1 2 3 4 5 6 7 8 KERR COUNTY COMMISSIONERS COURT 9 Special Session 10 Friday, August 31, 2012 11 1:00 p.m. 12 Commissioners' Courtroom 13 Kerr County Courthouse 14 Kerrville, Texas 15 16 17 18 19 20 21 22 PRESENT: PAT TINLEY, Kerr County Judge 23 GUY R. OVERBY, Commissioner Pct. 2 JONATHAN LETZ, Commissioner Pct. 3 24 BRUCE OEHLER, Commissioner Pct. 4 25 ABSENT: H. A. "BUSTER" BALDWIN, Commissioner Pct. 1 2 1 I N D E X August 31, 2012 2 PAGE 3 1.1 Consider/discuss, take appropriate action on order approving and authorizing the execution 4 of a Clean Water State Revolving Fund (CWSRF) Loan Forgiveness Agreement between Texas Water 5 Development Board and Kerr County in connection with the Center Point Regional Wastewater 6 Treatment System Project 3 7 1.2 Consider/discuss, take appropriate action on order approving and authorizing the execution 8 of an Economically Distressed Areas Program (EDAP) Grant Agreement between Texas Water Development 9 Board and Kerr County in Connection with the Center Point Regional Wastewater Treatment 10 System Project -- 11 --- Adjourned 18 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3 1 On Friday, August 31, 2012, at 1:00 p.m., a special 2 meeting of the Kerr County Commissioners Court was held in 3 the Commissioners' Courtroom, Kerr County Courthouse, 4 Kerrville, Texas, and the following proceedings were had in 5 open court: 6 P R O C E E D I N G S 7 JUDGE TINLEY: Let me call to order this special 8 meeting of the Kerr County Commissioners Court posted and 9 scheduled for this date and time, Friday, August 31, 2012, at 10 1 p.m. It is that time now. We have a short agenda. The 11 first item on the agenda is to consider, discuss, and take 12 appropriate action on order approving and authorizing the 13 execution of a Clean Water State Revolving Fund Loan 14 Forgiveness Agreement between the Texas Water Development 15 Board and Kerr County in connection with the Center Point 16 Regional Wastewater Treatment System project. I talked with 17 Bob Henderson a little bit earlier today. He had a conflict, 18 and was wanting to know if I wanted him to bust everything up 19 so that he could make arrangements to be here. 20 He said the essential element of this particular 21 agreement is that there must be real careful attention paid 22 on this end to make sure that we comply with all the 23 reporting, all the documenting, and all the scheduling and 24 all of the -- all of the various requirements on the Loan 25 Forgiveness Agreement in order for -- to remain in compliance 8-31-12 4 1 and be eligible for -- for forgiveness of the loan, as it 2 were. Otherwise, the bad news is you may be required to 3 repay. Which, of course, is not what you want to have 4 happen. I noted -- I didn't note until just a little bit 5 ago, an hour or so ago, that the County Attorney had made 6 some comments, and directed to Ms. Hargis, who is in 7 conference in Austin, far as I know, and -- 8 COMMISSIONER OEHLER: Last time I saw her, that's 9 where she was. 10 JUDGE TINLEY: Yeah. And apparently there are some 11 issues that the County Attorney has with respect to this 12 particular matter. So, unless somebody else has got some 13 comment they want to make, why, I'm going to throw it to him. 14 MR. HENNEKE: Sure, Judge. And I've got the 15 originals of the agreements; I'll give them back to the 16 Court. I believe the resolution for the loan forgiveness 17 agreement calls for the Court to adopt it in substantial form 18 as submitted. So, there may be -- the Court could approve 19 the agreement, you know, as to the general substance, and we 20 can clean up some of these issues later. But I e-mailed 21 Commissioner Letz and yourself and Ms. Hargis some of the 22 things I saw on the loan forgiveness agreement that might 23 need to be clarified. Under the definition of eligible 24 expenses, it talks about the term "project budget," but that 25 term's not defined anywhere. There's a few references -- 8-31-12 5 1 this is the T.W.D.B. template, so there may be some terms 2 that weren't cleaned up. There's a few references in it as 3 to bonds, but I don't know that we've issued bonds in 4 connection with this project, so I don't think that that's 5 applicable. There's -- Page 9, Section 4.01(e) says that 6 any -- any revision to the project schedule has to be 7 approved by T.W.D.B., and that might create a lot more work 8 than necessary. I want to see if T.W.D.B. would agree that 9 it could say any "substantial" revision would require their 10 approval, in case we have to make some kind of minor change. 11 As far as, you know, Section -- Page 12, Section 6.02 talks 12 about three business days, as far as how fast we would have 13 to act under that provision for stop work orders. That's 14 pretty quick. Maybe five business days or seven business 15 days or something. 16 COMMISSIONER LETZ: Rob, on that point, is there a 17 designated person for them to contact? If not, I think we 18 really need to put one in there. And the reason is that -- 19 I've been dealing with Water Development Board a lot this 20 year, and it is really difficult -- the communication is 21 difficult, 'cause there's so many different people from -- 22 COMMISSIONER OVERBY: Changing out. 23 COMMISSIONER LETZ: -- from up there that you talk 24 to. There's -- there's at least six you regularly hear from 25 for different reasons. 8-31-12 6 1 MR. HENNEKE: It puts Judge Tinley as the person to 2 whom notices should be sent. But, I mean, there's no -- no 3 day-to-day point of contact, and I agree with you on that. I 4 would have tried to raise these issues -- I didn't know that 5 Jeannie was out of town; I would have tried to work out these 6 issues before today's meeting, but I don't know who her point 7 of contact is over at T.W.D.B. where she got this Loan 8 Forgiveness Agreement. 9 COMMISSIONER LETZ: She's been talking primarily 10 with Karen. 11 MR. HENNEKE: I don't know Karen. 12 COMMISSIONER LETZ: And I can't pronounce her last 13 name. 14 MR. HENNEKE: So, I agree with you, there's a lot 15 of moving pieces there. But, you know, one other thing. You 16 know, the T.W.D.B. resolution attached as Exhibit A talks 17 about the County paying a 1.85 origination fee, but I don't 18 know what that is 1.85 percent of, and, you know, if that's 19 still a requirement. So, just a couple questions. I concur 20 with what Judge Tinley said, you know, relating what Bob 21 Henderson said. We're going to have to be real careful on 22 this. And not only do those requirements apply to us, but 23 they require any contractor or subcontractor that may be, you 24 know, retained to work on this, you know, in complying with 25 the equal employment opportunity laws, federal wage and labor 8-31-12 7 1 requirements, federal safety rules, and so on and so forth. 2 So, there's -- you know, and there's also some steps, too -- 3 for example, they may give us a loan, but it's conditioned 4 upon them receiving an Attorney General opinion that all of 5 the obligations in issuing the debt have been met. So, 6 before we start spending money, we would have to make sure, 7 too, that all of the criteria upon which T.W.D.B.'s 8 forgiveness is conditioned upon have been met before we move 9 forward. 10 COMMISSIONER LETZ: On that point, I believe that 11 has been done. I say I believe, but the question I have is 12 that there was a time limit, I believe only 30 months -- I 13 mean 30 days, and I think we're beyond the 30 days that it 14 was -- a lot of these changes of the closing date. So, I 15 think that's -- you know, that may have to be done, but I 16 know it wasn't -- an Attorney General opinion was rendered 17 earlier. 18 MR. HENNEKE: Mm-hmm. 19 COMMISSIONER LETZ: But whether it's still valid -- 20 I know there was a time period. But with that, you know, I 21 guess kind of what the Judge is saying; I mean, I'm not 22 positive if this has to be done today. 23 COMMISSIONER OEHLER: That's the question. Does 24 have it to be done today, or could it wait? 25 COMMISSIONER LETZ: Could it wait? 8-31-12 8 1 COMMISSIONER OEHLER: Till next week sometime. 2 COMMISSIONER OVERBY: Talking about the 6th through 3 the 9th? Or is it -- 4 COMMISSIONER LETZ: Well, they have to keep -- it's 5 been a moving target on the closing date. And we don't want 6 to try to shift the closing date way off, and if that 30-day 7 period that I -- of the Attorney General ends Tuesday or so, 8 then I definitely -- you know, we need to figure out how to 9 try to get this done today. A lot of, I think, the concerns, 10 you know, are very minor. 11 COMMISSIONER OVERBY: Right. 12 COMMISSIONER LETZ: Though what we're signing is 13 very serious. 14 JUDGE TINLEY: The concerns are minor, but the 15 effect of stumbling on one of those minor concerns might have 16 drastic consequences. 17 COMMISSIONER LETZ: Right. 18 JUDGE TINLEY: To the tune of a million-plus 19 dollars. 20 COMMISSIONER LETZ: Right. 21 COMMISSIONER OEHLER: Don't need that. 22 JUDGE TINLEY: No. 23 COMMISSIONER LETZ: I mean, the -- like, the three 24 business days, I agree, that's a really short turn-around 25 time to fix something. And that's -- you know, especially if 8-31-12 9 1 -- you know, with our schedules, and -- 2 JUDGE TINLEY: You know, I was given the 3 impression -- and nothing specific, but I was given the 4 impression, as I think several members of the Court were, 5 that it was really important that we get this done this 6 month, because I understand it's the close of the state 7 fiscal year, and they're trying to do this within this year's 8 budget operations. But, boy, if there's any questions on 9 this, I -- you know, I sure wouldn't go to Las Vegas and roll 10 the dice for a million-plus. And we're sticking our neck out 11 for that. 12 COMMISSIONER LETZ: I mean, I think the -- it's 13 unfortunate Jeannie isn't -- why don't we see if we can get 14 Jeannie on the phone? Because she's the one who's had the 15 most day-to-day contact with them, if it has to be done 16 today. 17 JUDGE TINLEY: Tess? 18 MS. MABRY: Yes? 19 JUDGE TINLEY: Do you know how we can reach Jeannie 20 on the phone? 21 MS. MABRY: She's got her cell with her. 22 JUDGE TINLEY: Pardon? 23 MS. MABRY: She's got her cell phone with her. 24 She's traveling. 25 JUDGE TINLEY: You've got her number, don't you? 8-31-12 10 1 MS. MABRY: Yeah, I can get it. Let me go get her 2 number real quick. 3 (Ms. Mabry left the courtroom.) 4 JUDGE TINLEY: Okay. I may be attaching too much 5 harum-scarum to this thing, but -- and I'm sure they've done 6 these things a number of times before, and they've always 7 probably worked out generally quite well. But I suppose 8 there's always a first time, and I don't want to be that 9 guinea pig. 10 COMMISSIONER LETZ: They're not the easiest to work 11 with on some of these things. I think it's important that we 12 know exactly, you know, what our obligations are. I think 13 we're very much aware, and I'm sure Jeannie's very much 14 aware, and I'm aware of the strict requirements for 15 forgiveness. I mean, that's why I made it -- fired off a 16 couple meetings ago that we need to have a definite set of 17 procedures, talk to Rob about it. We need to get it on our 18 agenda so we really get that handled as to procedurally how 19 we handle this whole project. And that's -- you know, these 20 are tough provisions, but they are the provisions. Some of 21 these things that Rob's pointed out, you know, like I say, 22 they're not huge, but they do have a huge ramification. 23 JUDGE TINLEY: Mm-hmm. 24 COMMISSIONER LETZ: The three days, that's an 25 unreasonable three days, and -- or it's unreasonable, in my 8-31-12 11 1 mind, for two governmental entities to try to solve something 2 in three days. 3 COMMISSIONER OEHLER: The thing is, we can't even 4 hardly post an agenda unless we have an emergency meeting. 5 COMMISSIONER OVERBY: That's right. 6 COMMISSIONER OEHLER: We can do it in two hours, I 7 think, on an emergency. But how do you know you're going to 8 be able to get a quorum in here, or the right quorum to 9 consider that? 10 JUDGE TINLEY: Go for it. 11 MS. GRINSTEAD: It should be coming through. 12 JUDGE TINLEY: Oh. 13 (Telephone call to Ms. Hargis was transferred.) 14 MS. GRINSTEAD: Jeannie, are you there? 15 MS. HARGIS: (via telephone) Yes. 16 JUDGE TINLEY: Ms. Jeannie Hargis? 17 MS. HARGIS: Yes. 18 JUDGE TINLEY: Pat Tinley here. How are you doing 19 this afternoon? 20 MS. HARGIS: Well, I'm driving south towards home. 21 JUDGE TINLEY: Okay. We'd like to talk to you for 22 a few minutes about this loan forgiveness agreement that 23 we've got under consideration. I know you've been gone a few 24 days at a conference. Unfortunately, Mr. Henneke had some 25 questions that were raised, and he sent an e-mail to you, 8-31-12 12 1 unaware that you were gone. So, we've kind of got these 2 things hanging up in the air. I talked -- 3 MS. HARGIS: I got his e-mail, but not until late. 4 I didn't get it until it was too late to respond, 'cause I 5 needed the -- the attorney's name. I know his first name, 6 but I didn't know his last name. 7 JUDGE TINLEY: With T.W.D.B., you mean? 8 MS. HARGIS: Yes. 9 JUDGE TINLEY: Isn't it Joe Reynolds? 10 MS. HARGIS: Yes. 11 JUDGE TINLEY: Okay. But -- and I talked with Bob 12 Henderson this morning, and Bob -- Bob said the forgiveness 13 arrangement is such that we must be very, very careful to 14 properly follow all the terms of the loan forgiveness 15 agreement and comply with it, and do the proper reporting 16 and -- and document things as required, do all the things 17 that it requires. And assuming we do that correctly, why, it 18 should be no problem. However, if we fail to do that, we 19 could be on the hook for the one million-plus of -- of the 20 loan. And I -- I guess the question to you is, in -- in 21 looking at the -- or considering the items that the County 22 Attorney raised, do you think it would be an appropriate 23 course of action for us to pass the resolution substantially 24 in the form -- the agreement in substantially the same form 25 that it is now, and then go forward to try and work out the 8-31-12 13 1 kinks? Or is it imperative we do something today, as the 2 last business day of the state fiscal year, or can we take 3 this matter up next week? 4 MS. HARGIS: I think you can take the matter up 5 next week. I don't think it's a year-end -- fiscal year-end 6 thing, because our grant has already been approved. It's a 7 -- it's a finance department at the T.W.D.B. problem, not 8 being able to get all their documents in place in order to 9 close. Now, this contract has been signed and approved by 10 the board -- T.W.D.B. board, so Joe Reynolds might have to 11 take that contract back to the board if we make changes. 12 COMMISSIONER LETZ: The changes are pretty minor, 13 but they -- you know, as an example, there's a three-day -- 14 if you're not in compliance, there's a three-day notification 15 period, which is pretty unreasonable, and Rob would like to 16 go to -- 17 MR. HENNEKE: Not just notification period; it's a 18 three-day period for the County to tender back a written 19 response. 20 COMMISSIONER LETZ: Right. Well, and the County -- 21 it's hard for us to do anything in three days, and so it's 22 kind of extending that to either five days or seven days. 23 JUDGE TINLEY: Seven to ten, yeah. 24 COMMISSIONER LETZ: Something. And so they're not, 25 certainly, substantive changes, but they are important 8-31-12 14 1 changes. 2 MS. HARGIS: Well, again, it's just like your 3 Commissioners Court; they're a board, and I'm sure Joe would 4 say, "I don't have any problem with these changes, but I have 5 to take it back to the board." 6 JUDGE TINLEY: Do you think the delay in working 7 these things is going to prejudice the ongoing aspects of the 8 project? Or significantly -- 9 MS. HARGIS: No. 10 JUDGE TINLEY: -- delay it? 11 MS. HARGIS: No, I don't think it's going to 12 jeopardize anything. I think they're good recommendations on 13 the part of our County Attorney that we need to follow up on, 14 and if we have to close a little later, we just have to close 15 a little later. It's not really our fault. They didn't get 16 us the contract in sufficient amount of time to be able to 17 deal with them, and that was not our fault. 18 JUDGE TINLEY: Okay. 19 COMMISSIONER LETZ: Okay. 20 JUDGE TINLEY: Any more questions for Ms. Hargis? 21 COMMISSIONER LETZ: I think we'll -- 22 JUDGE TINLEY: Thank you, ma'am. 23 COMMISSIONER LETZ: -- we'll take it up next week. 24 MS. HARGIS: Okay. I think that's a great idea. 25 JUDGE TINLEY: See you next week. 8-31-12 15 1 MS. HARGIS: Okay. 2 JUDGE TINLEY: Have a good weekend. 3 MS. HARGIS: You too. Bye-bye, everybody. 4 COMMISSIONER LETZ: Bye. 5 COMMISSIONER OVERBY: Bye-bye. 6 (Telephone call with Ms. Hargis ended.) 7 JUDGE TINLEY: Well, we probably shouldn't have had 8 this meeting called, but we are where we are. It appears to 9 me the fair consensus is, let's don't -- let's don't move any 10 affirmative direction until we feel a little bit more solid 11 about how we're going and where we're going. 12 COMMISSIONER LETZ: I mean, it's -- even if it 13 delays 30 days the closing agreement, it's still -- I mean, 14 it delays it 30 days. We've got to make sure we got this 15 right. 16 COMMISSIONER OEHLER: Isn't the state fiscal year 17 the same as ours? 18 JUDGE TINLEY: No, August 31 is the end of theirs. 19 COMMISSIONER OEHLER: August 31? Okay. 20 JUDGE TINLEY: But as she said, that -- that has no 21 bearing on that. The grant's already been done, and -- 22 COMMISSIONER OEHLER: Yeah. 23 JUDGE TINLEY: But we're in a hurry-up mode because 24 they're in a late mode. 25 COMMISSIONER OVERBY: Right. 8-31-12 16 1 COMMISSIONER LETZ: Yeah. 2 COMMISSIONER OEHLER: That's generally baloney when 3 that sort of thing happens. That's like somebody trying to 4 force -- you know, force you to pull the trigger. 5 COMMISSIONER OVERBY: Because of their delays. 6 COMMISSIONER LETZ: Yeah. But -- but I know that 7 this project -- the most recent ranking up there, the way 8 they rank them, I guess we're number two now. We were at one 9 point number one, but number two is still pretty darned good. 10 COMMISSIONER OVERBY: Pretty good. 11 COMMISSIONER LETZ: And I received a letter late 12 yesterday, day before yesterday, by e-mail that -- inviting 13 us to come and submit, giving us the timetable, parameters, 14 meetings we have to go to, all the stuff for -- to submit the 15 next application. So -- and if we wanted -- you know, 16 anyway, so they're very much supportive and want the project, 17 I think, as much as we do. But it's just a matter of -- I 18 don't -- it has been very difficult to get all the 19 documentation from them. 20 MR. HENNEKE: Are we comfortable that there wasn't 21 a substantial reason why we had to have a special meeting on 22 the last day of August, that we're not missing any deadline 23 if we pass until next week? 24 COMMISSIONER LETZ: I can make a quick call to Joe 25 Reynolds and ask him. 8-31-12 17 1 JUDGE TINLEY: Bet you can't find him today. 2 COMMISSIONER LETZ: You're probably right. 3 JUDGE TINLEY: Lay eight to five. 4 COMMISSIONER OVERBY: Try. Try and give him a 5 call. 6 COMMISSIONER LETZ: All right. I'll see if I can 7 track a number down for him, either he or Karen. I won't say 8 her last name. 9 JUDGE TINLEY: You don't want the eight to five, 10 Jon? 11 COMMISSIONER LETZ: No. 12 JUDGE TINLEY: Okay. 13 COMMISSIONER OEHLER: Dove season does open 14 tomorrow. 15 COMMISSIONER OVERBY: It does. Got a lot of folks 16 heading out. 17 JUDGE TINLEY: Lots of folks don't realize that 18 tomorrow's not today. Clean out the barrel of the shotgun. 19 COMMISSIONER OVERBY: I bet old Buster's probably 20 trying to get over to the ball game tonight. He's already 21 getting his pregame face on. 22 COMMISSIONER OEHLER: Where is it? 23 COMMISSIONER OVERBY: It's here. 24 COMMISSIONER OEHLER: Well, my gosh, he doesn't 25 have to get his ankles taped this early. (Laughter.) I mean, 8-31-12 18 1 I know it takes a while to do things, but -- 2 COMMISSIONER OVERBY: He probably does. 3 JUDGE TINLEY: Okay, let's go off the record for a 4 bit. 5 (Discussion off the record.) 6 JUDGE TINLEY: Okay, we're back on the record. 7 COMMISSIONER LETZ: Actually, I visited with Karen. 8 She said that, no, we do not have to have it done today. We 9 can't close until we get this done, but if we have a few 10 concerns, we can try to get this on another special meeting 11 next week to give County Attorney time to work with Joe 12 Reynolds. 13 COMMISSIONER OVERBY: Good. 14 JUDGE TINLEY: But you did not talk to Joe 15 Reynolds, did you? 16 COMMISSIONER LETZ: Yeah, but he was there, I'm 17 sure. 18 JUDGE TINLEY: You're sure? 19 COMMISSIONER OVERBY: You find out her last name, 20 how to pronounce it? 21 COMMISSIONER LETZ: I don't know. It's Karen. 22 JUDGE TINLEY: Okay. Anything else, gentlemen? 23 We're adjourned. 24 (Commissioners Court adjourned at 1:30 p.m.) 25 - - - - - - - - - - 8-31-12 19 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 capacity as 5 official reporter for the Commissioners Court of Kerr County, 6 Texas, at the time and place heretofore set forth. 7 DATED at Kerrville, Texas, this 31st day of August, 8 2012. 9 10 JANNETT PIEPER, Kerr County Clerk 11 BY: _________________________________ Kathy Banik, Deputy County Clerk 12 Certified Shorthand Reporter 13 14 15 16 17 18 19 20 21 22 23 24 25 8-31-12