out any hope about getting it done 20 by June 1, but let's -- 21 COMMISSIONER LETZ: I think there's -- I think part 22 of it could be done by June 1 pretty easily. I think the -- 23 the overtime issue is a -- could take a while; you have to go 24 back through so many records. But the payroll, getting that 25 right shouldn't take long, and I'd like to see us -- even if 5-12-06 23 1 we have to cut two checks, I mean, I think we need to try to 2 get the -- the payroll part fixed as quick as we can. Then do 3 the -- if we split it into two components, get the overtime, 4 then, as quick as we can get that, 'cause I don't think it's a 5 huge job to get the payroll and -- the flat payroll fixed. 6 COMMISSIONER WILLIAMS: I agree with your approach. 7 Let's take care of the base pay first, and the overtime can be 8 adjusted after we've gotten all these pieces laid in place. 9 And I'm wondering if -- if we might not be able to pick up on 10 the Judge's suggestion about some people who do hold C.P.A. 11 qualifications to help do some of the preliminary grunt work 12 to help the accounting firm have a lot of things in place when 13 they step in place to do that. I'm just wondering if we can 14 do -- do the two together and make it come out right. 15 COMMISSIONER LETZ: I think if the C.P.A. firm is 16 willing to do that, that's great, but I think they're the ones 17 that's signing the result, and it's up to them. 18 SHERIFF HIERHOLZER: The only thing I have with 19 volunteers, even if they're -- unless they're going to sign a 20 kind of contract and be bonded and that, I'd just have a 21 concern about opening personnel files with Social Security 22 numbers and all that in it to volunteers, or somebody that's 23 really not -- 24 COMMISSIONER WILLIAMS: That's a valid 25 consideration. 5-12-06 24 1 SHERIFF HIERHOLZER: You know, I would also agree 2 with Jonathan. The -- the overtime issue is -- is enormous. 3 Okay? That's going to take a lot of actual time and figuring, 4 going through every time slip for 87 employees for the last 5 three years -- 87 current employees. Now, the jail's always 6 had a pretty good turnover rate; y'all know that, so you got 7 those, too, that left. I have some that have died. I have 8 some that have retired, okay? You know, it's going to affect 9 all that stuff. But the basic payroll, the basic step and -- 10 and grade scales, all right, I even believe that I've already 11 corrected those for the Court. But I would definitely, before 12 you went by that, let an outside agency -- let somebody else 13 doublecheck our work, okay? But I believe that they're 14 correct, and you can see the calculation work. And if they 15 are, my only thing is -- yes, this is already, what, May the 16 12th, so the next payroll's going to come out wrong. Officers 17 are going to get paid wrong on the 15th of this month. We 18 know that, all right? But if we could get at least the 19 first -- the officers back to being paid correctly this year 20 so that they're not continually being paid wrong from now on, 21 let's get at least that corrected, or the base payroll, the 22 base step and grades fixed. And then go in and fix the 23 overtime and let them have that. 24 COMMISSIONER NICHOLSON: Rusty, where are the time 25 sheets and payroll records stored? 5-12-06 25 1 SHERIFF HIERHOLZER: I keep them all at our office. 2 COMMISSIONER NICHOLSON: Everything that an officer 3 would need is at your office? 4 SHERIFF HIERHOLZER: Yes, as far as that. Now, as 5 far as what they were actually paid, that's -- you know, some 6 of that is going to have to come out of the Treasurer's 7 office. We know what they should have been paid. 8 JUDGE TINLEY: I think the message we need -- this 9 Court needs to send to your people is that we're going to pay 10 them what they're due. They're entitled to it. We're going 11 to see that they get paid. Now, we may have to do it in a 12 couple of chunks, but -- however it works out logistically so 13 that it works out properly. But -- but I think -- I think you 14 can be assured that we want to do the right thing by your 15 people and see that they get what they're entitled to. 16 SHERIFF HIERHOLZER: I would appreciate that. 17 Because -- and I tried to tone it down a little bit. My 18 attitude hasn't been very good. I don't feel officers and 19 jailers get paid enough as it is, and then when we shortchange 20 them because of our mistakes, you're right, I think it's even 21 worse. So, yes, I'm tired of mistakes coming out of there, 22 and it needs to be fixed once and for all. 23 COMMISSIONER BALDWIN: Better cut him off. 24 SHERIFF HIERHOLZER: I'll sit down, Buster. 25 COMMISSIONER BALDWIN: The 22nd is the next 5-12-06 26 1 meeting -- Commissioners Court meeting. 2 COMMISSIONER NICHOLSON: I'm not going to be here. 3 COMMISSIONER BALDWIN: Okay. How about the -- 4 COMMISSIONER LETZ: I think -- why don't we just 5 have a special meeting to pick us an accounting firm next 6 week, as soon as Dave gets it. And I think you ought to -- 7 shouldn't take that long to -- he can even call some of them 8 in San Antonio, some of the local ones. There's only half a 9 dozen local, I think, that would probably handle something -- 10 I mean, really have personnel to do it, and some in San 11 Antonio. So I think by Tuesday, you ought to have a pretty 12 good idea as to who you want to talk to, so maybe set a 13 meeting for next Wednesday or Thursday and let them get going. 14 COMMISSIONER NICHOLSON: That'll work. 15 COMMISSIONER WILLIAMS: Thursday would be better for 16 me. 17 JUDGE TINLEY: I won't be available Thursday. I'll 18 be available Wednesday. 19 COMMISSIONER LETZ: Either day. 20 COMMISSIONER WILLIAMS: Late in the afternoon is 21 fine. 22 (Discussion off the record.) 23 COMMISSIONER WILLIAMS: We're just talking about 24 scheduling. Trying to figure out with the Judge and us in 25 terms of scheduling. 5-12-06 27 1 COMMISSIONER BALDWIN: 3 o'clock Wednesday, the 2 17th? 3 COMMISSIONER WILLIAMS: I can do it at 3 o'clock, 4 yes. 5 COMMISSIONER BALDWIN: What's going to happen at 6 3 o'clock on Wednesday, the 17th? 7 COMMISSIONER LETZ: Hopefully hire a firm to do the 8 audit of the payroll records. 9 COMMISSIONER WILLIAMS: What's the first pay period 10 in June? June what? 11 COMMISSIONER NICHOLSON: They get paid twice a 12 month? 13 SHERIFF HIERHOLZER: We get paid last -- yeah, 15th 14 and the 1st -- and the last day. 15 COMMISSIONER WILLIAMS: We need to have the step and 16 grade schedule corrected so that the first pay period in June 17 reflects the actual base pay, base plus whatever pieces are 18 there. 19 COMMISSIONER LETZ: That'll certainly be the goal, 20 but, I mean, I think you have to wait till we visit with -- 21 get some input. 22 COMMISSIONER WILLIAMS: I think that should be our 23 goal. 24 COMMISSIONER NICHOLSON: I don't think we need a 25 motion. We're just agreeing to meet next Wednesday, and 5-12-06 28 1 probably going to do this same agenda item again, have some 2 information about who might do the work for us, and hopefully 3 we'll select a contractor. 4 JUDGE TINLEY: Any other member of the Court have 5 anything to offer on this? 6 COMMISSIONER BALDWIN: No, sir. That sounds good. 7 JUDGE TINLEY: Mrs. Nemec, did you desire to be 8 heard? 9 MS. NEMEC: Yes, please. 10 COMMISSIONER BALDWIN: Are we going to get off of 11 the agenda item here? 12 MS. NEMEC: No, sir, not at all. All about the step 13 and grade schedule. 14 COMMISSIONER BALDWIN: Let me see the agenda item 15 again. 16 (Discussion off the record.) 17 MS. NEMEC: I have a prepared statement that I'd 18 like to read for the record, please. It says to Commissioners 19 Court from Barbara Nemec, County Treasurer. The question has 20 been raised as to whose responsibility it is to prepare the 21 step and grade schedule. I was under the impression that the 22 previous Court Administrator prepared this schedule along with 23 the position schedule until the time she retired. However, 24 after researching the matter, I found that she only prepared 25 the schedule up until the year 2000. My office did indeed 5-12-06 29 1 prepare the schedule for the following two years after that. 2 It is my understanding that errors being questioned today did 3 not reflect -- did not occur during the two years my office 4 handled the schedules. 5 At this point, the Court approved adding additional 6 amounts to each step/grade for the Sheriff's Department. I 7 tried to explain to the Court the schedule would not be 8 accurate in the manner they were proposing. It was at this 9 time that the Assistant Auditor volunteered to take over this 10 function. I was not opposed to this idea, since, one, I did 11 not agree that the manner that was being proposed would keep 12 the 2.5 increment uniformity that is set in the schedule, and 13 two, it was not a duty outlined in the Court Order Number 14 21189 appointing me County Personnel Officer. From that point 15 forward, the following is the manner in which the schedules 16 were being handled. One, Assistant County Auditor updates and 17 prepares step and grade schedule. Two, Assistant Auditor 18 gives Treasurer step and grade schedule. Three, County 19 Treasurer updates the position schedule by applying the 20 amounts from the updated step and grade schedule to each 21 employee, and during the budget process, both schedules are 22 adopted by the Commissioners Court. 23 During the budget process, it is typical to receive 24 several calls from various departments asking for payroll 25 figures reflecting the anticipated cost-of-living, merit 5-12-06 30 1 and/or longevity. At this early stage of the budget process, 2 the step and grade schedule is not yet available to reflect 3 the updated information. Therefore, I take the current 4 schedule that is in place and look up the step and grade that 5 each employee is being paid, and that amount is then 6 multiplied by the percentage of anticipated cost-of-living, 7 and then an additional 2.5 is added to that figure for each 8 grade that is being proposed. The 2.5 represents the standard 9 increments between grades. In November 1992, Court Order 10 Number 21189 was approved. This court order outlines my 11 duties as County Personnel Officer. The court order is 12 attached, and the duties of preparing the step/grade schedule 13 are not one of them. 14 The duties outlined in this order read as follows: 15 Personnel Officer shall be required to and shall have the 16 responsibility of keeping and maintaining such personnel files 17 of each county employee as required by the Court or the 18 personnel rules, assisting in the administration of the Kerr 19 County personnel policies, preparing reports and documents 20 required by state and federal agencies regarding personnel 21 matters, maintaining time records, monitoring accumulations of 22 sick, vacation, and overtime, administrating the benefits 23 program, and working with the County Auditor in matters of 24 accounting and compensation. The County Personnel Officer 25 shall assist elected officials, department heads, and 5-12-06 31 1 supervisors in personnel matters and shall make such reports 2 to Commissioners Court as may be requested to the Court. Any 3 questions? 4 JUDGE TINLEY: Thank you. 5 MS. NEMEC: Thank you. 6 JUDGE TINLEY: Anyone else present have anything to 7 offer in connection with the matter being considered today? 8 Any member of the Court have anything they wish to offer? 9 COMMISSIONER LETZ: Just a comment, and -- about 10 where we go from here. I think that the most important thing 11 at this moment is to do what we've done; is to get an 12 accounting firm to audit. The other part of it, as to what 13 caused it, I think that is something that the public has a 14 right to know as to why this happened. I'm not really trying 15 to point blame as much as figure out where the problems are. 16 And I'm somewhat shocked -- I think I've made this comment 17 before. Our personnel -- not the personnel side; the pay side 18 of this County's work, you know, this using Excel spreadsheet 19 to figure out pay in the computer days that we have today, and 20 the knowledge and the programs that are available, seems 21 really odd to me. Seems that it's way, way too manual. I'd 22 really like to look at going into the -- maybe the last 23 century in technology in this area, and -- and start doing 24 payroll properly. It just seems that we just have -- this is 25 an archaic way of doing it. We're actually doing it with an 5-12-06 32 1 abacus, almost. I mean, with technology -- I mean, I'm 2 exaggerating some, but not a lot. And there are -- are 3 certainly firms around that handle payroll functions, and I'd 4 like to inquire about outsourcing this entire function to the 5 private sector. And every -- I just think it can be done 6 cheaper and better. We've had a lot of problems this year, 7 and it just -- you know, we've spent way too much time on this 8 issue trying to fix mistakes, and I think it's time to move 9 forward on that. 10 COMMISSIONER WILLIAMS: I have a question, Judge. 11 We've devoted a lot of time and attention here to the errors 12 that have taken place in the Sheriff's Department step and 13 grade. Are we confident that there are not also errors in the 14 other step and grade that affect all the other employees? And 15 if we are confident, that's fine. If we are not confident, 16 then we should take the necessary steps to rectify that at 17 this time as well. 18 JUDGE TINLEY: You're right, Commissioner. I think 19 the Sheriff has indicated, with some test figures that he ran, 20 he thinks that the regular clerical and admin. schedule is 21 okay, but if we're going to have this thing reviewed by 22 professionals, I think they ought to look all of it. 23 COMMISSIONER WILLIAMS: We need to look at all of 24 it. There's no sense in completing one and going back to find 25 out we have to do it all over again. Just do it all at one 5-12-06 33 1 time. 2 COMMISSIONER LETZ: I think you're right, 'cause I 3 think it -- also, the confidence of the employees is at stake 4 here. 5 JUDGE TINLEY: Surely. 6 COMMISSIONER LETZ: But, anyway, I would put it back 7 on. I made those comments. I think we need to look into it a 8 little bit further, and I'll put it back on our next agenda as 9 well. 10 JUDGE TINLEY: Sheriff, did you have something? 11 SHERIFF HIERHOLZER: One last comment. I have to 12 say, gentlemen, I'm at my wit's end with all this. Okay? I'm 13 sick and tired. In the last just little bit, I've had three 14 employees that were overpaid on their paychecks, and had to 15 all of a sudden pay it back on short notice, and hurt them on 16 that. I've had employees that didn't receive paychecks. I've 17 had employees that were shorted on paychecks. I'm -- and I'm 18 -- I don't know what the problem is. And I'm not going to 19 blame Barbara, but the only thing I'll say is, I wish I could 20 pick and choose what laws in this state I wanted to enforce 21 that were part of my duties. 22 COMMISSIONER WILLIAMS: Well, you can't. 23 COMMISSIONER NICHOLSON: I wish you'd really tell us 24 how you feel about that, Sheriff. 25 MS. NEMEC: I'd like to tell you how I feel about 5-12-06 34 1 it. There have been 10 errors in the last few months in the 2 Sheriff's Department. Two of those errors I take 3 responsibility for. I have backup here, where those errors 4 came from and why they occurred. If you want to go into 5 executive session, I'll be glad to share it with you. 6 COMMISSIONER WILLIAMS: I see no useful purpose in 7 this dialogue. 8 COMMISSIONER BALDWIN: Stay on the agenda. 9 JUDGE TINLEY: Any member of the Court have anything 10 further? Tommy, you had something? 11 MR. TOMLINSON: Well, I didn't come prepared to say 12 anything, but there was a -- we had a -- I come before the 13 Court with a little mixed emotions. One is of surprise. The 14 other one is a little confusion, and maybe a little anger. 15 You know, the surprise part of this is that I didn't know that 16 -- that the Auditor's office was responsible for calculating 17 this schedule. I have never received, that I know of, a 18 directive from this Court or any other prior Court to that 19 effect. And what -- I mean, the County Judge, at the time 20 that the files were transmitted to the Treasurer's office, I 21 think the intent was to -- was to put that process in the 22 correct place. And -- and in my mind, it is in the correct 23 place, because, I mean, this -- this schedule is the basis -- 24 or, I mean it's basic to the step and grade footprint. 25 Because without it, you don't have anything. So, my confusion 5-12-06 35 1 is -- is how do you separate one function of -- of the payroll 2 process or the step and grade process from one -- one 3 department to another? I mean, I believe that -- that by 4 virtue of the fact that the Treasurer's office is the 5 personnel office, then anything related to personnel, I don't 6 care what it is, has to be done right there. And the 7 responsibility has to lie there. 8 And I think my employee that -- that was mentioned 9 in today's meeting, according to her, she assisted the 10 Treasurer, by the Treasurer's request. So, I mean, it's -- to 11 me, it doesn't matter who does the calculation. It doesn't 12 matter if it's right or wrong. What matters is -- is that the 13 person that's responsible takes that responsibility. I mean, 14 it can be -- I mean, Buster could have calculated it. If it 15 was right or wrong, the Treasurer or the Treasurer's office 16 has to assume responsibility. So, my -- my anger is that I 17 have -- and it's not with the Treasurer; it's not with the 18 Court, but I have been in the business world for almost 45 19 years. I've been in the military, I've been in college, and 20 in all those experiences, I've met many people and have had 21 lots of relationships. I've been -- I've been an employee and 22 I've been an employer. What -- what really makes me mad is 23 that none of those people that I've had association -- that 24 I've been associated with ever told me that I had the option 25 to pick and choose what part of my job that I'm not 5-12-06 36 1 responsible for. Thank you for your time. 2 JUDGE TINLEY: Thank you. Anything further? 3 MS. NEMEC: Yes, sir. I'd like to mention, for one, 4 that the payroll function is not the Treasurer's 5 responsibility in the court order that I was assigned to be 6 the County Personnel Officer. And Mr. Tomlinson says -- or 7 feels that it is my responsibility to do the step and grade, 8 and that it's not the Auditor's responsibility, but it is 9 clearly outlined in this court order. And if y'all want to 10 change it, if you feel like Mr. Tomlinson feels, then the 11 court order needs to be changed, because it says that I -- 12 that the Treasurer shall work -- is working with the County 13 Auditor in matters of accounting and compensation. Working 14 with, not doing them. 15 COMMISSIONER BALDWIN: Move we adjourn. 16 COMMISSIONER LETZ: Second. 17 JUDGE TINLEY: Motion made and seconded for 18 adjournment. Any question or discussion? All in favor? 19 (The motion carried by unanimous vote.) 20 JUDGE TINLEY: Opposed? We stand adjourned. 21 (Commissioners Court adjourned at 2:54 p.m.) 22 - - - - - - - - - - 23 24 25 5-12-06 37 1 STATE OF TEXAS | 2 COUNTY OF KERR | 3 The above and foregoing is a true and complete 4 transcription of my stenotype notes taken in my 5 capacity as County Clerk of the Commissioners Court 6 of Kerr County, Texas, at the time and place 7 heretofore set forth. 8 DATED at Kerrville, Texas, this 15th day of 9 May, 2006. 10 11 JANNETT PIEPER, Kerr County Clerk BY: _________________________________ 12 Kathy Banik, Deputy County Clerk Certified Shorthand Reporter 13 14 15 16 17 18 19 20 21 22 23 24 25 5-12-06