1 2 3 4 5 6 7 8 KERR COUNTY COMMISSIONERS COURT 9 Special Session 10 Monday, June 30, 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: TOM POLLARD, Kerr County Judge H. A. "BUSTER" BALDWIN, Commissioner Pct. 1 24 TOM MOSER, Commissioner Pct. 2 JONATHAN LETZ, Commissioner Pct. 3 25 BOB REEVES, Commissioner Pct. 4 2 1 I N D E X June 30, 2014 2 PAGE 3 1.1 Consider/discuss, take appropriate action on Change Order 1 for Hill Country Youth Event 4 Center 3 5 1.2 Consider/discuss, take appropriate action on Change Order 2 and establish policy for handling 6 such orders in the future at the Hill Country Youth Event Center 9 7 1.3 Discuss impact on county budget process as a 8 result of the City of Kerrville’s protest of commercial properties 22 9 --- Adjourned 32 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3 1 On Monday, June 30, 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 JUDGE POLLARD: Okay, looks to me like it's 9 a.m. 8 I'm going to declare the Commissioners Court agenda in 9 session on June 30th, 2014, at 9 a.m. The first item -- 10 let's see, we don't have any public stuff here today, huh? 11 COMMISSIONER LETZ: No. 12 JUDGE POLLARD: Does anybody want to make a 13 comment? We'll allow them anyway. Anybody? All right, 14 there being nobody, we'll go to Item Number 1.1 -- oh, we got 15 to do the prayer and the pledge. 16 (Prayer and pledge of allegiance.) 17 JUDGE POLLARD: All right. Number 1.1 on the 18 agenda; consider, discuss, and take appropriate action on 19 Change Order 1 for the Hill Country Youth Event Center. 20 Commissioner Reeves, Precinct 4, and Commissioner Letz, 21 Precinct 3. 22 COMMISSIONER REEVES: Commissioner Letz and I have 23 been working with Huser Construction, along with 24 Mr. Hastings, on some problems with the sewer lines which 25 have been uncovered. It kind of involves a 30-year-old 6-30-14 4 1 building, a 70-year-old building, and all of the attachments 2 that they may have. I'll probably let Mr. Hastings kind of 3 bring us up to date on what he's got, and the exhibit he's 4 come up with. 5 MR. HASTINGS: Yes, sir. 6 COMMISSIONER LETZ: We got it. 7 MR. HASTINGS: Everyone has this exhibit? Okay. 8 I'm going to hold it with north orientation up. On the 9 northeast side, the face -- the front of the building, we 10 have a sewer line that was intended that, as this new 11 structure goes in, that all of the plumbing go out to that 12 sewer line to the north -- northeast side. It's too shallow. 13 It's too shallow. There's a significant addition of 14 restrooms, and because of that, the sewer line has to be 15 deeper in order -- 16 JUDGE POLLARD: Why is that? For gravity flow? 17 MR. HASTINGS: For gravity flow, to continue to 18 have gravity flow. So, one way to fix it under the slab -- 19 and Change Order Number 1 is all about fixing everything 20 under the slab -- is to have that sewer stay under the slab, 21 come down to the southeast corner of the building, where -- 22 for future concessions, so that you can have a concession 23 stand there, so that you can -- you can have some kind of a 24 kitchen area, catering -- we call it "catering," and then 25 follow that building line in a northwesterly direction until 6-30-14 5 1 it exits the building. That's what Change Order Number 1 2 does; it fixes that. It's all plumbing that is under the 3 slab. 4 COMMISSIONER LETZ: One of the things also that is 5 causing the depth issue is that there's so many toilets in 6 the new restrooms, and you have to kind of stack things to 7 get them -- and they're also all so close together, to get 8 them to -- all to go down to a certain depth, you start out a 9 lot deeper, and that's where it hits a problem. And there's 10 also a lot involved in the old line. 11 COMMISSIONER MOSER: So this is just not knowing 12 where the old line was and the depth of it? 13 COMMISSIONER LETZ: We never spent the money to run 14 cameras through the lines and all that ahead of time. We 15 knew there was a line there and it was working. It was a 16 4-inch line, which the size -- the diameter of it was 17 sufficient, but it was a matter of -- after they did the -- 18 ran the camera through it, the plumbing company, Hardin 19 Plumbing, was actually amazed that it was working. 20 COMMISSIONER MOSER: Oh, I see. 21 COMMISSIONER LETZ: They said that it was so flat 22 in places that it -- you know, if we had had a whole lot of 23 volume, it wouldn't have -- may have started backing up even 24 the way it was. So, it just wasn't going to carry the load. 25 COMMISSIONER MOSER: Is the new line going to be 6-30-14 6 1 6-inch or 4-inch? 2 MR. HASTINGS: The new line under the slab is going 3 to be 4-inch, and it continued -- it can continue to be 4 4-inch. We called the engineer who designed it out of San 5 Antonio and said, "Are you sure? I mean, now's our chance to 6 go to 6-inch under the slab." And he said, "I'm very 7 comfortable with 4-inch, because my new design has it at a 8 very steep grade." 9 COMMISSIONER MOSER: Sure seems small, doesn't it? 10 MR. HASTINGS: It does seem small. 11 COMMISSIONER MOSER: How many -- especially with 12 how many toilets or whatever. 13 COMMISSIONER LETZ: Well, only half the toilets 14 would go into -- I mean, the other part goes into -- 15 MR. HASTINGS: The toilets -- 16 JUDGE POLLARD: Do you have any estimate of what it 17 would cost to go to -- additional cost to go 6-inch line? 18 COMMISSIONER LETZ: At this point, it's not a good 19 idea to change it. 20 COMMISSIONER MOSER: Is that right? 21 MR. HASTINGS: It's not; 4-inch is fine. But we do 22 have a proposal for 6-inch, and that's what Change Order 2 23 is, to have 6-inch out here in the parking lot. 24 COMMISSIONER LETZ: See, there's bathrooms here on 25 this edge. Those go straight out. 6-30-14 7 1 COMMISSIONER MOSER: Right. 2 COMMISSIONER LETZ: And then the other bathrooms 3 are here, and it goes down and out, so it's not all going 4 into one 4-inch line. 5 COMMISSIONER MOSER: Yeah, I see what you're 6 saying. Okay. 7 COMMISSIONER REEVES: Then the bathrooms in the 8 Show Barn that were completed a couple years ago go another 9 way. 10 COMMISSIONER MOSER: Different way. So, it's just 11 a few that go into the 4-inch line? 12 COMMISSIONER LETZ: Right, it's divided. 13 Everything's not going into one 4-inch line. 14 COMMISSIONER MOSER: Okay, got you. 15 MR. HASTINGS: At the end of the day, you're going 16 to have three -- we'll call it three sets of bathrooms. A 17 set -- two sets that are inside the new building that's being 18 constructed, both of those 4-inch going to a 6. 19 COMMISSIONER MOSER: Yeah. 20 MR. HASTINGS: And then in the existing Show Barn, 21 you have 4-inch going also to a 6. 22 COMMISSIONER MOSER: Okay, got you. Thank you. 23 COMMISSIONER LETZ: And the cost of this is an 24 additional $18,990. 25 COMMISSIONER MOSER: Good gracious. 6-30-14 8 1 COMMISSIONER LETZ: It's a -- 2 JUDGE POLLARD: Lots of ditching. 3 COMMISSIONER LETZ: It's just a lot of extra work. 4 The original -- and the reason it's so much -- and there's a 5 credit that we get part of that back on the next change 6 order. The County was going to -- and still is responsible 7 for all the ditching outside the building, so we were going 8 to pay for the work -- any work that was done on the outside 9 already. But now it's all under the slab, so it added a 10 whole lot of ditching. And the depth is -- it gets pretty 11 deep, too. Anyway, that's just the amount. And I'll make a 12 motion -- 13 JUDGE POLLARD: Money's available? 14 COMMISSIONER LETZ: It will -- well, yeah, it comes 15 out of the bond. It'll -- I mean, the -- you know, there's 16 really not a contingency. There's 150,000 set aside for the 17 arena, and whenever we spend more money, that's where it 18 comes from at this point. I mean, that would be my 19 recommendation. There's also additional, I mean, possible 20 funding in the parks and in the fire station, I think, but I 21 don't think we need to take those. I think this stays with 22 the -- you know, there's money for that facility, and it's 23 going with that. 24 COMMISSIONER MOSER: Okay. 25 COMMISSIONER LETZ: I'll make a motion that we 6-30-14 9 1 approve Change Order 1 in the amount of $18,990. 2 COMMISSIONER REEVES: I'll second. 3 JUDGE POLLARD: It's been moved and seconded that 4 Change Order Number 1 be approved. Any further discussion? 5 If not, those in favor, signify by raising your right hand. 6 (The motion carried by unanimous vote, 4-0.) 7 JUDGE POLLARD: It is 4-0, unanimous. All right, 8 we'll go to Item Number 1.2 on the agenda; consider, discuss, 9 and take appropriate action on Change Order 2 and to 10 establish a policy for handling such orders in the future at 11 the Hill Country Youth Event Center. Same two Commissioners. 12 COMMISSIONER REEVES: Want to take this one, 13 Jonathan? 14 COMMISSIONER LETZ: Yeah, I'll take it. Well, the 15 first part I'm going to give to Charlie, 'cause he can 16 explain what's going on outside the building. This one's 17 nicer, 'cause we have a credit on this change order. 18 Charlie, can you explain how we're doing all the 6-inch 19 outside now? 20 MR. HASTINGS: Yes, sir. Again, if you'll look at 21 the exhibit that I prepared for you, we focused -- on Change 22 Order 1, I focused on the northeast side of the building. 23 Now we're going to look at the northwest side of the 24 building. There's an existing 4-inch line that goes 25 underneath the power transformer, and -- and that is how 6-30-14 10 1 the -- the Ag Extension office is connected, and how the old 2 Youth Exhibit Center was connected. It was all going through 3 that 4-inch line. Well, this section right here adjacent to 4 the Show Barn is very flat. We've confirmed the elevations. 5 It's too flat for the additional flow, so we're not able to 6 utilize that. Plus it's going underneath the transformer, so 7 there was some issues anyway that we had some concerns -- 8 some safety issues, especially with the installation of it. 9 So, to solve that, we come back here to Riverside 10 Drive, where we're connected already to the city sewer, and 11 extend a 6-inch line up here to the northwest corner of the 12 proposed exhibit center that's under construction. One of 13 the things that -- that is beneficial for having a 6-inch 14 line there is that you can expand in the future. Now, River 15 Star is already connected down here to a 6-inch. It's 16 six that comes off of the city main out for a distance of 17 about 20 or 30 feet. It's all 6-inch right there, so we 18 would just be extending that 6 through our parking lot. And 19 here's an added benefit. If you would like to, sometime in 20 the future in this parking lot, have people have the ability 21 to tie their RV's onto sewer, maybe you've got some spots 22 where they can -- where, when we have these extended shows 23 and people need to be able to flush toilets and stuff, you 24 could tap into that 6-inch without any fear of overflowing 25 the line from everything that's connected to it now. So, 6-30-14 11 1 there's an added benefit, and the cost is very minimal. 2 In fact, because Change Order Number 2 is removing 3 130 feet of water line -- the reason it's being removed is 4 that we've discovered the exact location of where it is in 5 relation to the corner of the building. We originally 6 thought that it was going to be right in line with one of the 7 piers on the corners. It's not; it's about 6 feet away. And 8 Jim Maxwell, Maxwell Engineering, our engineer who put some 9 of these plans together, with Peter Lewis, contacted the City 10 of Kerrville and asked if -- if they would have -- if it 11 would be okay, if it would be reasonable and prudent for us 12 to have our easement go around the corner of that building, 13 and if 6 feet would be enough for them to still work on their 14 water main. They said yes. So, we just got rid of 130 feet 15 of water main, and it's a significant cost savings to us. 16 There would be about a $5,000 net change with Change Order 2, 17 deduct out of the -- out of the whole contract. 18 COMMISSIONER MOSER: How did you get from water 19 line to sewer line? You were talking 6-inch up to there, and 20 then all of a sudden you were talking about the water line. 21 MR. HASTINGS: There's also -- part of the 22 construction plans -- and not on this exhibit, because this 23 exhibit is all about sewer. But part of the construction 24 plans was to relocate an existing 8-inch water main. 25 COMMISSIONER MOSER: Oh, I see. That was part of 6-30-14 12 1 the plan? 2 MR. HASTINGS: That is part of the plan. 3 COMMISSIONER MOSER: I see, okay. 4 COMMISSIONER LETZ: It's the fire line. It's the 5 fire feed line. 6 COMMISSIONER MOSER: That we just put in last year 7 or so? 8 COMMISSIONER LETZ: Right. 9 COMMISSIONER MOSER: Yeah. 10 COMMISSIONER LETZ: Yeah. And then we thought it 11 was too close, but as it turns out -- and it was the plan 12 that we move it slightly, but as it turns out -- and that was 13 in the budget to move it, and then we -- 14 COMMISSIONER MOSER: Okay. 15 COMMISSIONER LETZ: Turns out we did not need to 16 move it. The City was working with us, or worked with 17 Charlie. 18 MR. HASTINGS: That would be -- the summary, what 19 you're doing with Change Order Number 2 is you're removing 20 130 linear feet of water main from the contract. You're 21 removing some 4-inch sewer line and replacing it with 6-inch 22 sewer line. Overall, the net effect of doing that is -- is a 23 deduct to the contract -- 24 COMMISSIONER MOSER: I see. 25 MR. HASTINGS: -- of about 5,000. 6-30-14 13 1 COMMISSIONER LETZ: 4,834. $4,834 deduct. I'll 2 make a motion that we approve Change Order 2, which we'll 3 have a deduct of $4,834. 4 COMMISSIONER REEVES: I'll second. 5 JUDGE POLLARD: Been moved and seconded that the 6 Change Order Number 2 be approved. Is there any further 7 discussion? You sure are quiet down there, Commissioner 8 Baldwin. 9 COMMISSIONER BALDWIN: Yes, sir. I'm watching. 10 JUDGE POLLARD: Okay. Hard weekend, huh? All 11 right, there being no further discussion, then those in 12 favor, signify by raising your right hand. 13 (The motion carried by unanimous vote, 4-0.) 14 JUDGE POLLARD: It is 4-0, unanimous. 15 COMMISSIONER LETZ: Judge, there's another portion 16 of this, which was establish a policy for handling such 17 orders in the future. The reason we put this on there is 18 that this was a -- a very -- there was no one that could 19 approve doing this work, and they really needed approval last 20 week. 21 JUDGE POLLARD: Cumbersome and slow. 22 COMMISSIONER LETZ: And so -- and I normally don't 23 have a problem, and it needs to come to the Court, but I just 24 put it on the agenda because it was a difficulty. They did 25 stop work for four or five days out there because they just 6-30-14 14 1 had to -- you know, they couldn't -- didn't want to act. 2 They finally were persuaded to continue going on through and 3 doing the ditching, on the assurance from Bob and I and 4 Charlie's recommendation that, you know, it's something that 5 we really had to do. We were hoping the Court would approve 6 doing them, but -- yeah. Otherwise -- and the alternative, 7 we told them, we said, "If the Court doesn't approve the 8 change order, we're going to have to deduct something out of 9 the building." Because, I mean, we can't -- the two of us 10 have no authority; neither does Charlie, to spend any 11 additional funds. Do we want to -- and the reason it's on 12 here, do we want to give Charlie any authority on change 13 orders up to a certain amount, to keep the -- the building on 14 schedule? 15 JUDGE POLLARD: Can we delegate that? 16 MS. STEBBINS: I believe you can delegate that. 17 COMMISSIONER BALDWIN: It's just, if we're spending 18 -- if we're changing the money from -- to more money, is 19 that -- is that the area you're talking about, up to a 20 certain amount? Or -- 21 COMMISSIONER LETZ: It's either up or -- even if 22 there's a deduct, we don't have authority to approve them 23 right now, so they have to come to Court. So -- 24 COMMISSIONER BALDWIN: Well, see, I don't have a 25 problem with deduct. I have a problem with spending more 6-30-14 15 1 than what we'd originally agreed to. 2 COMMISSIONER LETZ: Right. 3 COMMISSIONER BALDWIN: And I'd -- I don't have a 4 problem with that, as long as we're notified in a proper way. 5 COMMISSIONER LETZ: Right. 6 COMMISSIONER BALDWIN: You know, I just -- you 7 know, the whole reason, in my mind, for this body to be here 8 today is information purposes, for all of us to have the same 9 -- we're all riding the same horse. 10 COMMISSIONER LETZ: Right. Well, I think, 11 clearly -- and it's -- Charlie's going -- 12 COMMISSIONER BALDWIN: Big horse. 13 COMMISSIONER LETZ: Bob and I are involved because 14 we get more day-to-day out there. I don't really know that 15 it's necessary, because I don't know that we're going to have 16 a rush like this again. 17 COMMISSIONER REEVES: I think once -- 18 COMMISSIONER LETZ: I mean, there won't be one. 19 COMMISSIONER REEVES: I think once the site work is 20 done, if there's a change order that jumps out, at least they 21 can move over to work -- once the building's going up -- 22 COMMISSIONER BALDWIN: Be doing something else. 23 COMMISSIONER REEVES: But this -- I mean, it 24 stopped it in the tracks. 25 COMMISSIONER BALDWIN: And so we had to wait 72 6-30-14 16 1 hours? Is that what it was? Or -- 'cause it's definitely 2 not an emergency kind of thing. Is that what we're dealing 3 with? 4 COMMISSIONER REEVES: And it stopped it in the 5 tracks, and as Jonathan said, they just said they're going to 6 remobilize and charge us extra, and we finally convinced them 7 not to do that. But once the building -- I think once the 8 slab's in and some of the -- the other items are done, we 9 won't be faced with this case. They can move -- "Well, we'll 10 go work on this till we get a change order." But, you know, 11 it literally stopped the project. 12 COMMISSIONER MOSER: I'll make a suggestion. I 13 like the idea of just, you know, not having to come to court 14 to do this for some -- some amount, but I think we need to 15 identify what our contingency fund is to be tapped for doing 16 these kinds of changes. We ought to authorize Charlie to do 17 it, and then what each one of those authorizations would be, 18 but I think we need to identify what that contingency -- 19 total contingency money would be available. 20 COMMISSIONER LETZ: I think the -- I mean, in my 21 mind, it's zero. I mean, in reality, there's money in the 22 arena, and we know we're going to have change orders. 23 COMMISSIONER MOSER: Well, let's identify some 24 contingencies. 25 COMMISSIONER LETZ: I'd say -- 6-30-14 17 1 JUDGE POLLARD: I'm not sure we even need to do 2 this now in view of what you're talking about, since once 3 they get into the building they can just work on some other 4 part of it. I don't think we need it -- this process. 5 COMMISSIONER BALDWIN: That's what I'm hearing, but 6 I'm not sure I'm hearing the right thing. 7 COMMISSIONER LETZ: You are. I mean, that's true. 8 It's just a matter of whether we wanted to keep things, you 9 know, moving on schedule. We want to make sure we don't have 10 a scheduling problem, 'cause we're under a very tight 11 schedule. 12 COMMISSIONER REEVES: I think the next month is the 13 most critical one till the slab, and that's the most critical 14 point right now. 15 MS. STEBBINS: I can make a suggestion, maybe tying 16 it to something that would stop the work like this. Tying 17 your policy -- 18 COMMISSIONER MOSER: Long as we know what the funds 19 are. 20 COMMISSIONER LETZ: Right. 21 COMMISSIONER MOSER: I just want to put a cap on 22 the -- 23 MS. STEBBINS: Yes. 24 COMMISSIONER MOSER: I want to identify some 25 contingencies. 6-30-14 18 1 COMMISSIONER LETZ: I would think -- I mean, my 2 view would be, you know, if there's -- the change order is 3 less than $1,000, to give Charlie authority -- or to deduct, 4 to give Charlie authority to approve it, but he has to bring 5 it to the Court for approval. He is going to approve it 6 on-site. 7 COMMISSIONER MOSER: Yeah. 8 COMMISSIONER LETZ: And with a maximum for the 9 project of $10,000. 10 COMMISSIONER MOSER: That's -- I'll go with that. 11 That's good. That's good. 12 JUDGE POLLARD: And this is all connected to and 13 attached to the Ag Barn project? 14 COMMISSIONER LETZ: Right. And the money would -- 15 JUDGE POLLARD: Not a continuing thing. It's not 16 -- doesn't extend to other projects. Let's go with that. 17 COMMISSIONER BALDWIN: And eventually, the -- 18 COMMISSIONER LETZ: No, it comes to the Court at 19 our next -- 20 COMMISSIONER BALDWIN: The very next meeting? 21 COMMISSIONER LETZ: Next meeting. 22 COMMISSIONER BALDWIN: Second. 23 COMMISSIONER MOSER: Motion? Okay. So, 1,000 -- 24 $1,000 approved change orders, up to a maximum of $10,000 -- 25 COMMISSIONER LETZ: Total. 6-30-14 19 1 COMMISSIONER MOSER: -- for the Hill Country -- for 2 the Exhibit Hall project? 3 COMMISSIONER LETZ: Right. 4 COMMISSIONER BALDWIN: Are you okay with that? 5 MR. HASTINGS: Could I get some clarification? 6 COMMISSIONER BALDWIN: We just fired you. 7 (Laughter.) 8 MR. BOLLIER: Wake up, Charlie. Wake up. 9 JUDGE POLLARD: Good haircut, Charlie. 10 MR. HASTINGS: Thank you. 11 COMMISSIONER BALDWIN: No kidding. 12 MR. HASTINGS: I just want to clarify that we're -- 13 the proposal is to give me the authority to work on change 14 orders with the contractor to an amount not to exceed? 15 COMMISSIONER LETZ: Not to exceed $1,000 on a 16 specific change order, with a maximum of 10,000 for the 17 project. 18 MR. HASTINGS: A maximum of 10. 19 JUDGE POLLARD: You can have ten $1,000 change 20 orders. 21 MR. HASTINGS: Yes, sir. And if it exceeds that, I 22 have to come to Commissioners Court? Or if it costs more 23 than a -- than zero dollars, I have to come -- 24 COMMISSIONER LETZ: They all have to come to 25 Commissioners Court. 6-30-14 20 1 MR. HASTINGS: They all have to come. What if it's 2 a deduct? 3 COMMISSIONER LETZ: Still has to come to 4 Commissioners Court. 5 MR. HASTINGS: Still has to come. 6 COMMISSIONER LETZ: All of them have to come to 7 court, but if it's $1,000 -- within the parameters of $1,000 8 and $10,000 maximum, and/or deducts, it can wait until our 9 next regularly scheduled meeting. If it's more than that, 10 you need to -- Bob and I will decide whether we need to call 11 a special meeting or not. 12 MR. HASTINGS: Yes, sir. All this is in an effort 13 to not slow down the progress, because we're on a very, very 14 tight schedule between now and having it open in January. 15 COMMISSIONER LETZ: Correct. 16 MR. HASTINGS: Understood. 17 COMMISSIONER BALDWIN: And the reason -- in my 18 mind, the reason that we bring it back to the Court to -- and 19 to have this discussion, just like we're having it right now, 20 is for the record. So many times we do things, and two years 21 down the road we forget who each other are, much less what we 22 did last May. And we always have it in the record. It's 23 just better to do all of these things in the record, so we -- 24 for future purposes, for history. 25 MR. HASTINGS: Yes, sir. 6-30-14 21 1 COMMISSIONER BALDWIN: So that's the reason I like 2 coming -- bringing it back -- everything back. Plus, all 3 five of us need to know exactly what's going on out there all 4 the time. What was your name again? No. (Laughter.) Okay. 5 JUDGE POLLARD: Okay. It's been moved and seconded 6 that Change Order Number -- no, that this procedure be 7 approved with all of the conditions that we talked about. 8 Let's see, up to $1,000 per change order, with a maximum of 9 $10,000 for the Ag Barn project. Was there another 10 condition? 11 COMMISSIONER MOSER: Exhibit Hall. 12 JUDGE POLLARD: Yeah, Exhibit Hall. And were there 13 any other conditions on it? 14 MR. HASTINGS: I have a question. I have in my 15 hands right now a certificate for payment. Does this also 16 authorize me to -- to sign for payment? Or does that need to 17 go somewhere else? This is a regular payment. 18 COMMISSIONER LETZ: Come back to Bob or I, I guess. 19 The Court usually approves those things. 20 JUDGE POLLARD: Mm-hmm. 21 MR. HASTINGS: Thank you. 22 COMMISSIONER LETZ: But we only approve them after 23 the Court votes on them. All right. 24 JUDGE POLLARD: All right. I'm not going to try to 25 repeat that. 6-30-14 22 1 COMMISSIONER MOSER: All in favor? 2 JUDGE POLLARD: All in favor, signify by raising 3 your right hand. 4 (The motion carried by unanimous vote, 4-0.) 5 JUDGE POLLARD: It's 4-0, unanimous. Okay, I think 6 that's the end of the agenda, unless anybody has any other 7 comments. 8 COMMISSIONER MOSER: I've got a Number 1.3. 9 JUDGE POLLARD: Oh, okay. Discuss impact on county 10 budget process as a result of City of Kerrville's protest of 11 commercial properties. 12 COMMISSIONER LETZ: I put this on the agenda 13 partially because of what I read in the paper and partially 14 after talking with Ms. Hargis, "Fourth" Coates, and a little 15 bit with Diane. And I just want to make sure the whole Court 16 is aware of the impact this -- that process may have. It's 17 not -- I'm not trying to, you know, say it's good or bad, 18 indifferent, what the City's done, but it may have an impact 19 on it, and it could be pretty significant. So, Diane or 20 Jeannie can -- who's best -- who wants to -- 21 JUDGE POLLARD: Tell us how it will have an impact. 22 MS. BOLIN: Well, it will have an impact. July 23 11th, the Appraisal Review Board is going to meet with the 24 City and all the people that are involved with the downtown 25 area. If they determine that it does need to be reappraised, 6-30-14 23 1 it could push us out at least three months, according to 2 Fourth. It will take at least that long for them to -- to do 3 reappraisals. He has to approve 95 percent of the roll at 4 certification, and the commercial properties within the city 5 of Kerrville take up 9 percent of the roll, so it's going to 6 affect the whole county, not just -- not just us. 7 JUDGE POLLARD: Did you say 9 percent? 8 MS. BOLIN: 9 percent. 9 JUDGE POLLARD: 9 percent. 10 MS. BOLIN: Mm-hmm. It'll affect Center Point, 11 Ingram, Hunt, Divide. It's going to affect everybody. 12 COMMISSIONER MOSER: What's the magnitude of the 13 potential change in the appraised value? 14 MS. BOLIN: That I don't know. 15 COMMISSIONER LETZ: If they -- I can answer part of 16 that. I think if they -- the City doesn't reappraise 17 everything all at once, they've done part of it. If they 18 have to do the reappraisal, they have to -- they'll 19 reappraise the commercial properties in the county, and some 20 people's may go up; some may go down. 21 COMMISSIONER MOSER: So what would it mean, though? 22 They have an appraised amount now, right? And if -- what do 23 we have to do, go back to the previous year? If it's -- 24 COMMISSIONER LETZ: Well, they'll reappraise it -- 25 no, they'll -- 'cause they'll come in and reappraise all the 6-30-14 24 1 property. 2 COMMISSIONER MOSER: So it will just be -- we don't 3 know what it is. 4 COMMISSIONER LETZ: We don't know what it will be. 5 JUDGE POLLARD: Diane, if the City does extend it 6 out for a period of three months, how does that affect -- and 7 how does it affect -- 8 MS. BOLIN: It affects the whole budget process, 9 because you can't approve the budget without a tax rate, and 10 we can't do the tax rate without a certified roll. So, it's 11 a potential that we won't even begin getting money in until 12 November-December, depending on what the Appraisal Review 13 Board determines to do on July the 11th. 14 COMMISSIONER LETZ: So, when you say it will affect 15 when we get money in, so the impact -- if we're that delayed, 16 so you're late sending out the tax notices? 17 MS. BOLIN: Correct. 18 COMMISSIONER LETZ: And so we won't be getting our 19 money when we normally get it. 20 MS. BOLIN: No. 21 MR. HASTINGS: And if it gets to the -- worst case, 22 when we -- our reserves are pretty strong right now, so it 23 shouldn't be a problem. Maybe -- she's looking at me 24 differently. You may have to borrow money, short term, to -- 25 MS. BOLIN: Correct. 6-30-14 25 1 JUDGE POLLARD: -- make ends meet? 2 MS. BOLIN: Yeah. Usually the statements are out 3 by the 15th of October, so money starts coming in by the -- 4 by the end of October. And then the large part comes in in 5 November because of the half payments that people agree to 6 do. If it pushes it back to not being able to send out till 7 November, you won't start getting anything until the end of 8 November. You won't get anything at all in October. 9 COMMISSIONER MOSER: So that's a cash flow thing, 10 so my question is a budget thing, so let me ask my question. 11 So, in the budget, Jeannie, we use what the Appraisal 12 District has on the books right now? 13 MS. HARGIS: I don't know the answer to that. 14 COMMISSIONER MOSER: Huh? 15 MS. HARGIS: I don't know the answer to that. 16 COMMISSIONER MOSER: What did you use in the 17 budget? 18 MS. HARGIS: Well, I'm not sure we can even approve 19 the budget. So I -- 20 COMMISSIONER MOSER: No, I'm just saying in your 21 calculations, you used something for appraised value. 22 MS. HARGIS: Yes. 23 MS. BOLIN: The preliminary. 24 COMMISSIONER MOSER: So was that amount that you 25 used the amount that's in contention by the City? 6-30-14 26 1 MS. BOLIN: It's part of it. 2 MS. HARGIS: No, I don't know -- what we get in the 3 preliminary roll doesn't break that out. To me, anyway. 4 COMMISSIONER MOSER: But you use what the Appraisal 5 District -- 6 MS. HARGIS: I used -- 7 COMMISSIONER MOSER: -- has in the preliminary? 8 MS. HARGIS: I used two-thirds of it. I didn't use 9 all of it. 10 COMMISSIONER MOSER: I see. You assumed there may 11 be some change, so you used two-thirds of it. And if this -- 12 if it gets reduced, then we're going to have to figure out -- 13 and it wouldn't be reduced any more than it was the previous 14 year, surely? 15 MS. HARGIS: Well -- 16 COMMISSIONER REEVES: I disagree with that. It 17 could be. 18 COMMISSIONER MOSER: Could be -- yeah, could be, 19 but probably wouldn't. 20 COMMISSIONER REEVES: Probably wouldn't. But, I 21 mean, -- 22 COMMISSIONER MOSER: Could be. 23 COMMISSIONER REEVES: -- this is a kind of 24 uncharted territory for Fourth, I think, right now. 25 MS. BOLIN: It's uncharted, that's right. I think 6-30-14 27 1 when I talked to the State Comptroller's office last week, 2 they said they've only had three other counties that have 3 ever done this, where someone -- one of the entities has gone 4 forth and said, "We want to have this reappraised because we 5 think it's wrong." So, we're -- 6 COMMISSIONER MOSER: Well, it still seems to me 7 like, from a budget standpoint, we have it bound, okay. And 8 I understand it could change, but by bounding, you're -- you 9 use two-thirds of what they said, okay. 10 COMMISSIONER LETZ: But we can -- 11 COMMISSIONER MOSER: And the -- and we know the 12 bottom side would be the previous year, which would be less 13 than two-thirds what the appraised value is. So, therefore 14 we have a boundary for budgetary purposes. Cash flow is a 15 different thing, but we got the reserve for cash flow. 16 COMMISSIONER LETZ: We have a -- we can do a 17 budget, but the question is, can we approve a budget? And 18 the answer looks like it's no. 19 MS. BOLIN: No. 20 COMMISSIONER LETZ: If you can't approve a budget, 21 you have to revert to the previous year, so that's a huge -- 22 MS. HARGIS: She's looking at the law. 23 COMMISSIONER LETZ: That throws out the entire 24 budget; salary increases, insurance, everything. 25 MS. HARGIS: See, even though I have a budget, 6-30-14 28 1 that's the problem. It says in the Local Government Code 2 that you shall adopt a budget on or before September 30th or 3 as soon thereafter as practical. So that's, generally 4 speaking, about two weeks, is what they usually say is 5 practical. So we would -- I don't know what we would use. 6 Do we -- you know, do we come up with a temporary budget? I 7 don't know the answer to that. 8 MS. BOLIN: And in the Tax Code, it's within 60 9 days of receiving the certified value. 10 COMMISSIONER MOSER: Okay. 11 MS. HARGIS: So, you know, those are answers that 12 we don't have now. Cash flow's going to be a problem. We 13 have -- and I have -- went back to last year, and this is 14 before we had our increases in salaries last year, but we 15 have a two million dollar -- if we have five million, five, 16 which is what I had predicted, and we get in fees that time 17 of the year, sales tax and fees, no more than $750,000 a 18 month, max. So, we have a $2 million outgo in September, a 19 million, two in October, a million, four in November, and 20 then December, a million, seven. That's a total of six 21 million, three. And we have five, so -- 22 COMMISSIONER MOSER: Only have five what? 23 MS. HARGIS: Million, that I know of, to use for 24 cash flow. 25 JUDGE POLLARD: Reserves. 6-30-14 29 1 COMMISSIONER MOSER: In reserve? 2 MS. HARGIS: In reserve. 3 COMMISSIONER MOSER: Got you. 4 MS. HARGIS: So if we have 750 coming in, we will 5 probably, at some point, depending on how close we get -- we 6 have been down -- that one year when we got down to a 7 million, eight, we -- but Diane was able to give me money 8 then on almost on a weekly -- daily basis. She can't do that 9 now, so I don't know. I mean, I think the max we could go 10 would be the end of November. 11 COMMISSIONER LETZ: I think -- and the -- and I 12 talked to Fourth some, and the -- the reason he -- he 13 couldn't come -- I asked if he would come explain it to all 14 of us. He said because of the conflict of interest issue -- 15 he is on the A.R.B. -- that's why he can't come and talk. 16 But, you know, Diane -- he said, "Talk to Diane." There's a 17 -- a likelihood or a chance that the A.R.B. may not do a 18 reappraisal. 19 MS. BOLIN: Right. 20 COMMISSIONER LETZ: If they don't, if they say, 21 "No, we're not going to do a reappraisal," it's not a 22 problem. 23 COMMISSIONER MOSER: We're okay. 24 COMMISSIONER LETZ: We're fine. 25 JUDGE POLLARD: Well, not necessarily; it may go to 6-30-14 30 1 district court then. 2 COMMISSIONER LETZ: Right. But if you -- yeah. 3 JUDGE POLLARD: Then we do have a problem. 4 COMMISSIONER LETZ: Then you have a problem -- 5 another problem. But anyway, -- 6 JUDGE POLLARD: Big problem. 7 COMMISSIONER LETZ: -- I really put this on more as 8 an information -- informational item. We can't really -- we 9 can't do anything; we're not a party to the issues. But on 10 the 11th and at our next Commissioners Court meeting -- and 11 the 11th is the A.R.B. meeting or hearing with the City, so 12 at our next meeting on the 14th, we should know a direction. 13 COMMISSIONER MOSER: Is there anything we should 14 consider -- we can't do it right here, but consider preparing 15 a resolution of some type stating the position of the Court? 16 COMMISSIONER LETZ: That's a -- that's a tough -- 17 COMMISSIONER MOSER: I don't know what that 18 resolution is, but -- 19 COMMISSIONER BALDWIN: I don't know what the 20 position is. 21 COMMISSIONER MOSER: Yeah, right. 22 JUDGE POLLARD: Careful. Careful. 23 COMMISSIONER MOSER: Same thing. 24 JUDGE POLLARD: We're still on the record here. 25 COMMISSIONER MOSER: Yeah. 6-30-14 31 1 COMMISSIONER REEVES: My -- my experience in other 2 A.R.B. hearings, it's a question of facts, and not 3 resolutions. I mean -- 4 COMMISSIONER MOSER: Well, just to have a position. 5 COMMISSIONER REEVES: And that's what the A.R.B.'s 6 going to look at, I mean, the evidence that both sides will 7 present. So -- 8 COMMISSIONER MOSER: The only thing I'm saying is a 9 resolution could be, "The interest of the Court is to have 10 this resolved as soon as possible in light of budgetary and 11 financial management," something. 12 JUDGE POLLARD: Well, you know, every other -- 13 every other entity's got the same problem, including the 14 City. 15 COMMISSIONER MOSER: Right. 16 JUDGE POLLARD: They shot themselves in the foot. 17 COMMISSIONER MOSER: And the school districts. 18 COMMISSIONER LETZ: Anyway, that's all. It was 19 just for informational -- and the article in the paper 20 answered a lot of it and said a lot of the same things. But 21 when I put it on the agenda, the article hadn't been written. 22 JUDGE POLLARD: If there's nothing further, I'll 23 entertain a motion to adjourn. 24 COMMISSIONER REEVES: So moved. 25 COMMISSIONER LETZ: So moved -- second. 6-30-14 32 1 JUDGE POLLARD: Been moved and seconded. Those in 2 favor, signify by raising your right hand. 3 (The motion carried by unanimous vote, 4-0.) 4 JUDGE POLLARD: It's unanimous, we are adjourned. 5 (Commissioners Court adjourned at 9:34 a.m.) 6 - - - - - - - - - - 7 8 STATE OF TEXAS | 9 COUNTY OF KERR | 10 The above and foregoing is a true and complete 11 transcription of my stenotype notes taken in my capacity as 12 official reporter for the Commissioners Court of Kerr County, 13 Texas, at the time and place heretofore set forth. 14 DATED at Kerrville, Texas, this 30th day of June, 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 6-30-14