Finance Committee

Wednesday, 9:00 a.m., Jan. 16, 2002

Commission Hearing Room
4200 Smith School Road
Austin, TX 78744
Item
No.
Subject Public Hearing
Agenda Item No.
  Approval of the Committee Minutes from the previous meeting.  
  Summary of Minutes  
1. Chairman's Charges (Oral Presentation) Committee Only
2. Financial Review and Update
Staff: Suzy Whittenton
Committee Only
3. License System Update
Staff: Jayna Burgdorf
Committee Only
4. License and Permit Fees
Staff: Suzy Whittenton
Committee Only
5. Boat Fees
Staff: Suzy Whittenton, Dennis Johnston
4
6. Park Fees
Staff: Walt Dabney
5
7. Nonprofit Partners, Employee Fundraising, and Youth-Appropriate Advertising
Staff: Gene McCarty
6
8. Grants
- Local Park Funding
- Indoor Recreation Grants
Staff: Tim Hogsett
9
10
9. Small Community Grant Projects and Regional Park Grants
Staff: Tim Hogsett
11
10. Other Business  

Summary of Minutes
Texas Parks and Wildlife Commission

Finance Committee

November 7, 2001

BE IT REMEMBERED that heretofore on the 7th day of November 2001, there came to be heard matters under the regulatory authority of the Parks and Wildlife Commission of Texas, in the commission hearing room of the Texas Parks and Wildlife Headquarters complex, Austin, Travis County, Texas beginning at 11:58 a.m., to-wit:

I. FINANCE COMMITTEE:

Ernest Angelo, Jr., Committee Chair
Phillip Montgomery, III
Katharine Armstrong Idsal
John Avila, Jr.
Carol E. Dinkins (absent)
Joseph Fitzsimons
Alvin L. Henry
Donato D. Ramos
Mark E. Watson, Jr. (absent)

II. OPENING STATEMENT: Chairman Katharine Armstrong Idsal called the meeting to order.

III. APPROVAL OF MINUTES: Commissioner Ernest Angelo, Jr. asked for a motion to approve the minutes from the August 29, 2001 meeting.

IV. THE FOLLOWING ITEMS WERE PRESENTED TO THE COMMITTEE:

1. CHAIRMAN’S CHARGES

Presenter: Mr. Andrew Sansom

Mr. Sansom mentioned that Mr. Gene McCarty will present information regarding three specific issues relating to Sunset. They involve developing guidelines for employee fund-raising, developing best practices and accountability measures for nonprofit partners and guidelines limiting the expenditure of state monies by non-profit partners. Ms. Lydia Saldana stated that we have sold over 20,000 horned toad license plates since they were launched in October 1999. That is a gross revenue just over $407,000 and makes it the third most popular specialty plate in Texas. Our second plate – the bluebonnet – had some production problems and wasn’t released until July. Currently we have sold 1,354 plates which will benefit state parks. In 2002 we are looking at releasing a white-tailed deer and a bass plate.

3. License System Update

Presenter: Ms. Jayna Burgdorf & Ms. Terry Lewis

Ms. Burgdorf introduced Ms. Terry Lewis, our new license system manager. Ms. Burgdorf stated that the PC sales system is primarily used by our law enforcement offices and by low volume license agents (sell less than 100 licenses per year). We have been selling licenses at the front counter since the end of August and we have expanded that sales capability with the PC system to six of our law enforcement offices. We are adding additional law enforcement offices onto the system daily and they should be complete by the end of November. By that time we are also planning on rolling out the system to about 150 or so low-volume retailers. Since we have found that the PC system is more user friendly and has greater functionality, we are directing new agents to the PC method when they sign up. The hypercom sales system which is very similar to what we currently have and it is primarily used by our higher-volume retailers in the state parks. The pilot is ongoing right now at our front counter. WorldCom is in the middle of deploying devices and they are currently at 714 devices deployed (shipped out) as of yesterday. That is about ¼ of the devices that need to be shipped. The devices are shipped in training mode and then WorldCom works with the licensing agents to set the machine up over the phone. Once we get the version of software that will allow us to be comfortable, we will begin letting licensed agents in the field sell licenses live on the system. Transactive has continued to sell licenses through the fall and has agreed to continue through January 2002 if necessary and WorldCom has agreed to reimburse Parks & Wildlife for those contingency costs. Currently we are focusing on recreational license sales, but the commercial license sales capability should be here by late December. The ability to purchase a license over the phone through our call center and the ability for someone at their own home computer to purchase a license over the Internet – the call center on the Internet has to be fulfilled so that you get your actual license with the tags on it. The capabilities for those should take place in December and January. In spite of the delays we are excited about the new system. We have a neat looking license and believe we’re going to have much more accurate data in the database. Hunter education requirements will be printed on the license and therefore addresses the audit issues.

5. Artwork Approval

Presenter: Ms. Frances Stiles

Ms. Stiles presented the current year’s artwork for the waterfowl, non-game, turkey and saltwater stamps.

Mr. Bubba Wood of Collector’s Covey provided background information regarding the artists and wildlife for this year’s stamps. There will also be a change in the print for the non-game category since the print they presented was a game species. They also strategized on possible ways of promoting the stamps. The item was put on the Thursday commission agenda for public comment and action.

Break – Executive Session

2. Financial Review and Update

Presenter: Ms. Suzy Whittenton

Ms. Whittenton gave a financial review for FY02 and an update as to how we are addressing the audit issues in the State Auditor’s report. State park revenue is down approximately 13% as compared to prior year. The decline is contributed to how Labor Day fell as well as cancellations that took place after the September 11 attack. Preliminary numbers for October show that business in the parks has pick up somewhere between 15% and 20% compared to prior year.

In account 9, boat revenue was down in September by approximately 16% and it appears to be down in October as well. This is due to the cooling economy, with boats being a more luxury item. Our revenue for FY01 was $13.9 million and we only projected $13.5 million for FY02. If the current trend follows then we may not reach our FY02 projection; however this is not usually a busy time to register boats – a majority of them happen in March, April and May. Commissioner Montgomery asked staff to study if this could partially be a problem where people are using their boats and not registering them – an enforcement issue. As far as license sales, the Supercombo sales are up approximately 6.3% compared to prior year. As of October 23 we have sold approximately 1.5 million licensed stamps and permits. Hunting license sales are also up as of October 23. Total hunting licenses sold, including combos, were up 2.3% when compared to the same period last year. We have also sold almost 700,000 hunting licenses to date. Fishing licenses are up just over 3%, even though saltwater stamp sales are slightly down. We have currently sold over 800,000 fishing licenses. Currently, license sales are up 2.3% or $816,000. As of October 23 we have collected a total of $37 million, which is more than half of what we’ll collect all year. Since the induction of the super combo sales continue to grow and we anticipate to sell around 350,000 super combos in FY02. If you compare sales of October 23 to prior year, sales are up 6.3% or $18,000. Big Time Texas hunts this year added two new hunts, the Texas premium buck hunt and the Texas heritage hunt. We also enhanced some of the existing hunts. We have had a successful direct mail strategy that we have used in prior years which we include postage-paid return envelopes in August and send out reminders in October to those who hadn’t responded. Applications had to be postmarked by November 3 so we are still receiving entries. As of the end of October we had about 76,000 entries, and as of this morning we estimate that we have received approximately 86,000 entries. We are anticipating a 9%-11% growth rate.

At the end of September we had spent all but approximately 2.4% of our operating budget or about $4 million for FY01, which means we have spent almost 98% of everything we budgeted. The excess funds are attributed to us delaying hiring and delaying purchases that weren’t critical. Mr. Sansom has recommended that we consider using this on the game warden academy cadets that will begin in March that was not budgeted in the original 2002 budget and we anticipate that will cost approximately $700,000 just for salaries and some travel. That amount does not include money for their necessary equipment. When we prepared the FY02 budget we did budget part of the excess funds, but there are additional funds that have not been allocated.

The State Auditor’s report was released recently and we are taking their recommendations very seriously and are aggressively addressing every issue. Those issues deal with stamp allocation, mailroom processes, non-value added employees in the revenue department and reconciliation issues between two accounting systems. We have already begun correcting the issues and have made great progress in correcting the issues. We are down to less than $1 million left to reconcile and we plan on completing the process by the end of the calendar year.

4. Boat Fees/Park Fees

Presenter: Suzy Whittenton and Walt Dabney

Ms. Whittenton presented information regarding boat fees. Currently registration fees range from $25-$70 for a two-year registration, depending on the size of the boat. We also have the livery vessel fee which is used when boat owners rent their vessels out to the public and the dealer/manufacturer license which allows a dealer or manufacturer to use one registration for all of their boats. Other fees we charge include a $5 transfer fee, $25 quick title and other small fees that cover administrative expenses. The last fee increase was in 1996 and resulted in an increase in registration fees between $6-$25 (30-60% increase) depending on the type. It is difficult to compare the top 5 states (Michigan, California, Florida, Minnesota and Texas) because they use different methods to charge registration fees. Oklahoma bases their fees on the purchase price of the boat. For example, if you purchased a boat for $15,000 then it would cost you $150 to register the boat the first time and reduced by 10% of the purchase price in subsequent years. When you compare boat registration to vehicle/trailer registration fees you actually pay more to register your boat trailer than you do to register your boat. Since the last fee increase in 1996, boat fees bring in an average of $13.8 million per year. The last increase resulted in an additional $4 million in revenue, but we still aren’t covering a lot of our costs. Over the last 10 years the average cost of a boat has increased approximately $3,500 for an average boat.

We are also seeing an increase in costs associated to our boat patrols. The boats we use for game warden patrols are aging and we do not have the necessary funds to purchase new ones in our current budget. In addition, of our 470 game wardens approximately 100 have received the advanced boater accident investigation training since the training is only offered out-of-state and is very expensive. We are also looking at large costs associated with redesigning our boat computer system, purchasing additional portable breathalyzer tests, increased fuel costs/usage due to boat patrols, in addition to investigations of boat dealer fraud and boat theft.

In the last legislative session the Commission was granted the statutory authority to adopt rules for creation of a program for the continuing identification and classification of industry participants and set fees accordingly. This will help with dealer fraud.

We have met with the boating trade groups and they want us to create a program that would require a mandatory dealer registration so they would be required to certify that they are complying with state laws. We would identify all the manufactures, distributors and dealers and have the list available to the public and this would help address the fraud issues.

Dealer fees we discussed were Class A marine dealer ($500/year), Class B marine dealer ($250/year) and distributor/manufacturer ($500/every other year). Currently we only charge dealers and manufacturers $130 every other year. We also recommend charging the same fee for a livery vessel as we do for any other boat and increase the fee for titles and quick titles by approximately $10 and transfer and duplicate fees by $5. We estimate that if the proposed fees were in place for a full year that it would increase revenue in Fund 9 by $4 to $4.5 million.

We plan to publish the information in the Texas Register for public comment and continue to meet with constituent groups and the public and bring the Commission a proposal to consider in January.

Commissioner Fitzsimons asked that we try to determine if our current sales are down due to a drop in boat sales or are individuals waiting to register their boats due to the September 11 situation and the decline of the economy.

Chairman Angelo, without objections by other commissioners, authorized the staff to publish the item in the Texas Register.

Mr. Dabney stated that state park entrance fees, facility use fees and activity or use fees were their main source of funding. The current fee range was approved by the Commission and went through the public input process. We review each park annually and adjust fees within the approved range on a park-by-park basis. The last time the fees were changed in total was in 1991. Currently we are at the top of those ranges. We raise approximately $25 million a year in our fee program from all sources and our costs to operate them have increased. Also, we have lapsed approximately 80 positions to help cover the 4% pay raise. A new scale will give us the ability to grow with escalating costs over time.

We will be holding meetings with our constituents and would like approval to publish this item in the Texas Register for public comment.

Chairman Angelo, without objections by other commissioners, authorized the staff to publish the item in the Texas Register.

Ms. Whittenton noted that we have a cross-divisional committee to study fees and we are currently collecting and analyzing fees.

5. Nonprofit Partners, Employee Fundraising, and Youth-Appropriate Advertising

Presenter: Mr. Gene McCarty

(This item was pulled from the agenda due to time constraints)

V. ADJOURNMENT: Commissioner Ernest Angelo, Jr. adjourned the Finance Committee.


Committee Agenda Item No. 1

Finance Committee
Chairman's Charges
January 2002

(This item will be an oral presentation.)


Committee Agenda Item No. 2
Presenter: Suzy Whittenton

Finance Committee
Financial Review and Update
January 2002

I. Discussion: Staff will present a financial review for the year to date FY2002, including an update on Account 9, Game, Fish and Water Safety and Account 64, State Parks. This presentation will focus on the sale of hunting and fishing licenses, boat registration and titling fees, and state park fees. Updated budget and expenditure information will also be presented.


Committee Agenda Item No. 3
Presenter: Jayna Burgdorf

Finance Committee
License System Update
January 2002

I. Discussion: Staff will update the Commission on the implementation of the new license system. The update will include information regarding the closeout of the Transactive system and the statistics related to license agents selling via the WorldCom system. Staff will cover the call center and internet sales capabilities of the system, as well.


Committee Agenda Item No. 4
Presenter: Suzy Whittenton

Finance Committee
License and Permit Fees
January 2002

I. Discussion: Staff will brief the committee on issues related to license and permit fees, including proposed fee increases and proposed changes to rules aimed at streamlining and clarifying existing provisions. The presentation will include:

Staff will request permission to publish the proposed changes in the Texas Register for public comment.

NOTE: As of this writing, staff is in the process of developing the fee proposals. Proposed changes to rules will be available and distributed prior to the commission meeting.


Committee Agenda Item No. 5
Presenters: Suzy Whittenton, Dennis Johnston

Finance Committee
Boat Fees
January 2002

(This is Public Hearing Agenda Item No. 4.)


Committee Agenda Item No. 6
Presenter: Walt Dabney

Finance Committee
Park Fees
January 2002

(This is Public Hearing Agenda Item No. 5.)


Committee Agenda Item No. 7
Presenter: Gene McCarty

Finance Committee
Nonprofit Partners, Employee Fundraising, and Youth-Appropriate Advertising
January 2002

(This is Public Hearing Agenda Item No. 6.)


Committee Agenda Item No. 8
Presenter: Tim Hogsett

Finance Committee
Park Fees
January 2002

Local Park Funding
(This is Public Hearing Agenda Item No. 9.)

Indoor Recreation Grants
(This is Public Hearing Agenda Item No. 10.)


Committee Agenda Item No. 9
Presenter: Tim Hogsett

Finance Committee
Small Community Grant Projects and Regional Park Grants
January 2002

(This is Public Hearing Agenda Item No. 11.)


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