1 2 3 4 5 6 7 8 KERR COUNTY COMMISSIONERS COURT 9 Emergency Session 10 Thursday, September 30, 2004 11 7:30 p.m. 12 Commissioners' Courtroom 13 Kerr County Courthouse 14 Kerrville, Texas 15 16 17 18 19 20 21 22 23 PRESENT: PAT TINLEY, Kerr County Judge H. A. "BUSTER" BALDWIN, Commissioner Pct. 1 24 WILLIAM "BILL" WILLIAMS, Commissioner Pct. 2 JONATHAN LETZ, Commissioner Pct. 3 25 DAVE NICHOLSON, Commissioner Pct. 4 2 1 I N D E X Date Taken 2 PAGE 3 1.1 Consider and discuss temporary continuation of Lease Agreement by and between Hill Country 4 Juvenile Facility Corporation and Kerr County 3 5 1.2 Consider and discuss temporary continuation of Operating Agreement between Kerr County and 6 Kerr County Juvenile Board 3 7 --- Adjourned 25 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3 1 On Thursday, September 30, 2004, at 7:30 p.m., an 2 emergency meeting of the Kerr County Commissioners Court was 3 held in the Commissioners' Courtroom, Kerr County Courthouse, 4 Kerrville, Texas, and the following proceedings were had in 5 open court: 6 P R O C E E D I N G S 7 JUDGE TINLEY: Let me call to order the 8 special emergency meeting of the Commissioners Court of Kerr 9 County posted for this time and date, Thursday, 10 September 30th, at 7:30 p.m. The first item on the agenda 11 is consideration and discussion of temporary continuation of 12 a lease agreement between the Juvenile Facility Corporation 13 and Kerr County. I'm going to go ahead and call the second 14 item, too, because they're kind of both melded together, and 15 that's consider and discuss a temporary continuation of the 16 operating agreement between Kerr County and the Kerr County 17 Juvenile Board, both of those relating to the Juvenile 18 Detention Facility. Late this afternoon, there was a 19 proposal made by the counsel representing the trustee under 20 the trust agreement relative to the bonds issued by the Hill 21 Country Juvenile Facility Corporation. By virtue of the 22 notification which was necessary under the lease and 23 operating agreement documents to provide to the trustee as a 24 result of the passage of the Kerr County budget and the Kerr 25 County Juvenile Board budget, which nonappropriated funds 9-30-04 emg 4 1 for the lease payments under the -- under the lease 2 agreement, that triggered an automatic termination of the 3 lease, effective -- the lease and the operating agreement 4 effective as of midnight tonight. 5 The trustee was concerned, by having the 6 facility placed in the trustee's hands -- and you'll see one 7 document there from the counsel representing the trustee -- 8 that they cannot lawfully operate that facility. They don't 9 have the appropriate licenses -- obviously, they don't have 10 the appropriate personnel, but they don't have the 11 appropriate licenses to do that. That being said, the 12 proposal was subsequently made after they did their research 13 that they could not lawfully operate it, and they thought 14 that an abundance of caution required that there not be a 15 lapse between the time that the agreement was made and the 16 actual lease termination, which would be midnight tonight; 17 that there was a compelling need that we merely extend the 18 documents under which we have been operating for some time, 19 the lease agreement and the operating agreement, for an 20 additional period of one month. 21 The document which was proposed -- it's on 22 the letterhead of the Bank of New York -- is a letter 23 agreement which simply says that, that we will continue to 24 operate. I would point out that I mentioned to the counsel 25 for the trustee that I was concerned that the Juvenile Board 9-30-04 emg 5 1 had no funds with which to operate that facility except 2 those which were generated by the facility itself in the way 3 of income from its operations, and I did not want the -- the 4 Board to be responsible for any deficiency in operational 5 expenditures -- operation requirements which were not able 6 to be met with the revenue that could be generated. A 7 review of the documents indicates that, in both cases, the 8 lease agreement -- and I've talked with bond counsel about 9 this, and he's comfortable with this position; that it 10 extends only to appropriated revenues. That is our 11 obligation. And, of course, in -- in terms of -- of what 12 the County, in its budget, appropriated, we did not 13 appropriate it, so we would not have that obligation. That 14 would be under Section -- I believe it's 10.03(d). "From 15 and to the extent of appropriating funds" is -- is the 16 language on continued operation. You have basically that 17 same language in the operating agreement. 18 So, the proposal before the Court right now 19 is to, number one, extend the lease agreement under its 20 current terms for a period of one month, and the second item 21 is to extend the lease -- the operating agreement with the 22 Juvenile Board for a period of one month. This -- these 23 same agreements are on agendas for meetings to be considered 24 by the facility corp. and the Juvenile Board, respectively, 25 as soon as the Court takes whatever action it deems 9-30-04 emg 6 1 appropriate. 2 COMMISSIONER WILLIAMS: What is this 6 p.m. 3 deadline, Judge? 4 JUDGE TINLEY: The 6 p.m. deadline, I've 5 already talked to him about that, and I told him that we 6 could not meet that deadline, and he said -- and I explained 7 to him that we had to post an emergency meeting, and he's 8 expecting to hear from me as to the result of this meeting 9 at approximately 8 o'clock tonight. 10 JUDGE PROHL: We still haven't answered the 11 question about the operating funds. I mean, Tommy's not 12 here. Do we have enough funds, either in reserve or being 13 generated, to pay the overhead to run that facility for 30 14 days? 15 JUDGE TINLEY: I can't answer that question, 16 but in both cases, the requirements -- 17 JUDGE PROHL: My question is, is the trustee 18 going to pick up the deficiency? 19 JUDGE TINLEY: The trustee -- the trustee's 20 income consists of $1,250 a year for acting as a conduit for 21 the funds, solely. 22 JUDGE PROHL: About like what we've got. 23 COMMISSIONER WILLIAMS: $1,250 what? 24 JUDGE TINLEY: A year. The trustee acts as a 25 conduit for the funds that are paid, and then it distributes 9-30-04 emg 7 1 to the bondholders. 2 COMMISSIONER WILLIAMS: $1,250 for this 3 service? 4 JUDGE TINLEY: Mm-hmm. But the proposal is 5 essentially just the documents under which we've been 6 operating, to extend them for one month. That's -- 7 COMMISSIONER WILLIAMS: I thought I 8 understood Mr. Tomlinson, Judge Prohl, to say to the Court 9 the other day that he believed he could make the October 1 10 and the October 15 payroll. Was I -- did I hear correctly? 11 COMMISSIONER LETZ: Yeah, he said that. And 12 he -- but the issue came really whether he can make the 13 October 31st payment. 14 JUDGE PROHL: Yeah. You don't -- yeah, 15 you've got two weeks there that you don't have covered, is 16 the problem. And so the issue is going to be -- is whether 17 or not the County's going to appropriate two week's worth of 18 overhead to meet the obligation. I don't have a problem 19 entering into an agreement, because I think it helps 20 everybody, get us down the road and see what the options 21 are. But I certainly think there needs to be some 22 clarification as to where the funds are going to come from 23 to be sure that our employees are paid through end of the 24 month. I mean, I think employees got bills that need to be 25 paid, and that's -- you know, and I'm -- we haven't been in 9-30-04 emg 8 1 on these meetings, but a couple things -- I read what's in 2 the press. See, you've got to understand, this is not a 3 management issue, whether this place was mismanaged or not. 4 This is purely state funding matters that caused us to get 5 here, and I don't -- I know Buster's talking about whether 6 the Juvenile Board ought to be -- stand up and be 7 responsible for it. You know, let's get it clear that 8 there's three factors that -- that put us where we are, and 9 that's the reason we have to talk about those issues. And 10 one factor is the doubling of the requirement of the 11 staffing that was done in September of last year, which 12 instantly caused a $212,000 deficit, even if we were full. 13 We can't control that. Has nothing to do with management. 14 Secondly, they cut us the $20 a day for Level 5 children. 15 That cost us twenty -- about $29,000 a month, give or take a 16 little bit. Nothing we can do about that. And the third 17 thing was they took the 12 units away from us that, if full, 18 would cost us another $19,000. The fact was, we were losing 19 $44,000 a month plus a $212,000 deficit on the other end 20 that we couldn't do anything about. So, I have a problem 21 with -- I want to be sure the perception -- 22 COMMISSIONER BALDWIN: Is that what your 23 comment was when I walked in the room? I've been pointing 24 fingers and you don't like it? Is that what you said? Is 25 that what you mean? 9-30-04 emg 9 1 JUDGE PROHL: That's what I -- 2 COMMISSIONER BALDWIN: I can tell you, Karl, 3 this thing has rapidly been pointing toward this 4 Commissioners Court, and I don't like that at all. I don't 5 know where your problem is, but -- 6 JUDGE PROHL: Just want to be sure -- 7 COMMISSIONER BALDWIN: -- stick it out there. 8 Don't bring it here to this Court. 9 JUDGE PROHL: I just want everybody to 10 understand where the problem is that we -- you know, we've 11 all been in this together from day one. You know, y'all 12 were Commissioners; you voted on this thing. And there's 13 been a County Judge participate in every meeting we've ever 14 had, a representative of Commissioners Court. And whether 15 -- whether it be the Juvenile Board -- but my point is -- or 16 facilities board, my point is, there's not a lot we can do, 17 and I just want to be sure that everybody understands that; 18 that it's not a management question. It's a state funding 19 question. And now we're down to the question of whether or 20 not the Commissioners are going to appropriate funds to 21 manage -- pay for the operation of the facility for a period 22 of two weeks. Because -- 23 COMMISSIONER BALDWIN: That's not what we're 24 in here for. 25 JUDGE PROHL: I think it is. 9-30-04 emg 10 1 COMMISSIONER BALDWIN: I think that's what -- 2 JUDGE PROHL: That's what -- if we approve 3 this agreement, which you're being asked to do -- 4 COMMISSIONER BALDWIN: Well, I think we've 5 been doing that. I mean, we've been sending money out 6 there. 7 COMMISSIONER WILLIAMS: Well, I think that's 8 an issue that has to come before this Court in its next 9 regular meeting, as to whether or not we're going to 10 appropriate the continuing operational funds, and if so, how 11 much and for how long? And I think I, for one, and others 12 are going to want to ask the question of the operation -- of 13 the operators of the center, how can expenses be curbed? 14 What can we expect in revenues? What can we expect in other 15 -- other things that help stabilize this thing other than 16 the taxpayers' support through tax funds? And I think we're 17 legitimate in requesting -- asking those questions. I was 18 called at night after I got this; talked for 30 minutes to a 19 constituent -- hardline constituent. All of us in this room 20 know who this person is. I had a hard time explaining why 21 it wasn't Commissioners Court that made this -- why we made 22 this decision, and having only received this issue at the 23 eleventh hour, and why we didn't do something different than 24 what we did. So, you know, I think Commissioner Baldwin's 25 right. There's a whole -- the hot potato's laying right 9-30-04 emg 11 1 square in the middle of this desk, and people don't 2 understand the ramifications of the whole thing or how it 3 got here. 4 JUDGE PROHL: Well, and I appreciate that. 5 The thing is that when -- it wouldn't have mattered 6 particularly if it had been six months ago, which -- you 7 know, it accelerated so quickly. 8 COMMISSIONER WILLIAMS: I understand. 9 JUDGE PROHL: Faster than was anticipated. 10 But we'd still be in the same position, still have the same 11 deficits that were talked about, 'cause there's nothing 12 Commissioners Court could have done about it either, unless 13 you appropriated, and that creates a liability. And -- and 14 so, the way it's been structured, there is no liability, and 15 so -- so, you know, it's -- but my point -- what you're 16 talking about, I agree with you; we have to work this out. 17 But my point is, if you approve this and we have a shortfall 18 after the 15th of the month, that -- that's what I'm talking 19 about. Are we -- are we going to be liable for that 20 shortfall for that last two weeks? That's what I'm talking 21 about. When I say "appropriate," I'm not talking about a 22 long time; I'm talking about operating -- appropriating just 23 sufficient funds to pay our bills for the last two weeks. 24 COMMISSIONER WILLIAMS: I would be of a 25 mind-set, Judge, to do that, but I would need to know what 9-30-04 emg 12 1 that's all about. 2 JUDGE PROHL: And we don't know. 3 COMMISSIONER WILLIAMS: I don't think anybody 4 tonight is prepared to tell us what that's all about. 5 COMMISSIONER LETZ: I think part of the 6 problem has been -- this goes back ever since we set this 7 up, the Commissioners board has been kept in the dark. We 8 have never had any idea what the budget is out there. We've 9 asked, and this is way before, you know -- 10 JUDGE PROHL: This was Judge Henneke; this 11 goes all the way back. 12 COMMISSIONER LETZ: Bob Denson. It was Bob 13 and Fred. And, you know, we've asked questions. I ask 14 questions during the budgets about, you know, well, how do 15 we handle -- where's the Juvenile Board budget? What's all 16 that mean? "Here's the bottom line. Y'all don't need to 17 worry about it." You know, and that's pretty much what we 18 were told for six years. And then it came back; we were -- 19 financing came along two -- two years ago, and we signed 20 some -- we passed some resolutions, and then we were in the 21 dark again, other than there's an expansion going on out 22 there, and it was going to be a great deal. And I think the 23 frustration this Court has -- I think all of us have -- is 24 that -- up here is that, you know, August is the first time 25 we really hear there's a big problem, and then we really -- 9-30-04 emg 13 1 it's the end of September till we start dealing with it. 2 And it's -- you know, and we are the ones that -- you know, 3 we're -- the Court's in the paper all the time, not the 4 Juvenile Board, 'cause we have to deal with it. Y'all deal 5 with it, too. I don't know why -- but it's a -- 6 JUDGE PROHL: We've had our share of press, 7 thank you. Believe me. 8 COMMISSIONER LETZ: And there are lingering 9 -- you know, you say it's not management. I have no reason 10 to think that there is or has been any kind of management 11 issue, but the public thinks there's a management problem 12 out there, or was. And I don't know -- that's a perception 13 that I've had to deal with; I've had a lot of people call 14 me. So, I think -- you know, and I -- my answer is, I don't 15 know. I have -- I've never looked detailed at any of those 16 records. But I think that's a lot of history, really. It's 17 not that -- I mean, I think we're all very frustrated up 18 here that it's landed in our laps. I guess y'all are 19 frustrated as well because of lack of control over state 20 issues. But I think, you know, there is a sense of 21 frustration from three of the Commissioners. I don't 22 know -- Commissioner 4's been quieter; he hasn't been 23 involved a long time with this, but I think he's been 24 frustrated as well. But, going to this issue, I mean, I 25 agree with what you were saying, that -- I mean, if we agree 9-30-04 emg 14 1 to -- and as I read this, and I just read it real quick a 2 few minutes ago, what we're doing is just putting a 3 moratorium on doing anything. We're not transferring -- 4 JUDGE TINLEY: We're keeping the existing 5 agreements in effect by which -- 6 COMMISSIONER LETZ: For 30 days. 7 JUDGE TINLEY: -- the facility was operated, 8 and the pass-through facilities corp. to Kerr County lease, 9 and operating agreement with the Juvenile Board. We're 10 keeping those in effect. 11 COMMISSIONER LETZ: And -- but it has nothing 12 to do with any bond payments. 13 JUDGE TINLEY: No, no, no, no. 14 COMMISSIONER LETZ: This is the operations. 15 JUDGE PROHL: This is just -- yeah, this is 16 just operating. 17 COMMISSIONER LETZ: Well, then, the question 18 that you have, Karl, is that who's going to pick up the 19 slack? Because I think -- I don't think anyone wants to not 20 be able to pay employees and not pay our jailers, so 21 someone's got to pick up that slack if there's a shortage 22 sometime during this 30-day period. 23 COMMISSIONER WILLIAMS: This satisfies -- 24 see, if I'm correct, Judges, this satisfies the technical 25 requirement of the bond documents that, effective 12:01 9-30-04 emg 15 1 tonight, the key does, in fact, get turned and locked; is 2 that correct? This would keep it operating -- open and 3 operating for 30 days, so as not to throw juveniles out on 4 the street or their counties into chaos as to what to do 5 with those juveniles, et cetera, et cetera; am I correct? 6 JUDGE PROHL: Right. 7 JUDGE TINLEY: Yeah. That -- it would solve 8 the problem. And the obligation of both the County, under 9 the lease, and the Juvenile Board, under the operating 10 agreement, the -- the obligation is to the extent of the 11 appropriated funds in each case. That's the limitation, and 12 that's the only limitation we've got. But I wanted -- I 13 wanted you folks to know that I made it very, very clear to 14 the trustee that -- that the Juvenile Board had no funding 15 available to it except -- and the Juvenile Board, of course, 16 is responsible for the operation under the operating 17 agreement. Only the funds that were generated by the 18 facility were the only funds that the Juvenile Board had 19 available to it. I was concerned about any deficiency that 20 might be generated in operational expenses. Whether we set 21 it off out there in the future to deal with later, that's 22 fine. I just wanted the trustee's counsel to be very, very 23 aware that the Juvenile Board did not have that ability to 24 take care of any deficiency. 25 COMMISSIONER LETZ: I think the reality -- 9-30-04 emg 16 1 JUDGE TINLEY: That he very clearly 2 understands it. And -- and that's a fact of life, and 3 that's where we are. 4 COMMISSIONER LETZ: And the trustees told you 5 they don't have any money, either. So, the only person that 6 has any money is the County. 7 COMMISSIONER WILLIAMS: And they don't have a 8 license to operate. Judge, does your -- in your discussions 9 with the trustee today, the bond trustee, did you gain 10 anything from him that would lead you to believe that there 11 is a willingness on his part to represent the bondholders to 12 try to restructure this debt? 13 JUDGE TINLEY: I think they want to explore 14 any and all reasonable possibilities to get this thing 15 resolved. I don't think there's any question. He said -- 16 he said that it got dropped in his lap yesterday. I think 17 he talked to the -- our bond counsel once yesterday. He 18 called me this morning; I talked to him for the first time 19 at approximately 10:30. In fact, when we had our meeting 20 set for 10:30 and I was late a few minutes, that was why; I 21 was talking to him. And he said he had some legal issues to 22 look into. That's what the copy of a letter from -- from 23 Vincent Elkins is about. And then, when I talked to him 24 late this afternoon, that's when he came up with this 25 proposal. 9-30-04 emg 17 1 COMMISSIONER BALDWIN: Karl, do you -- do you 2 say that -- I thought I heard you say this, but I'm not 3 sure; I want to be clear about this. By us approving these 4 two documents, does that commit the County to the funding in 5 the latter part of October? 6 JUDGE TINLEY: I don't see it as doing at 7 that at all. 8 JUDGE PROHL: No, you have to appropriate. 9 No. 10 COMMISSIONER BALDWIN: Okay. 11 JUDGE PROHL: Doesn't do that. 12 COMMISSIONER BALDWIN: I couldn't see how, 13 but -- 14 JUDGE PROHL: No. I -- I'm just concerned 15 about it. 16 COMMISSIONER BALDWIN: Well, I am too. 17 JUDGE PROHL: I think that question will come 18 up, and I just -- plant the seed. 19 COMMISSIONER BALDWIN: Well, I think -- you 20 know, I think this Court's going to do whatever we can 21 reasonably, you know, that -- to help. I think. I'm -- I'm 22 not going to speak for these other guys, but I certainly 23 think that we would take a look at everything. 24 COMMISSIONER WILLIAMS: I've said all along, 25 I think we should find every avenue to restructure the debt 9-30-04 emg 18 1 and try to salvage it. If we're ready for a motion, Judge, 2 I'll give you a motion. 3 JUDGE TINLEY: All right, I'm ready. 4 COMMISSIONER WILLIAMS: Let me make certain I 5 understand what we're doing. We are -- we are agreeing to 6 extend the lease agreement; is that correct? 7 JUDGE TINLEY: On -- on the first item on the 8 agenda. 9 COMMISSIONER WILLIAMS: The agreement. 10 Extend the lease agreement. 11 JUDGE TINLEY: To have a continuation of the 12 existing lease agreement between Hill Country Juvenile 13 Facility Corporation and Kerr County for an additional month 14 until November 1, 2004. 15 COMMISSIONER WILLIAMS: Thank you for framing 16 the motion. That would be my motion. 17 COMMISSIONER BALDWIN: Second. Second, yes, 18 sir. 19 JUDGE TINLEY: Any question or discussion on 20 the motion? 21 COMMISSIONER LETZ: Question. Do you want to 22 cite the way it was worded in the -- the Bank of New York 23 about the moratorium, and cite the section? I mean, 'cause 24 to me, it's not an extension; it's a moratorium under -- 25 it's taking an option under, evidently, Section 10.03(c). 9-30-04 emg 19 1 I mean, I don't know if there's any difference, but it's -- 2 'cause they -- we're doing it under the -- we're exercising 3 a provision of the agreement, as I read their letter. 4 JUDGE TINLEY: Do you want your motion to -- 5 COMMISSIONER WILLIAMS: Let me -- 6 JUDGE TINLEY: -- to include that? 7 COMMISSIONER WILLIAMS: Let me take a look at 8 it real quick. 9 JUDGE TINLEY: Okay. 10 COMMISSIONER BALDWIN: Are you the County 11 Attorney tonight? 12 JUDGE TINLEY: Why not? 13 COMMISSIONER LETZ: While he's -- 14 COMMISSIONER WILLIAMS: Well, no -- well, no, 15 I don't. Because if you read on in that sentence, it says 16 we accomplish that moratorium with a lease and operating 17 agreement to remain in effect. So, in effect, we are 18 extending the lease agreement. 19 COMMISSIONER LETZ: Okay. 20 COMMISSIONER WILLIAMS: That's all we've got 21 to reasonably want to do. 22 JUDGE TINLEY: The moratorium is on the 23 transfer of the possession and control, which would 24 automatically be triggered -- 25 COMMISSIONER WILLIAMS: As a result of our 9-30-04 emg 20 1 action. 2 JUDGE TINLEY: -- per provisions of that 3 lease agreement by virtue of the notice that I've given. 4 COMMISSIONER WILLIAMS: Correct. My motion 5 stands. 6 JUDGE TINLEY: Any further question or 7 discussion? All in favor of the motion, signify by raising 8 your right hand. 9 (The motion carried by unanimous vote.) 10 MR. EDWARDS: All opposed, same sign. 11 (No response.) 12 JUDGE TINLEY: We now have the second item on 13 the agenda; essentially the same motion, but only with 14 respect to the operating agreement between Kerr County and 15 Kerr County Juvenile Board, to continue that agreement in 16 effect until November 1, 2004. 17 (Low-voice discussion off the record.) 18 COMMISSIONER WILLIAMS: Are we talking about 19 a -- what period of time are we talking about in 1.2? Just 20 that consider and discuss temporary continuation of 21 operating agreement between Kerr County and the Juvenile 22 Board for "a period"? 23 JUDGE TINLEY: Same period of time. 24 COMMISSIONER WILLIAMS: For a period not to 25 exceed? Or -- 9-30-04 emg 21 1 COMMISSIONER BALDWIN: November 1. 2 COMMISSIONER WILLIAMS: -- up to and 3 including, or what? 4 JUDGE TINLEY: Until November 1, I think is 5 the language that we -- that we used. 6 COMMISSIONER WILLIAMS: For a period of 30 7 days. 8 COMMISSIONER BALDWIN: Through October -- 9 COMMISSIONER WILLIAMS: October 30 or 31? 10 JUDGE TINLEY: 31 October. 11 COMMISSIONER WILLIAMS: 31? 12 JUDGE TINLEY: I think the other motion was 13 until November 1. 14 COMMISSIONER LETZ: I think that the -- the 15 funding issue really needs to be somewhat resolved here, 16 because from a -- the operating standpoint, I don't know 17 how, if we're -- with all our vendors, if we have accounts 18 with them or cash up front or -- or how we're operating 19 right now. But, you know, there needs to be -- we're going 20 to have to start -- someone's going to have to commit to pay 21 those bills. 22 COMMISSIONER BALDWIN: Would the -- would the 23 bills be October 15 or November 1? 24 COMMISSIONER WILLIAMS: I thought I 25 understood -- 9-30-04 emg 22 1 COMMISSIONER BALDWIN: When do they come due 2 to be paid? 3 COMMISSIONER WILLIAMS: I thought I 4 understood Mr. Tomlinson to say he could make the mid-month 5 payroll and the end payroll. He thought they could scrape 6 together the end one; he's got accounts receivable coming 7 in, so forth and so on. There are still some reserves to 8 draw down, but very few. Is that correct? 9 JUDGE TINLEY: That's correct. 10 COMMISSIONER WILLIAMS: So, the likelihood 11 that -- that the Juvenile Board would come to Commissioners 12 Court for some additional funding is, I would say -- 13 COMMISSIONER LETZ: Good. 14 COMMISSIONER WILLIAMS: -- pretty real. 15 Pretty real likelihood. 16 COMMISSIONER BALDWIN: But not tonight. 17 COMMISSIONER WILLIAMS: Not tonight. 18 JUDGE TINLEY: No. No, that -- we're not to 19 that issue yet. But -- 20 COMMISSIONER LETZ: But if we -- 21 JUDGE TINLEY: But the extent of Kerr County 22 is only as to appropriated funds, and the obligation of the 23 Juvenile Board under the operating agreement also is only as 24 to appropriated funds. That's the language in both cases. 25 COMMISSIONER BALDWIN: I move for approval of 9-30-04 emg 23 1 Item Number 1.2. 2 COMMISSIONER WILLIAMS: Second. 3 JUDGE TINLEY: Motion made and seconded for 4 extension of the operation -- operating agreement between 5 Kerr County and Kerr County Juvenile Board until 6 November 1st, 2004. Any question or discussion? All in 7 favor of the motion, signify by raising your right hand. 8 (The motion carried by unanimous vote.) 9 JUDGE TINLEY: All opposed, same sign. 10 (No response.) 11 JUDGE TINLEY: That motion does carry. 12 There's no further business on the agenda, so I will declare 13 the meeting adjourned. 14 COMMISSIONER LETZ: Judge, before we go, just 15 one quick comment on this. How do you -- just -- if I can 16 kind of get my brain wrapped around this thing, how are we 17 going to proceed? I mean, who is -- is it the Juvenile 18 Board or is it Commissioners Court, or are we jointly going 19 to be trying to figure out -- holding each other's hand for 20 the next month? Who is going to deal with the trustee, try 21 and figure out the plan? I mean, who's doing what? 22 JUDGE TINLEY: I don't think we've got a plan 23 yet. We just know that they're willing to -- to sit down 24 and work with us to try and find some solutions. 25 COMMISSIONER LETZ: But, I mean, by what we 9-30-04 emg 24 1 just did, we give everything back to the Juvenile Board. 2 And I just don't want to get in a situation -- 3 JUDGE TINLEY: We're the only ones that can 4 operate it. 5 COMMISSIONER LETZ: Right. 6 JUDGE PROHL: Well, but -- but I think, from 7 -- from discussions as to how the -- if there's refinancing 8 or whatever's going to occur, it has to be Commissioners 9 Court. We don't have any authority to deal with that. And 10 so I think it has to be a combination of everybody working 11 together jointly to try to come up with what's best for the 12 County, for the juveniles, and for everybody. And -- and, I 13 mean, I don't -- I don't see how either one entity can do it 14 by themselves, because we just -- you know, you have to have 15 that overlap of knowledge. And I think -- you know, I think 16 the ball is basically in the trustee's hands to -- to get 17 ahold of the bondholders; say, "Okay, what are you guys 18 willing to do? Let's all come to the table and see what is 19 viable." Because the Juvenile Board has to be charged with 20 running the facility, at least from the paper standpoint. 21 They have to be involved in it from that standpoint. 22 Structuring and financing is going to be Commissioners 23 Court, as I see it. 24 COMMISSIONER LETZ: What about the other 25 entities that are involved, such as K.I.S.D.? I mean, I 9-30-04 emg 25 1 presume that they're -- 2 JUDGE PROHL: Well, you understand what they 3 propose. 4 JUDGE TINLEY: Let me go -- let me go ahead 5 and -- we can get in some discussions otherwise, but we need 6 to get these other ends of it knocked down, if you don't 7 mind. 8 COMMISSIONER LETZ: Okay. 9 JUDGE TINLEY: We've run a pretty tight 10 deadline here. Did I call for adjournment of the Court? 11 COMMISSIONER WILLIAMS: You did for 12 Commissioners Court. 13 (Discussion off the record.) 14 (Commissioners Court adjourned at 7:57 p.m.) 15 - - - - - - - - - - 16 17 18 19 20 21 22 23 24 25 9-30-04 emg 26 1 STATE OF TEXAS | 2 COUNTY OF KERR | 3 The above and foregoing is a true and complete 4 transcription of my stenotype notes taken in my capacity as 5 County Clerk of the Commissioners Court of Kerr County, 6 Texas, at the time and place heretofore set forth. 7 DATED at Kerrville, Texas, this 5th day of October, 8 2004. 9 10 11 JANNETT PIEPER, Kerr County Clerk 12 BY: _________________________________ Kathy Banik, Deputy County Clerk 13 Certified Shorthand Reporter 14 15 16 17 18 19 20 21 22 23 24 25 9-30-04 emg