1 2 3 4 5 6 7 8 KERR COUNTY COMMISSIONERS COURT 9 Special Session 10 Monday, February 24, 2014 11 9:00 a.m. 12 Commissioners' Courtroom 13 Kerr County Courthouse 14 Kerrville, Texas 15 16 17 18 19 20 21 22 23 PRESENT: H. A. "BUSTER" BALDWIN, Commissioner Pct. 1 TOM MOSER, Commissioner Pct. 2 24 JONATHAN LETZ, Commissioner Pct. 3 BRUCE OEHLER, Commissioner Pct. 4 25 2 1 I N D E X February 24, 2014 2 PAGE --- Commissioners' Comments 5 3 1.1 Public Hearing for revision of plat for 4 Lot 117R of Falling Water, Precinct 3 8 5 1.2 Consider/discuss, take appropriate action for Court's final approval and grant a variance for 6 Lot 117 A-R for revision of plat for Lot 117R of Falling Water, Precinct 3 8 7 1.3 Consider/discuss, take appropriate action to 8 accept preliminary alternate plat with minimum lot size variance for Lot 14 of Verde Park 9 Estates 2; set a public hearing, Precinct 2 11 10 1.14 Consider/discuss, take appropriate action regarding application for TxDOT grants to 11 improve county roads per HB 1025 14 12 1.4 Consider/discuss, take appropriate action to accept preliminary revision of plat for Lots 2, 13 3-A, 4-A, 8-A, and 9 of Ranches on Sunset Ridge; set a public hearing, Precinct 3 15 14 1.13 Consider/discuss, take appropriate action on 15 question concerning proposed certificate of obligation 18 16 1.5 Discussion with Hill Country District Junior 17 Livestock Show Association representatives concerning use of funds they plan to contribute 18 for the Hill Country Youth Event Center 23 19 1.18 Consider/discuss, take appropriate action to enable Schreiner University to perform a marketing 20 analysis for the Exhibit Hall at Hill Country Youth Event Center 29 21 1.6 Consider/discuss, take appropriate action on 22 capital items for proposed Certificate of Obligation 32 23 1.7 Consider/discuss, take appropriate action to 24 approve the basic financial statement and supplementary information audit for the period 25 ending 9-30-2013, and Federal and State Single Audit Report for period ending 9-30-2013 44 3 1 I N D E X (Continued) February 24, 2014 2 PAGE 3 1.9 Status for Alamo Community College facility at the Kerrville/Kerr County Airport -- 4 1.11 Consider/discuss, take appropriate action to 5 redistribute and refund unused 2013 multi-county budget funds from former 198th Judicial District 61 6 1.10 Consider/discuss, take appropriate action on 7 request from Kerr County YMCA to use Flat Rock Park, the Hill Country Youth Event Center, and 8 River Star Arts and Event Park for a 5k Run/Walk on June 14, 2014 72 9 1.12 Consider/discuss, take appropriate action to 10 approve an application to Texas Water Development Board for the Center Point Waste Water System 81 11 1.15 Consider/discuss, take appropriate action on 12 emergency medical services and Request For Proposal for Emergency Medical Services 86, 13 110 1.16 Consider/discuss, take appropriate action to 14 approve submission of “Intent to Submit Application” for the FY15 Competitive 15 Discretionary Grant Program administered by Texas Indigent Defense Commission 89 16 1.17 Consider/discuss, take appropriate action to 17 accept the Tier 1 Partial Exemption Racial Profiling Report for Constable, Precinct 4 90 18 1.22 Consider/discuss, take appropriate action 19 regarding contract addendum with Kerr County Roller Derby for use of Show Barn at the 20 Hill Country Youth Event Center 91 21 4.1 Pay Bills 96 4.2 Budget Amendments 96 22 4.3 Late Bills 97 4.4 Approve and Accept Monthly Reports 99 23 5.1 Reports from Commissioners/Liaison Committee 24 Assignments -- 5.2 Reports from Elected Officials/Department Heads 100 25 4 1 I N D E X (Continued) February 24, 2014 2 PAGE 3 1.19 Consider/discuss, take appropriate action on interviews and possible hiring of Veteran 4 Services Officer (Executive Session) 108 5 1.8 Consider/discuss, take appropriate action on order authorizing the issuance, sale and delivery 6 of up to $4,000,000 in aggregate principal amount of “Kerr County, Texas Combination Tax and Revenue 7 Certificates of Obligation, Series 2014”; securing the payment thereof by authorizing the levy of an 8 annual ad valorem tax and pledge of certain surplus revenues of County’s Park System; approving and 9 authorizing execution of a paying agent/registrar agreement, a purchase contract, official statement, 10 and all other instruments and procedures related thereto 117 11 1.20 Consider/discuss, take appropriate action on 12 personnel matters in Road and Bridge Department (Executive Session) --- 13 1.21 Consider/discuss, take appropriate action 14 regarding the Mooney Aircraft Production facility and lease (Executive Session) --- 15 --- Adjourned 136 16 17 18 19 20 21 22 23 24 25 5 1 On Monday, February 24, 2014, at 9:00 a.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 COMMISSIONER BALDWIN: Good morning, ladies and 8 gentlemen. Welcome to Commissioners Court. It is now 9 a.m. 9 Monday, February the 24th, 2014. We're in the Commissioners 10 Courtroom with four Commissioners present, and we're going to 11 start our meeting with a word of prayer and the pledge of 12 allegiance, and the honorable Commissioner Moser is the 13 leader of that. 14 COMMISSIONER MOSER: Stand, if you will, and pray 15 with me. 16 (Prayer and pledge of allegiance.) 17 COMMISSIONER BALDWIN: Thank you, you may be 18 seated. Commissioner, do you have anything to bring to the 19 Court today? 20 COMMISSIONER MOSER: Well, let's see, a couple 21 things. Status on what's happening out at the airport real 22 quick. Len Odom and the crew are preparing the site for 12 23 new T-hangars. They're under construction. Those things 24 will be in place by the summer, and the -- by all 25 indications, they should be filled. I think out of 40 -- I 2-24-14 6 1 mean, out of 12, I think we got about 40 names of people that 2 are potentially there, and so different -- different points 3 of commitment on that. "Commitment" means handing over the 4 dollars, okay. So, that's very good. Another thing that's 5 important to the community is Kerrville South wastewater 6 trenches are being dug as we speak to hook up another 20 -- 7 20 houses out there, and so those are -- we're moving dirt. 8 That's it. 9 COMMISSIONER BALDWIN: Commissioner Letz? 10 COMMISSIONER LETZ: Two things. One, on the -- we 11 had a Region J meeting last week, which is always very 12 exciting. But what was truly exciting about that was that we 13 had one of the directors -- new directors from the Texas 14 Water Development Board, Bech Bruun, came down for that 15 meeting, and had a good visit with him. And then after that, 16 a representative from U.G.R.A., Commissioner Moser and myself 17 met with Director Bruun and went over the two projects in the 18 eastern part of the county to kind of familiarize himself 19 with it and talk about it, and he was very enthusiastic about 20 it, very glad to hear, get the updates. He had a lot of 21 questions about what we were doing and where we were going. 22 And on the water side, he liked the regional aspect of the 23 different things we were looking at. So, it was a very 24 positive meeting. He's a very engaged director, which is 25 really good, and very happy with that. I guess that's all I 2-24-14 7 1 have. I have a number of things to be discussed later on, 2 but that's enough to get started. 3 COMMISSIONER BALDWIN: Mr. Oehler? 4 COMMISSIONER OEHLER: Not a thing. 5 COMMISSIONER BALDWIN: Not a thing? 6 COMMISSIONER OEHLER: Not a thing. 7 COMMISSIONER BALDWIN: Not a thing. I have -- I 8 have one item. I just now got an e-mail. I've got a 9 granddaughter -- for any of you folks that are praying 10 people, I have a prayer request. My granddaughter that's 19 11 years old, and she's a missionary in Africa, and she has 12 malaria down there. And she just got there; I don't know 13 what the deal is, but -- so if you would be kind enough to 14 lift her up in prayers and ask that malaria to go somewhere 15 else, I'd appreciate it. Thank you. 16 I want to open the podium to anyone in the audience 17 that has anything that they want to talk to the Commissioners 18 Court about that's not an agenda item. If you have something 19 you'd like on speak on that's an agenda item, we have request 20 forms at the back table. You don't have to fill one out, but 21 it would be -- it helps us keep up with who would like to 22 speak. But right now, if there's anyone that would like to 23 come to the podium and talk to the Commissioners Court about 24 any issue that's not an agenda item, please come forward. 25 Seeing no one coming, we'll go right straight to our agenda. 2-24-14 8 1 Item Number 1, public hearing for the revision of plat for 2 Lot 117R of Falling Water, Volume 7, Page 346, in Precinct 3. 3 So, we'll recess the Commissioners Court meeting and open the 4 public hearing at this time. 5 (The regular Commissioners Court meeting was closed at 9:07 a.m., and a public hearing was held in open 6 court, as follows:) 7 P U B L I C H E A R I N G 8 COMMISSIONER BALDWIN: Mr. Odom? Your name's on 9 here. 10 COMMISSIONER LETZ: Commissioner, he doesn't speak 11 at public hearings. 12 MR. ODOM: I don't speak at a public hearing. 13 COMMISSIONER BALDWIN: Oh, that's right. I'm 14 sorry, but your name is still on here. 15 MR. ODOM: Yeah. 16 COMMISSIONER BALDWIN: Is there anyone from the 17 public that would like to speak on this -- on this item in 18 Falling Water? It's a revision of plat for Lot 117R of 19 Falling Water. Seeing no one coming, we'll go to Item 2. 20 (The public hearing was concluded at 9:08 a.m., and the regular Commissioners Court meeting was 21 reopened.) 22 - - - - - - - - - - 23 COMMISSIONER BALDWIN: Sorry about that, Mr. Odom. 24 MR. ODOM: That's all right. I'll stand up here 25 now. 2-24-14 9 1 COMMISSIONER BALDWIN: Consider, discuss, and take 2 appropriate action for the Court's final approval and grant a 3 variance for Lot 117A-R for the revision of plat for Lot 117R 4 of Falling Water, Volume 7, Page 346, in Precinct 3. Leonard 5 Odom. 6 MR. ODOM: Yes, sir. And I want to say that I feel 7 sorry for your daughter. Please take care of her, because my 8 dad had malaria. As a kid, I used to have to pull him out of 9 bed and wet him down and cool him off, 'cause he was in 10 Burma, China, and India and came back with that. So, -- 11 COMMISSIONER BALDWIN: That's encouraging. 12 MR. ODOM: -- it did not go away. 13 COMMISSIONER BALDWIN: Thank you, Leonard. I hear 14 exactly what you're saying. I appreciate it. 15 MR. ODOM: It is bad, let's just put it that way. 16 COMMISSIONER MOSER: All the more reason for strong 17 prayer. 18 COMMISSIONER BALDWIN: Yeah, absolutely. 19 MR. ODOM: April the 24th, 2006, Mr. Hoekstra 20 combined Lots 117A, 3.75 acres, and 116D, 2.97 -- 2.937 21 acres, through a revision of plat process, forming Lot 117R, 22 which was 6.694 acres. In January of 2013, the property was 23 foreclosed on. Lot 117R was mortgaged with Wilmington Trust 24 Company, and Lot 116D was mortgaged with a different 25 financial company. Citi Mortgage would like to separate Lot 2-24-14 10 1 117R back into Lot 116D and Lot 117A. The proposed Lot 2 117A-R has only 99.45 linear feet of road frontage, and the 3 current Subdivision Rules and Regulations require a minimum 4 of 150 linear feet of road frontage, so a variance is 5 requested for Lot 117A-R. Lot 116D-R has 250.31 linear feet 6 of road frontage. So, at this time, we ask the Court for the 7 final approval with the road frontage variance for Lot 117A-R 8 regarding revision of plat for Lot 117R of Falling Waters, 9 Volume 7, Page 346, Precinct 3. 10 COMMISSIONER LETZ: Move approval. 11 COMMISSIONER OEHLER: Second. 12 COMMISSIONER BALDWIN: We have a motion and a 13 second. Any further discussion? 14 COMMISSIONER LETZ: And just a comment -- just a 15 comment. You know, we're -- I think Leonard said it; I'll 16 reiterate it. We're putting these two lots back the way they 17 originally were. 18 MR. ODOM: Originally were. 19 COMMISSIONER BALDWIN: Actually fixing something. 20 COMMISSIONER LETZ: And fixing something. And, you 21 know, the road -- the variance was not required, or if it 22 was, it required a variance that was granted when we did the 23 full subdivision plat originally. But a variance is included 24 in my motion. 25 COMMISSIONER BALDWIN: Anything else? 2-24-14 11 1 COMMISSIONER OEHLER: This is one of those -- one 2 of those things that you referred to in another meeting. 3 When we combine lots, sometimes we can't foresee whether 4 there's a mortgage on one and not another. Or -- 5 COMMISSIONER BALDWIN: That's true. 6 COMMISSIONER OEHLER: This is one of those examples 7 of what can happen by combining lots, and so we will probably 8 have something to do changing that in the future. 9 COMMISSIONER BALDWIN: Very good. Anything else? 10 MR. HENNEKE: Commissioner, we're back in the 11 Commissioners Court meeting and out of the public hearing, 12 right? 13 COMMISSIONER BALDWIN: Yes, we are. Thank you very 14 much. So, all in favor, raise your right hand. 15 (The motion carried by unanimous vote.) 16 COMMISSIONER BALDWIN: Motion carries. Thank you. 17 Item 3, consider, discuss, and take appropriate action to 18 accept the preliminary alternate plat with minimum lot size 19 variance for Lot 14 of Verde Park Estates 2, Volume 5, Page 20 235, and set a public hearing in Precinct 2. Mr. Odom? 21 MR. ODOM: Yes, sir. Jerry and Shirley Pearson 22 sold Lot 14 in Verde Park Estates 2 on May the 4th, 2013, to 23 Miguel and Rosa Caldera, and also on September the 15th, 24 2010, to Jimmy Stout. The issue has been resolved with both 25 homeowners by subdividing Lot 14B, .66 acres for Mr. Caldera, 2-24-14 12 1 and Lot 14A, 2.21 acres for Mr. Stout. We brought the 2 concept to the Court and asked for a variance to Kerr 3 County's 1-acre minimum for proposed Lot 14B. The State's 4 minimum on lot size is a half an acre. By working this 5 subdivision the way that it is proposed today resolves the 6 past issue of the lot being sold twice. At this time, we ask 7 the Court to accept the preliminary alternate plat and grant 8 a minimum lot size variance for Lot 14 of Verde Park Estates 9 2, Volume 5, Page 235, and set a public hearing for Monday, 10 April the 14th, 2014, at 9 a.m. If final plat is ready on 11 April the 14th, 2014, we will ask the Court to accept the 12 final plat after the public hearing is held. This property 13 is located in Precinct 2. 14 COMMISSIONER MOSER: So moved to set a public 15 hearing as requested. 16 COMMISSIONER LETZ: Second. 17 COMMISSIONER BALDWIN: Motion made and seconded. 18 Any further discussion? 19 COMMISSIONER LETZ: I'll make a comment. There are 20 still issues related to septic on this lot, and, of course, 21 Commissioner Moser and I are both aware of it; Road and 22 Bridge is, but we need to set the public hearing, and we'll 23 see what happens on the septic issues. 24 COMMISSIONER BALDWIN: All in favor, raise your 25 right hand. 2-24-14 13 1 (The motion carried by unanimous vote.) 2 COMMISSIONER BALDWIN: Motion carries. Item -- 3 let's see, I don't have a watch today. We're not there yet. 4 COMMISSIONER MOSER: You can -- 5 COMMISSIONER BALDWIN: 1.5. 1.5, discussion with 6 the Hill Country District Junior Livestock Show Association 7 representatives concerning the use of funds they plan to 8 contribute for the Hill Country Youth Event Center. Mr. 9 Reeves and Mr. Bauer, if you'd please come forth, and fifth. 10 That's Mr. Reeves, I believe. 11 MR. REEVES: That's Mr. Reeves. Thank you. 12 COMMISSIONER LETZ: Commissioner, if I can 13 interrupt, that's a timed item also, unfortunately. 14 COMMISSIONER MOSER: Yeah, it is, 9:20. 15 COMMISSIONER BALDWIN: At 9:20. Mr. Reeves, would 16 you sit down somewhere? 17 MR. REEVES: Yes, sir. (Laughter.) 18 COMMISSIONER BALDWIN: And quit trying to cause 19 trouble here. 20 MR. ODOM: 1.4? 21 COMMISSIONER LETZ: 13. 22 COMMISSIONER BALDWIN: I want to try 13; consider, 23 discuss, take appropriate action on a question concerning the 24 proposed certificate of obligation. Mrs. Standridge? 25 Mrs. Standridge? 2-24-14 14 1 COMMISSIONER MOSER: She's not here. 2 COMMISSIONER BALDWIN: Oh, she's not here, okay. 3 All right. We really need something that -- 4 COMMISSIONER LETZ: 14's a short one, I bet. 5 COMMISSIONER BALDWIN: Do you think so? 6 COMMISSIONER MOSER: Yeah. 7 COMMISSIONER BALDWIN: That's a lawyer presenting 8 it. We can do it. Item 1.14; consider, discuss, take 9 appropriate action regarding application for TexDOT grants to 10 improve county roads per House Bill 1025. Mr. Henneke? 11 MR. HENNEKE: Mr. Odom beat me to the podium. 12 COMMISSIONER BALDWIN: Mr. Odom, would you like to 13 speak on this? 14 MR. ODOM: No, I wouldn't. I would like to speak 15 on 1.4, though. 16 COMMISSIONER BALDWIN: Okay. Let's get -- let's 17 get 1.14 done; that's the one I've called, and we'll get to 18 that. 19 MR. HENNEKE: This is the -- the Eagle Ford Shale 20 grant money that, last Commissioners Court meeting, y'all 21 looked at me funny when I talked about having to create that 22 taxing zone as part of the grant requirements. We've also 23 found out that part of the, you know, grant requirements 24 involve the county submitting a -- a report to TexDOT 25 documenting the condition of every county road in the county 2-24-14 15 1 with some detail, more so than we already have prepared. And 2 before asking Mr. Odom and Ms. Hofer to start working on 3 that, with what looked like it could be a good deal of work, 4 you know -- I don't know. We've -- there's always hoops we 5 keep finding out we need to jump through, and it's all just 6 been, you know, to apply for the grant money. But before 7 having folks do a lot of work, I wanted to confirm that the 8 Court really wanted that use of time of county employees. 9 COMMISSIONER BALDWIN: Mr. Henneke, I can tell you 10 I'm not interested. 11 COMMISSIONER MOSER: Me either. 12 COMMISSIONER OEHLER: Me either. 13 COMMISSIONER LETZ: I'll make a motion that we 14 direct county staff to not proceed with applying for this 15 grant. 'Cause I think we've told them to proceed, so I want 16 to make a motion to tell them not to proceed. 17 COMMISSIONER MOSER: I'll second it. 18 COMMISSIONER BALDWIN: I've got a motion and 19 second. Any further discussion? All in favor, raise your 20 right hand. 21 (The motion carried by unanimous vote.) 22 COMMISSIONER BALDWIN: Motion carries. Thank you. 23 Item 1.4; consider, discuss, and take appropriate action to 24 accept the preliminary revision of plat of Lots 2, 3A, 4A, 25 8A, and 9 of Ranches on the Sunset Ridge, Revision of Plat 2-24-14 16 1 Record Number 13-3714, and set a public hearing for Precinct 2 3. Mr. Odom? 3 MR. ODOM: Yes, sir. I thought for a second you 4 were still angry at me for making a comment about your 5 daughter. 6 COMMISSIONER BALDWIN: No. 7 MR. ODOM: On May the 28th, 2013, the Court 8 approved the revision of plat for Lots 1, 3, 4, 5, 6, 7, 8, 9 and 10 of Ranches on Sunset Ridge. A drainage study was 10 done, reviewed and approved at that time. Now we ask the 11 Court to accept the preliminary revision of plat for Lots 2, 12 3A, 4A, 8A, and 9 of Ranches on Sunset Ridge found in Plat 13 Record Number 13-3714, and set a public hearing for Monday, 14 April the 14th, 2014, at 9:10 a.m., Precinct 3. 15 COMMISSIONER LETZ: Just a -- a comment on this a 16 little bit. I think we'll have the actual preliminary plat 17 on our next agenda. It wasn't quite ready here, but we can 18 go ahead and set the public hearing. This is a very -- our 19 rules can be -- under our rules, there can be no runoff, 20 post-construction of the development. There is going to be a 21 very slight increase in runoff because of the lot sizes that 22 they're changing, but it's very, very small. And I met with 23 the developer and Mr. Odom and Lee -- it wasn't you? -- no, 24 Lee Voelkel about it, and I think what we're going to do, our 25 rules allow for vegetative requirements that can help 2-24-14 17 1 mitigate runoff issues. And the issue's very -- so there's 2 going to be some no-build zones put on the plat for these, 3 some of the lots that are affected here. And the drainage 4 areas and the area right next to where the water would go is 5 not going to have any kind of construction permitted on it. 6 And that vegetation will then, we think, slow down the water. 7 So, we're -- you know, and basically we're following our 8 rules, but it's a little bit different way of doing it than 9 we've done it in the past. 10 COMMISSIONER MOSER: So, those restrictions would 11 be delineated where? 12 COMMISSIONER LETZ: They will be -- it will be on 13 the preliminary plat. That's where the -- we're not going to 14 approve it today. It'll be at our next meeting; we'll have 15 the preliminary plat. But it's about a 100-foot or 75-foot 16 strip along the boundary where the water is going. 17 COMMISSIONER MOSER: That will be -- 18 COMMISSIONER LETZ: It'll be delineated there, some 19 deed restrictions very similar to that. We said this has to 20 be a lot restriction -- or a plat restriction, because they 21 can always change deed restrictions. 22 COMMISSIONER MOSER: Right. 23 COMMISSIONER LETZ: And we want to make it that 24 they can -- this cannot be modified. So, it's -- you know, 25 it works from all -- basically all scenarios. Trying to put 2-24-14 18 1 any kind of detention structures would do more damage and 2 cause more -- if we ever do get any rain, more probably 3 siltation and runoff than the approach we're taking. So, 4 anyway, we'll have that next time, but I'll make a motion to 5 set the public hearing as requested. 6 COMMISSIONER BALDWIN: And that was April 14th at 7 9:10? 8 MR. ODOM: Yes, sir. 9 COMMISSIONER MOSER: Second. 10 COMMISSIONER BALDWIN: Motion and second. Further 11 discussion? All in favor, say "aye." 12 (The motion carried by unanimous vote.) 13 COMMISSIONER BALDWIN: Thank you. 14 COMMISSIONER OEHLER: Mr. Odom? I've got something 15 for you here. 16 COMMISSIONER BALDWIN: We're going to go ahead and 17 go to Item 1.13 now; Mrs. Standridge is here, I understand. 18 Consider, discuss, take appropriate action on question 19 concerning the proposed certificate of obligation 20 Mr. Standridge? 21 MS. STANDRIDGE: Yes, sir. 22 COMMISSIONER BALDWIN: Ma'am, may I make a 23 suggestion? 24 MS. STANDRIDGE: Yes. 25 COMMISSIONER BALDWIN: And you do -- this is your 2-24-14 19 1 agenda item, and you're going to do what you want to, and I'm 2 going to allow that. You've fired shots at these guys, and 3 none of us can obviously answer your question, but there will 4 be a gentleman here at 1:30. 5 MS. STANDRIDGE: Okay. 6 COMMISSIONER BALDWIN: Our bond guy will be here at 7 1:30 that can give you in detail everything you need to know. 8 MS. STANDRIDGE: Okay. 9 COMMISSIONER BALDWIN: It's just a suggestion to 10 you. 11 MS. STANDRIDGE: Sure. 12 COMMISSIONER BALDWIN: Fire your shot right now, 13 or -- 14 MS. STANDRIDGE: No. And, my goodness, I totally 15 respect each of you for the office that you hold. I truly do 16 that. So, if -- if I came across as firing shots, please 17 forgive me. 18 COMMISSIONER BALDWIN: Okay, I'm sorry. "Shot" was 19 a bad choice of words. 20 MS. STANDRIDGE: Okay. Well, I just wanted to say 21 I -- I want each of you to know that I respect the office 22 that you hold. I even respect the office of the President. 23 I may not agree with him, but I respect him for his office 24 that he holds. (Laughter.) So -- but I'm just -- this is my 25 first time -- last time was my first time to Commissioners 2-24-14 20 1 Court, so it was interesting. And the one thing that has 2 bothered me about this whole issue has been the certificates 3 of obligation, and I spent a lot of time on the computer 4 looking and trying not to go to any website that was 5 prejudiced. I just wanted to find a definition, and finally 6 I found one. A certificate of obligation is a bond issued by 7 a city or a governing body, county, without voter approval. 8 That was real simple, so it just meant that I do understand 9 that. 10 One of the things I did -- that concerns me. And 11 then in looking back through the transcript of last time -- 12 and thank you very much for trying to explain that to me. 13 And I still have not got an answer, and I can at 1:30, who 14 actually -- how this gets paid for. Because there is 15 interest; there has to be a fee for the loan and that sort of 16 thing. So, I just was curious how that progresses throughout 17 the generations. And then as I began to read the transcript 18 from last week, I realized that -- it was actually, I think, 19 you who said actually 2000 that this plan was done. And I 20 can tell you, from having remodeled houses and built houses 21 from scratch, that if we let an outdated plan come up, the 22 cost has changed, definitely. And so I guess more than 23 anything, the investigation was what I was speaking to, that 24 I was just wanting more input. I also would love for it to 25 be a voter item, but that the voters get to say, "Yes, this 2-24-14 21 1 is the exact plan we're going to do, and this is what we want 2 to do," and then I think everybody would be on board. But, 3 anyway, those were my concerns, and that's what I wanted to 4 speak to. And thank you very much for hearing me. 5 COMMISSIONER LETZ: I will comment on part of that, 6 'cause I misspoke at the last meeting as to the date and the 7 amount of that previous issue. The actual plan was done in 8 2002. 9 MS. STANDRIDGE: Okay. 10 COMMISSIONER LETZ: The master plan we had done by 11 our consultant out of Fort Worth, Quorum Associates. Out of 12 that, the Court decided -- I think the total estimate of cost 13 at that time for -- and it was a larger horse arena and all 14 kinds of things; it was about 8 million, somewhere in that 15 area. I went on memory on that a little bit. The bond issue 16 that was run at the time was for a very small part of it -- 17 or, actually, I shouldn't say very small; for basically a 18 small convention center. It was 3.5 million for that, the 19 bond issue. What we have continued on, we have looked at 20 that portion of that master plan that was done back then, and 21 we have -- 22 MS. STANDRIDGE: Okay. 23 COMMISSIONER LETZ: -- built a barn which was part 24 of that. We moved a rodeo arena, and we're renovating -- the 25 exhibit hall is now -- I guess what we're talking about now 2-24-14 22 1 is basically reno -- or not renovating, building a new one, 2 tearing down the old one. This is not what the voters voted 3 on. They voted on a small convention center. It had -- it 4 was two stories and had a big atrium, all kinds of stuff. 5 That was voted down. We are basically replacing what is 6 there. It will be slightly larger. So, I wanted to -- you 7 know, I gave some wrong numbers and dates last time. 8 MS. STANDRIDGE: Well, when I looked at the dates 9 and thought, oh my goodness, we're not talking 10 years past 10 the planning, we're talking -- well, now 12, if you say it's 11 2002. 12 COMMISSIONER LETZ: And since that -- that was the 13 original plan. In 2003, we did another study that reaffirmed 14 the direction we were going; 2006, we did another one. And 15 then last year, at the, basically, request of Commissioner 16 Moser, we started one that went from February and went 17 through May of last year, looked at it again, talked to the 18 Chamber of Commerce, talked to the Extension Office. And 19 based on that, we modified the plan quite a bit after about a 20 three-month review of the plan in 2013. And then out of that 21 -- after that work, we modified the drawings, and that's what 22 we authorized the architect to go out for construction 23 documents on. 24 MS. STANDRIDGE: Well, thank you for hearing me. 25 And my bottom line still is that, as a voter, I would like to 2-24-14 23 1 have a say-so in what happens with this. And I'm just 2 speaking for myself, not anybody else here. But thank you 3 for hearing me. And I would also ask, as -- looking through 4 the transcript, I was a little bit shocked at how rude you 5 guys are to each other sometimes, and I would ask that you 6 would be very cordial and disagree agreeably. That's the 7 teacher in me. I just had to kind of make that -- 8 COMMISSIONER LETZ: We may be rude, a little bit 9 terse to each other up here, but I can assure you, when we're 10 out of here, we all get along. We understand we fight each 11 battle individually; we win some, lose some. 12 MS. STANDRIDGE: Sure. 13 COMMISSIONER LETZ: But we -- there's no hard 14 feelings from what's said in here. 15 MS. STANDRIDGE: Okay. 16 COMMISSIONER MOSER: I'll second that. 17 MS. STANDRIDGE: All right. I'm new to this. 18 COMMISSIONER MOSER: Okay. 19 COMMISSIONER BALDWIN: Thank you, Mrs. Standridge. 20 COMMISSIONER MOSER: Thank you. 21 COMMISSIONER BALDWIN: We're going to Item 5; 22 discussion with the Hill Country District Junior Livestock 23 Show Association representatives concerning the use of the 24 funds they plan to contribute to the Hill Country Youth Event 25 Center. Mr. Reeves and Mr. Bauer. 2-24-14 24 1 MR. REEVES: Now. 2 COMMISSIONER BALDWIN: You must be Mr. Reeves. 3 MR. REEVES: Good morning again, gentlemen. For 4 the record, Bob Reeves, 1650 F.M. 479, Harper. I'm here 5 representing the Hill Country District Junior Livestock Show. 6 Mr. Bauer is behind me, and can add to it what we need. As 7 you recall, Commissioner Letz -- and we've been working on 8 this two, three years. I feel with your cooperation, with 9 driving to other facilities, we've come up with some good 10 plans; that we looked at other facilities all over this part 11 of the state, San Angelo, San Antonio, what went right, what 12 went wrong, and we appreciate working as partners with you. 13 You've requested a couple years ago that the association 14 raise $500,000 towards Phase 2. To-date, subject to it being 15 new construction and approval of our plans, we can bring you 16 a check for $250,000, and we're prepared to do that as soon 17 as our auditor, y'all's auditor, our legal, everybody can 18 come to an agreement, 'cause I don't know if we just walk in 19 with a check or if you want cash, or how you'd like us to 20 bring it, but we can do that. No cash? Okay. 21 MR. HENNEKE: Nickels and dimes, Bob. 22 MR. REEVES: We are working on the other 250,000. 23 We feel like that once ground is broken on Phase 2, we will 24 be able to come up with the rest of it. I'll remind you that 25 this is over and above the $340,000 that we've already spent 2-24-14 25 1 on pens for the facility, and I believe it was four or five 2 -- about $4,500 that we've added for speaker upgrades. So, 3 if we can move forward and we figure out how to get the money 4 to you, and let us get everything in line, I's dotted, T's 5 crossed, we're ready to proceed with this. 6 COMMISSIONER LETZ: Thank you, Mr. Bauer (sic). 7 One comment -- or comment/question. Hopefully today, we're 8 going to authorize the certificate of obligation that will 9 fund -- or complete funding, I should say, the exhibit hall. 10 We need to -- you know, I don't want to wait on y'all's 11 future fundraising, you know. And I would ask that if -- you 12 know, assuming we go along with funding that, the balance 13 250,000, if it comes in, that we have the discretion to use 14 it for the arena upgrade, as opposed to the new construction, 15 because we can't start a construction project when we're 16 short $250,000. Anyway, so that's a question. I mean, if 17 you can raise the money before we start construction -- it 18 would be a 90-day period -- great; we'll put it towards -- 19 designate it, or y'all can earmark it as you see fit. But 20 once we award a contract, we have to have the money. And I'd 21 like to try to move this forward, so if you'd give us the 22 flexibility -- or you would have the flexibility, not -- 23 really, it's not up to us; it's up to you to -- the balance, 24 designate it for one of those two uses. 25 MR. REEVES: That's not a problem with the second 2-24-14 26 1 $250,000. The 250,000 I am referring to we received based on 2 grants with the specific new construction to Phase 2. 3 COMMISSIONER LETZ: Okay. 4 MR. REEVES: So, we can be agreeable either way on 5 the second 250,000, because we'll know how to apply for our 6 grants. 7 COMMISSIONER LETZ: Okay, I appreciate that. 8 COMMISSIONER MOSER: Let me -- may I? 9 COMMISSIONER LETZ: Sure. 10 COMMISSIONER MOSER: For clarification, first of 11 all, I'm all for the exhibit hall. Everybody hear that? I'm 12 all for the exhibit hall. The -- the second thing is, what 13 I'm hearing is -- and let me understand. Previously, the -- 14 it was the intent of the County to take taxpayer money to -- 15 to do something at the exhibit hall, okay? And at that time, 16 there was some agreement, commitment, I don't know what -- 17 how it was, as the Judge would say, memorialized or what, on 18 the -- your organization bringing $500,000 to that -- to that 19 end. We were going to contribute "X" amount; Junior District 20 Livestock Show was going to bring 500,000. So, what I'm 21 hearing today is Commissioner Letz says, "Let's move forward 22 to build it with the taxpayers' money." You're going to 23 bring a check for 250,000, which I -- I think everybody in 24 the world would appreciate, and we do. But there's -- we're 25 going to try and get the other 250. So, one is a commitment, 2-24-14 27 1 "We're going to do it." The other one's, "We're going to try 2 and do it." And I'm asking that just for very clear 3 clarification. Am I understanding that correctly? 4 COMMISSIONER LETZ: My intent is that they are 5 obligated to still bring that $250,000. 6 COMMISSIONER MOSER: What is the obligation? 7 COMMISSIONER LETZ: Our word and their word. 8 COMMISSIONER MOSER: Okay. 9 COMMISSIONER LETZ: I'd say their word. We don't 10 have a contract. We have a -- a longstanding partnership 11 with the Stock Show Association as to that facility. That 12 association originally built it. We took it over, and we -- 13 if anything, we kind of fell down on our part of the bargain 14 on maintaining it and upgrading some of these things. We 15 relooked at this, I don't know, five, six years ago, seven 16 years ago, looked at the whole agreements that we do have -- 17 we do have a formal agreement with the association, but it's 18 not related to this. This was a -- a challenge that I think 19 I made, and the Court supported at the time, for them to 20 raise $500,000. They, relatively quickly, raised the 250,000 21 for a new building, and then everything kind of got slowed 22 down, and they basically couldn't go out -- 23 COMMISSIONER MOSER: So, for clarification, one is 24 a real commitment, sign the deal. The other one is an 25 intent. 2-24-14 28 1 COMMISSIONER LETZ: I think both of them were -- 2 COMMISSIONER MOSER: No, I'm saying today. One 3 will be -- if we pass it, one will be a commitment to build. 4 The other will be an intent to raise. 5 COMMISSIONER LETZ: I would say that's true. 6 Because, I mean -- I don't know. They can't -- 7 COMMISSIONER MOSER: Okay. 8 COMMISSIONER LETZ: But they have -- both of them 9 originally were intents, I would say, 'cause there really 10 wasn't a contract. I think that -- I believe that the Stock 11 Show Association will honor that intent and will come up with 12 $250,000. 13 COMMISSIONER MOSER: Okay. So, I'll say it one 14 more time. One will be a firm commitment; we'll sign the 15 contract to build something. That's a commitment. And the 16 other will be an intent to raise an additional 250,000. 17 COMMISSIONER LETZ: I think that's correct. 18 COMMISSIONER MOSER: Okay. 19 COMMISSIONER OEHLER: More like a commitment with 20 an intent. They're committed to do it. 21 COMMISSIONER MOSER: How do you commit? 22 COMMISSIONER OEHLER: Their word. 23 COMMISSIONER MOSER: Okay. 24 COMMISSIONER OEHLER: It's always been good. 25 COMMISSIONER MOSER: That's an intent. Okay, got 2-24-14 29 1 it. Got it. 2 COMMISSIONER LETZ: Okay. 3 COMMISSIONER MOSER: That was for clarification. 4 COMMISSIONER BALDWIN: Okay. 5 COMMISSIONER LETZ: Thank you. From my standpoint, 6 thank you for coming and clarifying that. 7 COMMISSIONER BALDWIN: Is any action required here? 8 Okay. I've been requested that we bump Item 18 -- 1.18 up to 9 this time now, and that is consider, discuss, take 10 appropriate action to enable Schreiner University to perform 11 a marketing analysis for Exhibit Hall at the Hill Country 12 Youth Event Center. Commissioner Moser? 13 COMMISSIONER MOSER: Thank you, Commissioner 14 Baldwin. At the last Commissioners Court, I made a motion, 15 it didn't get a second, to have a marketing -- an economic 16 impact analysis done by Schreiner University on the exhibit 17 hall, to understand what the market is, what we can address, 18 and what -- what it should be. Since then, I've looked at 19 every document that I think exists on the exhibit hall. I 20 may be missing some; I don't know. But bottom line, in this 21 stack of documents, and I think Commissioner Letz referred to 22 a lot of them a while ago, there are a lot of plans -- and 23 don't get me wrong. There are a lot of plans. The workshop 24 was about plans. It was not about what the need is. 25 And I want to go back, and I also want to 2-24-14 30 1 reference a document that was a memorandum from Sudie Burditt 2 in 2000, and it was Subject: Ag Complex, blah, blah, blah. 3 It was primarily for the exhibit hall. And it says, "Scope 4 of services for consulting firm." Now, I'll just read the 5 titles. A, market analysis. Number 2, facility 6 recommendations. Number 3, analysis of competitive 7 environment. Number 4, estimated annual operating results. 8 To my knowledge, this proposal from Visitors and Convention 9 Bureau was never enacted. I mean, there was no action; there 10 was nothing done with this. Sudie Burditt, who was Executive 11 Director or whatever of the Convention Bureau -- yeah, 12 Convention Bureau, did an analysis, I think, in 2005, 2008. 13 I have it in here; I don't remember the exact date. Her 14 analysis was that the facility was available 42 weeks a year 15 for noncommitted things like the stock show and other things, 16 which, you know, was 14 weeks out of the year. But she 17 assumed that it was used every single weekend for three days 18 a weekend, fully booked, and with that, it was $5 million 19 worth of income. So, that was kind of a quasi-economic 20 impact analysis. 21 What I would like to do -- and I'm not going to 22 make a motion, but I'm just going to inform the Court that 23 I'm going to ask Schreiner University to do the marketing 24 analysis, an economic impact analysis that I requested last 25 time. And it's in the record of what I did, and I'll not 2-24-14 31 1 delineate it, but basically what it'll say, start next week, 2 bring to the -- bring for information, if the Court so 3 chooses to hear it, what the plan is for the marketing 4 analysis, what it should be, what the needs are, what the 5 competition is, all those good things, and then bring us an 6 interim report and have it completed by -- within 90 days. 7 So, I'm going to engage Schreiner University to conduct that 8 study, and I will pay for any expenses that they have, and I 9 will present it to the Court just for information or whatever 10 it -- other uses it may be useful. 11 But I think a marketing analysis is critically 12 important when we get ready to have two and a half -- two, 13 two and a half million dollars worth of taxpayer money to 14 build something which we -- I cannot find what the need is. 15 I find lots of plans. Lots of plans. And I think there's a 16 lot of good intent for this. There's a lot of emotion in it 17 on both sides, and the only way to get rid of that is to have 18 something that's a credible -- credible study. So -- and I 19 think Schreiner University has demonstrated in this community 20 that they can perform those independent studies. As a matter 21 of fact, they did one for the controversial riverwalk that 22 the City is engaged in doing, and they looked at it from an 23 economic analysis, and it didn't come out very good. As a 24 matter of fact, it come out -- came out very bad. So, it was 25 a quality of life; the City decided to move forward on that. 2-24-14 32 1 So, they've done it for Dietert Center; they've done it for 2 multiple, multiple organizations around the county. So, this 3 is for information. I'm going to ask them to do that, and I 4 will present the findings as we proceed through the study. 5 So, that's it. 6 COMMISSIONER BALDWIN: Thank you, Mr. Moser. Item 7 1.6; consider, discuss, take appropriate action on capital 8 items for the proposed certificate of obligation. 9 Commissioner Letz? 10 COMMISSIONER LETZ: Let me -- we've talked about 11 this several times. And if I can find -- there's way too 12 many papers here. 13 COMMISSIONER BALDWIN: I'm assuming you're 14 referring to a list of some sort, huh? 15 COMMISSIONER LETZ: Do you have yours? I just -- 16 oh, that's not the right list. 17 COMMISSIONER OEHLER: That's the wrong one. This 18 is the right one here. 19 COMMISSIONER LETZ: I got that. 20 COMMISSIONER OEHLER: That's mine. 21 COMMISSIONER LETZ: Just wait a minute. 22 COMMISSIONER BALDWIN: You heard that lady about 23 y'all getting along? 24 COMMISSIONER OEHLER: Yeah, I do. What she doesn't 25 understand is it's really more fun than really getting mad at 2-24-14 33 1 each other. 2 COMMISSIONER BALDWIN: We do fine down at our end. 3 COMMISSIONER OEHLER: Yeah, right. 4 COMMISSIONER LETZ: And, evidently, this is a 5 little bit confusing, 'cause I talked to both Jeannie -- and 6 the Sheriff's in it, and Commissioner Oehler this morning as 7 I walked in. Anyway, but it's -- what it is basically is a 8 similar list to what we had last time, with some revisions. 9 The first group of numbers is the 2014 certificate of 10 obligation; it's how those funds are broken down. Its 1.55 11 -- 1,550,000 for the arena, 450,000 -- I mean, excuse me, for 12 the exhibit hall. First number, 450,000, is for the arena. 13 1.3 million for the Sheriff's communication system; that 14 number is based on Trott Communication's analysis. And that 15 number, as you will recall, has grew 300,000 since the last 16 time we met. Environmental Health Department's addition, 17 that's 200,000. We have a quote from J.M. Lowe. I met with 18 Ray and came out with a number, and their estimate was for 19 one -- they think about 180 is the number, but we went ahead 20 put 200 here just to make sure we're covered. On Kerrville 21 South Fire Department, that was reduced after, I think, 22 Tom -- the comments that Commissioner Moser made, and talking 23 with Commissioner Baldwin a little about it, we're probably 24 not ready to build a fire station. But we're ready -- but we 25 do need to continue working towards that and looking at that 2-24-14 34 1 and figuring out agreements. And I put money here for that 2 purpose; it's 100,000. Upgrade for parks, I know 3 Commissioner Moser has mentioned restroom facilities in 4 Center Point. That's kind of in here. There may be some 5 others. Contingency, 100,000 is in here, but it's got almost 6 a dotted line up to the Sheriff's communication system, 7 because there could be some additional costs on there 8 potentially, depending on what we do with EMS and fire and 9 our city contracts. Because when it comes to additional 10 stations -- or not stations -- 11 SHERIFF HIERHOLZER: Frequencies. 12 COMMISSIONER LETZ: Frequencies that may be needed. 13 And issuance cost is about 100,000. So, the total amount for 14 the C.O. would be 3.9 million. That next group of numbers is 15 kind of the exhibit hall. The cost estimate that we have for 16 that is 2.2 million. The stock show, as they mentioned, will 17 be 250,000 contributed. We have 400,000 that we've 18 previously allocated for that facility that we have, so the 19 additional amount we're talking about is 1.55 million. And 20 then the arena renovations, 700,000 is a newer number that we 21 have. And then I took that 250,000 that the Stock Show 22 Association -- we discussed there. So, it's 450,000 for 23 that. That's how we came up with those. Anyway, that's the 24 -- you know, as I see it. 25 I think, you know, we certainly can make some 2-24-14 35 1 adjustments. The total amount, I think, is pretty much fixed 2 at 3.9 million, is the number that we can -- which is less 3 than we talked about last time by 100,000, but that number 4 is -- if we're going to proceed today, it's fixed. 5 COMMISSIONER MOSER: May I -- 6 COMMISSIONER LETZ: Certainly. 7 COMMISSIONER MOSER: -- ask a question? I'd like 8 -- I'd like some kind of -- like Ms. Standridge, I'd like 9 some clarification, if I may, on the C.O. process. And to 10 start with, I'd like to ask the Auditor to clearly state step 11 one, step two, step three, that when a C.O. is envisioned, 12 and how it's finally approved, with all the publications and 13 everything else, if -- if I could ask Jeannie to do that. I 14 can ask her; I don't know if she will. 15 COMMISSIONER LETZ: I would -- I would really 16 recommend that you ask that of either Mr. Henderson or Mr. 17 Spurgeon. I mean, they're the ones -- I mean, Jeannie's not 18 an attorney. 19 COMMISSIONER MOSER: This is just for 20 simplification, you know, just step one -- and the reason -- 21 let me tell you, the reason I ask that is -- is because I 22 don't fully understand it myself. When we -- when we 23 advertise this, when we -- what can be in the advertisement 24 as far as categories of things to borrow. I've seen this for 25 the first time today, okay? Now, I know you've been working 2-24-14 36 1 on it, and I admire you for doing that, but I think that this 2 is a very significant item. What I would -- the thing 3 that -- that I can't comprehend is, this -- this is like, why 4 don't -- why don't we use the same process that we use in 5 establishing a budget? Why don't we identify the potential 6 items that could be out there from the department heads, from 7 Commissioners, from other members of the Court, and say, 8 "Here are the things that we think we would like to include 9 in the certificate of obligation, and here's what we think 10 that they would cost." And then we look at that and say this 11 is what we think we can afford, okay, and then come up with 12 something. 13 This -- this is kind of -- and I'm not casting 14 stones or anything. I'm just talking about the process. I 15 think our process could be greatly improved by doing that. I 16 think it would let the public see what we're talking about. 17 Not that, you know, they get to vote on a certificate of 18 obligation; I'm not talking about that, but in identifying 19 what's there. Like, for example, I think that there -- I'll 20 use this for a case in point, 'cause I think we need to have 21 some -- some money for bridges, which are safety critical. 22 Somebody's going to have an accident and going to get hurt on 23 some of the -- let me say they're not bridges, but where 24 water flows under the road, okay? Culverts and whatever. 25 Very, very narrow. Road is one width; it narrows down as it 2-24-14 37 1 goes over that. But that can't be included in this 2 certificate of obligation, because what we put in the paper 3 didn't say bridges or water. So, I can't -- that's gone. 4 You know, the process will not allow us, as a Commissioners 5 Court, if we proceed with this certificate of obligation, to 6 include that. We just can't do it. So, I don't like that 7 process. I think it -- I think it's not the right way to 8 conduct the people's business. And so I don't -- you know, 9 I'm seeing these numbers that you have here for the first 10 time, so I don't know what we're supposed to do with them. 11 COMMISSIONER LETZ: Can I -- let me comment, -- 12 COMMISSIONER MOSER: Okay. 13 COMMISSIONER LETZ: -- if I could. Every item on 14 this list has been talked about in 2013 multiple, multiple 15 times. Certainly, the arena and the exhibit hall, those 16 numbers, we have multiple cost estimates. We've done designs 17 and redesigns, so those are the first two. I mean, clearly, 18 we've talked about it with the full intent of going along. 19 Unfortunately -- well, let me just go down the list. 20 Sheriff's communication system. The Sheriff's brought that 21 up before at the last C.O. It was brought up before, and 22 when -- and talking with him again, his system is at a point 23 that it was down a good part of last week, and we're almost 24 at an emergency on getting that one. We knew that was 25 coming, and the Court has -- you know, he's told us for the 2-24-14 38 1 last several years. 2 Environmental Health Department addition, that is 3 one that I'll take the blame for not probably bringing it to 4 the Court sooner, but certainly Ray, when he was given a new 5 position out there -- and I'm one of the liaisons to there, 6 and so I worked very closely with Ray on trying to get a lot 7 of that organized. He worked with a budget that he didn't 8 have, and he's trying -- he's been -- and we told him 9 basically come back to us in December with a plan and 10 analysis of his department. Part of that was this, but I 11 don't think it was ever really brought to the Court with a -- 12 a drawing. As I said, I was aware of it, so I'll take 13 responsibility for not bringing that forward. But it was 14 a -- trying to consolidate that department, that structure 15 was in a lot worse organizational shape, I think, and 16 structural shape, really, than I was aware of. But that's 17 why that's on there. 18 Kerrville South Fire Department. There were, in 19 2013, at least six agenda items on this topic that Judge 20 Tinley put on about moving forward, plus we had A.D.A., 21 drainage study, so that certainly has been discussed. The 22 upgrade for parks, that's something that really, you know, is 23 new, but I knew that there was -- you know, we usually have 24 -- we've always had that on here, or always on future -- or 25 past C.O.'s that we've done, because we do like some park 2-24-14 39 1 upgrades; we try to get them. We haven't -- we've, you know, 2 spent a minimal amount on the parks. So, to say that we 3 haven't discussed any of those items I don't think is 4 accurate. What has happened which is different this time 5 than our previous C.O.'s, is that in the last ten years -- I 6 think ten years, Judge Pat Tinley was kind of the lead on 7 them. And the Judge probably did a better job on putting 8 this together than I did. When he -- since that's been 9 vacant, we left these items silent. And he and I talked 10 about them in the fall, with the full hope and goal that he 11 would be here in January to take -- move forward on them, and 12 he wanted us to wait a little bit because he wanted to be 13 here. Every item on here, he was very supportive of. With 14 his passing, someone had to take up -- you know, move 15 forward. The County can't quit working. We needed these 16 projects. Some of them may be debatable. Some of them, in 17 my opinion, are not debatable. And I took forward -- 18 unfortunately, again, I'll take responsibility for it. This 19 is Commissioner Moser's first time he's gone through the C.O. 20 process. The other three of us have gone through a previous 21 one or two, and -- 22 COMMISSIONER OEHLER: Six or seven. 23 COMMISSIONER LETZ: As we've done them. And, you 24 know, I had a conversation with him the other day. He didn't 25 know the process. And, you know, I'm sorry he didn't know 2-24-14 40 1 the process. I thought it was clear. We -- this list -- 2 have you seen the list before today? 3 COMMISSIONER MOSER: No. 4 COMMISSIONER LETZ: No, you've seen this -- almost 5 an identical list two weeks ago where the numbers were 6 slightly different. We've adjusted them, based largely on 7 the Sheriff's Department and the fire department. 8 COMMISSIONER MOSER: May I -- I understand what you 9 said, and -- and all I'm talking about is the process. Now, 10 I very clearly heard you say these things have been 11 discussed, and I don't disagree with that. I think 12 everything on here has been in some form of discussion in 13 this Court, but never with the intent of let's create a 14 comprehensive list, quantify it to the best that we can, draw 15 the line where we can afford, and move forward. So, you 16 know, I know a bunch of these things have been discussed, but 17 I thought -- just because you're discussing something, all of 18 a sudden we say, "Let's collect everything we've ever 19 discussed and put it on the list." That's what the process 20 is. So, that's -- that's the issue I have. I think -- I 21 think we can all improve, and that's all I'm suggesting, is I 22 think there's a way to improve our process with creating the 23 list for the C.O. That's -- that's my only comment on that. 24 I'm not talking about each line item in here. 25 I wish we had an opportunity to talk about -- and I 2-24-14 41 1 think we will. That's the reason I was going to have Jeannie 2 say, "Here's the process," the procedure, okay, step one, 3 step two in creating a certificate of obligation, and how we 4 identify the categories, the title, the topic. I don't care 5 what you call it, okay. And then the next step is you get 6 down to quantifying what each one of those things are to fit 7 within what the proposed total amount to be borrowed is. I 8 think I understand that. So -- 9 COMMISSIONER LETZ: I think there's one thing -- 10 COMMISSIONER MOSER: Sure. 11 COMMISSIONER LETZ: -- that I haven't mentioned. 12 The -- you know, the list, so to speak, you know, there is a 13 -- one of the goals that I had, and I felt the whole Court 14 has as well, was that there be no tax increase. 15 COMMISSIONER MOSER: Tax rate increase. 16 COMMISSIONER LETZ: Tax rate increase. That we had 17 to come up with a C.O. that would work within our current tax 18 rate. 19 COMMISSIONER MOSER: Right, got that. 20 COMMISSIONER LETZ: And we looked at what we have 21 falling off, based on previous C.O.'s and how that works, to 22 come up with a number. The max, based on our financial 23 analysis -- or analyst and legal counsel, the maximum that we 24 could do this time was 4 million. Back of my mind, I was 25 trying to keep it, you know, really as small as we could keep 2-24-14 42 1 it; at the same time, but -- but accomplish the projects that 2 have been on the front burner of the Court for some time. 3 And the reason I was really -- that 100,000 is not a whole 4 lot of money in the big scheme of things for this C.O., but I 5 also know that we have on the horizon another big debt item, 6 which is a jail. We're going to have to address the jail in 7 the near future. And I think that -- you know, I was trying 8 to keep it so we kept the intention, 'cause I was the one 9 that kind of really worked with the financial advisers the 10 most on this, and with the Auditor and our legal counsel on 11 bonds. You know, I was the driving force to keep it as 12 little as possible. 13 If I would have known about the bridges, -- and it 14 was just a communication problem -- we certainly could have 15 added 100,000 for a bridge. I think that there are -- are 16 ways to do that still through our budgeting process. I don't 17 think the -- from what our conversations -- I don't want to 18 practice engineering, 'cause I see Mr. Hastings sitting in 19 the audience, but I think that there -- you know, there are 20 other projects in the past, we have gone through Road and 21 Bridge Department and set them up as a special project line 22 item. The Sheppard Rees Road, that was done; a lot of the 23 other bridges, which I think we can accomplish that. 24 COMMISSIONER MOSER: Okay. I don't want to talk -- 25 I'm not suggesting we talk about line items. 2-24-14 43 1 COMMISSIONER LETZ: Okay. 2 COMMISSIONER MOSER: I'm just suggesting -- 3 COMMISSIONER BALDWIN: We're going to stop after 4 this. 5 COMMISSIONER MOSER: Yeah, and I agree with that. 6 I'm talking about the process for establishing items for -- 7 candidate things for C.O.'s, tax rate, blah, blah, blah, all 8 that kind of stuff. I'm not talking about that. So, I think 9 that, you know, the other thing, as I look through this list 10 just by title, I see one thing in there that's probably 11 urgent, okay? That's the Sheriff's communication. And, you 12 know, if -- if he needs a million, or a million, three, and 13 that's urgent and his deputies can't communicate, we've got 14 to do something, okay? And whether it's a C.O. or some other 15 process, I think we need to move forward on those kinds of 16 things. But I think to -- to lump everything together for 17 all things which are not urgent, then just -- I'm not in 18 favor of C.O.'s for that. Thank you. 19 COMMISSIONER BALDWIN: Commissioner Letz, do you 20 have any intention of taking any kind of action on this right 21 now, or would you like to put it off till the 1:30 -- 22 COMMISSIONER LETZ: Yes. 23 COMMISSIONER BALDWIN: Postpone it till 1:30 so we 24 can hear the whole package all at one time? 25 COMMISSIONER LETZ: Right, I would think that's 2-24-14 44 1 correct. 2 COMMISSIONER BALDWIN: Okay, we're going to 3 postpone that one. 4 COMMISSIONER MOSER: All right, thanks. 5 COMMISSIONER BALDWIN: Thank you guys for your 6 discussion. Please don't do that again. (Laughter.) 7 COMMISSIONER MOSER: You're in charge. 8 COMMISSIONER BALDWIN: Yeah, I am now. 1.7; 9 consider, discuss, take appropriate action to approve the 10 basic financial statement and supplementary information audit 11 for period ending September 30, 2013, and the federal and 12 state single audit report for the period ending September 13 30th, 2013. Ms. Hargis? 14 MS. HARGIS: I'm going to let our auditor -- 15 external auditor, Keith Neffendorf, present the audit at this 16 time. Y'all have preliminary drafts. 17 MR. NEFFENDORF: I decline. I decline to give it 18 back to Ms. Hargis. It's the same -- why don't y'all get 19 laptops; then I can skip all these. We've got electronic 20 versions. That way we can skip all the paper, tree cutting. 21 COMMISSIONER OEHLER: One more. 22 MR. NEFFENDORF: One more? 23 COMMISSIONER OEHLER: Then you have a stack. 24 MR. NEFFENDORF: Yep, we can save the trees. 25 MS. HARGIS: Don't pass these out too much, 'cause 2-24-14 45 1 I need them. 2 SHERIFF HIERHOLZER: She gets one. 3 MS. HARGIS: You can give the electronic version. 4 COMMISSIONER BALDWIN: We're going to eat lunch 5 today sometime. 6 MR. NEFFENDORF: Okay, that's good. I'm glad you 7 cut me off. No. 8 COMMISSIONER MOSER: Thank you very much. 9 MR. NEFFENDORF: Anyway, the audit for the county 10 for the year ended September 30th, 2013, is in accordance 11 with all the A.I.C.P.A. and GASB standards. And in their 12 infinite wisdom, we had two new GASB standards this year. Of 13 course, they always have to come up with something new and 14 different. I'll go through at that point to hit where 15 they're at. 16 COMMISSIONER MOSER: For the others, you want to 17 tell them what that acronym means? 18 MR. NEFFENDORF: Sure, Governmental Auditing 19 Standards Board. 20 COMMISSIONER MOSER: Okay. 21 MR. NEFFENDORF: Their own separate body. But 22 anyway, the audit, of course, complies with the A.I.C.P.A. 23 GASB audit standards, and as usual, as we've seen since 2004, 24 you get two sets of financial statements. One set is what I 25 call the governmental basis, and that's the set that Jeannie 2-24-14 46 1 keeps the records on. That's what y'all adopt the budget and 2 set the tax rate on. The second set is a GASB 34 model, 3 where we have to come up -- include all your fixed assets, 4 depreciation, long-term debt, just like a business enterprise 5 would see, come up with a net income or loss. And then 6 there's a reconciliation between the two, and we'll go over 7 and hit the high points. If, at any time, you have a 8 question, just stop and ask me. 9 After the index on Page 1 is the Independent 10 Auditor's Report. Basically, the A.I.C.P.A., in its 11 wisdom -- and I'm a member of that, and so I get to dis them 12 every time I can. We now get two pages -- two full pages to 13 tell you the same thing. We did an audit of the financial 14 statements of the county, and on Page 2, the top paragraph, 15 Opinions. In our opinion, the financial statements referred 16 to present fairly the financial position of the County as of 17 September 30th, 2013, and changes in financial position for 18 the year then ended. That's basically it. Takes two pages 19 to tell you the same thing. You got a clean opinion, 20 unqualified opinion, the best you can get. 21 Management's Discussion and Analysis, Pages 3 22 through 8, is the requirement in GASB 34. We're not required 23 to audit it; that's why it's labeled "unaudited." It is real 24 good for your readers of your financial statements, because 25 it gives them condensed financial information and a narrative 2-24-14 47 1 summary, but I'll do my own highlights. What I've been told 2 is that they can get more out of those five pages than they 3 can the remaining 50. It's a lot easier to read, smaller 4 numbers. The first statement we give an opinion on, Page 10, 5 Statement of Net Position. This is the balance sheet of the 6 County, including all your assets, capital assets, 7 depreciation, long-term debt, and at the end of the year, you 8 could see the assets for the county as a whole were 9 67,009,756. The liabilities, including your long-term debt, 10 were 13,636,000, so you came up with a net position, the 11 equivalent of a stockholder's equity or retained earnings, of 12 53,373,552. So that's -- that's a good financial position. 13 COMMISSIONER BALDWIN: Better than Gillespie 14 County, right? 15 MR. NEFFENDORF: I won't get into politics, but 16 it's good. It's good. They probably were better before, but 17 now they've got the jail, so -- don't tell anybody I said 18 that. No. Page 11 and 12, Statement of Activities. This is 19 the equivalent of a net income statement for the county. 20 It's done in a format required by GASB, so it's a little bit 21 different, but it comes up with the same profit and loss like 22 a business would see. First column, expenses there for those 23 departments, including depreciation, amounted to, last year, 24 $25,647,269. Subtract off the charges for services; these 25 are all the fees of offices and the Tax Assessor/Collector's 2-24-14 48 1 fines and fees collected for motor vehicles, operating grants 2 and contributions. This, of course, is from the few money -- 3 little bit of money that comes from the State. The same way 4 with the capital grants and contributions, so you come up 5 with a net loss of 20,000 -- 20,815,264. Out of that was 6 financed, you could see as shown below, property taxes for 7 general and debt service, 1.8 million, sales tax, 3.2 8 million, and then the other items, and come up with a net 9 general revenues of 20,713,000, to show a net change or loss 10 for the year of 101,285. 11 Pages 13 and 14 are the governmental balance sheet. 12 This gives the assets and liabilities in fund balance for 13 each of the major funds, and then a total for the 14 governmental funds. This is done on the governmental basis, 15 and you can see the new item was one of the GASB's, and in 16 their infinite wisdom, you know, we used to have three 17 classes of assets, liabilities, and funds balances. Now we 18 have a fourth called deferred inflows of resources. It's a 19 liability, moved from a liability account to this new 20 category for your property taxes. As you know, in 21 governmental accounting, property taxes, you record the 22 receivable, but they're all deferred until they're actually 23 collected, and that used to be a liability. Now it's a new 24 category, deferred inflows of resources. How that makes for 25 better financial reporting, I don't know, but it's here. 2-24-14 49 1 First column, general fund, the major funded assets 2 of 7,330,674; liabilities, 886,855; your deferred property 3 taxes, 685,442. So, a net fund balance of 5,758,377. And 4 that's a good -- good fund balance for a general fund. Road 5 and Bridge, likewise, you had assets of 728,764; liabilities 6 and your property tax deferrals made up 178,000, so a net 7 fund balance of 552,000. Which capital projects, the C.O.'s 8 you issued in the prior year, the remaining cash in those 9 were 1,958,000. Most of that is all in fund balance. Then 10 your other funds were the wastewater fund, where the moneys 11 are held basically in escrow by the T.W.D.B. That's why it's 12 called restricted for construction. They're 1,377,650. The 13 other funds, all your little special revenue funds, debt 14 service funds, that's the total of those. So, the grand 15 total of all the County's funds on the governmental basis at 16 the end of the year, you had assets of 12,796,505. 17 Liabilities and deferred revenues for property taxes of about 18 one -- 1,900,000, so a net fund balance of 10,852,495. 19 The reconciliation on Page 15 shows how we get 20 there, governmental to GASB. Of course, the big item is your 21 capital assets, minus your accumulated depreciation, minus 22 your long-term debts, 38,729,793. Current year capital 23 outlays and long-term debt principal payments, 4,537,243. 24 Depreciation expense, 1,885,172. Then you have your 25 reclassifications from the modified accrual to accrual. 2-24-14 50 1 These basically have to do with your recognition of your 2 fines and taxes receivable, 1,139,193. Page 16 and 17, the 3 expenditures of revenues for each of the funds on the 4 governmental basis. Let's see, the general fund last year 5 took in 20,708,616. Expenditures, 19,760,762. So, you add 6 in the excess of 947,854. Road and Bridge had a deficit of 7 29,233. Of course, the capital projects fund where you'd 8 issued the C.O.'s in the prior year, we're spending the money 9 on capital improvements this year; had a deficit of 10 2,820,962. 11 Same way with the wastewater fund. Deficit of 12 409,316. Total for the county as a whole last year over the 13 governmental basis, 25,947,000 in revenue, 28,248,000 in 14 expenditures, for a deficit of 2,300,000. But, of course, we 15 had about 2,900,000 in capital improvements. That was money 16 that was taken from the C.O.'s in the prior year, and 17 expenditure for this year. It's just the way governmental 18 accounting works. Page 18 shows that deficit, or a net 19 change of 2,282,652. Add back your current year outlays and 20 long-term debt principal payments, 4,513,000, subtract your 21 depreciation expense, 1,885,172. Then your accrual 22 adjustments, like I said before, have to do mainly with your 23 fines receivable and taxes receivable to come up with your 24 net change under GASB 34 of 101,285. 25 Page 19 is just a summary of the agency funds. 2-24-14 51 1 These have to do with your moneys, the fees of office that 2 are due to you. Most of it's due to other funds; we collect 3 it, remit it to the county or the state, or where -- the 4 other party where it belongs. Notes on -- Page 20 starts the 5 notes to the financial statements. The first part of the 6 notes are what I explained about the use of GASB 34 and then 7 use of fund accounting. The notes I'd like to point out 8 start on Page 27, the deposits and investments. The County's 9 required to comply with the Public Funds Investment Act. At 10 the end of the year, the County's deposits were secured by 11 FDIC coverage and pledged securities. 12 The second part of that on Page 28 shows the 13 listing of the County's investments, and it shows the listing 14 there with the money market accounts, C.D.'s, and of course, 15 some in TexPool. These investments are in accordance with 16 the Public Funds Investment Act. The moneys at the bank, 17 whether it be a C.D. or a money market account, are secured 18 by FDIC coverage and/or pledged securities above the $250,000 19 FDIC coverage. And, finally, TexPool, of course, is not 20 secured by FDIC coverage and/or pledged securities, but it 21 has built-in safeguards in accordance with the Public Funds 22 Investment Act; therefore, all your investments are in 23 accordance With the Public Funds Investment Act. The other 24 notes are also just additional disclosures, give other 25 details of the balance sheet items that I've already gone 2-24-14 52 1 over. 2 Page 30, the bottom of the page, shows all your 3 changes in your capital assets, and then related on Page 31 4 at the top shows the depreciation expense for the year. Page 5 32 shows your long-term liabilities for your bonds payable 6 and your compensated absences. You can see last year, you 7 issued no -- had no long-term debt issued. Retired, the 8 payments were made in accordance with the debt service 9 schedule, 1,434,650, reducing your outstanding liability for 10 the bonds payable in C.O.'s of 11,366,628. And at the bottom 11 of the page, it just gives a listing of those C.O.'s, and the 12 balances outstanding and amounts due within one year. And 13 the top of Page 33 shows the debt service requirements 14 showing the principal and interest payments over the next 15 five years and thereafter. 16 And then, finally, the other note on Page 34 is, of 17 course, the note for the Texas County and District Retirement 18 System. The County is a member of that system, and they 19 provide to us, as the auditors, this information that's 20 listed on this disclosure showing the plan description, 21 funding policy. Last year the planned cost for the 22 retirement for the county employees was 1,486,225. Page 35 23 shows the expenditure each year. The middle of the page 24 shows what the expenditure was for the retirement system for 25 the last five years, and down at the bottom shows the funding 2-24-14 53 1 progress. The amount of actuarial value of assets down there 2 is 30,550,000. Liability was 37,160,000, so your unfunded is 3 6,610,000, which is 82.81 percent. Which most of the other 4 -- almost all the counties in this area are in the 80 to 5 high-80 percent range. 6 Page 36, joint venture with the Airport and 7 the City, that just shows the assets, liabilities, and the 8 net position of the airport, which the County includes 9 one-half of all those items in its audit report, since it is 10 a joint venture with the City. Page 38 shows the 11 post-employment benefits other than pension benefits. Under 12 GASB 45, we have to do now accrued liability for the expense 13 of providing health insurance for your retired employees, and 14 that shows on page -- the next page down at the bottom. It 15 does the same thing; you have to get an actuarial to 16 basically do an evaluation of what the expense should be, 17 which is shown up on the top of Page 38. And the same thing, 18 it shows last year the OPEB cost was $89,097. And at the 19 evaluation date of 12-31-12, of course, these aren't funded, 20 so the liability was $625,435. And the other notes pretty 21 are much standard disclosure, except over on Page 42, that's 22 the prior period adjustments to comply with the new GASB 23 standards. One of those was -- used to, we could capitalize 24 bond issues cost, amortize them. Now they want us to expense 25 them, so that basically takes care of that item. The same 2-24-14 54 1 way with the recording of the deferred revenues. Now, 2 instead of being a liability, it's a separate item. 3 Page 43 shows the schedule for budget 4 compliance for the general fund. Last year, it shows that 5 the County complied with the budget. The revenues were 6 budgeted at 21,230,000. Actually, it collected 20,708,000; 7 you were short 521,591. But on the expenditure side, you 8 budgeted 21,365,000. You only spent 19,760,000, so you had a 9 favorable variance of 1,605,176. So, overall, you had 10 planned a deficit of 135,000; it turned out to be a positive 11 difference of 947,854. So, you can see the positive variance 12 in the budget. Same way on Page 44 for the Road and Bridge 13 fund. Your revenue's a little short of what you had budgeted 14 by $15,797, but your expenditures were under budget by 15 73,193. So, in both cases, overall, you had planned a 16 deficit of 86,000; it was only 29,233, so you had a favorable 17 variance to the budget. 18 Page 45 shows the -- what I showed you earlier 19 on the retirement system, and it just shows for the last five 20 years, you can see you've been funded at about 80 percent, 21 which is normal for most counties. Page 46 shows the 22 liability for the OPEB cost, and that too just gives for the 23 last -- since '08, and they're done every three years. The 24 supplementary information statements starting on Page 47 are 25 just all your special revenue funds and little debt service 2-24-14 55 1 funds and capital projects. That just shows the assets, 2 liabilities, and fund balance for each one of those funds. 3 We've already gone over the ties with the total in the front. 4 Same way on 53; Page 53 gives the summary of the revenues and 5 expenditures for each one of those funds, and the totals tied 6 with financial statements in the front. Page 59 just shows 7 the agency funds. These are accounts that the County -- 8 there's money run through that the County holds as an agent, 9 and you can see those funds as listed there. Of course, the 10 bulk of them are just flow-through moneys. The County 11 collects the money and remits it either to -- to the State, 12 which most of the official fees go to, or the County gets to 13 keep their portion, which is not big enough. If we could 14 keep more of these, we'd be in better shape. 15 And the final section, the two items, since 16 the County collected or spent over $400,000 for the Texas 17 Water Development Board, we are lucky enough to qualify for 18 the single audit. Therefore, we get to go and show all you 19 these raft of letters, the separate package where, once 20 again, the letters -- and I'll just briefly summarize those. 21 We have to test for compliance, internal control used over 22 financial reporting; we found no major weaknesses. We had to 23 test for compliance with laws, contracts, and grants; we 24 found no instances of noncompliance. The same way under the 25 OMB Circular A-133, Single Audit Act. We found no instances 2-24-14 56 1 of noncompliance, and we also didn't find any problems with 2 internal control used over financial reporting. And in our 3 opinion, the schedule of federal expenditures is in 4 accordance with the County's records, and fairly stated. And 5 then finally, you can see in that packet on Page 8 is a 6 listing of the federal awards, and it shows the program and 7 total spent for last year. And, of course, the bottom of the 8 page shows the state awards. So, the total for those state 9 awards -- you can see the federal expenditures amounted to 10 660,428. You qualify for the Single Audit Act at the 500,000 11 level. Amen. It's been changed to 750,000, so starting in 12 2015, they've upped the limit in their wisdom. Thank you. 13 COMMISSIONER MOSER: A couple of things. 14 MR. NEFFENDORF: Yes? 15 COMMISSIONER MOSER: Back on page -- no. 16 MR. NEFFENDORF: I have one other letter, the last 17 letter in the packet that just is another requirement of 18 GASB. 19 COMMISSIONER MOSER: Why don't you finish? 20 MR. NEFFENDORF: Yeah. Saying that we, as 21 independent auditors, have to report these items to you, the 22 governing body of the county, as listed in this letter. 23 Significant audit findings; there were none. No difficulties 24 encountered in performing the audit, no corrected or 25 uncorrected misstatements, no disagreements with management, 2-24-14 57 1 and no other audit findings or issue that requires 2 disclosures. Amen. We thank Jeannie and her staff and all 3 the offices we visited, 'cause we do go through a lot of 4 stuff and see a lot of documents, and we always appreciate 5 their cooperation. Every office we go to, they're always 6 willing to give us the data and documents that we want to 7 see. That makes it a lot easier. 8 COMMISSIONER MOSER: Comment. 9 MR. NEFFENDORF: Sure. 10 COMMISSIONER MOSER: First of all, I think 11 everybody in the county, particularly department heads and 12 Jeannie, should be complimented for a job well done. I mean, 13 no issues here. 14 MR. NEFFENDORF: Right. 15 COMMISSIONER MOSER: Very good report, thank you. 16 Seems very thorough. Question. Is it possible in this 17 report, which has a lot of good information in it, to be 18 submitted to the Court in advance? And -- and you come 19 forward next year, and we can just have questions or some -- 20 MR. NEFFENDORF: Sure. 21 COMMISSIONER MOSER: Rather than going through it 22 in detail like we did, unless we need to put it in the 23 record. 24 MR. NEFFENDORF: No, that's fine. That would be 25 good. 2-24-14 58 1 COMMISSIONER MOSER: Just -- I'm on process today. 2 MR. NEFFENDORF: Yeah, that's fine by me. 3 COMMISSIONER MOSER: That's something we might want 4 to consider next year. 5 MR. NEFFENDORF: Yeah. 6 COMMISSIONER MOSER: But not to belittle it; it's 7 extremely important. 8 MR. NEFFENDORF: Right. Many of you get the 9 electronic version; that's even better. 10 COMMISSIONER MOSER: And can we do that and be 11 prepared and ask questions or whatever? 12 MR. NEFFENDORF: Sure. 13 COMMISSIONER MOSER: Okay. 14 COMMISSIONER LETZ: We can discuss that, 'cause I 15 personally like the report. Sorry, Keith. 16 MR. NEFFENDORF: Yeah. 17 COMMISSIONER MOSER: Okay. Yeah, okay. 18 COMMISSIONER LETZ: I just think it's a good public 19 way to talk about it. 20 COMMISSIONER MOSER: Okay. 21 COMMISSIONER LETZ: Rather than it just be 22 something that we look at it and then -- 23 COMMISSIONER MOSER: Okay. 24 COMMISSIONER LETZ: -- put in the file. 25 MR. NEFFENDORF: Well, and I like to hit the high 2-24-14 59 1 points, the items that we have to show that the County 2 complied. I could sit here for two hours and talk about 3 this, but my god -- 4 COMMISSIONER LETZ: This is long enough. 5 (Laughter.) 6 COMMISSIONER MOSER: It's good. It's long enough. 7 MR. NEFFENDORF: But -- yeah. But the -- we always 8 try to get you the electronic version as fast as we can. 9 COMMISSIONER MOSER: Okay, sure. Thank you. 10 MR. NEFFENDORF: Yeah. 11 COMMISSIONER BALDWIN: Jeannie, do we approve? 12 Accept? 13 MS. HARGIS: Approve. 14 COMMISSIONER BALDWIN: Approve. 15 COMMISSIONER LETZ: I'll make a motion that we 16 approve the audit as submitted. 17 COMMISSIONER OEHLER: Second. 18 COMMISSIONER BALDWIN: Motion and second. Any 19 further discussion? 20 COMMISSIONER OEHLER: Only thing I'd like to say 21 about it is, you know, a lot of times during the campaign, 22 most always there's an issue of fiscal responsibility, or the 23 lack of. I have not seen that in this particular campaign by 24 any candidate. It has not become an issue, so maybe, you 25 know, it's not all that bad. We're in pretty good shape, 2-24-14 60 1 guys. You know, it's taken a long time to get to this point, 2 and we have achieved some things we set goals to do, and that 3 -- one of them was to get at least 25 percent reserve, and 4 that took a while. It doesn't take long to spend it, but it 5 sure does take a while to save it. But I wanted to make that 6 point. 7 COMMISSIONER BALDWIN: Thank you for those good 8 words. 9 MR. NEFFENDORF: Yeah. 10 COMMISSIONER BALDWIN: Anybody else? We have a 11 motion and a second. All in favor, raise your right hand. 12 (The motion carried by unanimous vote.) 13 COMMISSIONER BALDWIN: None opposed. Motion 14 carries. Thank you, sir. 15 MR. NEFFENDORF: All right, thank you. 16 COMMISSIONER BALDWIN: See you next year. 17 MR. NEFFENDORF: All right, thank you. 18 COMMISSIONER LETZ: Commissioner, after all that 19 writing, do you think Ms. Banik may want a break? 20 COMMISSIONER BALDWIN: Yeah. We're going to go 21 through just a couple -- we're going to postpone a couple of 22 things. 23 COMMISSIONER LETZ: Okay. 24 COMMISSIONER BALDWIN: Item 1.8, we're going to 25 postpone that till 1:30. Item 1.9 is going to be passed 2-24-14 61 1 until March 24th. Is that correct? 2 COMMISSIONER MOSER: Correct. 3 COMMISSIONER BALDWIN: That's correct. And then 4 when we come back from our break, we'll take up item 1.10. 5 COMMISSIONER MOSER: Okay. 6 COMMISSIONER BALDWIN: We'll be in recess for about 7 10 minutes. We've still got lots to do. Thank you. 8 (Recess taken from 10:21 a.m. to 10:38 a.m.) 9 - - - - - - - - - - 10 COMMISSIONER BALDWIN: The Commissioners Court's 11 back in session. And I know everyone that has an agenda item 12 here wants to get to the top, but I'm sorry, we can't all be 13 there at the same time. But there is -- we have an agenda 14 item that all the players are here, and it's set at 10:30, 15 and it's beyond that, and so we're going to do that. The 16 District Attorney, they've taken a break from upstairs and 17 came down here to take care of their issue, so we're going to 18 call that item. It's Item 1.11; consider, discuss, and take 19 appropriate action to redistribute and refund unused 2013 20 multi-county budget funds from the former 198th Judicial 21 District. Scott Monroe is going to address the Court, and I 22 think the County Auditor will have some comments along with 23 him. Mr. Monroe? 24 MR. MONROE: Yes. May it please Your Honors, thank 25 you for letting me come here. 2-24-14 62 1 COMMISSIONER BALDWIN: Bowing works. 2 MR. MONROE: Okay, fair enough. And we are taking 3 a break upstairs from some pretrials. As you guys are aware, 4 in September we went through redistricting. My -- the old 5 198th Judicial District was six counties: Kerr, and then 6 I'll just name the cities; Junction, Rocksprings, Mason, 7 Menard, and Brady. And those five counties are no longer 8 part of that district. They formed their own district, the 9 452nd. As part of the redistricting, I then acquired Bandera 10 County from the 216th, so I'm now a two-county district. 11 Well, when the Legislature did that, and it was to take 12 effect September 1st, 2013, what the Legislature didn't do 13 was tell us what to do with overlapping budget periods. My 14 year for Kerr County starts October 1st and ends September 15 30th. Some of my counties in the old 198th are actually on a 16 calendar year. Some of my counties, when I took over the 17 job, I found out had not been paying, and so we got a hold of 18 them and they did pay, but for a period of time, Kerr County 19 covered a good bit of that budget, 'cause my bills never 20 stopped. My salaries of my employees went on month-to-month 21 whether I had money from Brady or Mason or Menard or Kerr 22 County or whoever. I don't know how Jeannie Hargis did that, 23 but she managed to do that. 24 COMMISSIONER MOSER: Did we get a thank-you note? 25 MR. MONROE: I haven't gotten mine. Perhaps it's 2-24-14 63 1 in the mail. And then -- so what happened shortly after 2 September the 1st is, I received a letter from the County 3 Judge of Menard, Richard Cordes, who very politely and 4 respectfully asked that my office, the 198th District 5 Attorney, refund a 1/12 percentage of Menard's budget for the 6 month of September, because according to the Legislature, I 7 was not their D.A. in the month of September. And that is 8 correct. I have not gotten that request from the other four 9 counties. I did hear directly from Judge Bearden of Mason, 10 who basically said they were not going to make a formal 11 request like that, but that if I was going to pay money to 12 any of the counties, they certainly would like their portion. 13 I have not heard from the other three counties directly. 14 I've just heard that if I do one for one, then all of them 15 will ask for it. 16 I will tell you that I've also received a 17 request -- it's not related to you today, but so you know -- 18 to redistribute the asset forfeiture money as well, which was 19 not in the creation of the new district, so it's a little 20 different, but there is some alignment to receive funds. I 21 wasn't their D.A. in September, and that's correct. I wasn't 22 their District Attorney. So, I don't really oppose that 23 prospect of refunding them a 1/12 portion of their budget, 24 provided that there are still funds available out of that 25 year that I didn't use, because I changed some employees 2-24-14 64 1 around. I think I ended up with a surplus; I didn't use all 2 the money. So, I don't have a problem doing that, but 3 whatever we do with Menard, I'm going to get asked for all of 4 them. And as you guys know, I don't even have a checkbook 5 any more, so I'm not exactly sure where I do that, how I 6 would even request it. I don't know whether I would request 7 some sort of budget amendment for last year, or whether that 8 would be an item for this year. I'm not sure I know exactly 9 how much surplus funds there were, which is why I asked 10 Commissioner Baldwin to have Ms. Hargis here to address that. 11 And, again, I don't have a problem with asking -- I 12 am a little concerned that it could have a domino effect. 13 Perhaps that's me just being overly cautious. Because I did 14 not plan to go to Bandera and say, "I was your D.A. in 15 September, and you did not pay me." And I don't want to 16 encourage Bandera to go to Mr. Curry and say, "You weren't 17 our D.A. in September; give us our money back," which I'm 18 afraid is where all of this is going to go. So, that's why I 19 wanted to put this on the agenda, discuss it with you guys. 20 I will do whatever you guys think is appropriate, and 21 whatever way you think it's appropriate. I wanted to express 22 my concerns to you about the potential domino effect, 23 although that's not the end of the world, were this to even 24 happen. It's just there. And I didn't want anybody to do 25 anything, and then have something said later on, and, "Oh, we 2-24-14 65 1 didn't talk about that," or, "We didn't think about that." I 2 don't blame them for asking for money. It's not a great deal 3 of money if we were to refund them 1/12. So, I think there 4 is sufficient funds left over from my budget, because I had 5 one less Assistant D.A., so I know at least in salaries, 6 there was a good bit of savings from what my predecessor had. 7 So, provided that those moneys are there, I don't have a 8 problem doing it. 9 COMMISSIONER BALDWIN: Scott, is 1/12 an 10 appropriate amount? 11 MR. MONROE: Well, I think that's for -- based on 12 that reasoning, which is what Judge Cordes gave me, they were 13 only requesting 1/12. I didn't -- nobody has come to me and 14 said, "Hey, how much did you have in unused funds? Because a 15 portion of that's ours, and if you didn't use all your money 16 last year, we want our portion back." That hasn't happened 17 yet. It might. Nobody's come to me and said that. You 18 know, again, I can kind of understand that -- that if you 19 didn't use all of our money -- you know, theoretically, Kerr 20 County's money would go back into Kerr County coffers. I 21 don't know what you would do about Mason, Menard, Junction's 22 money that wasn't used, but nobody has asked me to refund all 23 of an unused portion. 24 COMMISSIONER MOSER: Would you -- had all the 25 counties contributed? 2-24-14 66 1 MR. MONROE: I believe by the end of the year, 2 they, in fact, had all paid up. 3 COMMISSIONER MOSER: Okay. 4 MR. MONROE: So, you know, I don't know how -- how 5 much you want to put this under a microscope, and Ms. Hargis 6 can -- can probably tell you a little bit more. There's no 7 question, a couple of these counties -- or one would be glad 8 to pay for two years. There were some misunderstandings, and 9 I'll state it that way, about, well, we're supposed to send 10 them an invoice each year, and they don't give us our money 11 until we actually give them an invoice. And did they have 12 one or did they not have one, and did we fax it to the wrong 13 phone number, or, you know, did I wear the wrong color suit 14 on Tuesday or, you know, whatever. But we -- once we found 15 out that not all the counties had paid, we approached all the 16 counties and we got the money. We didn't realize that at the 17 time. As a matter of fact, that was at the time we were 18 originally discussing funding the improvements to the 19 building at the law enforcement center, and we thought we had 20 additional funds in our budget from -- left over from 21 previous years that, in fact, had been spent because the 22 other counties hadn't paid. So, for a period, Kerr County 23 has covered this, so you'll have to ask Ms. Hargis in theory 24 whose money is left over there, whether that's their money or 25 whether that's Kerr County's money. At the end of the day, I 2-24-14 67 1 don't know the answer to that. I just want to do what you 2 guys think is appropriate. I'm happy to join with you in 3 whatever decision you make, but I do think it should be a 4 joint decision. I think all of us should make the decision 5 together, and whatever that decision is, we'll honor it and 6 do what you say. So -- 7 COMMISSIONER LETZ: I have a question for 8 Ms. Hargis, actually. Can you give us -- can you tell me 9 about the -- the accounting part of it, as to where the 10 money -- the surplus, what happens to it, where it goes? My 11 first impulse is to refund 1/12, but I want to figure out -- 12 COMMISSIONER MOSER: If it was all contributed 13 properly. 14 COMMISSIONER LETZ: But I want to figure out, you 15 know, what happened, I mean, when -- plus there's surplus 16 there. 17 MS. HARGIS: The D.A.'s office has their own fund, 18 and each year we get a budget along with every county that 19 they serve, and we pay our budget to that fund just like 20 every other county. So, the money is actually residing in 21 the D.A.'s fund, not in ours, because we're on a pooled cash 22 basis, which means that we function off of one checking 23 account that funds everything, because our software allows us 24 to keep up with the bank balance. Two years ago, at the -- 25 when Scott came in, those counties hadn't -- some of them 2-24-14 68 1 hadn't paid for two years. Most -- I'd say three or at least 2 four of them hadn't paid for two years, and he didn't have 3 any money. So, at that point, they were actually living off 4 the reserve that -- you know, they had a negative balance in 5 their cash, and we were paying for them. The -- you know, 6 this is -- the money is in his account. It's not -- you 7 know, it will come out of his account; it won't come out of 8 Kerr County's account. So -- 9 COMMISSIONER LETZ: Is there, I guess -- I know 10 there's money there, but is there -- you know, was there a 11 surplus at the end of last year out of that fund? Not 12 counting the asset forfeiture fund. 13 MS. HARGIS: The asset forfeiture fund is a 14 separate fund. 15 COMMISSIONER LETZ: Okay. 16 MS. HARGIS: The -- there were -- there was a 17 surplus. I wouldn't call it necessarily a surplus. There 18 was unspent money, because he didn't -- because he was only 19 organizing -- he was only there for nine months, and he 20 didn't have an opportunity to hire all the staff that he 21 needed to hire. So, I don't really consider that a surplus, 22 because I think that's just time on the ground, and trying -- 23 and money that he may need in the future. And it also 24 depleted -- by them not paying for the two years, it depleted 25 that little bit of cash balance that he had, just like we 2-24-14 69 1 have. He needs that 90 days to be able to function on it, 2 and so he needs 90 days to function on. Those counties 3 didn't pay. We paid, you know, the lion's share of that. We 4 were 55 percent of those six counties, so there's not a lot 5 to pay back for their 1/12. But that would be all I would 6 recommend that you pay back -- or that he recommend -- that I 7 would recommend to him to pay back, would be the 1/12. 8 COMMISSIONER OEHLER: How much money are you 9 talking about, total, if you do all five counties? 10 MS. HARGIS: Probably not more than 25,000. 11 MR. MONROE: $25,000 or $30,000. 12 MS. HARGIS: Some of them are only going to get, 13 you know, 1,500. You know, it just depends on the size. 14 It's based on population. 15 COMMISSIONER OEHLER: Yeah. 16 COMMISSIONER MOSER: But everybody had paid up? 17 MS. HARGIS: Everybody had paid up, because we -- 18 COMMISSIONER MOSER: Okay, just making that point. 19 MS. HARGIS: Not, you know, through the year, but 20 by the end of the year, they had all paid. 21 COMMISSIONER MOSER: Okay, that's good. 22 COMMISSIONER OEHLER: But they paid up for previous 23 years when they hadn't paid, too? 24 MS. HARGIS: Yes, and we didn't get that until 25 2013. 2-24-14 70 1 COMMISSIONER OEHLER: Okay. I'm -- I'm game for 2 letting them have 1/12, which I think is right, because 3 they've basically overpaid, and it was just the one month 4 that was from September 1 to October 1. 5 COMMISSIONER LETZ: And if Bandera wants to refund 6 one and bill the other, that's fine too. 7 MR. MONROE: Well, I didn't approach Bandera, and I 8 wasn't planning on approaching Bandera. 9 COMMISSIONER LETZ: I think a lot of it's -- 10 MR. MONROE: Talking about the dominoes; I didn't 11 want to be the one to push them. So -- 12 COMMISSIONER BALDWIN: So, your recommendation is 13 what? 14 MS. HARGIS: If the Court -- or the D.A. would like 15 to pay back no more than one month. 16 COMMISSIONER MOSER: 1/12. 17 MS. HARGIS: Which is 1/12. 18 MR. HENNEKE: But I would say it's not Kerr County; 19 it's not this Court appropriating the money. I mean, it's 20 nice for Scott to come and seek the -- 21 COMMISSIONER BALDWIN: Yeah, I agree. 22 MR. HENNEKE: -- the courtesy of that, but I don't 23 see that there's any action -- 24 COMMISSIONER MOSER: By the Court? 25 MR. HENNEKE: -- taken by the Court, and I don't 2-24-14 71 1 think y'all have authority to appropriate money back. It's 2 the D.A.'s budget. It's separate from Kerr County. 3 COMMISSIONER MOSER: Okay. 4 COMMISSIONER LETZ: But can he make it -- I mean, 5 I'm fine with that, as long as Scott's -- I mean, how does -- 6 procedurally, how does it happen? Does Scott -- 7 MR. HENNEKE: Scott tells Jeannie to cut a check to 8 Menard, and -- 9 COMMISSIONER LETZ: Okay. 10 MR. HENNEKE: You know, out of his budget. I 11 mean -- 12 COMMISSIONER LETZ: Okay, that's fine. 13 COMMISSIONER MOSER: Good luck. 14 MS. HARGIS: It will probably have to be a budget 15 adjustment which we'll bring to the Court for that fund. 16 MR. MONROE: Fair enough. Appreciate it. 17 COMMISSIONER BALDWIN: Are you good with that? 18 MR. MONROE: You bet. 19 COMMISSIONER OEHLER: Okay. 20 MR. MONROE: May I be excused? 21 COMMISSIONER LETZ: And put the -- 22 COMMISSIONER OEHLER: Don't look at me. 23 COMMISSIONER LETZ: -- put the bad guys in jail. 24 COMMISSIONER OEHLER: Buster's in charge of this 25 meeting. 2-24-14 72 1 COMMISSIONER BALDWIN: Go put the bad guys in jail. 2 COMMISSIONER MOSER: And help get some others out 3 quickly. 4 MR. MONROE: Hey, if you build me a new jail, I can 5 fill it. 6 COMMISSIONER MOSER: You missed the message. You 7 missed the message. Get them out. 8 MR. MONROE: That's not all up to me, 9 unfortunately. See y'all later. 10 COMMISSIONER BALDWIN: Thank you, sir. 11 COMMISSIONER MOSER: Thank you. 12 COMMISSIONER BALDWIN: Okay. All right. 13 COMMISSIONER MOSER: Okay. We had this -- we've 14 got Keller Drozdick here. 15 COMMISSIONER BALDWIN: Keller's going to have to 16 wait. 17 COMMISSIONER MOSER: Okay. This said 10:15. 18 COMMISSIONER BALDWIN: Okay. Item 1.10; consider, 19 discuss, take appropriate action on request from the Kerr 20 County Y.M.C.A. to use Flat Rock Park, the Hill Country Youth 21 Event Center, and River Star Arts and Event Park for a 5K 22 run/walk on June 14th, 2014. Ms. Misty Reichenau and 23 Samantha Taylor, I think. 24 MS. REICHENAU-KOTHE: Yes, sir. 25 COMMISSIONER BALDWIN: Yeah. 2-24-14 73 1 MS. REICHENAU-KOTHE: Morning. I am Misty 2 Reichenau Kothe; I'm the Special Events Director at the Kerr 3 County Y.M.C.A. Here with me today is Amanda Taylor; she's 4 our events chair and board member. Also here in support are 5 our C.O., Brenda Thompson, and the president of the board of 6 directors, Lisa Winters, in case you have any questions for 7 any of us. We are here today on behalf of an event that we 8 have taken over. We were awarded the Tyler Behrens 5K Run 9 when they decided they were going to no longer do it. She 10 wanted to pass it on, and she gave -- she chose to give that 11 to the Kerr County Y.M.C.A. So, we are taking that and 12 running with it, and we are making it the Kerr County 13 Y.M.C.A. Splash and Dash 5K run/walk and fun run. It's a 14 Father's Day celebration on June 14th. We are here today to 15 ask for the facility usage of the Flat Rock Park, the exhibit 16 hall, and possibly River Star, when you have the ability to 17 do that, and then the consideration for a reduced fee as a 18 nonprofit. 19 COMMISSIONER OEHLER: It would probably be the show 20 barn, not the -- 21 MS. TAYLOR: Yes. 22 COMMISSIONER OEHLER: -- exhibit hall. 23 MS. REICHENAU-KOTHE: Yes. That's -- Samantha 24 actually talked to her after we submitted this, and we 25 realized that it was going to be the show barn. 2-24-14 74 1 COMMISSIONER OEHLER: You have to make it subject 2 to the River Star being available, if we have it in our 3 possession. 4 MR. HENNEKE: I can speak on that. 5 COMMISSIONER BALDWIN: Yeah. What -- why don't you 6 do that, to let us know where we are in that? 7 MR. HENNEKE: Okay. The -- as y'all are aware, the 8 Arts and Crafts Foundation went into bankruptcy. Kerr County 9 had had a 20- or 30-year lease with them for use of the River 10 Star facility. In the bankruptcy proceedings, the -- the 11 debtor has to list all of their assets that are subject to 12 the bankruptcy proceeding, and the lease with Kerr County was 13 not listed as an asset. So, without it being in the 14 schedule, absent some effort by the trustee to put the lease 15 into the assets, then 120 days following expiration, then the 16 -- the lease is rejected and terminated. That 120 days is 17 Friday, so after Friday, and we don't anticipate any kind of 18 action taking, Kerr County has resumed possession of the 19 facility. Now, there is still -- this may be something we 20 have to bring back at a subsequent Commissioners Court 21 meeting. 22 In preparing for today's Commissioners Court 23 meeting, I was visiting with our bankruptcy attorney. The 24 buildings that are out there are still a question. You know, 25 under the -- under the lease that was entered into, you know, 2-24-14 75 1 permanent structures became the property of the County upon 2 conclusion of the lease. Now, initially, those buildings 3 that -- the restroom facility and the office facility 4 were not fixtures, but they've been improved as such that, 5 you know, it would -- it would damage the structures to try 6 to move them. So, I think that there's a fair argument that 7 what was once a temporary building has now become a permanent 8 building, and as such, belongs to the County. But we don't 9 have a way of adjudicating that right now. 10 I mean, I can tell you that we have not been able 11 to find a financing -- financing statement with the Texas 12 Secretary of State reflecting that anyone perfected the 13 security lien on the buildings, so there's not a superior 14 credit holder, to the best of our research. And it's good 15 and bad. I mean, we can't see that anyone has a lien on 16 them, but that also makes them unencumbered assets that the 17 trustee and bankruptcy might try to do something with. 18 There's going to be a difficulty in doing so, because they're 19 on our property and they're kind of fixed in the ground, but 20 we need to resolve the title issue there. And I'll bring 21 that -- you know, we can come back later, but, you know, to 22 get the buildings, we have to get them out of the bankruptcy 23 estate. And right now, we've been kind of laying low, not 24 really wanting to pop up the issue. 25 You know, a couple options that we have is, one, 2-24-14 76 1 you know, we can approach the trustee to -- and ask the 2 trustee just to abandon the buildings because they're 3 burdensome or of minimal value. Second option is that we 4 could approach the trustee and make an offer for the 5 buildings. You know, an offer -- Mr. Autry suggested an 6 offer of, you know, $10,000 or $15,000 might be enough to get 7 the trustee willing to sell it to us free and clear of the 8 lien. The trustee, by statute, is deemed to be a good-faith 9 purchaser of the property without notice of competing 10 interest. So, if the trustee were to accept an offer that we 11 were to convey and sell it to us, then -- then that's done. 12 Or the third thing is, we can just keep our heads down as we 13 have been and wait to see, you know, what happens at the 14 conclusion of the bankruptcy proceedings. If the bankruptcy 15 proceedings end without any action being taken on these, then 16 theoretically we can file some kind of quiet title action 17 here in Kerr County to conclusively establish title and 18 possession of the buildings. So, after this Friday, we've 19 got -- we regain control over the facility. We've been 20 taking care of it, you know, for the last couple months, 21 making sure that it didn't waste, but at some point I'll need 22 to -- I'll need further direction from the Court on how you 23 want to approach the issue of the buildings that are out 24 there. 25 COMMISSIONER MOSER: So, Rob, from what my 2-24-14 77 1 understanding, all the options that you discussed, that will 2 be addressed at a future Commissioners Court? 3 MR. HENNEKE: It's not on this agenda. That's -- 4 COMMISSIONER MOSER: Yeah, I understand. But for 5 purposes of these ladies -- 6 MR. HENNEKE: But for purposes of these ladies, we 7 can let them use the River Star facility after Friday. 8 COMMISSIONER MOSER: We could do that, and just say 9 something about not -- not -- can't use the buildings, or 10 something like that? 11 MR. HENNEKE: We don't own the buildings. I 12 mean -- 13 COMMISSIONER MOSER: I know, but I'm just trying to 14 get back to her agenda item so they don't have to sit here 15 and discuss all the options. 16 MR. HENNEKE: No. 17 COMMISSIONER MOSER: So we could do that, right? 18 MR. HENNEKE: Yeah. 19 COMMISSIONER MOSER: And then we'll discuss all 20 these other options at a future court date. 21 COMMISSIONER LETZ: More likely with a different 22 County Attorney. 23 MR. HENNEKE: Yes. 24 COMMISSIONER MOSER: Could be. Okay. 25 COMMISSIONER BALDWIN: Can we get all that in 2-24-14 78 1 writing? 2 MR. HENNEKE: She's got it. 3 MS. REICHENAU-KOTHE: I think our -- 4 COMMISSIONER OEHLER: Move -- excuse me. Move to 5 approve your agenda item and allow use of Flat Rock Park and 6 River Star Arts and Event Center, which includes the show 7 barn. 8 COMMISSIONER MOSER: Second. 9 COMMISSIONER BALDWIN: I have a motion and a 10 second. Yes, ma'am? 11 MS. GRINSTEAD: I just missed the beginning. Are 12 they a nonprofit, so we're doing the nonprofit status? 13 COMMISSIONER OEHLER: Are you a nonprofit? 14 MS. REICHENAU-KOTHE: Yes. 15 COMMISSIONER OEHLER: You've got a 501(c)(3)? 16 MS. REICHENAU-KOTHE: Yes. 17 COMMISSIONER OEHLER: And that the rate be reduced 18 to the 501(c)(3) nonprofit rate. 19 COMMISSIONER BALDWIN: And you'll provide some kind 20 of documentation to Jody that you're a 501(c)(3)? 21 MS. REICHENAU-KOTHE: Yes, sir. 22 COMMISSIONER BALDWIN: Thank you. Okay. Is that 23 clear? Jody, are you okay there? 24 MS. GRINSTEAD: My only other option is, we've 25 never rented River Star, so I don't know what fees on that 2-24-14 79 1 would be. 2 COMMISSIONER LETZ: I think -- I mean, my thought 3 would be there wouldn't be a rate for Flat Rock; that's a 4 public facility. We don't charge for Flat Rock. River Star, 5 a little bit of limbo. I wouldn't charge for that. So, the 6 only fee is going to be the -- use the nonprofit rate for the 7 show barn. 8 MS. REICHENAU-KOTHE: Okay. 9 COMMISSIONER OEHLER: Which is not much. 10 MS. REICHENAU-KOTHE: Thank you. 11 MS. TAYLOR: Thank you. 12 COMMISSIONER OEHLER: Another use, imagine that. 13 COMMISSIONER MOSER: We haven't voted yet. 14 COMMISSIONER BALDWIN: So, everybody good with 15 that? Jody? 16 MS. GRINSTEAD: Mm-hmm. 17 COMMISSIONER BALDWIN: We have a motion and second. 18 Any further discussion? All in favor, raise your right hand. 19 (The motion carried by unanimous vote.) 20 COMMISSIONER BALDWIN: Motion carries. Thank you 21 very much. 22 MS. REICHENAU-KOTHE: Thank you. 23 MS. TAYLOR: Appreciate your help. 24 COMMISSIONER BALDWIN: Thank you. 25 COMMISSIONER MOSER: I think Rusty had a -- Rusty 2-24-14 80 1 had a question. 2 COMMISSIONER BALDWIN: Rusty Hierholzer? 3 COMMISSIONER MOSER: Yes, he had a question on 4 that. 5 SHERIFF HIERHOLZER: My concern was, are they going 6 to ask to close Riverside or something like that with the 5K 7 going to all three of those facilities? 8 COMMISSIONER OEHLER: You need Riverside closed? 9 MS. REICHENAU-KOTHE: What we ask is if we could 10 possibly get it closed for about two hours, or traffic 11 control where they can -- because there will be a -- there 12 will be a part where most of the runners will pass, and then 13 it'll be 20 minutes before they come back. 14 COMMISSIONER OEHLER: Put it on the next agenda. 15 MS. REICHENAU-KOTHE: Okay. 16 COMMISSIONER OEHLER: We'll do that for a specified 17 time. 18 MS. REICHENAU-KOTHE: Okay. 19 COMMISSIONER OEHLER: Give us the times that you 20 need it closed. 21 MS. REICHENAU-KOTHE: Okay. 22 COMMISSIONER OEHLER: 'Cause we can't vote on this 23 item, I don't believe. 24 MS. TAYLOR: Okay, thanks. 25 COMMISSIONER BALDWIN: Thank you. Item 12; 2-24-14 81 1 consider, discuss, take appropriate action to approve an 2 application to the Texas Water Development Board for the 3 Center Point wastewater system. Commissioner Moser and the 4 honorable Keller Drozdick. 5 COMMISSIONER MOSER: Thank you, Commissioner. Just 6 a preamble to this. What this is is to keep the project 7 moving, and we have to get in the queue for prioritization by 8 Texas Water Development Board, and that application must be 9 in by March the 3rd. So, Keller's going to elaborate on the 10 details of it. 11 MR. DROZDICK: Yeah, real quick overview. This is 12 an annual funding program they have through -- CWSRF is the 13 acronym. Yes? 14 COMMISSIONER LETZ: I don't mean to interrupt you, 15 but one of the interesting things that Director Bruun said 16 last week was they have changed that, and there is no longer 17 a deadline for SRF funding. Now, I think we need to go ahead 18 and proceed, but to make sure -- he said they have -- they're 19 changing, so they're going to take all grant applications 20 that would come in annually, and they'll review them as 21 received, because they thought it was unreasonable, and made 22 no sense for them to do it on an annual basis only. Anyway, 23 so you may look at that and the timing, and if we need to do 24 it now, we can. But if not -- 25 COMMISSIONER MOSER: Let's err on the side of -- 2-24-14 82 1 let's do it by March 3rd. 2 MR. DROZDICK: I'm glad you brought that up. What 3 I saw in the solicitation packets, they mentioned that they 4 will accept them at any point; it's not a drop-dead. Anybody 5 who gets this in by March 3rd gets kind of preferential 6 treatment. Not a longer deadline, but, you know, it's a -- 7 COMMISSIONER LETZ: Preference? 8 MR. DROZDICK: -- preferential solicitation. 9 COMMISSIONER MOSER: Full speed ahead. 10 MR. DROZDICK: So -- and we do it annually on a 11 more ongoing basis. What this does, essentially, it throws 12 your hat in the ring. It's the first step. There's no 13 commitment on the County's part, but it starts the process. 14 And what that process is, is they take this dozen-page form 15 or so with attachments and they score it, so that they rank 16 it. And when they do that, then they're able to rank all the 17 projects they have in-hand. And then they say, okay, here 18 are 400 projects ranked in order, and they start spending the 19 money with Project 1 down the line till they run out of 20 money. And if -- when I say spend the money, what I really 21 mean, they say, "We've got enough money to cover these first 22 25 projects" or whatever they can, and then in August, they 23 issue you an invitation to apply, and so in August/September, 24 everybody that got cut gets a letter saying, "You have scored 25 high enough, you're now invited to submit a formal request 2-24-14 83 1 for funding." So, at that point, we have 90 days to do the 2 application, and that would be where we would be formally 3 committing to actually pursuing funds and acquiring them and 4 all this, depending on the terms they offer, and whatever 5 comes -- shakes out at that point. Right now, all we're 6 submitting is just that initial get-the-ball-rolling kind of 7 application. So -- 8 COMMISSIONER LETZ: This is for the construction? 9 MR. DROZDICK: Correct, yeah. Sorry, this is for 10 the Center Point project. It's currently already funded for 11 all the planning and design work, up to providing actual 12 documents for bid. That's already funded. We're currently 13 working on that now in my office. This application is 14 specifically for the construction phase, which is not 15 currently funded. 16 COMMISSIONER MOSER: Make a motion that we proceed 17 with submitting the application for construction phase for 18 getting in the priority list as specified. 19 COMMISSIONER LETZ: Second. 20 COMMISSIONER BALDWIN: We have a motion and second. 21 Any further discussion? 22 COMMISSIONER OEHLER: Yeah. What other funding is 23 required for the wastewater project? 24 COMMISSIONER MOSER: Construction. 25 COMMISSIONER OEHLER: What other funding besides 2-24-14 84 1 what you're asking for is required? 2 MR. DROZDICK: The funding in construction would 3 pay for all of the -- the infrastructure up to the property 4 line of the individual homes. So, from that service 5 connection -- 6 COMMISSIONER OEHLER: Have we not issued C.O.'s to 7 help pay for this? 8 MR. DROZDICK: I don't know how y'all paid for it. 9 COMMISSIONER BALDWIN: I don't know anything. 10 COMMISSIONER OEHLER: Have we done? 11 COMMISSIONER MOSER: You said what additional 12 funding? Was that the question? 13 COMMISSIONER OEHLER: I'm -- I'm asking one of 14 those questions like you like to ask. 15 COMMISSIONER MOSER: Okay, that's good. 16 MR. DROZDICK: Well, I will tell you -- 17 COMMISSIONER OEHLER: If there's some money from 18 C.O.'s to help -- 19 COMMISSIONER LETZ: I think, technically, the 20 funding that we have borrowed from Water Development Board 21 has been classified as C.O.'s. 22 COMMISSIONER MOSER: Okay. 23 MR. DROZDICK: Yeah. Yeah. 24 COMMISSIONER OEHLER: So, it's okay to borrow money 25 for wastewater, but not for other things? 2-24-14 85 1 COMMISSIONER MOSER: That's your position. That's 2 good. 3 COMMISSIONER LETZ: Keller -- and I have no problem 4 with this, but another suggestion on this, the other thing 5 that Director Bruun said that he -- and I'm not sure how we 6 get this done. He said that we really need to get the 7 Department of Health to do a reanalysis of their findings 8 that a lot of these areas were not substandard. And his 9 reasoning is, he goes while it will not -- and there are not 10 EDAP funds, it potentially could impact one -- and I'm not 11 sure of the application, but certainly the funding 12 percentage. If they go back in and do a determination, and 13 instead of having a 50/50, it could be up to an 80/20, 90/10, 14 and that we really -- he said that, and I don't know how we 15 do that. So, that's your job. 16 MR. DROZDICK: The last time we -- the last round 17 we had when we did that was under the EDAP program, and 18 actually it was -- the way it was set up at this point under 19 the EDAP program was the Water Development Board was the one 20 who submitted the request to the State Health Services to 21 come out and do the analysis, and they did come out. But 22 they never talked to the right person, and that was kind of a 23 fiasco. 24 COMMISSIONER LETZ: Right. 25 MR. DROZDICK: I will look into that, try to figure 2-24-14 86 1 out how to get them back out, see what I can find out. 2 COMMISSIONER LETZ: And the -- and if there are 3 issues that we've had in the past on getting maybe a little 4 bit of a runaround, if you can let us know. I know that -- I 5 think there's a very strong desire by those -- Director Bruun 6 to streamline it and make it a much easier process, and the 7 whole prioritization is based on making it an easier process 8 for all applicants to use, you know, these facilities. So, 9 if -- if there's a problem with that, let me know, and we 10 can, I'm sure, get that resolved. 11 MR. DROZDICK: Okay, will do. 12 COMMISSIONER BALDWIN: Anything else? All in 13 favor, raise your right hand. 14 (The motion carried by unanimous vote.) 15 COMMISSIONER BALDWIN: Motion carries. Thank you, 16 Keller. Good to see you. 17 COMMISSIONER MOSER: Thank you, Keller. 18 COMMISSIONER BALDWIN: Item 1.15; consider, 19 discuss, take appropriate action on Emergency Medical 20 Services and Request for Proposals for Emergency Medical 21 Services. Commissioner Baldwin. That would be me. We have 22 the document -- the RFP, the recommended document from our 23 attorney in Austin. We have that in-hand. It is a large 24 document, and it's going to take some going through with all 25 of us before we're ready to actually adopt it and send it 2-24-14 87 1 out, but I -- hopefully the County Attorney has some comments 2 to make about it. 3 COMMISSIONER LETZ: Commissioner, I don't want to 4 proceed. I mean, I agree with you. You can get him to talk, 5 but I have a question for him before he even starts on that. 6 Is it possible for us to go into executive session on this 7 item under that agenda item the way it was worded this time? 8 Which is to go over EMS services, which includes our contract 9 with the City of Kerrville. It's not listed as an executive 10 session potentially, but under the our current contract and 11 contract negotiation, it seems like it does qualify as an 12 executive session item, that portion of it. And, certainly, 13 the RFP is not. And I'm not sure if anyone else other than 14 me want to go in executive session. 15 COMMISSIONER MOSER: I think that's a good idea. 16 COMMISSIONER LETZ: But -- 17 MR. HENNEKE: I mean, there's several different 18 ways, not having -- you know, having surprised me on this 19 question here in the middle of Commissioners Court with 20 everyone sitting here watching, I mean -- (Laughter.) You 21 know, you certainly have the -- the attorney/client, you 22 know, for questions about the draft RFP, if you have, you 23 know, legal questions about the -- the final draft that 24 Mr. Campbell and I have submitted, which I'll represent to 25 the Court in our position, it's ready to go, you know, when 2-24-14 88 1 y'all choose, if y'all choose to issue it. And then, 2 certainly, you know, on issues involving the contract 3 negotiations with -- with the City -- 4 COMMISSIONER LETZ: Or anybody. 5 MR. HENNEKE: -- or anybody, then that would be a 6 different exception there. 7 COMMISSIONER MOSER: It says in here in executive 8 session, Commissioners Court reserves the right to adjourn 9 into executive session at any time to discuss any of the 10 above matters permitted by state law. So, it sounds like we 11 could. 12 MR. HENNEKE: I mean -- no, I mean, you're right, 13 Tom. We reserve the right on executive session if 14 applicable, so there's -- yes, there -- there is several 15 exceptions that would provide for this. 16 COMMISSIONER MOSER: Sure. 17 MR. HENNEKE: You would -- if we're talking about 18 questions on the proposed RFP, that would be under the 19 attorney/client exception. If this is about negotiations 20 with the existing or proposed future contract with the City, 21 that would be a different one, but either would apply, and I 22 think would fall under this agenda item. 23 COMMISSIONER LETZ: Commissioner Baldwin, do you 24 have any comments? 25 COMMISSIONER BALDWIN: I've already made mine. 2-24-14 89 1 It's a large document, and I have to look at it before I'll 2 vote to send it out. 3 COMMISSIONER LETZ: I agree with that, and I think 4 I'd like to go into executive session on the emergency 5 services. 6 COMMISSIONER BALDWIN: This very day? 7 COMMISSIONER LETZ: Yes, sir. 8 COMMISSIONER BALDWIN: Today? 9 COMMISSIONER LETZ: Yes, sir. 10 COMMISSIONER BALDWIN: Very good. We'll pass on 11 that to executive session. Thank you. Item 1.16; consider, 12 and discuss, take appropriate action to approve submission of 13 Intent to Submit Application for the FY-15 Competitive 14 Discretionary Grant Program administered by the Texas 15 Indigent Defense Commission. Grant moneys would be used to 16 fund the creation of a Kerr County Public Defender program. 17 Mrs. Lavender. 18 MS. LAVENDER: Okay, yes. This is what we had our 19 workshop Friday to discuss, and I think at the end of the 20 workshop, we decided not to do this. So, I would request 21 that we table this issue until next year. 22 COMMISSIONER MOSER: Good. 23 COMMISSIONER BALDWIN: Thank you, ma'am. 24 Appreciate your hard work. 25 MS. LAVENDER: Thank you. 2-24-14 90 1 COMMISSIONER MOSER: Absolutely. 2 COMMISSIONER BALDWIN: 1.17; consider, discuss, 3 take appropriate action to accept Tier 1 Partial Exemption 4 Racial Profiling Report for Constable, Precinct 4. Constable 5 Huffaker is not here. 6 COMMISSIONER OEHLER: That's one of those things we 7 do. I move that we -- 8 COMMISSIONER BALDWIN: We have a motion. Is there 9 a second? 10 COMMISSIONER LETZ: Second. 11 COMMISSIONER OEHLER: -- that we accept the Tier 1 12 Partial Exemption Racial Profiling Report from Constable, 13 Precinct 4. 14 COMMISSIONER BALDWIN: We have a motion and a 15 second to accept the agenda item. Any further discussion? 16 All in favor, raise your right hand. 17 (The motion carried by unanimous vote.) 18 COMMISSIONER BALDWIN: Motion passes. Thank you. 19 Everything else is executive session except for the paying 20 bills, et cetera. We are going to the approval agenda. 21 THE CLERK: Commissioner, we have Item 1.22. 22 COMMISSIONER BALDWIN: I'm sorry, there are two 23 others, aren't there? Stand by, let me find them. 24 COMMISSIONER OEHLER: One of them's Roller Derby. 25 COMMISSIONER BALDWIN: Are they here, by any 2-24-14 91 1 chance? 2 COMMISSIONER OEHLER: There she is right there. 3 COMMISSIONER BALDWIN: Item 1.22; consider, 4 discuss, take appropriate action regarding contract addendum 5 with the Kerr County Roller Derby for use of the show barn at 6 the Hill Country Youth Event Center. Ms. Jones? 7 MS. JONES: Yes, sir. We are -- last year we used 8 WFTDA, which is Women's Flat Track Association, where we went 9 to do insurance with. We are moving -- we decided as a 10 league that we wanted to move to -- there's two facilities 11 that make up the women's roller derby. We want to use the 12 U.S.A. Roller Sports, and we will be applying to get 13 insurance to cover the building. It will still offer the 14 same thing WFTDA would; it's just a different entity for our 15 uses. They did ask me when I submitted our charter -- and 16 once we get chartered, we also get a proof for insurance -- 17 that they have an addendum made to our agreement. And it 18 was -- it is agreed and understood that U.S.A. Roller Sports, 19 USARS, shall not be liable for any loss, injury, or damage to 20 persons or properties arising from circumstances or 21 conditions connected with the facility which are not under 22 USARS' control or which are not due to the negligence of 23 USARS or not directly related to USARS' use of the premises. 24 And I understand that there might be, with the language -- 25 not so much that it's just not covered completely. If it's 2-24-14 92 1 not comfortable with -- y'all aren't comfortable with the 2 insurance purposes, like if it's not -- if we need something 3 additional on top of that to get this moving. 4 MR. HENNEKE: As I understand it -- let me jump in 5 here. As I understand the general policy, in leasing or 6 using the event center facility, we've required persons to 7 have their own insurance policy covering the facility. And 8 based upon what you've provided to me, how I understand that 9 is that the policy through USARS just covers the -- the 10 practice and competition. You know, if -- two team members 11 crash into each other playing roller derby and get hurt, then 12 the insurance would cover their participation in the 13 activity. But it excludes injuries on the premises that are 14 caused outside of participating in the sport, so that if -- 15 if you're walking to your car and slip on ice and break your 16 ankle, because that wasn't part of the -- you know, it looks 17 like this is what the USARS policy would be excluding. 18 And the County has a blanket general liability -- 19 premise liability policy that covers the facility, but it's 20 my understanding that with persons that have, you know, 21 contracted to use the facility, we've always had them have 22 their own blanket insurance policy. And if that is the 23 policy of the Court consistent with that, then it would seem 24 that the roller derby team would need to get a supplemental 25 policy to cover what's being excluded from the USARS policy 2-24-14 93 1 in order to have all -- you know, coverage for anything that 2 would happen at the event center. 3 COMMISSIONER LETZ: Question. Does the -- the 4 policy that they're talking about, does it cover -- you 5 mentioned it covers them if they have a wreck and get hurt. 6 Does it cover a spectator 'cause they're going so fast, they 7 go fly off the court and hit somebody? Does it cover that 8 person? 9 MR. HENNEKE: Well, that's a good -- another 10 example. I haven't seen the USARS -- I mean, all I've been 11 provided with was the -- the exclusion, the paragraph of what 12 they would exclude. 13 MS. JONES: I believe it does cover if somebody 14 were attending as a spectator. Because it's pretty -- 15 MR. HENNEKE: I haven't seen the policy. 16 MS. JONES: I know you haven't seen it. I can only 17 show you what we had with WFTDA, which doesn't really apply 18 since it's an old policy, and it will be through a different 19 insurance group, but it would be similar to that. I could 20 try to get that for you. 21 COMMISSIONER LETZ: Maybe -- I think I dozed off 22 for a second when you started. 23 MS. JONES: Sorry. 24 COMMISSIONER LETZ: What is the question? What are 25 you asking us? 2-24-14 94 1 MS. JONES: I'm asking, can -- it's either can this 2 be added to our original contract, as far to get chartered 3 through USARS? We would -- we would still need to go forward 4 with this in the contract, and then if it was, do we also 5 need to get a supplemental insurance to make sure we cover if 6 you aren't comfortable with this, if this is saying it isn't? 7 COMMISSIONER LETZ: Do they have any insurance now? 8 MS. GRINSTEAD: Well, she was using a different 9 company. They're trying to switch companies. 10 MS. JONES: We're switching companies. 11 COMMISSIONER LETZ: But you have insurance now? 12 MS. JONES: Yes. 13 COMMISSIONER LETZ: It would seem to me it's fine 14 to have that, but you're probably going to need some 15 additional, too. 16 COMMISSIONER OEHLER: That's what it sounds like to 17 me. I don't think we can start that. 18 MS. JONES: Okay, that's fine. But is it -- would 19 it -- if we still went forward with this, can this be added 20 -- can this addendum still be added on top of us getting in a 21 supplemental insurance to cover anything else? 22 COMMISSIONER LETZ: I wouldn't know why we -- 23 COMMISSIONER OEHLER: I don't know why you 24 couldn't. 25 MR. HENNEKE: Yeah. The use agreement could say 2-24-14 95 1 that, you know, we -- we acknowledge that the USARS policy, 2 you know, has this exclusion, but that the tenant is 3 responsible for acquiring supplemental insurance to provide 4 coverage for any -- any gap or exclusion. 5 MS. JONES: Okay. 'Cause, really -- 6 COMMISSIONER OEHLER: I make a motion -- you just 7 stated the motion. I'll make that motion. 8 MS. JONES: Thank you. 9 MR. HENNEKE: Don't make me repeat it. 10 COMMISSIONER LETZ: Second. 11 COMMISSIONER BALDWIN: I have a motion and second. 12 Any further discussion? Whatever that motion might have 13 been. 14 COMMISSIONER OEHLER: Kathy's got it; I saw her 15 writing it down. 16 COMMISSIONER BALDWIN: Okay. 17 COMMISSIONER LETZ: Motion is to allow an addendum 18 to make the two insurances together qualify as required 19 insurance. 20 COMMISSIONER BALDWIN: There you go. 21 COMMISSIONER OEHLER: There you go. Second. 22 COMMISSIONER BALDWIN: All in favor, raise your 23 right hand. 24 (The motion carried by unanimous vote.) 25 COMMISSIONER BALDWIN: Motion carries. Thank you 2-24-14 96 1 very much. 2 MS. JONES: Thank you, gentlemen. 3 COMMISSIONER MOSER: The other agenda items are 4 executive session. 5 COMMISSIONER LETZ: They're all executive, looks 6 like. 7 COMMISSIONER BALDWIN: Item 20 is an executive 8 session too? Yes. 9 COMMISSIONER MOSER: Yeah. 10 COMMISSIONER OEHLER: We can pay the bills and all 11 that. We can do all that. 12 COMMISSIONER BALDWIN: Yes, I guess we can. Sure. 13 Approval agenda. Does anybody want to pay the bills? 14 COMMISSIONER MOSER: Move we pay the bills. 15 COMMISSIONER BALDWIN: I have a motion. 16 COMMISSIONER LETZ: Second. 17 COMMISSIONER BALDWIN: And a second. Any 18 discussion about the bills? All in favor, raise your right 19 hand. 20 (The motion carried by unanimous vote.) 21 COMMISSIONER BALDWIN: Bills will be paid. Budget 22 amendments. 23 MS. HARGIS: We have one budget amendment. 24 COMMISSIONER OEHLER: I don't see one. 25 MS. HARGIS: This just has to do with the election 2-24-14 97 1 fund. We're just moving -- adding $5,000 in expenditures 2 there that they didn't expense in the original budget, and 3 this is for tablets that they need for the election. 4 COMMISSIONER LETZ: Move approval. 5 COMMISSIONER OEHLER: Second. 6 MS. HARGIS: This is a non-budgeted fund by the 7 county. We can't budget -- 8 COMMISSIONER OEHLER: We don't have any choice. 9 MS. HARGIS: No. 10 COMMISSIONER BALDWIN: Now, are we voting -- are we 11 voting to transfer funds? 12 MS. HARGIS: No. They have the money in the fund, 13 but they just didn't budget for it. So, we just need to 14 show -- 15 COMMISSIONER BALDWIN: I see what you're saying, 16 okay. So, we have a motion and second, and any further 17 discussion? All in favor, raise your right hand. 18 (The motion carried by unanimous vote.) 19 COMMISSIONER BALDWIN: Motion carries. Thank you. 20 Late bills, Ms. Auditor? 21 MS. HARGIS: No, sir, we don't have any. 22 COMMISSIONER LETZ: Yeah, you do. 23 MS. HARGIS: Oh, you do? Well, I don't have them, 24 so that's great. 25 COMMISSIONER MOSER: Three of them. 2-24-14 98 1 COMMISSIONER LETZ: Three late bills. 2 MS. HARGIS: They didn't give them to me. 3 COMMISSIONER LETZ: We have one to Airtech for 4 6,000. 5 MS. HARGIS: Yes. 6 COMMISSIONER LETZ: One to B.C.F.S. for 8,955.16, 7 and one to Peter Lewis for 8,454.04. 8 COMMISSIONER MOSER: What's B.C.F.S.? 9 MS. HARGIS: That's the grant for the Juvenile 10 Probation Department. 11 COMMISSIONER MOSER: Oh, okay. 12 MS. HARGIS: It's an in and out. 13 COMMISSIONER MOSER: Okay, got you. 14 MS. HARGIS: And then the $6,000 are the new 15 air-conditioners that we put downstairs so that we -- they 16 don't freeze and burn up down there. And this -- their 17 architectural fees, I need to put those in, because I have to 18 put this on the federal questionnaire as well. 19 COMMISSIONER LETZ: Okay. Move approval. 20 COMMISSIONER OEHLER: Second. 21 COMMISSIONER MOSER: Second. 22 COMMISSIONER BALDWIN: So we have a motion and 23 second. Any further discussion? All in favor, raise your 24 right hand. 25 (The motion carried by unanimous vote.) 2-24-14 99 1 COMMISSIONER BALDWIN: We have monthly reports 2 presented from the Kerr County Treasurer; Kerr County 3 Treasurer, December 2013, revised Page 3; J.P. 1; Constable 3 4 for November and December 2013, and January of 2014. So, the 5 constable's turning in one, two, three months at one -- at 6 the same time. It also includes J.P. 4 and the Kerr County 7 Treasurer's quarterly investment report. I'd entertain a 8 motion to approve these as -- as presented. 9 COMMISSIONER MOSER: So moved. 10 COMMISSIONER BALDWIN: And is there a second? 11 COMMISSIONER LETZ: Second. 12 COMMISSIONER BALDWIN: Motion and second. Any 13 further discussion? All in favor, raise your right hand. 14 (The motion carried by unanimous vote.) 15 COMMISSIONER BALDWIN: Stand by, and we'll sign 16 these things just for funsies. Information agenda. Any 17 reports from Commissioners, liaison/committee assignments, et 18 cetera? 19 COMMISSIONER LETZ: The Auditor has her hand up. I 20 know you weren't trying to look that way. 21 COMMISSIONER BALDWIN: Auditor's not a 22 Commissioner. 23 COMMISSIONER LETZ: Oh. 24 COMMISSIONER BALDWIN: Nothing from the 25 Commissioners Court? 2-24-14 100 1 COMMISSIONER LETZ: Have you told her yet? 2 (Laughter.) 3 COMMISSIONER BALDWIN: She'll find out soon, 4 believe me. We have been through that before. 5.2, reports 5 from elected officials and department heads. How about the 6 Auditor? Do you have anything to say? 7 MS. HARGIS: Yes, I do. 8 COMMISSIONER BALDWIN: All right. 9 MS. HARGIS: I don't want to take the thunder out 10 of our financial advisers, but we have been upgraded from a 11 double A-minus to a double-A, which is going to greatly 12 reduce the interest rate on this issue and in the future. 13 This is really good. We were downgraded when the City was 14 downgraded, and so we have been moved up, and that's a real 15 great asset. 16 COMMISSIONER MOSER: Like, what would that mean 17 percentage-wise? 18 MS. HARGIS: Could be as much as a whole basis 19 point. 20 COMMISSIONER MOSER: Really? Wow, a basis point. 21 MS. HARGIS: Yeah, 1 percent. 22 COMMISSIONER BALDWIN: Thank you very much. 23 Anything else? 24 MS. HARGIS: No, that's it. 25 COMMISSIONER BALDWIN: That's great news. Good for 2-24-14 101 1 you. Any other elected official? Department head? We'll 2 just go around the room. Yes, ma'am, at the back. Could you 3 state your name? 4 MS. LAVENDER: I just want you to know that last 5 week, we had one formal and one informal request on our 6 pauper burial policy, and they were both handled and both 7 were denied, and so there is an ongoing issue with that. So, 8 I'm glad we got the policy in place, because it made it 9 possible for us to judge them with a fair policy to base it 10 on. 11 COMMISSIONER BALDWIN: Rusty, they're making me 12 sign off on this stuff, so I need either a bulletproof vest 13 or one of your guys -- 14 SHERIFF HIERHOLZER: Not my problem. 15 COMMISSIONER BALDWIN: This is just not right or 16 fair. Bonnie, do you have anything to add? You're a 17 department head now, aren't you? 18 MS. ARNOLD: I wish. 19 COMMISSIONER BALDWIN: Ms. Treasurer? Leonard? 20 MR. ODOM: Nothing, sir. 21 COMMISSIONER BALDWIN: How about you, young lady? 22 MS. LANTZ: We are going to be starting our Healthy 23 County program in March, so everybody needs to be on the 24 lookout for it. So, we're hoping everybody will start 25 walking with Sonic Boom so we can get more funds for healthy 2-24-14 102 1 projects within the county. 2 SHERIFF HIERHOLZER: Buster, that's me and you. 3 COMMISSIONER BALDWIN: Yeah, yeah, yeah. 4 COMMISSIONER MOSER: So, what -- 5 COMMISSIONER OEHLER: I'd like to see that happen. 6 COMMISSIONER MOSER: -- what does that mean? What 7 do you have to achieve to be able to get more funds? 8 MS. LANTZ: Everyone that signs up for the program, 9 the County also gets a portion. Like, for example, if you 10 sign up and you make -- or you meet your needs, what they're 11 requesting you to do, you get a $50 gift certificate from TAC 12 to use however you want to use it. 13 COMMISSIONER MOSER: Okay. 14 MS. LANTZ: And then for every person that 15 participates and completes, the County gets up to $35 a 16 person -- 17 COMMISSIONER MOSER: Okay, wow. 18 MS. LANTZ: -- to use towards healthy things within 19 the county. 20 COMMISSIONER LETZ: So, are these -- generally, I 21 know a lot of the employees walked at lunch in previous ones, 22 one of the things. Is that going to be done only during the 23 day? Any time? Or -- 24 MS. LANTZ: You wear a ped, and you wear it all the 25 time, so you just keep on it your shoe and walk, you know, 2-24-14 103 1 forever. So, if anyone's interested, make sure you see me. 2 There's going to be an e-mail go out where, if you want a 3 ped, we'll get you one. So -- 4 COMMISSIONER MOSER: Put it on, take it off 5 whenever? 6 MS. LANTZ: Mm-hmm. 7 SHERIFF HIERHOLZER: Just leave it on. 8 MS. LANTZ: Just leave it on. 9 COMMISSIONER MOSER: Yeah, right. But, I mean, if 10 you're doing a strenuous exercise, then -- 11 MS. LANTZ: And we also have a healthy assessment 12 program going on right now. You can log onto -- those 13 employees who have Blue Cross and Blue Shield, everyone that 14 participates in and does the healthy assessment on 15 themselves -- nobody else sees it -- they'll also get a $35 16 gift certificate from TAC, which -- to spend however they'd 17 like, and the County will also get -- they'll match the 18 County for every person that does that. So, we're going to 19 be going around to the different departments encouraging 20 everybody to sign up for that, and it's just to be healthy. 21 COMMISSIONER MOSER: Rusty has been preparing 22 himself to get into that program. 23 SHERIFF HIERHOLZER: I'm -- I've been preparing. 24 Quit smoking. 25 COMMISSIONER BALDWIN: Jody, did you want to talk 2-24-14 104 1 about anything? 2 MS. GRINSTEAD: I'm good. 3 COMMISSIONER BALDWIN: Rusty? 4 SHERIFF HIERHOLZER: Of course, you know what it's 5 going to be is jail. I hate to say this -- 6 COMMISSIONER BALDWIN: Okay, that's enough. Sit 7 down. 8 SHERIFF HIERHOLZER: We were at 167 at one time 9 last week. We are back down to about 160 right now. At one 10 time over the weekend, I had 33 females. I only have 32 11 beds. I will have to -- we're at 29 right now, females. But 12 the only thing I know to do at this point is contact some 13 other counties that might have some bed space, and get them 14 to start sending us rough drafts of contracts for 15 out-of-county housing. And I'm guessing right now we're not 16 going to find that for under $50 a day per inmate. It's 17 costing us over that right now to house our own, so I think 18 that's pretty close to what we'll be spending, is $60 a day 19 or so. I'll have to look at it when we get that. 20 COMMISSIONER LETZ: Rusty, there's a spike that 21 seems to have happened recently. Is it because of the new 22 legislation, the Michael Morton or whatever it's called? 23 SHERIFF HIERHOLZER: Part of it, I think, is 24 because of the new legislation. The Michael Morton Act has 25 hurt us all because it's requiring so much more. And part of 2-24-14 105 1 it is just the -- I can't say for sure. I know that the 2 indictment numbers are staying pretty well the same. 3 They're -- we're having long grand jury days. But I think 4 some of the negotiations on plea bargaining and all that 5 is -- is maybe slowing down some. You know, it's just the 6 class of inmates. We go through this at times. Sometimes it 7 drops, but here lately, for the last several months, when 8 I've been hoping it would start dropping, it's actually been 9 increasing. I can't give you anything other than they are. 10 Last week we had 61 that were 216th charges, felony charges, 11 and we had 40 -- no, 50 that were 198th felony charges. So, 12 that's -- you know, the majority is felony charges. Now, 13 some of those could add a misdemeanor attached with them here 14 or there, but it's just -- it's just the classification of 15 inmates we're getting. It's just like trying to find outside 16 trustees now. We used to where we could work five inmates 17 outside that fit my requirements. Now I'm lucky to find one 18 that fit those requirements, because otherwise their charges 19 are just more and more serious, and the type we haven't been 20 allowed to use or haven't been wanting to use outside the 21 facility. 22 COMMISSIONER MOSER: Question. If we send some 23 inmates to other facilities, they assume all the 24 responsibilities? 25 SHERIFF HIERHOLZER: I wish. That's why I'm -- I'm 2-24-14 106 1 totally against housing inmates. Always have been, okay? 2 Number one, because it doesn't alleviate our liability at 3 all. They're our inmates. We're totally liable for that 4 inmate, period. And that's a big liability when you have no 5 say-so over how that inmate's treated or anything else. 6 COMMISSIONER MOSER: Right. 7 SHERIFF HIERHOLZER: The other thing is, we have a 8 medical contract that covers our medical. If they are at 9 another facility, we pay that medical on -- you know, 10 outright. It's not under our contract, so it does get very 11 expensive. 12 COMMISSIONER MOSER: So, there's hidden things 13 associated? 14 SHERIFF HIERHOLZER: There's a lot of hidden, yeah. 15 The transportation back and forth. Right now, there's only 16 -- Bandera's had some space available at times, but they've 17 been housing for Hondo and Fredericksburg, and after that, 18 gentlemen, we're looking at probably Comanche. You're 19 looking at a four-hour trip one way, just to -- and these 20 inmates aren't done with court. We're going to be traveling 21 back and forth every week hauling them back and forth to 22 court. I don't know what to do. 23 COMMISSIONER MOSER: You'll figure it out. 24 COMMISSIONER BALDWIN: Anything else? Counselor, 25 did you have -- did you have anything further? 2-24-14 107 1 MR. HENNEKE: No, sir. 2 COMMISSIONER BALDWIN: Okay. Okay. Let me ask a 3 question of you guys. Y'all want -- we're coming back at 4 1:30 to have Item 1.8 to authorize the issuance, sale, and 5 delivery of up to $4 million aggregate principal amount to 6 Kerr County -- the certificates of obligation, with our guru. 7 Do you guys want to bring back the executive session at that 8 time? Or do you want to -- I mean, look at the clock. Or do 9 you want to go now and try to knock it out? Or however -- 10 how do you want -- what do you want to do? 11 COMMISSIONER OEHLER: Let's do it. 12 COMMISSIONER LETZ: My preference is to go into 13 executive session now, but any action to be taken on these, 14 we reserve the right to go back, if we need to, at 1:30. 15 COMMISSIONER MOSER: Yeah. 16 COMMISSIONER BALDWIN: Okay. 17 COMMISSIONER MOSER: I think I agree with that. 18 COMMISSIONER BALDWIN: This Commissioners Court's 19 going into executive session. Bye. 20 (The open session was closed at 11:34 a.m., and an executive session was held, the transcript of which 21 is contained in a separate document.) 22 - - - - - - - - - - 23 COMMISSIONER BALDWIN: Commissioners Court is -- 24 we've been in executive session; we're now coming out into 25 open session again, and we're going to deal with some of 2-24-14 108 1 these executive session items that we had, and -- and 2 deliberated in executive session. So, we'll start with Item 3 1.19; consider, discuss, and take appropriate action on 4 interviews and possible hiring of the Veteran Services 5 Officer. Commissioner Letz? 6 COMMISSIONER LETZ: Yes. I think everyone knows 7 we've been looking at this position for some time, gone 8 through several rounds of interviews. Originally, I think we 9 had either 15 or 16 that applied for the job. A committee 10 was appointed, which I was one of the members of that 11 committee, and it was narrowed down to seven or eight that we 12 conducted interviews with, and then that was -- three were 13 recommended to the full Court and had interviews with the 14 full Court. Now, one of the -- the exciting things is the -- 15 more than three, but definitely the three finalists were all 16 outstanding. I think they all would have been good 17 selections, but we did narrow it down to one, Ms. Maggie 18 Baker, who's here. She didn't know till a few minutes ago 19 that this was going to be said. I think she will do an 20 outstanding job. She has some experience in this field. The 21 compassion she has shown towards veterans is unbelievable. 22 She's a veteran herself. And I'll make a motion that we 23 offer the position of Veteran Service Officer to Ms. Margaret 24 Baker at a salary of 34,000 a year. 25 COMMISSIONER MOSER: Second. 2-24-14 109 1 COMMISSIONER BALDWIN: We have a motion and a 2 second. Any further discussion? I think she's going to make 3 a good hand too; I'm excited about this. 4 MS. BAKER: Thank you so much. 5 COMMISSIONER BALDWIN: Finally. 6 COMMISSIONER OEHLER: Going to be a good move for 7 Kerr County, and just -- it's the right thing to do. 8 COMMISSIONER BALDWIN: Did you hear him? 9 MS. BAKER: Yes, thank you. 10 COMMISSIONER OEHLER: I believe we got the right 11 person. 12 COMMISSIONER BALDWIN: He's shy. 13 COMMISSIONER OEHLER: Yeah, so are you. 14 COMMISSIONER BALDWIN: Yeah. All in favor, raise 15 your right hand. 16 (The motion carried by unanimous vote.) 17 COMMISSIONER LETZ: Effective date would be no 18 later than April 1st. It can be as soon as all y'all can 19 coordinate that. That's up to you and the H.R. Department. 20 I'm not sure of your -- Ms. Baker's schedule and commitments 21 and things. But as far as our standpoint, we talk about 22 March 1st is fine, but if it needs to be March 15th, April 23 1st, whichever works out. 24 COMMISSIONER OEHLER: Whichever one works for you 25 because of your present employment. 2-24-14 110 1 MS. BAKER: Okay. 2 COMMISSIONER LETZ: Okay. 3 MS. BAKER: Thank you so much. 4 COMMISSIONER BALDWIN: Motion carried unanimously. 5 Congratulations. Welcome aboard. 6 MS. BAKER: Thank you. 7 COMMISSIONER MOSER: Get to work. 8 COMMISSIONER LETZ: There will be a -- on this 9 item, we'll probably be having a special meeting Friday 10 morning -- you didn't know that yet -- and there may -- 11 setting up that office and some other related issues will 12 probably be on that agenda. 13 COMMISSIONER BALDWIN: 15? 14 COMMISSIONER LETZ: Okay, Item 15. 15 COMMISSIONER BALDWIN: 15. Yeah, we're going to 16 recall it. Item 15; consider, discuss, take appropriate 17 action on Emergency Medical Services and Request for 18 Proposals for Emergency Medical Services. Just EMS in 19 general is what -- what we're going to discuss here. So, -- 20 COMMISSIONER LETZ: Okay. 21 COMMISSIONER BALDWIN: -- Commissioner, do you have 22 a comment to make? 23 COMMISSIONER LETZ: I've got a comment. We talked 24 about this a little bit in executive session. Possibly my 25 motion may be a little bit of a surprise to members of the 2-24-14 111 1 public, but I don't think anyone on the Court. But I'd make 2 a motion that we request and set a special meeting for next 3 Monday with the City Council to attempt to finalize a 10-year 4 deal based on the current contract, with the exact terms to 5 be finalized at that meeting. 6 COMMISSIONER OEHLER: Second. 7 COMMISSIONER MOSER: I would -- 8 COMMISSIONER BALDWIN: So we have a motion and a 9 second. Is there any further discussion? 10 COMMISSIONER MOSER: Yeah. Maybe you'd modify your 11 motion, say maybe not 10-year, but a long-term -- so if we've 12 got some 5- or 7- or 10-year, whatever that turns out to be, 13 that's okay. 14 COMMISSIONER LETZ: Long-term's fine. 15 COMMISSIONER MOSER: Yeah, okay. 16 COMMISSIONER BALDWIN: Okay. Any further 17 discussion now? Anything else? I think that's a good idea. 18 Where would you like to have this meeting? 19 COMMISSIONER LETZ: Union Church. 20 COMMISSIONER BALDWIN: Union Church sounds good to 21 me. When is this, next Monday? 22 COMMISSIONER LETZ: Monday, at 3:00? 9:00? Maybe 23 at 9:00. 24 COMMISSIONER MOSER: Okay. 25 COMMISSIONER LETZ: And I'll make a comment, 'cause 2-24-14 112 1 I'm -- you know, just some members of the Court -- probably 2 most members of the Court have had conversations with members 3 of City Council, and, you know, this isn't a shot in the 4 dark. We think that, you know, we can make a deal. We are 5 still working on two paths rights now. We have an RFP that 6 we're continuing to work on, but our preference has always 7 been to finalize the deal with the City of Kerrville, and if 8 we're able to do that, great. We certainly -- you know, I 9 don't want to go ahead forward; I don't think this Court 10 wants to go forward with an RFP unless we're certain that we 11 need to. If we need to, we will, but I think it will be 12 worthwhile to meet one more time. 13 COMMISSIONER MOSER: Only other comment that I'd 14 make is, this is a deal we need to make, okay? I think 15 everybody on the Court agrees that we need to make a deal. 16 Hopefully, I think people in the City think that. It's just 17 a matter of settling on some of the details. So, there's a 18 real push to do that, and I think we need to get it 19 accomplished. 20 COMMISSIONER OEHLER: My only comment is that I -- 21 this has been going on way too long. It needs to be settled, 22 because this is not an ordinary type issue. This is health 23 and safety, and everybody in this meeting needs to keep in 24 mind that we're talking about the health and safety of all of 25 the public of Kerr County, including ourselves. And you 2-24-14 113 1 really need to be open to that and have a -- have a really 2 sensitive understanding of this issue. It's not like 3 catching dogs or patching potholes. You know, this is -- 4 this is a real issue, and a lot of people are very concerned 5 about it, because they're concerned that if we do go out for 6 contract, that their service may change; it may not be the 7 same level of service that they're used to having. Kerrville 8 has an excellent service. We've never said otherwise. And 9 we would love to keep it, but we do need to enter into a 10 long-term agreement. 11 COMMISSIONER MOSER: Absolutely. 12 COMMISSIONER OEHLER: Because this doesn't need to 13 be hanging over the public's head every three years, and -- 14 and put everybody in turmoil, and have the concern that they 15 may not get service or may not have enough ambulances or 16 whatever. I just hope that everybody will be mindful of that 17 and give it a really good-faith effort to come to an 18 agreement. 19 COMMISSIONER BALDWIN: I'd like to see us have a -- 20 I echo everything that's been said. I'd like to see us have 21 a meeting to where we're focused on the health and safety of 22 our constituents, the taxpayers, the citizens of this county, 23 as opposed to in meetings past, we've focused on how much 24 money do we need to run this thing? How much can we afford? 25 You know, let's just do our best effort to provide whatever 2-24-14 114 1 it takes to get the deal done. And, you know, it's -- the 2 City Council folks are our friends and our neighbors. And 3 some of these kids are -- that work in the fire department, I 4 worked in the fire department with their daddies and, you 5 know, I watched them grow up. And I'm proud of them, and I 6 absolutely love them to death, and -- and they're excellent. 7 They're the finest fire department, EMS group in the state of 8 Texas; there's no question of that. And we have an 9 opportunity to continue working with them, and I think that 10 we should do everything that we can to -- to do that. 11 COMMISSIONER MOSER: I want to add one other thing. 12 I think this is -- I think I agree with everything everybody 13 said here. Super important. And I think the thing is, from 14 a citizens' perspective, that's the entire county. That's 15 people in the city, outside the city; that, you know, we need 16 to strive as hard as we can not to have to duplicate services 17 in anything, because they're all owned by the residents of 18 this entire county. So, I think if we can get this one 19 accomplished, a lot of other things will -- will fall into 20 place; you know, animal control, et cetera, et cetera. So, 21 it's -- EMS is probably the most -- most important part of 22 all those services, but the other things are important too. 23 So -- 24 COMMISSIONER LETZ: I think the focus of this 25 meeting is EMS only. 2-24-14 115 1 COMMISSIONER MOSER: Absolutely. I'm just saying 2 that's the -- I agree with you. I'm saying if we get this 3 one, then I think the others become secondary, tertiary. 4 COMMISSIONER BALDWIN: And I think that -- 5 COMMISSIONER LETZ: Our agenda is EMS only. 6 COMMISSIONER BALDWIN: -- this -- this body here 7 should be willing to increase what we've been giving. I 8 mean, meet them somewhere. I know that they've asked for a 9 huge amount of money, which -- whatever. They have their 10 number, and we should move our number toward them some, and 11 -- and try to put this thing together for 10 -- preferably, I 12 like the 10-year thing, but we'll go five if necessary. But 13 I like the 10-year thing. I think it's the best thing for 14 the public of Kerr County. We need to do this thing. 15 COMMISSIONER LETZ: And my final comment on this 16 is, you know, in my conversations with just one member of the 17 City Council, there's a reason for this. I think -- I think 18 we can get there, and I think it's -- it isn't just us making 19 an effort. There's been communication between myself, I know 20 other members of the Court and other members of the City 21 Council that we feel we can get there. 22 COMMISSIONER MOSER: I think we've all collectively 23 talked to a bunch of different individuals over at the City, 24 so I think the sense is there. Good. 25 COMMISSIONER BALDWIN: What do you want to do now? 2-24-14 116 1 COMMISSIONER LETZ: Vote. 2 COMMISSIONER BALDWIN: Vote? 3 COMMISSIONER LETZ: To set the meeting on Monday, 4 9 o'clock, Union Church. 5 COMMISSIONER BALDWIN: Oh, yeah. So, we have a 6 motion and a second to -- to have a joint meeting with the 7 Commissioners Court and Kerrville City Council at 9 a.m. 8 Monday at the Union Church building. And I assume that we 9 need to invite them? Or maybe they can read it in the paper 10 and just show up or something. But -- 11 COMMISSIONER LETZ: They're aware of this date, I 12 believe. They're aware, okay. 13 COMMISSIONER BALDWIN: So, we'll just leave it at 14 that. So, any further discussion? All in favor, raise your 15 right hand. 16 (The motion carried by unanimous vote.) 17 COMMISSIONER BALDWIN: Motion carries. Want to do 18 Item 20, or what? 19 COMMISSIONER LETZ: Nothing we can do publicly on 20 20, I don't think. 21 COMMISSIONER BALDWIN: No. 22 COMMISSIONER LETZ: Item 20 -- there will be a -- 23 well, I'll announce it, do an agenda for Friday. There will 24 be an agenda item: Consider, discuss, take appropriate 25 action to create a new position in the Road and Bridge 2-24-14 117 1 Department, and budgeting for same. 2 COMMISSIONER BALDWIN: So, are we done until the 3 bonding people get here? 4 COMMISSIONER LETZ: Yes. 5 COMMISSIONER BALDWIN: Is that where we are in 6 this? 7 MS. HARGIS: They were on the other side of Boerne 8 about 10 minutes ago. 9 COMMISSIONER BALDWIN: There's Bonnie. I guess we 10 can get started. 11 COMMISSIONER LETZ: Why don't we just recess till 12 they get here? 13 COMMISSIONER BALDWIN: Okay. 14 COMMISSIONER MOSER: They were on the other side of 15 Boerne 10 minutes ago? 16 COMMISSIONER LETZ: They'll be here in 10, 15 17 minutes. 18 COMMISSIONER BALDWIN: Let's recess until they get 19 here. There's no sense setting a clock. 20 (Recess taken from 1:54 p.m. to 2:04 p.m.) 21 - - - - - - - - - - 22 COMMISSIONER BALDWIN: Okay, commissioners Court's 23 back in session. It is now, I don't know, 2:04 Monday 24 afternoon. We're back in session, and we will now take up 25 Item 1.8; consider, discuss, and take appropriate action on 2-24-14 118 1 order authorizing the issuance, sale, and delivery of up to 2 $4 million in aggregate principal amount of the Kerr County, 3 Texas combination tax and revenue certificate of obligation, 4 Series 2 -- Series 2014, securing the payment thereof by 5 authorizing the levee of an annual ad valorem tax and a 6 pledge of certain surplus revenues of the county park system, 7 and approving and authorizing the execution of a Paying 8 Agent/Registrar Agreement, a Purchase Contract, an Official 9 Statement, and all other instruments and procedures related 10 thereto. And before we dive into that thing, 11 Mrs. Standridge? 12 MS. STANDRIDGE: Yes? 13 COMMISSIONER BALDWIN: This is Tom Spurgeon sitting 14 here in the middle, the handsome one with the hair, and he 15 would be -- he would like for you to ask him your question. 16 MS. STANDRIDGE: Well, you know -- goodness, 17 did all you gentlemen come here to just answer my... 18 (Laughter.) 19 COMMISSIONER BALDWIN: Hey, -- 20 MR. SPURGEON: Yes, ma'am. 21 COMMISSIONER BALDWIN: -- we're here to please. 22 MS. STANDRIDGE: I am totally impressed and blown 23 away. No, I -- you know, I'm here to learn. I heard this 24 morning that -- I asked questions last time and this morning, 25 but I heard you say that they were explaining everything, so 2-24-14 119 1 I'm here to learn. I don't have any -- 2 COMMISSIONER BALDWIN: I thought we had to ask the 3 question, what is the definition of a C.O.? 4 MS. STANDRIDGE: Oh. Well, you certainly can give 5 it to me. 6 MR. SPURGEON: Be happy to. A certificate of 7 obligation is a form -- is a form of debt that only cities 8 and counties can issue. It's a tax obligation, just like a 9 general obligation bond would be, but with one major 10 distinction, and that is a general obligation bond has to be 11 voted on in order to -- to issue that type of debt. A 12 certificate of obligation was actually first approved in 1971 13 by the Legislature, because -- and it allows a city or county 14 to issue a tax indebtedness just like what's happening today. 15 So, it's a pledge of ad valorem taxes without the need for an 16 election. But there is a procedure that the issuer goes 17 through to provide notice in the local newspaper of the 18 city's and -- city's or county's intention to issue 19 certificates of obligation and the projects for which they 20 are seeking that authority. 21 The County did that, back -- I think January 15th 22 was the first publication. That was a requirement. It has 23 to be in the newspaper, published twice, at least 31 days in 24 advance of this meeting, which was done. And the first 25 publication, I think, was January 15th, and they followed up 2-24-14 120 1 on January 22nd. It included a list of all the projects that 2 the County was intending to finance with the C.O.'s. There's 3 an opportunity that if the voters present a petition of at 4 least 5 -- signed by at least 5 percent of the registered 5 voters, then the County can't proceed with the actual 6 issuance of C.O.'s unless an election is called. C.O.'s are 7 done very, very frequently throughout the state of Texas. 8 Not -- I guess I don't know the percentage in terms of how 9 much, or C.O.'s versus general obligations, but it's a very 10 common thing, particularly for what we call "bread and 11 butter" type of projects. And -- and so that's -- it's not 12 at all uncommon to see this being done by cities and counties 13 throughout the entire state, and that's -- that's really 14 what's going on today. 15 And the reason that can be done a little bit 16 different than a school district, and just -- I may be 17 telling you more than you want to know, but the Constitution 18 itself is not -- does not require that a city or county must 19 vote on a tax for the issuance of debt, and so the 20 Legislature has that authority to create an instrument like 21 this that does not require a vote. There's another type of 22 instrument, too, that -- that a city or a county can levee 23 without a tax -- I'm sorry, without an election; that's 24 called a tax note, but there's some limitations on that. 25 You can -- if you're doing it for infrastructure -- not 2-24-14 121 1 infrastructure, for -- for physical improvement type things, 2 the debt can't exceed longer than seven years; maturity can't 3 be longer than seven years. A C.O. issue does not have that 4 restriction; you can go out 40 years with a certificate of 5 obligation issue. There are other issuers in the state where 6 the Constitution does require that there be an election 7 before they levy any sort of tax obligation, one of which is 8 school districts. That's why you see school districts going 9 to voters very frequently, because the Constitution requires 10 that they have to have an election before they can issue tax 11 debt. 12 COMMISSIONER MOSER: So, what -- let me ask, what 13 are the restrictions on items that can be funded with a C.O.? 14 MR. SPURGEON: There are -- well, it essentially 15 has to be a public improvement. 16 COMMISSIONER MOSER: Has to be a public 17 improvement? 18 MR. SPURGEON: Has to be publicly owned, and -- but 19 beyond that, it is -- it can be for virtually any kind of 20 improvement -- public improvement that the county or city 21 would want to finance, just as if they were doing it with a 22 general obligation bond. So, it's -- it's very, very broad. 23 COMMISSIONER MOSER: Okay. 24 MR. SPURGEON: Very broad. 25 MR. MOSTY: So, if the County had a facility that 2-24-14 122 1 it wanted to use these funds for, what constitutes "for 2 public improvement"? 3 MR. SPURGEON: Well, when you say a facility, I 4 mean, it would -- if you wanted to build -- just like some of 5 these are building some buildings; I think there's one out at 6 the fairgrounds, as I recall. These are very commonly done 7 for -- for street improvements, streets and roads. They're 8 done for courthouse improvements very commonly. Even things 9 going on like the fairgrounds, that's a very common type of 10 thing. Bridges. I think sort of county-type things; water 11 and sewer improvements a lot of times are done with 12 certificates of obligation. 13 COMMISSIONER MOSER: Well, let me give you an 14 example. 15 MR. SPURGEON: Okay. 16 COMMISSIONER MOSER: If the City/County owns 17 airport facilities, right? 18 MR. SPURGEON: They own the buildings? 19 COMMISSIONER MOSER: Right. We lease the 20 buildings. 21 MR. SPURGEON: Yes. 22 COMMISSIONER MOSER: And we lease to a company 23 that -- that sells their product to the public. 24 MR. SPURGEON: Right. 25 COMMISSIONER MOSER: So, you know what my question 2-24-14 123 1 is? 2 MR. SPURGEON: I do. 3 COMMISSIONER MOSER: Would that qualify? 4 MR. SPURGEON: I do. And as long as the city or 5 the county own that building, you could issue a certificate 6 of obligation for that. Now, you're going to get a different 7 tax treatment on that, because the ultimate user of that is 8 not the governmental unit, but it's going to be a private 9 entity, and so there would be a taxable issue that would be 10 done. Your bonds are -- your C.O.'s today are going to be 11 tax-exempt for federal income tax purposes. 12 COMMISSIONER MOSER: Mm-hmm. 13 MR. SPURGEON: But we'd have to look through who 14 the ultimate user is in your scenario. You're -- you are 15 describing something where most likely the tax treatment on 16 that would be a taxable obligation. 17 COMMISSIONER MOSER: I see. Okay. 18 MR. SPURGEON: And we kind of have to look at -- I 19 mean, as long as the County and the City retain ownership of 20 that and that you have the legal authority to be building 21 that for -- and leasing it to somebody else, then you could 22 finance that through a C.O. issue. 23 COMMISSIONER MOSER: But it may not be -- not fit 24 the category of tax-free? 25 MR. SPURGEON: Correct. 2-24-14 124 1 COMMISSIONER MOSER: Okay. 2 MR. SPURGEON: Exactly right. 3 COMMISSIONER MOSER: Okay. 4 MR. SPURGEON: Right. 5 COMMISSIONER MOSER: Okay. 6 MR. SPURGEON: And that's one of the things we 7 always look at in terms of what is the use of what's being 8 financed, no matter if it's a bond issue or C.O.'s or 9 whatever. We always look at the ultimate use so that we get 10 comfortable with giving our tax exemption opinion. 11 COMMISSIONER MOSER: One other question, if I may, 12 on when we publish the intent to do this -- 13 MR. SPURGEON: Yes, sir. 14 COMMISSIONER MOSER: -- on two occasions, and we 15 list, "Here are the categories." 16 MR. SPURGEON: Right. 17 COMMISSIONER MOSER: Then that locks in those 18 categories? 19 MR. SPURGEON: It -- it locks it into the 20 agreement. I mean, you can't go outside that, you know. 21 COMMISSIONER MOSER: You have to stay within those 22 categories? 23 MR. SPURGEON: You have to stay within those 24 categories, correct. Now, there are things that do happen 25 sometimes where something that's listed, you may not end up 2-24-14 125 1 ultimately spending the proceeds for that purpose, but you 2 can't go outside that. 3 COMMISSIONER MOSER: Okay. Couldn't add a new one? 4 MR. SPURGEON: No, sir. 5 COMMISSIONER MOSER: Okay, got you. 6 MR. SPURGEON: Right. 7 COMMISSIONER MOSER: Okay. 8 MR. TRAYLOR: That would require a new notice 9 period. 10 COMMISSIONER MOSER: A new notice period, and that 11 would delay things "X" number of -- 12 MR. SPURGEON: It would. And we've done that. 13 I'll give you an example when we did it with the city last 14 year, that we did the first Notice of Intention, and I think 15 even made their first publication. And the director of 16 finance called and said, "We'd like to add some different 17 projects." We ended up delaying the overall issue, so we 18 combined everything into one issue, and not have -- 19 COMMISSIONER MOSER: Okay. 20 MR. SPURGEON: -- duplication of costs. And so 21 Dusty's absolutely right; without doing another notice, you 22 couldn't add to it. 23 COMMISSIONER MOSER: Are there any other negatives 24 other than the delay, and -- if you do that? 25 MR. SPURGEON: I -- I think I would say no. I 2-24-14 126 1 mean -- 2 COMMISSIONER MOSER: Okay. So, it's delay -- delay 3 of notice of intent. That would be -- that's the only thing, 4 schedule delay. 5 MR. SPURGEON: Yes. I mean, depending on when -- 6 when that happened, I guess. 7 COMMISSIONER MOSER: No. No, I meant there's 8 nothing about, "Oh my gosh, if you do that, the bonding 9 agents or people who buy the bonds are -- they're going to 10 get nervous about you," or something like that? 11 MR. TRAYLOR: Well, that is a good question. I'll 12 step up here real quick. Depending upon the timing. 13 MR. SPURGEON: Right. 14 MR. TRAYLOR: As of -- as of the time that the 15 bonds have actually -- the certificates have actually gone 16 out into the market and been marketed to end investors, and 17 end investors actually waiting there to -- and have committed 18 their funds, all right, to then have to say, "Wait, we're 19 going to redo this notice for 30 days..." 20 COMMISSIONER MOSER: Sure. 21 MR. TRAYLOR: Yes, that -- that would be a negative 22 impact from the investors. 23 COMMISSIONER MOSER: We're not at that point right 24 now? 25 MR. TRAYLOR: We are. 2-24-14 127 1 COMMISSIONER MOSER: We're at that point? 2 MR. SPURGEON: Yes. They've gone to the market 3 now. They've not been approved yet. 4 COMMISSIONER MOSER: Right. 5 MR. SPURGEON: That's not going to be approved 6 until this Court takes action. 7 COMMISSIONER MOSER: Right. 8 MR. SPURGEON: But it has gone to the market, and 9 the market has some expectation that -- that it would be 10 acceptable. But that -- it's clearly within your discretion. 11 COMMISSIONER MOSER: Okay, got you. Okay. So, 12 there's -- that would be more than just a schedule impact; 13 that could be a -- 14 MR. TRAYLOR: Correct. Investors would then come 15 back and look at you the next time, say, "Kerr County, do you 16 really mean business this time or not?" 17 COMMISSIONER MOSER: Okay, good. 18 COMMISSIONER BALDWIN: Good. Thank you very much. 19 Ms. Standridge? I was going to answer that for you, but the 20 lawyers showed up. 21 MS. STANDRIDGE: He did a great job. Thank you. 22 COMMISSIONER BALDWIN: That was good. Thank you 23 very much. 24 MR. SPURGEON: You bet. 25 COMMISSIONER BALDWIN: Commissioner Letz? 2-24-14 128 1 COMMISSIONER LETZ: I'll turn it over to 2 Mr. Traylor to kind of go over, I mean, the -- where we are 3 and what the next steps are. 4 MR. TRAYLOR: Certainly. Just -- just for the 5 record, my name is Dusty Traylor. I'm a director at RBC 6 Capital Markets. Bob Henderson and myself have the honor of 7 serving Kerr County as your financial adviser. Tom Spurgeon 8 and Nick from McCall, Parkhurst, and Horton are also here, 9 who serve the county as your -- your bond counsel. Since the 10 Commissioners Court gave notice of intent to issue these 11 Certificates of Obligation in January, we've been working 12 closely with the County -- specifically, Jeannie -- to 13 prepare and update a preliminary official statement for the 14 market, and coordinate our activities with your underwriter, 15 Southwest Securities. We also recently visited with Standard 16 and Poor, bond rating agency, who speaks to the market as to 17 the creditworthiness of Kerr County. We just got back last 18 week notice of an upgrade in the County's bond rating from 19 double A-minus to a full double-A, and that is a -- that is a 20 very good result. That translates into helping the County go 21 out into the market and achieve lower interest rates with 22 investors. 23 Today, we went out and worked closely with the 24 underwriters to help them go into the market to sell these 25 certificates of obligation, and we were successful in doing 2-24-14 129 1 so. We have before you this -- this afternoon a certificate 2 of obligation with a principal amount of $3,805,000, with a 3 -- however, the investors are providing a premium of 4 approximately $198,968, so that you can make a project 5 deposit of $3,900,000. That's how much will be going into 6 the account to complete your projects. And the big question 7 is, what's the interest rate? The interest rate on this C.O. 8 is, all in -- that's when you factor in the cost of issuance 9 and the interest. The all-in TIC is a 2.8639 percent fixed 10 over the course of the next 14 years, with a final maturity 11 of 2-15-2028. 12 However, one of the things that -- that we have 13 done at the County's request, to give yourselves the ability 14 to repay as much of this early as possible, we negotiated 15 with the investors a 7-year call feature. So, normally you 16 sell C.O.'s with a 10-year call feature. You'll be able to 17 go out in seven years, or in 2021, and begin paying -- 18 retiring more of these certificates of obligation than 19 scheduled; you could hopefully repay them earlier and reduce 20 your interest cost even further. All in all, from a 21 coordination standpoint, everything worked out very well, and 22 the interest rate we could not be more ecstatic with. To get 23 the 2.68 all-in -- or 2.86 all-in rate and the 7-year call 24 feature is a very positive result, and it speaks to the 25 strong credit of Kerr County in the market. 2-24-14 130 1 COMMISSIONER MOSER: What other costs are 2 associated other than interest with this? I mean, do you 3 guys get a fee of some type? 4 MR. TRAYLOR: The fees for us? 5 COMMISSIONER MOSER: Yeah. 6 MR. TRAYLOR: The Texas Attorney General's office 7 also collects a fee. Then the underwriters themselves 8 collect a fee to take the bonds in and split them up into 9 5,000 or so denominations and sell them off to various end 10 investors. There's also the cost we talked about, Standard 11 and Poor's up -- upgrading the County's rating. There's a 12 cost to get rated by Standard and Poor's, various printing 13 fees and things like that. 14 COMMISSIONER MOSER: So, when you lump all that 15 stuff up, what's the bottom line? 16 MR. TRAYLOR: Overall cost of issuance on this is 17 estimated at just under $100,000, 99,498. 18 COMMISSIONER MOSER: Okay, thank you. 19 COMMISSIONER LETZ: All right. Well, I'll make a 20 motion -- read this? 21 MR. SPURGEON: Yes, sir. 22 COMMISSIONER LETZ: Make a motion that we pass an 23 order authorizing the issuance and sale and delivery of 24 $3,805,000 aggregate principal amount of Kerr County, Texas 25 combination tax and revenue certificates of obligation, 2-24-14 131 1 Series 2014, securing the payment thereof by authorizing the 2 levy of an annual ad valorem tax and pledge of certain 3 surplus revenues of the county park system, and approving and 4 authorizing execution of a Paying Agent/Registrar Agreement. 5 A Purchase Contract, an Official Statement, and all other 6 instruments and procedures related thereto. 7 COMMISSIONER OEHLER: Second. 8 COMMISSIONER BALDWIN: We have a motion and a 9 second. Further discussion? 10 COMMISSIONER MOSER: Question on the statement of 11 pledge of certain surplus revenues of the county park system. 12 MR. SPURGEON: You bet. Happy to address that. 13 And it's -- and actually, maybe a little detail on what a 14 C.O. is all about versus a general obligation bond. There's 15 a provision in the statute when it was first created back in 16 1971 which, frankly, probably could be maybe relieved under 17 -- at some point. But there's a provision -- there's an odd 18 part of the Certificate of Obligation Act that says if you 19 levy -- or if you issue C.O.'s and attach a revenue pledge 20 behind it, you're able to sell the C.O.'s what's called "for 21 cash." Which means that they operate just like a bond does, 22 where you -- you issue them, you receive the proceeds 23 immediately, you put them in your project account, you spend 24 it just as you would a normal bond issue. When I first 25 started in this business about 32 years ago, there were some 2-24-14 132 1 communities that, if they didn't put a tax behind it, there 2 was a very cumbersome procedure where you literally issued 3 C.O.'s and they were -- a certificate was issued in the name 4 of a vendor, and then the vendor had to turn that in to a 5 bank that had agreed to pay all those C.O.'s, and et cetera. 6 It's a very, very cumbersome process. So, you will see 7 certificates of obligation issued that will always have a -- 8 a tax pledge to it. There's a minor nuance for counties. If 9 this was just for a county building, then you wouldn't have 10 to attach any kind of a revenue pledge, but you have other 11 things, that kind of takes it outside of that. So, -- 12 COMMISSIONER MOSER: I see. 13 MR. SPURGEON: -- you're doing a pledge of your 14 park system. And the other thing that's a little unusual 15 about counties is that you don't have a lot of revenue 16 sources that you -- you have -- or that the law allows you to 17 pledge, further debts. And so what we're doing here -- and 18 we worked with Jeannie, and there was -- I guess the first 19 time we did this was maybe a couple years ago, and you have 20 some relatively minor revenues. But as long as we attach 21 some sort of revenue pledge. Doesn't mean you're going to 22 use those revenues for this purpose. We're just doing this 23 to satisfy a particular provision of the law so that you can 24 sell the C.O.'s for cash and put them in your project 25 account. 2-24-14 133 1 COMMISSIONER MOSER: Okay. So, that's just 2 pledging -- pledging the park property? 3 MR. SPURGEON: It's not even property. It's -- 4 it's really just revenues themselves. 5 COMMISSIONER MOSER: Okay, got you. 6 MR. SPURGEON: And just to be even kind of crazier, 7 sometimes the Attorney General doesn't necessarily look to 8 see whether or not you have any sort of positive revenues. 9 We've sometimes pledged revenue systems where there are not 10 positive revenues. That operation -- 11 COMMISSIONER MOSER: Okay. 12 MR. SPURGEON: -- kind of eats up more than the 13 revenues. 14 COMMISSIONER MOSER: Thank you. 15 MR. SPURGEON: You bet. 16 COMMISSIONER MOSER: Thank you. 17 COMMISSIONER BALDWIN: Any further discussion? 18 Anything from the audience? 19 COMMISSIONER LETZ: Is this a record vote? Or a -- 20 just a raise-your-hand vote? 21 MR. SPURGEON: It does need to be on record, so we 22 need to know at least three members of the Court voted for 23 it. 24 COMMISSIONER BALDWIN: Okay. All right. So, yes, 25 we need a record vote. 2-24-14 134 1 MR. SPURGEON: A record vote. Yes, please. 2 COMMISSIONER BALDWIN: So, I'll start. 3 Commissioner 1 votes aye. 4 COMMISSIONER MOSER: Commissioner 2 votes no. 5 COMMISSIONER LETZ: Commissioner 3 votes aye. 6 COMMISSIONER OEHLER: Commissioner 4 votes aye. 7 COMMISSIONER BALDWIN: So, there's three votes to 8 one vote no, and the motion carries. 9 MR. SPURGEON: Okay. 10 COMMISSIONER BALDWIN: I have a question for you 11 guys. Mr. Spurgeon and Dusty and your -- Mr. Henderson and 12 your companies, how long have y'all been doing business with 13 this county? 14 MR. TRAYLOR: I think at least 20 years, if not 15 longer. 16 COMMISSIONER BALDWIN: I agree. Somewhere around 17 Noah's Ark. 18 COMMISSIONER OEHLER: Somewhere around then. 19 MR. SPURGEON: My recollection is late '80's for 20 me. I can't remember who the County Judge was at the time, 21 but I remember a transaction; I want to say it was '88 or 22 '89, something to that effect, I believe. 23 COMMISSIONER BALDWIN: I just wanted to talk about 24 that for a second. There's folks that think we're all 25 brand-new at this thing, and it's how we go about doing it. 2-24-14 135 1 COMMISSIONER LETZ: Thank y'all very much. 2 COMMISSIONER MOSER: Thank you. 3 MR. TRAYLOR: Thank y'all. 4 COMMISSIONER OEHLER: Great interest rate. I like 5 the 2.144 two years ago. 6 MR. TRAYLOR: I think it may have been. Think it 7 may have been. 8 COMMISSIONER OEHLER: We were expecting -- had this 9 rating been left alone, -- 10 MR. TRAYLOR: Yeah. 11 COMMISSIONER OEHLER: -- we would probably be 12 paying another percent. 13 MR. TRAYLOR: You would have paid more. You would 14 have paid more. 15 COMMISSIONER OEHLER: I believe that your estimate 16 when we started this was 4.2 percent. 17 MR. TRAYLOR: Correct. Correct, yeah. I mean, it 18 -- the rating made -- absolutely made a difference. And the 19 reduction in the term from 20 years down to 14 years, that's 20 also made a difference. 21 COMMISSIONER OEHLER: Finally, we get to this point 22 to where we can move forward and get it done. 23 MR. TRAYLOR: 10-4. 24 COMMISSIONER OEHLER: Long overdue. 25 COMMISSIONER BALDWIN: Is there anything else to 2-24-14 136 1 come before the Court on this day? Anything from anybody in 2 the audience? We're adjourned. 3 (Commissioners Court adjourned at 2:25 p.m.) 4 - - - - - - - - - - 5 6 7 STATE OF TEXAS | 8 COUNTY OF KERR | 9 The above and foregoing is a true and complete 10 transcription of my stenotype notes taken in my capacity as 11 official reporter for the Commissioners Court of Kerr County, 12 Texas, at the time and place heretofore set forth. 13 DATED at Kerrville, Texas, this 28th day of February, 14 2014. 15 16 JANNETT PIEPER, Kerr County Clerk 17 BY: _________________________________ Kathy Banik, Deputy County Clerk 18 Certified Shorthand Reporter 19 20 21 22 23 24 25 2-24-14