1 1 2 3 KERR COUNTY COMMISSIONERS' COURT 4 Special Session 5 Thursday, June 6, 2019 6 9:00 a.m. 7 Commissioners' Courtroom 8 Kerr County Courthouse 9 Kerrville, Texas 78028 10 11 12 13 14 15 16 17 18 19 20 21 22 23 PRESENT: ROB KELLY, Kerr County Judge HARLEY BELEW, Commissioner Precinct 1 24 TOM MOSER, Commissioner Precinct 2 JONATHAN LETZ, Commissioner Precinct 3 25 DON HARRIS, Commissioner Precinct 4 2 1 I-N-D-E-X 2 NO. PAGE 3 1.1 Pay the Bills. 3 4 1.5 Court Orders. 3 5 1.6 Consider, discuss and take appropriate 4 action to accept the Annual Financial 6 Report, which includes the Independent Auditor's Report and Audited Financial 7 Statements for the period ending September 30, 2018 as presented by Armstrong, 8 Vaughan & Associates, Inc. 9 1.7 Consider, discuss and take appropriate 31 action to surplus desks and various side 10 desks, and dispose of properly. 11 1.8 Consider, discuss and take appropriate 31 action to approve posting for the IT 12 Director position with the existing job description as revised to date. 13 2.1 Reports from Department Heads; discussions 32 14 related to reports may follow. 15 *** Adjournment. 34 16 *** Reporter's Certificate. 35 17 * * * * * * 18 19 20 21 22 23 24 25 3 1 JUDGE KELLY: It is Thursday, June the 6th, 2 2019, and D-Day by the way, for those of you who don't 3 remember, and the Kerr County Commissioners' Court is 4 now in session. The first item on your agenda is to pay 5 the bills. Joy. 6 MRS. JOHNSON: Good morning. For Kerr 7 County we have $910,147.53. For other funds for the 8 Treasurer to disburse, Adult Probation 717.83. Airport 9 is $568.72. Fund 78, the County Clerk fees, is $138.00. 10 COMMISSIONER MOSER: Move we pay the bills 11 and make disbursements as presented by the Auditor's 12 Office. 13 COMMISSIONER HARRIS: Second. 14 JUDGE KELLY: Okay, been moved by 15 Commissioner Moser, and seconded by Commissioner Harris 16 to approve to pay the bills as presented. Any other 17 discussion? Those in favor raise your hand. Unanimous, 18 four zero. 19 Next item on the agenda budget amendments? 20 MRS. JOHNSON: There are none. 21 JUDGE KELLY: Late bills? 22 MRS. JOHNSON: There are none. 23 JUDGE KELLY: Approve payroll? 24 MRS. JOHNSON: There is none. 25 JUDGE KELLY: Okay, court orders. We're 4 1 moving quick. 2 (Commissioner Letz present.) 3 COMMISSIONER LETZ: Turn off my phone. 4 JUDGE KELLY: We're on court orders. 5 COMMISSIONER LETZ: May 30th. I'll make a 6 motion that we approve the courts orders from the 7 meeting of May 30th as presented. 8 COMMISSIONER BELEW: Second. 9 JUDGE KELLY: Motion's been made by 10 Commissioner Letz, being seconded by Commissioner Belew 11 to approve court orders as presented. Any further 12 discussion? Those in favor raise your hand. Unanimous, 13 five zero. 14 1.6 consider, discuss and take appropriate 15 action to accept the annual financial report, which 16 includes the Independent Auditor's Report and Audited 17 Financial Statement for the period ending September 30, 18 2018 as presented by Armstrong, Vaughan & Associates. 19 MR. ROBLES: Debbie Fraser is our External 20 Auditor with Armstrong, Vaughan & Associates. She's 21 here to present the Audited Financial Statements for 22 17-18. I wanted to make a quick public statement to 23 thank her and her staff for all the hard work they did 24 this year. And for that, I'll turn it over. 25 MS. FRASER: Thank you. This was a 5 1 different audit than we've had prior, with the loss of 2 Brenda; however, I have to say that the Auditor's 3 Department worked really hard while we were here. Every 4 year I tell you, you know, we try not to be invasive, 5 but inevitably we are because we're here for a week and 6 we request a lot of documents. 7 This year there are some issues that 8 occurred mainly because Brenda had always done specific 9 items in the past, and so it was kind of a learning 10 curve to find the information and get into her computer, 11 and those types of things. So it is a little later, two 12 months later, than we generally like to report. 13 So anyway, again, James and Joy and Suprina 14 did a really good job of helping us get that 15 information. I thought I'd go into it in a little more 16 depth because there are a couple new people on the 17 Commissioners' Court. And Mr. Kelly and I -- Judge 18 Kelly and I went over it in pretty, pretty good depth 19 this morning. So if he falls -- 20 JUDGE KELLY: I felt it was pretty good 21 depth. 22 MS. FRASER: If he falls asleep, I'll know 23 why. But anyway, there's two reports. One is for your 24 Federal compliance, and the other is for your Annual 25 Financial Report. The Independent Auditor's Report is 6 1 on page 1, and this basically said after adjustments 2 your financial statements are materially correct and 3 fairly stated, you received an unmodified opinion, which 4 is the best opinion you can get. There are no 5 modifications to the opinion. 6 I do want to point out on page 2, we have an 7 emphasis of matter paragraph, and that is discussing 8 GASB Statement No. 75, which is Governmental Accounting 9 Standards Board Statement 75, and it has to be 10 implemented at the end of your 9-30-2018 year. And that 11 was basically to put your OPEB, or Other Post-Employment 12 Benefits Liabilities on the financial statement. This 13 consisted of retiree insurance; it does not consist of 14 the TCDRS, life insurance, because they had not done the 15 actuarial study for that. So only one county in Texas 16 has that actuarial study completed. And they're going 17 to complete those in the next couple years. 18 So your financial statements are broken down 19 into several parts. At the beginning you have your 20 management discussion analysis. That's right after -- 21 COMMISSIONER MOSER: Would you give us the 22 page you're on? 23 MRS. FRASER: Page 4, sorry. Page 4. And 24 I'm not going to go over that. Generally this section 25 has been written by Brenda. We helped quite a bit in 7 1 this area, but it's from the county's point of view. 2 If you turn to page 15 and 16, this is where 3 the actual financial statement begin. So we have two 4 sets of financial statements in this audit report. 5 There's a full accrual, which are the statement of net 6 position and the statement of activities. 7 And then the modified accrual. And the 8 modified accrual is how you budget typically. The full 9 accrual is really for your lenders. So you started in 10 the full accrual, you'll recognize capital assets, debt, 11 your pension liability, and your net OPEB liability, as 12 well as the 50 percent of your Airport. 13 So if you look at the actual financial 14 statement, the total assets at the end of the year were 15 a hundred point six million. Your deferred outflow of 16 resources consisted of pension-related contributions, 17 and OPEB related contributions, and then some actuarial 18 assumptions. But primarily it your pension related, or 19 your pension TCDRS money that has been contributed from 20 December first, 2018 through September -- I'm sorry, 21 January first, 2018 through September 30th, 2018, 22 because an actuarial study is performed in December -- 23 COMMISSIONER MOSER: Let me ask you a 24 question. On the assets receivables net, 4,600,000, is 25 that anticipated taxes due, or what is that? 8 1 MS. FRASER: That is your taxes due, and it 2 also is court fines that have been -- 3 COMMISSIONER MOSER: So these are actuals. 4 These are things that people knowing they owe us that's 5 not estimation though? 6 MS. FRASER: No, there's no estimation. The 7 estimation though is in the allowance for the actual 8 accounts. 9 COMMISSIONER MOSER: Okay, good. Thank you. 10 MS. FRASER: On page 16 are your 11 liabilities. Your total liabilities that you typically 12 don't see on your modified accrual statement are your 13 non-current liabilities, which consist of the net 14 pension liability, Other Post Employment Benefits 15 liability, and then your debt service. 16 Your deferred inflows of resources are 1.3 17 million, and then your net position at the end of the 18 year were 43.1 million. Of that investment in capital 19 asset is close to 26 million. And that 26 million is 20 derived by taking your capital assets minus any debt 21 that's attributed to those capital assets. 22 COMMISSIONER MOSER: I don't want to take 23 too long, but let me ask you another question back on 24 page 15. Instruction and process 14 million. I would 25 assume that that is -- is that the Center Point 9 1 Wastewater System primarily? 2 MS. FRASER: Yes. 3 COMMISSIONER MOSER: And so if I wanted to 4 look at liabilities with that stuff that we have to pay 5 regarding loans and things, where do I see that? 6 MS. FRASER: The liabilities -- 7 COMMISSIONER MOSER: Probably due in more 8 than one year. 9 MS. FRASER: -- 26 million and the 1.9 10 million. But if we go back to page 42 -- oh, go ahead. 11 COMMISSIONER MOSER: I was going to say, is 12 that included, the things that -- our debt, due in more 13 than one year, the 27 million -- 26,900,000, I would 14 assume that that's probably where that is. 15 MS. FRASER: Yes. 16 COMMISSIONER MOSER: Okay, good. That 17 answers my question. Thank you. 18 MS. FRASER: And there is a breakdown on 19 page 42. 20 COMMISSIONER MOSER: Okay, thank you. 21 Appreciate it. 22 MS. FRASER: And again we talked about 23 hopefully you will be receiving some funds for 24 reimbursement on the Center Point from the users. 25 COMMISSIONER MOSER: Right. 10 1 MS. FRASER: Any other questions on 15 and 2 16? 3 Page 17 is the Statement of Activities. 4 Again, this is on the full accrual method so you will 5 see depreciation in this kind of mixed in with the 6 expenses in this report; whereas, typically you don't 7 see depreciation in your Modified Accrual Statement. 8 Additionally, you won't see the payment for your debt in 9 here, because that shows up as a reduction of your 10 liability on your balance on your statement of financial 11 position. 12 On page 19 and 20, this is your balance 13 sheet. And again, this is the Modified Accrual 14 Statement, and this is how you typically see it 15 budgeted. So in the general fund, you have total assets 16 of 13 million, and almost 9.9 million of that is cash 17 and investments. 18 For Road & Bridge, you had total assets of 19 1.2 million, and that again 992,000 is in your cash and 20 investment. 21 Capital Projects, all of those was in cash 22 and investment, 486,000. Center Point, you have 23 20,515,354, and 3,000,000 inter-government receivables 24 from the State, basically. And then you have restricted 25 cash that is in your escrow fund of 17.3 million. 11 1 In your other non-major governmental funds, 2 and I'm just going to say that this encompasses some of 3 your debt service funds, CHOMP Grants, various other 4 grants, and there is more detail into that concerning 5 these other non-agent governmental funds. So 1.5 6 million of the total assets are for those 7 governmental -- non-major governmental, and of that 1.3 8 million is cash and investments. 9 Page 21 and 22 is an extension of the 10 balance sheet for your liabilities deferred in flows and 11 balances. At the end of the year, you had 17.6 million 12 in total liabilities. Of that, over 16 million of it is 13 attributed to the Center Point Wastewater Fund. And one 14 million 98 is the general fund. 15 If you go down to the very bottom, the 16 second lineup you'll see the total fund balances in each 17 fund. 9,450,000 is the total fund balance in the 18 general fund, but 9.4 million of that is unassigned fund 19 balance, so that's available for you to spend in the 20 next year. And we typically, the GFOA requests that you 21 have three to six months, and we think you have about 22 four and a half, five months of unassigned fund balance 23 in that account. 24 COMMISSIONER MOSER: Does unassigned fund 25 balance mean it's not in the budget? 12 1 MS. FRASER: No, no, no. 2 COMMISSIONER MOSER: It's reserve? 3 MS. FRASER: It's your reserve, yeah. Yeah. 4 Sorry. So that's reserve that you have available to 5 spend next year. 6 COMMISSIONER MOSER: Okay, thank you. 7 MS. FRASER: You actually had a restricted 8 fund balance in the Center Point Fund of 4.2 million. 9 If you look on page 23, this is the reconciliation of 10 the governmental funds to the statement of financial 11 position. And I'll just point out quickly on page 22, 12 if you look at the second lineup, at the very last 13 column, that's the number we start with, 16.4 million, 14 then we add back in the capital assets, the joint 15 venture that you have with the City on the Airport. 16 The next item is deferred revenue, so those 17 are your deferred state court costs and your deferred 18 taxes. And then you have your accrual for compensated 19 absences and bonds, capital leases, we subtract those. 20 And then the next line is the combination of 21 all your OPEB liabilities as well as your pension 22 liabilities, and so we deduct almost 10.8 million for 23 those. And then again, the interest payable. So you 24 end with 43.1 million. And I'm just going to show you 25 where to find that number, it's on page 16, the very 13 1 last number. So that's your statement of net position. 2 And so we just are reconciling the 3 accumulation of those assets, liabilities that aren't 4 recorded in the balance sheet to what's recorded in the 5 statement of financial position. So for instance, if 6 you wanted to add up all the capital assets, they'd 7 equal 54 million and so on and so on. Any questions on 8 that? 9 (Silence.) 10 On page 24, this is the statement of revenue 11 and expenditures and changes in fund balance, and again, 12 this is how you budget, rather than the full accrual 13 basis. The total revenues that you received over the 14 course of the year were 45.3 million. 13.1 million of 15 that is Center Point, and 25.9 was general fund. 16 In the expenditures section, you spent 4.3 17 million in general fund, and Road & Bridge was 3.6 18 million. Capital Projects, you finished up the jail, so 19 that was almost another three million. And then you 20 spent 13.8 million in your Center Point Wastewater Fund, 21 and then 3.3 million in those other non-major funds. 22 So that left you overall with a balance of 23 over, I guess, excess, or deficiency of what you 24 collected over what you spent of almost 2.27 million. 25 I do want to point out that in the capital 14 1 projects, you had bonds for those expenditures, so you 2 expected to eventually come to a negative in that 3 account, as well as your Center Point Wastewater Fund. 4 The general fund was a positive 1.6 million before any 5 transfers. Your Road & Bridge fund was a little 6 underwater 650,000. 7 If you turn to page 26 and you carry forward 8 those numbers, you did issue a capital lease obligation 9 in the general fund, and you transferred out 561,750.00, 10 so that left you with a net change in fund balance of a 11 positive 1.5 million, so you increased your fund balance 12 at the beginning of the year from 7.9 to 9 and a half 13 million approximately. 14 In the Road & Bridge fund, the general fund 15 actually subsidized you about 445,000 that transferred 16 in. And then you issued a capital lease during the 17 course of the year, so you actually had financing 18 sources and uses of a positive of 163,000, which brought 19 you from a negative to a positive of 12,318. So your 20 fund balance last year was 970,000 compared to 983,000 21 this year. 22 In your capital projects fund, you had no 23 other financing sources or uses, but as you expected, 24 you had a negative change in fund balance, and your fund 25 balance at the end of the year is 401,917. 15 1 On Center Point Wastewater, you spent 2 713,524. And the -- you ended the year with fund 3 balance at the end of the year of 4.2. Again, you 4 expect to draw those funds down and see a negative in 5 that, too over the course of the project. 6 Your other major funds, you had a net change 7 of fund balance of 98,000, and that increased your fund 8 balance from about 1.1 million up to 1.2 million. 9 On page 28 -- did you have any questions? 10 Okay. On page 28, this is a reconciliation of the 11 statement of revenues expenditures and changes in fund 12 balance to the statement of activities, and if you'll 13 notice your net change in fund balance, the governmental 14 funds, was a negative two million. And if you flip over 15 to page 27 the last column, third number up, that's your 16 net change in fund balance. And we basically just add 17 and subtract the current activity over the course of the 18 year to get us back to the change in net position for 19 the governmental activity, and you'll see that number on 20 page 24. I'm sorry, wrong wrong page. 18, and it's the 21 fourth line up. So if you ever want to check figures 22 where we're driving these numbers, those are where you 23 look. Any questions on that? 24 (Silence.) 25 MS. FRASER: Page 29, this is your statement 16 1 of fiduciary net position, so basically these are the 2 cash and investments and the liabilities or who they're 3 due to on your agency fund. The monies for instance 4 that you collect on behalf of the County for other 5 cities within your County. There is a breakdown of that 6 fiduciary fund that begins on page 95 and 96, 97 and 98, 7 and I won't go over those. I'll let you look at those 8 at a later time. 9 Those that I think are interesting are on 10 page 37. This is basically Note A-19 where we're 11 telling you that we had to record a prior period 12 adjustment to recognize the OPEB liability as described 13 in note end. The statement is noted as a PPA, or Prior 14 Period Adjustment on the governmental-wide statement; 15 not on the fund statement. 16 I think another, I guess, interesting note 17 would be the receivables, and this is the breakdown of 18 the receivables that you have outstanding, so you see 19 you have about 1.6 million in outstanding in court fines 20 and receivables net, and about 811,142 on the general 21 fund for property taxes. 70,000 for Road & Bridge, and 22 114,000 in property tax for the other governmental fund. 23 And again, those are your debt service funds. 24 Note to you unavailable revenue, and we 25 recognize a good portion of your court fines and fees 17 1 receivable is unavailable. We only recognize 60 -- in 2 the modified accrual, we only recognize 60 days out so 3 if they're receivable, we consider that current, and the 4 rest is considered unavailable revenue until you collect 5 it. 6 COMMISSIONER LETZ: On the court fines and 7 fees, is there a page in here that shows the change 8 there from last year? I'm interested if we're 9 collecting our court fees or not. 10 MS. FRASER: On page 7. So your receivables 11 went up quite a bit. Well, they went up 40 thousand. 12 COMMISSIONER LETZ: Okay, I see where it is. 13 2017 to '18. 14 COMMISSIONER BELEW: I thought that was 15 broken out somewhere else where I saw it earlier, that 16 extra 40 thousand. 17 MS. FRASER: Well, we do have an allowance 18 for doubtful accounts that we set up for that, but for 19 instance the county has court fees and fines receivables 20 of 7.5 million, and we do record an allowance of 21 uncollectibles of 5.8 million. That's based on your 22 collection ratios over the course of many years. 23 COMMISSIONER LETZ: So we're not collecting 24 an awful lot of our fines and court fees? 25 MS. FRASER: You're not out of the realm 18 1 because this is since inception, but now when you renew 2 your license if you have an outstanding fine that's been 3 recorded about the state, the person can't get the 4 license until they pay this. So you have a better 5 chance now than you did five, ten years ago collecting 6 that. But, no and that's not unusual. 7 COMMISSIONER LETZ: So we're no worse than 8 most counties? 9 MS. FRASER: No. You're not worse than any 10 other counties. 11 MRS. STEBBINS: If I can add, I think we're 12 better than a whole lot of counties similarly situated 13 from the State Reports in collection of fines and fees. 14 MRS. DOWDY: I have a question. May I ask a 15 question? Does this include district or just -- 16 MRS. STEBBINS: District and County. 17 COMMISSIONER HARRIS: What do you attribute 18 our increase, did we do anything different? 19 COMMISSIONER LETZ: No, not -- my question 20 really goes to a -- probably the next year or the year 21 after this year, that we will be required to have a 22 collection department if our population comes in over 50 23 thousand. And we kind of -- we had a separate 24 collection department that we set up largely through a 25 volunteer service Russ Duncan, then we consolidated and 19 1 then we went back to where the collections were County 2 Clerk and District Clerk's offices. But we're going to 3 have to go back and consolidate at some point by State 4 Law, so it's just -- I'm just trying to get a gauge, you 5 know, if we're doing -- how we're doing, if we're doing 6 worse than we did before, better than we did before. 7 Anyway, it's going to have a budget impact coming up, 8 and seems like it's a lot of money that's out there. 9 MS. FRASER: And a lot of places do have 10 collection agencies that hit that pretty hard. 11 COMMISSIONER LETZ: Okay. Just it's money 12 that we should try to get. 13 COMMISSIONER BELEW: And it'll pay for 14 itself. 15 COMMISSIONER LETZ: Maybe. Okay, thank you. 16 MS. FRASER: Page 41 is a breakdown of your 17 capital assets in Note H. Note G is basically a 18 breakdown of your property tax calendar and discusses 19 your rate and assessed value. And you to have 923,632 20 that remains outstanding in delinquent taxes as of 21 September 30th, 2019. 22 On page 42, this is a breakdown of your 23 long-term debt. And nd to answer Commissioner Moser's 24 question, you do have two -- or three obligations in 25 there, the TWDB Series 2012, and then Series 2016 A and 20 1 B. That doesn't include your two year. 2 COMMISSIONER LETZ: Right. It should be in 3 this year probably, they'll be revenue coming in. Will 4 that be earmarked in this report so we can -- 5 MS. FRASER: We can apply it directly to 6 the -- and it should be applied directly to the bonds. 7 COMMISSIONER LETZ: It would be helpful to 8 make sure to see how that's working, because a lot of 9 that has to be paid. 10 MS. FRASER: Page 44 is a breakdown of the 11 capital assets -- 12 (Mrs. Stebbins leaving courtroom.) 13 MS. FRASER: -- that for capital leases. 14 Sorry, it was a spider. So you had total capital leases 15 of 636,675. 312 of that is due in the next year. 16 (Mrs. Stebbins returning to courtroom.) 17 MS. FRASER: And then right below that is a 18 breakdown of the next three years until it's due, and 19 the corresponding interest. 20 The cumulated depreciation on your capital 21 assets leased so far is 1,035,667. 22 Page 45, this is the area employee 23 retirement system, so this is what relates to your 24 pension liability. And if you turn to page 46 you'll 25 see that it's calculated a year in arrears, so this 21 1 calculation is provided by the TCDRS system, and they do 2 an actuarial study that comes out usually around July, 3 midyear, but again it's retroactive to the past year, so 4 it's -- and it's on a calendar year. 5 So you had 656 people either receiving 6 benefits, inactive or active employees, in '16, and it 7 went up to 670 in 2017. 8 Your net pension liability if you look on 9 page 48 is 3,897,646. They think that there was a 10 discount rate. It could be a negative 3.3 million, or a 11 positive 12.5 million that you would need to recognize, 12 so there's a wide range. 13 Change in net pension liability starts on 14 the bottom of page 48, and I'm just going to go over the 15 last column. You had seven million that you owed at the 16 end of last year in pension liability, and if you look 17 at that and go down to the third column. That 4.9 18 million in interest on total pension liability is really 19 what drove your liability down, so you had a very good 20 year as far as investments in that fund. You don't pick 21 those; TCDRS picks those, they're very conservative 22 typically. And if you wanted to look at what they've 23 invested in, that's on page 47 at the bottom. 24 COMMISSIONER MOSER: That's pretty 25 impressive rate of return. 22 1 MS. FRASER: Very good rate of return. 2 COMMISSIONER MOSER: Do we have a brokerage 3 business? 4 MS. FRASER: I don't think so. Continued on 5 Note J, mid-page 49, this is the breakdown of your 6 deferred outflows and inflows of your pension liability 7 only. So I discussed the contribution subsequent to the 8 measurement date, that's 1.3 million. So from January 9 first, 2018 through September 30, 2018 the county and 10 the employees contributed 1.3 million, so that's an 11 asset that hasn't yet been consumed. 12 And then you'll see the actuarial 13 assumptions and the investment earnings. They have to 14 be amortized over a five year -- seven-year period. A 15 couple of them are five-year, a couple of them are 16 seven-year. So for instance that 4.9 million that you 17 see that was earned in 2017, that will be amortized in 18 your financial statement over a five-year period. 19 The group -- 20 COMMISSIONER BELEW: Let me ask you a 21 question. On page 16, we have Other Post-Employment 22 Benefits liabilities at nearly 8 million. And then 23 what's due within the year is right at two million. Up 24 above that is the net pension liability, so in light of 25 what you were just talking about, help me understand how 23 1 those two things correlate, please. 2 MS. FRASER: Well, the non-current 3 liabilities due within one year, and due in more than 4 one year. Those are related to your debt and your 5 capital leases that we looked at on page 40. 6 COMMISSIONER BELEW: It says employment 7 benefit liability. 8 MS. FRASER: The other post-employment 9 benefits we're getting to, well that's the next note. 10 But the next pension liability is that 3.8 million. 11 COMMISSIONER BELEW: Okay. 12 MS. FRASER: The Other Post-Employment 13 Benefits is the item that GASB required us to record 14 this year; whereas, you have seen a small retiree 15 insurance liability, but when you did your actuarial 16 study they changed from using the projected unit credit 17 to the entry age individual, which increased your 18 liability considerably. 19 So that next note on page 51 is related to 20 the retiree insurance that you allow people who retire 21 before they go on to Medicare to use, but it's not for 22 the 17 people that are on that; it's calculated using 23 every single employee in the County and the possibility 24 that they will eventually be on this insurance, and 25 you're paying a little higher premium because of the 24 1 employees that are in this pool. Number one because 2 they're generally older. Does that make sense? 3 COMMISSIONER BELEW: Yeah, it helped. 4 Getting to that anyway, but I wanted to make sure I 5 understood how it all fit together. 6 MS. FRASER: It is a hard -- it is a high 7 number, you know, it's double almost what your pension 8 liability is, which I had told the Judge this morning, I 9 was a bit surprised at that number. But you do have 300 10 active and inactive employees, and 17 on the retiree. 11 Note M is basically your commitment to 12 contingencies, and I won't go over this, but basically 13 the East Kerr/Center Point Wastewater Collection 14 Project. This isn't a required note, but we've put it 15 in because we think it clarified the spending on each 16 grant and loan that you've taken. And it's been in the 17 past three audit reports, so not new. 18 Page 56 is the commitment and contingency 19 note. And this is your investment in the joint venture, 20 which is the Airport. 21 Page 57, you have a commitment of 12 million 22 still left in the East Kerr/Center Point Wastewater 23 Project, and that was before you signed the two-year 24 agreements in the current year. 25 Note O discusses the two new bonds as well 25 1 as the grant you received from TWDB during the course of 2 the new year. 3 And then Note N is the prior period 4 adjustment, and again that's related to the OPEB 5 liability that had not been reported in the prior year. 6 Page 59, this is your budget to actual 7 report, and it also has 2017 in the last column, and 8 I'll let you look at that and if you want to ask any 9 questions, I hopefully can answer them. And this is 10 just a replica of the general fund that we discussed in 11 the front of the report. 12 And page 60 is a breakdown of the Road & 13 Bridge Fund, the budget actual and compared to last year 14 also. 15 On page 62, this is your required 16 supplementary information for your pension, and we kind 17 of went over all of that, and I did tell you something 18 wrong and I want to correct it. That interest that I 19 showed you on the total pension liability, that was 20 interest on the liability that you have. That net 21 investment income is the number that I really wanted to 22 point out, and that was 7.7 million. And if you look, 23 it almost doubled from the prior year. 24 2015 on the net investment income you'll see 25 that you had a big downturn, that was because they 26 1 changed their accrual -- or their actuarial method from 2 projects -- or projected unit credit to entry as normal, 3 and they realigned their investment. So if you go back 4 a couple reports you'll see that the distribution of 5 investments was different. 6 So page 62 and 63 are basically just more 7 information on that pension. 8 64, we kind of went over. This is your OPEB 9 liability. And I'm not going to go over the rest of 10 report unless you have questions later that you'd like 11 to ask me, and you're welcome to call me. My phone 12 number is on the opinion letter. 13 You have the Kerr County Compliance for 14 Federal and State Award. And I do want to say this is 15 probably the place where we struggled a little more 16 because typically it steps a little report. 17 JUDGE KELLY: I have that from when we met, 18 but I'm not sure if the other Commissioners do. It's 19 bound. 20 MR. ROBLES: I'll get it. 21 COMMISSIONER MOSER: Yeah, I don't have it. 22 Well, while James is getting it, can I ask you a couple 23 questions from your letter on the last page? You have a 24 couple of, I think, three recommendations. One of them 25 was deleted court tickets, and you say deleted tickets 27 1 should be performed -- a review of the deleted tickets 2 should be performed periodically, so that's something -- 3 that's a way for approvals or -- 4 MS. FRASER: Yes, yes. If you're able to go 5 in through the Odyssey System and pull them up and see 6 which ones are deleted and just review why they were 7 deleted. 8 COMMISSIONER MOSER: So we need to be more 9 thorough at that? 10 MS. FRASER: Yes, you need to be thorough at 11 that. 12 COMMISSIONER MOSER: Okay. Next one is 13 Fixed Assets Tracking. Performance in not preparing an 14 actual physical inventory, and you were unable to find 15 assets during your spot check, so we need another area 16 of improvement? 17 MS. FRASER: Yes. And I think this is more 18 on the departments; not on the Auditor's Office. 19 COMMISSIONER MOSER: Yeah. I took that as 20 departments. That's what you said, departments are not 21 preparing them. 22 MS. FRASER: Yeah. So when you dispose of 23 an asset, preferably you send the disposal to James. 24 Typically, I think they sense if it's a car or a truck, 25 it's sent over to the Tax Assessor=Collector and the -- 28 1 COMMISSIONER MOSER: So maybe it's just the 2 county, because I know anytime anybody gets rid of a 3 stapler -- 4 MS. FRASER: Oh, no, I'm not sure about a 5 stapler. 6 COMMISSIONER MOSER: No. I'm being 7 facetious. But I mean with things on the agenda today, 8 broken chairs and things like that. 9 MS. FRASER: Yeah. 10 COMMISSIONER MOSER: I'm surprised that we 11 don't track everything because it's brought to Court. 12 MR. ROBLES: Well, that's kind of something 13 we started last year. That's why you see it -- 14 COMMISSIONER MOSER: All the time. 15 MR. ROBLES: Yeah. We did not used to do 16 that. Well, not like we should have. 17 COMMISSIONER MOSER: Okay. So this is last 18 year's thing. And this year's -- 19 MR. ROBLES: Which is why you see -- which 20 is why you see people disposing of things. 21 COMMISSIONER MOSER: Very good. Okay, 22 thanks. 23 MS. FRASER: They've already responded to 24 the comment basically. 25 COMMISSIONER MOSER: Okay, good deal. And 29 1 then the last one is Cross Training Auditor Employees. 2 MS. FRASER: Yeah. As you all know this was 3 a very difficult year for the Auditor's Department. And 4 Brenda did a lot of things, and they were pretty 5 contained, and so when James and Joy and Suprina had to 6 take over some of those things they had never seen 7 before. So it would be -- and that's probably typical 8 in a lot of departments. But it would be nice if you 9 cross trained because it could happen even though you 10 never think it's going to happen, but it could. 11 COMMISSIONER MOSER: Okay. We can't cross 12 train up here because of the open meeting law. 13 JUDGE KELLY: We just have to do it in 14 public. 15 COMMISSIONER MOSER: There you go. 16 COMMISSIONER LETZ: This page, it would be 17 good to get to the District Judges so the new Auditor -- 18 when a person is hired, looks at these and says -- 19 COMMISSIONER MOSER: Good point. If I could 20 make one other general comment. This is extremely -- 21 how many people do you have prepare this? This is 22 really -- 23 MS. FRASER: Well, we have 25 in our office, 24 but I think we brought five over here, so -- 25 COMMISSIONER MOSER: Well, it's a lot of 30 1 detail, a lot of hard work. It's a very good report. 2 Thank you. 3 MS. FRASER: And again, I want to say that 4 the Auditor's Office did an amazing job, and it's 5 getting the information and helping us out, and we hope 6 we helped them out. And it was just a more difficult 7 audit than it has been in the past, but I think we kind 8 of got everything worked out, and we were happy with the 9 results. 10 COMMISSIONER BELEW: Brenda kind of made 11 life easy for a lot of people. 12 JUDGE KELLY: She did. And by the way, she 13 spent about an hour with me going over this before court 14 today, and she had told me that she's available to visit 15 with anybody. Come back up and visit with us if we need 16 more information. So we want to thank you for your 17 report. 18 And at this time, I'm going to make a motion 19 that we accept the financials as presented. 20 COMMISSIONER HARRIS: Second. 21 JUDGE KELLY: So I made a motion, been 22 seconded by Commissioner Harris to accept the financials 23 as submitted by Miss Fraser. Any further discussion? 24 Those in favor raise your hand. Unanimous, five zero. 25 Again, thank you very much for your hard 31 1 work, we really appreciate it. 2 We'll go to the addendum on the agenda 3 consider, discuss and take appropriate action to surplus 4 desks and various side desks, and dispose of properly. 5 And all the property numbers are listed here. Is there 6 any discussion for that? 7 COMMISSIONER LETZ: I make a motion that we 8 surplus the items as listed. 9 COMMISSIONER MOSER: Second. 10 JUDGE KELLY: Motion's been made by 11 Commissioner Letz, seconded by Commissioner Moser to 12 approve the surplus of those items as presented. Any 13 further discussion? Those in favor raise your hand. 14 Unanimous, five zero. 15 The next agenda addendum is consider, 16 discuss and take appropriate action to approve posting 17 the IT Director position with the existing job 18 description as revised to date, which is attached. 19 I'm trying to get that posted as quickly as 20 possible. So is there any discussion about this? 21 COMMISSIONER MOSER: Make a motion that we 22 post it as modified. 23 COMMISSIONER BELEW: Second. 24 JUDGE KELLY: Okay, motion made by 25 Commissioner Moser, seconded by Commissioner Belew to 32 1 approve and post the job description as presented. Any 2 other discussion? Those in favor raise your hand. 3 Unanimous, five zero. 4 Then what else do we to have to do today? 5 COMMISSIONER MOSER: Just a clarification on 6 the law that was signed signed by the Governor into law 7 on the requirements to meet on Thursday for this? 8 MRS. SOLDAN: I wanted to speak on it. 9 COMMISSIONER MOSER: Please do. No, no, 10 please do. That was just the subject matter; I can't 11 speak on it. 12 MRS. SOLDAN: So I sent the -- the e-mail to 13 you guys last Friday letting you know the Governor 14 signed SB34, which applied to HB 160, which removes the 15 population bracket from that language, meaning that 16 there's no county that has to meet prior to disbursing 17 expenses related to payroll. So I believe that a court 18 order would need to be passed at our regular -- our next 19 regularly scheduled Commissioners' Court meeting to 20 authorize that to be discontinued, and then we could 21 just move forward the way we did it before. 22 COMMISSIONER MOSER: But that's only related 23 to payroll? 24 MRS. SOLDAN: Payroll and expenses. And 25 then the Court order, I would suggest, and I have a 33 1 sample -- I have a couple of samples from other counties 2 that I can forward to Jody or whoever that would also 3 address items that might incur a late fee like we used 4 to pay on Friday, utility bills that might incur a late 5 fee if we waited until the next Commissioners' Court 6 meeting, or any travel or reimbursement for any 7 employee. 8 COMMISSIONER MOSER: So just put those on 9 regular court sessions. 10 MRS. SOLDAN: We would go back to regular 11 court sessions, but we would be authorized to pay any 12 budgeted expenses as needed like payroll and all that. 13 COMMISSIONER MOSER: If it's budgeted then 14 just to authorize. 15 MRS. SOLDAN: Right. 16 MRS. STEBBINS: Tracy showed me the court 17 order, and what it would do is go back to business as 18 usual before the Attorney General opinion that we had to 19 have these meetings. 20 COMMISSIONER LETZ: Put it on our agenda to 21 discuss it, because I think there's a value to these 22 Thursday meetings; not necessarily every week, but some 23 of them. 24 COMMISSIONER MOSER: Some of them, sure. 25 MRS. SOLDAN: It doesn't mean that you can't 34 1 meet; it just means we don't have to -- 2 JUDGE KELLY: Well, looking at the boss over 3 here. Put an item on the agenda to adopt that court 4 order and get us back to normal the way it was. But 5 also to be able to discuss the weekly meetings, and with 6 what we want to do about it. Because I think most of us 7 feel like it's been beneficial to be able to talk with 8 one another. 9 And in terms of information items, I talked 10 to Roy Walston yesterday. He's got recommendations to 11 fill that 4-H position over there, and wanted to know if 12 we wanted to review his recommendation. 13 COMMISSIONER BELEW: Didn't do any good last 14 time. 15 COMMISSIONER LETZ: I figure it's a good 16 idea to bring that person in. 17 JUDGE KELLY: I told him I thought it 18 probably was. And he wanted to know if we wanted to go 19 through all the applications, and I said no, just his 20 recommendation. And I think he has three applicants. 21 Is there anything else we need to discuss 22 today? Okay, then the Court will be adjourned. 23 * * * * * * 24 25 35 1 STATE OF TEXAS * 2 COUNTY OF KERR * 3 I, DEBRA ELLEN GIFFORD, Certified Shorthand 4 Reporter in and for the State of Texas, and Official 5 Reporter in and for Kerr County, do hereby certify that 6 the above and foregoing pages contain and comprise a 7 true and correct transcription of the proceedings had in 8 the above-entitled Commissioners' Court Approval Agenda. 9 Dated this the 4th day of July, A.D. 2019. 10 11 /s/DEBRA ELLEN GIFFORD Certified Shorthand Reporter 12 No. 953 Expiration Date 04/31/2020 13 * * * * * * 14 15 16 17 18 19 20 21 22 23 24 25