Texas Parks and Wildlife Commission
Finance Committee

January 16, 2002

Commission Hearing Room
Texas Parks & Wildlife Department Headquarters Complex
4200 Smith School Road
Austin, TX 78744
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          5       BE IT REMEMBERED that heretofore on the 16th day

          6   of January, 2002, there came on to be heard matters

          7   under the regulatory authority of the Parks and

          8   Wildlife Commission of Texas, in the Commission

          9   Hearing Room of the Texas Parks and Wildlife

         10   Headquarters Complex, Austin, Texas, beginning at

         11   9:00 a.m. to wit:

         12   

         13   
              APPEARANCES:
         14   THE PARKS AND WILDLIFE COMMISSION:
              FINANCE COMMITTEE:
         15   
              CHAIR:   Katharine Armstrong Idsal, San Antonio, Texas
         16            Donato D. Ramos, Laredo, Texas
                       Philip Montgomery, III, Dallas, Texas
         17            Ernest Angelo, Jr., Midland, Texas
                       John Avila, Jr., Fort Worth, Texas (Absent)
         18            Alvin L. Henry, Houston, Texas (Absent)
                       Mark Watson, Jr., San Antonio, Texas (Absent)
         19            Joseph Fitzsimons, San Antonio, Texas

         20   THE PARKS AND WILDLIFE DEPARTMENT:
              Robert L. Cook, Interim Executive Director, and other
         21   personnel of the Parks and Wildlife Department

         22   

         23   

         24   

         25   


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          1                      JANUARY 16, 2002

          2                 CHAIRMAN IDSAL:  Good morning.  Happy

          3   New Year.  This meeting is called to order; but before

          4   proceeding with any busy I believe Mr. Cook has a

          5   statement to make.

          6                 MR. COOK:  Madam Chairman, thank you

          7   very much.  A public notice of this meeting containing

          8   all items on the proposed agenda has been filed in the

          9   Office of the Secretary of State as required by

         10   Chapter 551, Government Code referred to as the

         11   Opening Meetings Law.  I would like for this action to

         12   be noted in the official record of this meeting.

         13                 CHAIRMAN IDSAL:  Thank you, Mr. Cook.

         14                 Our first order of business today is the

         15   meeting of the Finance Committee.  Chairman Angelo,

         16   would you please take the gavel.

         17                 VICE-CHAIRMAN ANGELO:  Thank you,

         18   Madam Chairman.  The first item of business is the

         19   approval of the committee minutes from the previous

         20   meeting.  Are there any corrections, additions, or a

         21   motion that they be approved?

         22                 COMMISSIONER RAMOS:  I move that they be

         23   approved.

         24                 VICE-CHAIRMAN ANGELO:  Second?

         25                 COMMISSIONER MONTGOMERY:  Second.


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          1                 VICE-CHAIRMAN ANGELO:  All in favor say

          2   Aye.

          3                 ALL COMMISSIONERS:  Aye.

          4                 VICE-CHAIRMAN ANGELO:  Opposed.

          5                 (No Response.)

          6                 VICE-CHAIRMAN ANGELO:  The minutes are

          7   approved as presented.

          8   ITEM 1.  CHAIRMAN'S CHARGES.

          9                 VICE-CHAIRMAN ANGELO:  Chairman's

         10   Charges are the first item on the agenda; and I'll ask

         11   Bob Cook to lead the discussion on that and present

         12   the comments.

         13                 MR. COOK:  Thank you, Mr. Chairman.  We

         14   have three charges that we are addressing at this time

         15   that I want to tell you about to --

         16                 Charge No. 1:  To implement provisions

         17   of the Sunset Bill, Senate Bill 305, that being to

         18   develop guidelines for employee fundraising above

         19   $500, develop best practices and accountability

         20   measures for non-profit partners, and determine and

         21   define content that is appropriate for reviewing by

         22   youth.  Our staff has been working on this; they have

         23   developed and published the proposal in the Texas

         24   Register for public comment.

         25                 Requirements for solicitation and


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          1   acceptance of gifts equal to or greater than $500 by

          2   TPWD employees; best practices criteria for non-profit

          3   partners as recommend by the Sunset Advisory

          4   Commission and developed a definition of youth

          5   appropriate advertising based on recommendations by

          6   the Sunset Advisory Committee.  This appears as Item

          7   No. 7 on your agenda today that we'll move forward to

          8   the full commission tomorrow.

          9                 Our next charge:  To review all fees to

         10   increase revenues and insure a fair fee structure.  We

         11   will be presenting -- making a presentation on that on

         12   the status of our findings and some recommendations to

         13   you shortly.

         14                 Finally, to review and implement

         15   appropriate State Auditor audit recommendations.  Our

         16   staff continues to work on these recommendations, and

         17   we are currently heavily involved with the Elton Bomer

         18   Management Review team on several of audit issues.

         19   Thank you, sir.

         20                 VICE-CHAIRMAN ANGELO:  Thank you,

         21   Mr. Cook.  At this point we're going to go out of

         22   order on the published agenda for the Finance

         23   Committee and take up Items 4, 5, and 6, which have to

         24   do with fees, and we'll ask Bob Cook to lead the

         25   discussion on these items.


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          1   ITEMS 4, 5 and 6.  LICENSE and PERMIT FEES, BOAT FEES,

          2   and PARK FEES.

          3                 MR. COOK:  Thank you, Chairman.

          4                 Chairman and Commissioners, I am Robert

          5   L. Cook, TPWD's Interim Executive Director.  Thank you

          6   for the opportunity to discuss a very important

          7   subject with you: The subject of fees, revenues, and

          8   budgets.  These issues are important to everyone in

          9   Texas who loves, uses, and appreciates our State's

         10   unique natural and cultural resources.  License fees

         11   for hunting and fishing, state park entry fees and use

         12   fees, commercial fees, boater registration fees,

         13   etcetera, are all very important to our constituents

         14   and to our employees.

         15                 To better understand the issues before

         16   us today, it is necessary that I briefly review some

         17   recent history and related work on this subject.

         18                 What we do at TPWD and how we do it:

         19   Our legislatively dictated duties, our resource and

         20   conservation management efforts, research programs,

         21   various outreach and education programs, and the

         22   management of our facilities across the state are

         23   subject to regular -- some of us feel almost

         24   constant -- review, update, and revision.

         25                 For example, we routinely receive --


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          1   solicit and receive constituent and user review and

          2   suggestions.  Some of which comes through our issue or

          3   area specific advisory committees.

          4                 We do -- Routinely through the years we

          5   do long-range planning strategies in which we involve

          6   all levels of employees within the agency, our

          7   constituents, and the citizens of Texas who are

          8   interested in what we do and how we do it.

          9                 We are subject, of course, to review by

         10   oversight agencies such as the State Auditor's Office,

         11   and the Sunset Commission, and by our State's elected

         12   officials, and finally the review, input, and

         13   direction given by you, our Commissioners.

         14                 In short, our programs, our goals and

         15   objectives, what we do and how we do it have been

         16   reviewed and fine tuned to a high degree.  We are

         17   doing what is needed in an efficient and effective

         18   manner.  We have responded to the best of our ability

         19   to the needs of the resources for which we are

         20   responsible, and to the wishes of all of those

         21   involved and interested.  Survey results have clearly

         22   documented that our users, our constituents, and the

         23   citizens of Texas approve of and are very satisfied

         24   with the results of our efforts.

         25                 With those thoughts in mind, staff


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          1   initiated the budget planning process for the FY02

          2   fiscal year, in which we currently operate, in the

          3   late spring of 2001 during the legislative session.

          4   As always, initial planning was based on our approved

          5   and ongoing programs, duties and land management

          6   responsibilities using long-range revenue forecasts

          7   for the year ahead.

          8                 At the end of the legislative session in

          9   late May 2001 and with the successful passage of our

         10   Sunset Bill we knew what was expected and we

         11   incorporated those needs into our budget planning for

         12   the fiscal year in which we currently operate.  By

         13   midsummer 2001 we settled on our revenue forecasts for

         14   the upcoming fiscal year and finalized our current

         15   FY02 budget with your approval at our August

         16   Commission Meeting.

         17                 Revenue forecasts indicated

         18   approximately the same total available cash as was

         19   available in FY01; therefore, we absorbed the much

         20   needed and welcomed state employee pay raise and other

         21   related added expenses by reducing our operating funds

         22   by approximately four percent.

         23                 Later in the summer of 2000 -- Late in


         24   the summer of 2001 we began to discuss and consider

         25   the need for a long-range funding strategy to raise


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          1   user fees to recover the lost operating funds and to

          2   create funding of approximately $5 million annually

          3   for needed capital projects.  We had not raised most

          4   of these fees in five or six years and we didn't want

          5   to have to raise them again for another five or six

          6   years.  This funding level would have created -- would

          7   have required approximately a twenty percent increase

          8   in fees across the board.

          9                 Our leadership and our supportive users

         10   urged caution and requested that we carefully review

         11   all programs in search for cost-cutting opportunities

         12   and higher operating efficiencies.  Staff redoubled

         13   their efforts in this review and began to explore

         14   every possibility in detail.

         15                 Into the fall of 2001, we continued to

         16   ask ourselves, "Is this absolutely necessary?  Do we

         17   have to do this at this level?  Do we have to increase

         18   this fee?"  Everything changed for America and for all

         19   of us on September the 11th, 2001.  We are all still

         20   struggling with that tragedy -- trying to cope with

         21   its impact on us in many different ways:  We still do

         22   not know all of its impact, but we do know that it

         23   united us together as never before.  We will not give

         24   up our freedom.  We will continue to try to live

         25   normal lives and raise our families to the best of our


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          1   ability.  However, we continued to wonder how this

          2   terrible event will affect TPWD, our sites, our

          3   programs, and conservation in Texas in general.

          4   Throughout the fall -- the summer and fall of 2001 the

          5   economy in Texas and in our nation continued to

          6   decline, unemployment continued to rise.  We again,

          7   redoubled our financial review efforts looking for

          8   ways to save, expenses to reduce, while still

          9   providing all needed services.  We wanted to be part

         10   of the solution not part of the problem.

         11                 November the 6th, 2001, Proposition 8

         12   passed with almost 65 percent voter approval.  This

         13   was not an opinion pole; this was the people of Texas

         14   saying with their vote, "I will support TPWD.  I

         15   believe in TPWD and what they are doing.  I am willing

         16   to commit my dollars to pay for needed repairs,

         17   maintenance, and specific development projects at

         18   TPWD."  Obviously, this will be a major positive

         19   impact on our funding needs over the next six to seven

         20   years and is much appreciated; it became a major

         21   factor in this -- in this review consideration.

         22                 We also incorporated into our financial

         23   review and thought process that any significant fee

         24   increase would result in the loss of users.  We know

         25   it happens; we've seen it happen every time we do it.


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          1   Fewer park visitors, fewer license buyers, fewer

          2   participants in the outdoors of Texas, fewer

          3   customers, fewer supporters, and fewer children

          4   enjoying the very assets that we all love so dearly

          5   and the resources that need their involvement so

          6   much.

          7                 In summary, we have thoroughly reviewed

          8   our revenues, and our expenditures, and our programs.

          9   We have scrubbed all accounts and passed budget for

         10   any left over, unused funds.  Based on this review and

         11   after giving full consideration to the issues and

         12   concerns mentioned above, we believe that we can fund

         13   TPWD's FY03 and FY04 operations and programs at or

         14   very near our current funding and staff levels without

         15   fee increases.

         16                 In the short term, we do not have to

         17   have additional funding for new capital projects.

         18   Therefore, we recommend to this Committee that other

         19   than a few commercial fishing fee increases mandated

         20   by statute and included as a rider in our

         21   appropriations bill that no additional or new fees be

         22   implemented at this time.

         23                 As opposed to our original long-term

         24   funding strategy, it is important to note that this

         25   short-term strategy is realistic only for the next one


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          1   to two years.  This action does not address our

          2   long-term funding needs.  Additional funding is

          3   needed.  Our duties, responsibilities, and programs

          4   are important; our capital needs are very real.

          5   However, common sense and good judgment tells us to

          6   not implement fee increases when the overall economy

          7   is down, unless it is absolutely necessary.  We do not

          8   want to implement fee increases knowing that it is

          9   likely we are going to lose a substantial and possibly

         10   significant number of our users, our constituents, our

         11   friends.  We should not implement new or additional

         12   fees at this time that might discourage the citizens

         13   of Texas and of our nation from visiting and enjoying

         14   the beautiful and unique outdoors of Texas and our

         15   cherished state parks, fish hatcheries, and wildlife

         16   management areas.  We will monitor the key economic

         17   indicators closely during the coming months when

         18   considering future needs and fee increases.  These

         19   budgets are lean; there is no fat, but we can and will

         20   do the job.

         21                 It is important to mention that the

         22   budgets for FY03 and '04 resulting from this

         23   recommendation of no fee increases do not contemplate,

         24   do not include any planned reduction in force.

         25   Although, some additional positions may have to be


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          1   held vacant to meet anticipated funding needs.  For

          2   example, in state parks right now, today, we have 91

          3   vacant positions.  And that's true in all of the

          4   divisions across the -- across the agency.

          5                 Finally, as you know, we are in the

          6   process of searching for and selecting our new

          7   executive director.  We believe that, along with our

          8   new leader, this would be an appropriate time to

          9   conduct a thorough strategic review of agency's

         10   revenues, mission, goals, and programs.

         11                 In closing, we have shared our financial

         12   review information and the many factors involved in

         13   this recommendation with our Management Assessment

         14   team, which includes Mr. Elton Bomer, Mr. T.C.

         15   Mallett, and Ms. Sidney Hacker.  They have studied and

         16   reviewed our information thoroughly.  They have

         17   discussed the various aspects of this recommendation

         18   with us in detail.  They have made many positive and

         19   constructive suggestions throughout this process.

         20   They support this recommendation 100 percent.

         21                 It is important to the staff at TPWD;

         22   this is a very important issue.  It is important to us

         23   that you and our constituents understand that it is

         24   important to us.  This is not just a job for us.  This

         25   is a serious commitment by everyone at TPWD to the


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          1   natural and cultural resources of Texas and to the

          2   citizens and leaders of Texas for whom we work.  We

          3   will tighten our belts.  With your help and guidance

          4   we will focus our efforts and achieve our goals.  We

          5   will do our share.

          6                 In closing, Mr. Chairman, Commissioners,

          7   I know these people at Texas Parks and Wildlife

          8   Department; I know their commitment and their

          9   dedication.  You can count on them from one end of the

         10   state to the other; they will do this job; they will

         11   do it right; they will do it on time; and they will do

         12   it in budget.  I'll be glad to take any questions.

         13                 VICE-CHAIRMAN ANGELO:  First, Bob, let

         14   me say that I -- I think you and the staff, all the

         15   department heads, and all the folks that worked on

         16   this deserve everyone's commendation for the effort

         17   that's been put in because this is not easy, I know.

         18                 MR. COOK:  Thank you.

         19                 VICE-CHAIRMAN ANGELO:  And to take --

         20   take into consideration the -- the timing and the

         21   circumstances and to have come up with what you've

         22   done is a remarkable effort, I think.  And it's

         23   greatly appreciated by me.

         24                 MR. COOK:  They've done -- they've done

         25   a great job.


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          1                 VICE-CHAIRMAN ANGELO:  Do we have any

          2   questions?

          3                 COMMISSIONER FITZSIMONS:  Bob, I want to

          4   also commend you on making the hard call and putting

          5   first things first.  Let me ask you, what bearing or

          6   consideration was given to the passage of Prop 8 and

          7   how that fits into the recommendation?

          8                 MR. COOK:  Well, it was a --

          9   Commissioner Fitzsimons, it was an absolute major

         10   decision.  Part of our -- part of our concern on this

         11   capital budget involved many of these facilities that

         12   we will be able to maintain, repair, keep those

         13   facilities in operation.  We won't be able to really

         14   change the facility, completely rebuild the facility,

         15   and I'll -- and I'll give you a really good example, I

         16   believe, is our fish hatchery at Jasper.  And Phil

         17   would have to correct me, and I don't recall our exact

         18   numbers, but the fish hatchery at Jasper is 70 -- 75

         19   years old.  It's current production level is about 60,

         20   70 percent -- Phil, am I in the ballpark? -- of its

         21   once -- of its once capacity, what we were once

         22   producing there.  It is the site, the place, where we

         23   produce many of the fish that our lakes are dependent

         24   upon.  That production level is continuing to decline,

         25   the facility just, you know, it's wearing out; we can


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          1   keep it operating, we can make some substantial

          2   improvements to it.

          3                 The better choice, the wiser choice,

          4   from a -- from a financial and a long-range standpoint

          5   would be to rebuild that hatchery somewhere else.  And

          6   Mr. Durocher is working very closely with a number of

          7   entities and, in fact, he's -- he's got some people

          8   who are willing to help us do that.  But we will have

          9   to have some capital money to do that.  That's --

         10   that's a big one that comes to mind immediately.

         11   Obviously, some of our projects that we've got on tap

         12   that we're looking at:  The Sheldon Project, Rural

         13   Birding Center, the River Center, all of those kind of

         14   projects -- very seldom do we end up saving money on

         15   those projects.  It usually ends up taking a little

         16   extra capital money to finish some of those projects,

         17   so we were looking for a way to fund some of this new

         18   development.  What Prop 8 will do is keep us in

         19   operation, let us make some major improvements to some

         20   of the old facilities, but not rebuild them where that

         21   is -- that is the real best solution.

         22                 Wonderful -- I mean, we were -- we were

         23   so appreciative of Prop 8 and it is so -- I think

         24   it -- I think it's so meaningful the message that it

         25   sent.  Even in the times that we were in, on November


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          1   the 6th, people went to the ballot box and said, "I

          2   support TPWD and I'll pay my money to support it."  I

          3   think that was a -- that was a big point for us.

          4                 VICE-CHAIRMAN ANGELO:  Bob, you

          5   mentioned the 91 park vacancies and -- yet to put that

          6   a little bit in perspective, what -- what would be the

          7   normal vacancies due to attrition and whatever?

          8                 MR. COOK:  That's a very good question

          9   and -- and right on target.  Having -- Having worked

         10   in that area some and continuing to be closely

         11   involved -- and Mr. Dabney, of course, can -- can

         12   again correct me if I'm off track here -- but I

         13   believe it would be safe to say that at almost any

         14   given time in an organization of that size, of over

         15   1200 FTEs, you can anticipate having 50, 55, 60

         16   vacancies almost at any time.  Just to go through the

         17   advertising, interviewing, selection and hiring

         18   process and getting somebody in that job you're going

         19   to have 50 to 60 vacancies in that division.

         20                 We are -- knowingly have strung that out

         21   some, are holding some of the positions, and will

         22   rotate some of them as some of them -- you know, as --

         23   as the key time comes along on state parks we'll --

         24   we'll hire those positions.  We'll get them in place,

         25   but we'll have to hold, maybe, some others vacant.


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          1                 VICE-CHAIRMAN ANGELO:  So this approach

          2   is in effect adding some 30, 35 or so --

          3                 MR. COOK:  I'd say at state parks in the

          4   vicinity of 35 to 40 additional vacancies that we are

          5   holding a little bit longer than we normally would to

          6   generate some funding to cover that difference.

          7   That's true -- that's true in all divisions.

          8                 VICE-CHAIRMAN ANGELO:  You have

          9   something, Mr. Ramos?

         10                 COMMISSIONER RAMOS:  Yeah.  I want to

         11   echo the same comments that you both made and commend

         12   you, Bob, and -- and staff.  But what I am really

         13   impressed is that we have prioritized and we are very

         14   sensitive to our users.  It doesn't make any sense

         15   that we have parks if we price ourselves out of the

         16   market, and it's obvious from your work that you've

         17   prioritized it and it's very important.

         18                 MR. COOK:  It's very important.

         19                 COMMISSIONER RAMOS:  A second issue that

         20   I think you need to be commended for, that's the --

         21   you -- you effectively are saying that you're making

         22   this department and TPWD more efficient.  And there's

         23   always ways of improving efficiency and be more cost

         24   effective, and I commend you and -- and staff, all of

         25   you that worked on it.  Thank you.


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          1                 VICE-CHAIRMAN ANGELO:  Phil?

          2                 MR. MONTGOMERY:  Again, without

          3   repeating everybody, thank you.  I know these are

          4   tough exercises for everybody, but it's appropriate,

          5   and it's appropriate to recognize we're living in

          6   unusual times and we've got to react to them.

          7                 What -- Bob, since August when we

          8   signaled our intent to look at the possibility of fee

          9   increases, what's changed in the way we're looking at

         10   the budget, the forward budget?  Question one and two,

         11   how do you see us going with the forward planning

         12   that -- that you're signaling?

         13                 MR. COOK:  Well, the one of -- one of

         14   the interesting factors that's happening to us right

         15   now, and, you know, we're not sure why, it -- it looks

         16   like, for example, that -- that our state park

         17   visitation is up; it's up significantly.  We've got a

         18   lot of people coming to state parks right now.  There

         19   is some evidence, for example, that -- that across the

         20   nation that is true.  People are staying closer to

         21   home.  People are, you know, kind of wanting to get in

         22   touch, you might say.  So the -- the actual revenues,

         23   as we perceived along here, the actual revenues coming

         24   in to us over the next several months during this

         25   fiscal year are going to be very important to us of


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          1   how we proceed into FY03 and '04.

          2                 I think it -- through this process one

          3   of the things we did, for example, was talk about

          4   and -- and have a long list of ideas, and -- and I

          5   would be remiss in -- in not saying thanks to --

          6   likewise to everyone, especially a gentleman by the

          7   name of Paul Hammerschmidt in our Coastal Fisheries

          8   Division.  Paul does a tremendous job of kind of

          9   keeping all of these cats herded together up here

         10   and -- and putting this information package together.

         11   But we looked for ways to create packages, whether

         12   that be in licenses or park entry fees combined with

         13   the opportunity to fish in the park that day, and --

         14   and we're heavily in -- I mean, we're into that.  We

         15   are looking for those kind of opportunities to -- to

         16   increase what we offer for the money that we're

         17   offering right now, thereby attracting additional

         18   people to our sites.

         19                 There are opportunities in all of these

         20   areas.  One of the -- one of the areas of concern that

         21   we have and that we -- that we initially addressed

         22   here was that some of our park sites, some of our RV

         23   sites, some of our hotel sites, cabins and those kind

         24   of things, are under priced.  We -- we haven't changed

         25   those fees in a long time.  There's some indication


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          1   that some of the -- the funding -- the funds that we

          2   receive -- the fee that we charge for RV hookups may

          3   not pay for the electricity when that $175,000,

          4   $200,000 RV backs up in there and -- you know, that

          5   cord's about that big around and you suck it in there

          6   and the lights in the entire community dim, you know,

          7   but -- you know, we charge $15 for the site.  So we do

          8   need to look at some of that.  We are -- we are behind

          9   on some of those things, and there's some real

         10   opportunity there.

         11                 On the other hand, to generate

         12   significant numbers of dollars in state parks, that --

         13   that doesn't get you there.  And the only other

         14   opportunity that we see on our sites is that gate

         15   entry fee, which is the most -- the most dangerous one

         16   to be increasing from the standpoint of our users.  So

         17   those are all considerations, Commissioner, as we --

         18   as we go on into this process that we're going to

         19   continue to work on, we're going to continue to

         20   develop and we'll be coming back to you with some

         21   thoughts on those, some ideas, some suggestions.

         22                 VICE-CHAIRMAN ANGELO:  And somewhat in

         23   line with what your question was, Phil, when we get to

         24   the financial review, I think I want to say that

         25   the -- the numbers that looked a little bit scary on


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          1   the low side at our last meeting have improved across

          2   the board, and that's -- that was helpful also.

          3                 Any other comments?  Questions?  Madam

          4   Chairman?

          5                 CHAIRMAN IDSAL:  Does anybody have any

          6   questions?  As I recall --

          7                 COMMISSIONER FITZSIMONS:  Well, I have

          8   one question for Bob.  If -- if I understand you

          9   right, Bob, what you're saying is, the recommendation

         10   is not to go with -- with across-the-board fee

         11   increases where -- you need to study where

         12   strategically with a more pinpoint accuracy fees may

         13   need to be increased in certain areas and not in other

         14   areas and the whole -- the wholesale?

         15                 MR. COOK:  Yes.  Where that opportunity

         16   exists.

         17                 COMMISSIONER FITZSIMONS:  Right.

         18                 MR. COOK:  Absolutely.  And part of

         19   this, remember too, is that we -- we -- as I mentioned

         20   in my comments, we are coming to you with

         21   recommendations -- why we've got Suzy and Hal sitting

         22   here -- on the commercial fishing fees.  And that's

         23   part of this packet, and -- and -- and if there are no

         24   other questions, I would suggest that we -- that we

         25   allow --


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          1                 VICE-CHAIRMAN ANGELO:  I believe the

          2   Chairman's got a comment first.

          3                 CHAIRMAN IDSAL:  I have no more

          4   questions, but I -- I want to make a comment here.  I

          5   want to say how proud I am of this staff of the Texas

          6   Parks and Wildlife Department.  They have worked like

          7   Trojans; they have tightened up their belts; they have

          8   rolled up their sleeves; they have scrubbed numbers;

          9   they've looked at things in different ways and from

         10   different angles, and I just couldn't be more proud of

         11   the employees of this agency.  And I -- I just want to

         12   say that -- thank you all very much.

         13                 VICE-CHAIRMAN ANGELO:  Okay.  Now, Bob,

         14   if you would, go ahead and elaborate on the

         15   commercial.

         16                 MR. COOK:  As -- as -- as part of this,

         17   like I say, part of our fee, the -- the -- really, the

         18   only part of the fee recommendation in these items

         19   that we're bringing forward to you is to address some

         20   increases in specific commercial fishing fees.  And we

         21   have Suzy and Hal here to -- to brief you on that and

         22   move that forward.

         23                 VICE-CHAIRMAN ANGELO:  Suzy, if -- you

         24   might explain also why it is we're at this point,

         25   particularly with the commercial -- why we're doing it


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          1   right now and what's the impetus behind that.

          2                 MS. WHITTENTON:  Okay.  Yeah.  I've got

          3   that as part of the presentation, which I can go ahead

          4   and move right into.  For the record, I'm Suzy

          5   Whittenton, Chief Financial Officer, and with me is

          6   Hal Osburn, the Division Director of Coastal

          7   Fisheries.

          8                 A study by the State Auditor's Office

          9   that was published in December of 2000 determined that

         10   Parks and Wildlife did not receive enough revenue from

         11   license fees in the commercial fishery programs to

         12   recoup the costs of managing those programs.

         13   Subsequently, this report became the basis for a

         14   legislative appropriations rider in the current

         15   appropriations bill, which is -- which addresses cost

         16   recovery from those programs.

         17                 This is the rider that's actually listed

         18   in the bill.  It's Rider No. 22 and it reads, "That it

         19   is the intent of the Legislature that Parks and

         20   Wildlife shall adjust rates charged for licenses in

         21   each commerical fishery program accordingly as to

         22   provide funds necessary to recoup costs associated

         23   with the management of the program.  In making the fee

         24   determination, the -- the Department should consider

         25   the commercial value of the license and the amount


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          1   needed to recoup Department costs."  That's the exact

          2   wording in the bill.

          3                 In order to reach complete cost recovery

          4   we would need to increase all commercial license fees

          5   by over 100 percent, and that would be in addition to

          6   the license fee increase that was adopted by the

          7   Commission last year, which was, in some cases, up to

          8   a 50 percent increase, and that was expected to --

          9   that is expected to generate about six hundred

         10   thousand.  We're now proposing to do approximately a

         11   20 percent increase.

         12                 The -- in re -- in restructuring

         13   commercial fees, the staff's concerned about

         14   socioeconomic disruptions to coastal communities from

         15   large fee increases:  Restoring the commercial

         16   fisheries to a profitable status through license buy

         17   back and other conversation measures may be necessary

         18   before substantial fee increases become practical.

         19   And -- and as a first step toward balancing the

         20   interests of the State and the industries a 20 percent

         21   fee increase appears to be appropriate for commercial

         22   fishery licenses.  If this -- If we should go forward

         23   with this, it would bring in approximately $600,000 of

         24   additional revenue per year.

         25                 This slide shows examples of what a


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          1   20 percent increase in commercial fees would translate

          2   to by license type:  Wholesale fish dealers would pay

          3   $750 a year as opposed to the current fee of $625;

          4   resident commercial Gulf shrimp boats would pay $450

          5   as opposed to the current $375; resident commercial

          6   bay or bait shrimp boats would by $348 opposed to

          7   $290; commercial crab fisherman fee would go from $500

          8   to $600; and the commercial fin fish fisherman license

          9   would go from $300 to $360.  That's what the 20 --

         10   those are some of the bigger licenses -- some of the

         11   ones we sell the most of.

         12                 The staff proposals to publish these

         13   increased fees in the Texas Register and to take

         14   public comment.  We'll post the information on our web

         15   site and hold at least one public hearing, then we'll

         16   bring this issue back to the Commission in April with

         17   input from the industry for your final consideration.

         18                 VICE-CHAIRMAN ANGELO:  Suzy, this is the

         19   second round of these commercial license increases,

         20   correct?

         21                 MS. WHITTENTON:  That's right.

         22                 VICE-CHAIRMAN ANGELO:  And it's your

         23   analysis, though, that this does not yet get us to the

         24   actual replacement of the costs, is that --

         25                 MS. WHITTENTON:  That's correct.  It --


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          1   our calculation of what we think we'd need to recoup

          2   to do complete cost recovery would be to bring in

          3   about $3 million in additional fees.  You know, this

          4   gets us part -- part of the way there.  But, as I

          5   said, to get to complete cost recovery, we'd be

          6   looking at over a hundred percent or approximately a

          7   hundred percent license fee increase.  And so what

          8   we're proposing is to do that more gradually, take

          9   us -- take a first step -- or actually a second step

         10   towards getting to cost recovery in this proposal.

         11                 VICE-CHAIRMAN ANGELO:  Hal, what do

         12   you -- what impact do you think this is going to have

         13   on the industry, if any?

         14                 MR. OSBURN:  Well, I -- I think that a

         15   20 percent fee increase is -- is absorbable.  The

         16   industry is never happy about additional fees, but --

         17   but the cost of doing business does vary on the

         18   coast.  I think the cost of the price of fuel or the

         19   price of -- of the product or the -- that you're

         20   getting at the market based on the imports probably

         21   has more -- much more effect on the profitability of

         22   the industry than would these -- these relatively

         23   small fee increases.

         24                 VICE-CHAIRMAN ANGELO:  Are there any

         25   other questions of comments?  Phil?


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          1                 COMMISSIONER MONTGOMERY:  Something I

          2   notes -- noticed about the structure of the leases.  I

          3   don't know if this is the time to talk about them or

          4   not, but at some point I'd like to bring that up.  Is

          5   this the right time to do it?

          6                 VICE-CHAIRMAN ANGELO:  Which leases?

          7                 COMMISSIONER MONTGOMERY:  On the oyster

          8   bays.

          9                 VICE-CHAIRMAN ANGELO:  That's a

         10   different -- that's going to come up under

         11   Regulations.

         12                 COMMISSIONER MONTGOMERY:  Right.  Okay.

         13   We'll take that up later.  That's fine.

         14                 VICE-CHAIRMAN ANGELO:  Yeah.  Any other

         15   comments or questions?

         16                 There being none, as the chairman of the

         17   Finance Committee I authorize the staff to publish

         18   this item in the Texas Register for the required

         19   public comment period.

         20                 MS. WHITTENTON:  Thank you.

         21                 VICE-CHAIRMAN ANGELO:  And before we

         22   move on from this discussion, we have the pleasure of

         23   having Mr. Bomer and his associates here in the

         24   audience this morning, and I'd ask, Elton, do you have

         25   any comments you'd like to make with respect to the --


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          1   the fee situation?

          2                 MR. BOMER:  I don't have any comments

          3   with the exception of being in total agreement with

          4   what Mr. Cook and the staff have come up with.

          5                 VICE-CHAIRMAN ANGELO:  Well, we --

          6                 MR. BOMER:  We have looked at it very

          7   closely, and we're -- we're pleased with the -- with

          8   the result.

          9                 VICE-CHAIRMAN ANGELO:  We appreciate

         10   y'all being here this morning.

         11                 MR. BOMER:  It's our pleasure.

         12                 VICE-CHAIRMAN ANGELO:  Thank you for

         13   your efforts.

         14                 If that -- we'll move on then and get

         15   back in the order of the agenda, the -- pick up Item

         16   No. 2, which is a financial review and update to be

         17   presented Suzy Whittenton.  Suzy?

         18   ITEM 2.  FINANCIAL REVIEW and UPDATE.

         19                 MS. WHITTENTON:  Thank you,

         20   Mr. Chairman.  The focus of the financial review today

         21   will be on current-year revenue status and on this

         22   year's operating budget status.  First, I'll cover

         23   account nine's primary revenue sources, which are

         24   license fees and boat registration and titling fees.

         25                 As of December 31st, we had sold 2.2


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          1   million licenses, stamps, and permits.  Now, this is

          2   up about two-and-a-half percent over where we were at

          3   this time last year.  Super combo sales are up

          4   6.6 percent, and we continue to see a shift from the

          5   regular combo licenses to the super combo.

          6                 This slide breaks out the hunting

          7   licenses out by themselves with the combination

          8   licenses included.  And the number of hunting licenses

          9   sold is -- is almost level over last year, but it --

         10   it's up less than 1 percent -- .8 percent, so it is a

         11   little bit higher.  We've sold just over a million

         12   hunting licenses this year.

         13                 Fishing license sales are doing well;

         14   they're up by over 6 percent so far this license year,

         15   and we've sold over one million fishing licenses as

         16   well.  You'll notice resident fishing licenses are up

         17   by 9.6 percent.  So as expected license revenue is up

         18   also by about three-and-a-half percent or $1.8 million

         19   when compared to last year's revenue.  This is mostly

         20   due to the super combo sales and to the resident

         21   fishing sales.

         22                 Now, the original revenue estimate for

         23   this year, for the FY02 year, did project that revenue

         24   would be higher this year than last year, so we were

         25   counting on it being up.  The revenue estimate was


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          1   not -- about $900,000 higher than last year, so at

          2   this time we're ahead of even our revenue projection.

          3   And the -- the Comptroller's revenue estimate is the

          4   same for these license fees for this year; it's $64.8

          5   million.  And as of December 31st we had collected 80

          6   percent of that revenue estimate, and at this time, it

          7   looks like we'll meet or exceed the revenue estimate

          8   in this category.  As you know, we usually do sell

          9   most of our licenses in the first few months of the --

         10   of the license year.

         11                 Turning to boat revenue, Registration

         12   and Titling fees:  As of December 31st revenue's up

         13   four-and-a-half percent over last year, which is only

         14   $93,000, because we don't collect that much of our

         15   boat revenue in the first -- you know, in these winter

         16   months; we collect most of it after April or after

         17   March.  Now, again, the Comptroller's revenue estimate

         18   for boat registration and titling fees is $900,000

         19   higher than last year's actual revenue, so we hope

         20   that this trend continues through the spring and

         21   summer.  And if you'll remember, revenue from boats

         22   was down in September and October, and we looked at

         23   those trends and I'm not -- I can't really pinpoint

         24   what happened, but it came back up in November and

         25   December so that we recovered that lost revenue.  It


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          1   shift -- I guess the -- the people were -- shifted

          2   from the months that they -- they bought their -- or

          3   they -- that they renewed their registration.  As of

          4   the end of December, we collected 16 percent of our

          5   revenue estimate.  The revenue estimate this year is

          6   $14.8 million from the source.  And as I said, most

          7   boat revenue is received between March and June or

          8   July, so it's really too early to tell on boat revenue

          9   whether we'll meet or exceed or be below on the

         10   revenue estimate, but at this time, it looks -- it

         11   looks all right.

         12                 Turning now to our other primary

         13   account, the State Park account, Account 64, a look at

         14   the park revenue collected to date.  The fall months

         15   have been very good for park income, as Bob mentioned

         16   earlier, revenue is up sixteen-and-a-half percent over

         17   last year, which is about $882,000; however, the

         18   current year revenue estimate from the Comptroller's

         19   office and -- and that we've adopted is $900,000 than

         20   last year's actual, so, you know, we're getting there

         21   to reach -- reaching the revenue estimate and we're

         22   counting on these increased park revenues in order to

         23   meet the projections.

         24                 Park revenue is estimated at

         25   $27.5 million.  We've collected 23 percent of that so


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          1   far.  Historically, we collect most of our park

          2   revenue between March and August, so we won't know

          3   until the summer whether we'll meet or exceed this

          4   revenue estimate also.  But at this time, park revenue

          5   looks really good.

          6                 I wanted to briefly show you where we

          7   are in terms of spending on our current year operating

          8   budget.  As of the end of December, which is one-third

          9   of the way through our fiscal year, we've spent

         10   31 percent of budgeted funds.  So this -- and this

         11   includes payables and encumbrances and -- so we're

         12   about where we would expect to be in terms of cash

         13   flow and spending for the year.  And that was all I

         14   had for a financial update, and I would be happy to

         15   take any questions if you have any.

         16                 VICE-CHAIRMAN ANGELO:  Do we have any

         17   questions or comments?  There being none, Suzy, we

         18   thank you for that one.  And we'll take up Item No. 3,

         19   which is a license system update, and we'll be --

         20   we'll be briefed on this item by Jayna Burgdorf and

         21   Terry Lewis.

         22   ITEM 3.  LICENSE SYSTEM UPDATE.

         23                 MS. BURGDORF:  Chairman and Members of

         24   the Commission, for the record, I am Jayna Burgdorf

         25   and I am joined by Terry Lewis, she's our license


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          1   system contract manager, and in spite of the past few

          2   months she is actually still new.

          3                 We are here to give you a brief

          4   presentation on the license systems status.  The good

          5   news is, we are not going to be giving you any dates

          6   as to when we're going to turn the system on.  The

          7   system is operational.  The hypercom units in the

          8   stores, that's in the vast number of retailers that we

          9   have out there, those are operational; the PC system

         10   for the law enforcement offices that sell both

         11   recreational and commercial sales is operational; the

         12   call center which is actually now here at Parks and

         13   Wildlife -- this is our park reservation call

         14   center -- are taking our 1-800 customer calls, that's

         15   operational; and internet sales are expected to come

         16   on in the spring of 2002.

         17                 Of course, during this time now, this

         18   transition, Transactive is shutting down.  They are

         19   removing terminals from agent locations that will last

         20   at least through the end of January.  In this month we

         21   are scheduled to begin audits on both WorldCom system

         22   and the Transactive system.

         23                 We have a signed contract amendment with

         24   WorldCom, as you all are aware, that reimburses us for

         25   the cost of the contingency with Transactive through


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          1   the fall.  In addition, there is some funding in that

          2   reimbursement for Parks and Wildlife's delayed

          3   implementation costs.

          4                 So in spite of the fact that we are --

          5   largely have the implementation behind us, there are

          6   some remaining issues.  And the highest priority issue

          7   for us right now is that one-third of the agents have

          8   not sold a license on the new system, and it -- and if

          9   you can, I'd like to share with you some numbers.

         10                 In the Transactive system this fall, we

         11   had 2,365 agents that were selling licenses and, as

         12   Suzy mentioned, that's our big license sells time of

         13   the year.  2,220 of those folks sent in agreements

         14   with us, signed agreements, saying, yes, we want to

         15   continue in the WorldCom system.  Almost 2,000 of

         16   those folks have connected their equipment so they

         17   could be selling licenses; theoretically, they've gone

         18   through the implementation process and, if you walked

         19   in there, you should be able to buy a license, but

         20   actually, only 1,550 or so have sold a license on the

         21   new system.  So what we've done is we've been calling

         22   them; we've called over a hundred of them to try and

         23   determine, you know, why have you not sold licenses.

         24   Over half of them have indicated that they haven't

         25   either had the time to set up the equipment and/or


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          1   they don't have a demand for selling licenses at this

          2   time right now.  It is a slow period for us; it is a

          3   slow license sales period.

          4                 We have been adding about ten to twenty

          5   agents a day for the past two weeks, and so we're

          6   going to continue to keep working on that.  I'd like

          7   to show you this map that will also kind of give you

          8   an idea of the coverage that we have across the State,

          9   because, of course, that's our -- that's our biggest

         10   concern:  Can customers get their licenses when they

         11   need them?

         12                 The blue areas are Zip codes where we

         13   had agents in Transactive and we now have agents in

         14   WorldCom that are selling licenses.  The red areas are

         15   areas -- Zip codes where we had agents in Transactive

         16   but we -- they are not selling now on the WorldCom

         17   system, haven't made a sale yet.  And the white areas

         18   are where we have not had an agent selling a license

         19   at all this fall, we haven't had anybody sign up with

         20   the system in that area.

         21                 So again, we're working with WorldCom.

         22   We're going to keep calling these folks, keep

         23   encouraging them to transition over; we're going to

         24   focus on these areas where we feel like we need

         25   coverage; and -- and deal with issues we -- escalate


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          1   issues as they come to our attention.

          2                 So we do have some key dates coming up.

          3   We've got the License Deputy Advisory Committee

          4   meeting on February 11th; and that will be a really

          5   good session for us, this will be the first time we've

          6   gotten together with these folks in a while.  We'll

          7   focus on both the implementation and also on what we

          8   can do -- their suggestions for improving the

          9   process.  Again, hope to have internet sales

         10   capability by March.  And then this Phase Two

         11   functionality, what that really means is more -- you

         12   know, all the deliverables with WorldCom, none of them

         13   should be due any later than April.  There are some

         14   support applications, some reports that we're still

         15   not getting right now that we've contracted for, those

         16   are all coming between now and the end of April.  And

         17   then, I think, later today you're going to hear about

         18   a concept on changing the back of the license paper

         19   for a log; and if that is approved then you'll start

         20   seeing that kind of paper out in the fields in June,

         21   so that by the new license year we will have all paper

         22   in the new format.

         23                 And we'd be happy to answer any

         24   questions for you.

         25                 VICE-CHAIRMAN ANGELO:  Would it be


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          1   correct to say that you're not concerned by the fact

          2   that this several hundred agents have not performed

          3   with the new system and attributing that mostly to the

          4   fact that this is a slow time, or do you think there

          5   is some reason to be worried about that?

          6                 MS. BURGDORF:  Oh no.  I mean, we're

          7   concerned.  I guess we just -- we're just in the worry

          8   mode for the past year, so we're just going to keep

          9   worrying.  But I think it made me feel a lot better

         10   when we called them and we said, you know, what --

         11   what's going on here?  You know, on -- on the down

         12   side of it, while 50 percent of them said, you know,

         13   we just haven't -- no one really wants to buy one

         14   right now, about a quarter of them we got no answer,

         15   which could mean -- you know, when you're a retail

         16   location you'd expect someone to be there answering

         17   the phone during the day.  Some -- but you have to

         18   remember some of the people who sell licenses for us

         19   really just are seasonal, so that could be part of

         20   it.  The other quarter did say that they were having

         21   some problems, and so what we did then is escalate

         22   those to the WorldCom help desk for those to -- for

         23   them to call those people directly and try and work

         24   through those problems.

         25                 VICE-CHAIRMAN ANGELO:  Have you in the


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          1   past experienced a loss of some -- some significant

          2   number of agents from year to year?

          3                 MS. BURGDORF:  I think with -- just like

          4   any small business we do have a number of these folks

          5   who go out of business every year.  And I think there

          6   are many license agents -- you know, the last time

          7   they had a fee increase was the same time we did our

          8   last fee increase, and we were -- what we did is they

          9   were averaging about a 4 percent commission and we

         10   raised it to 5 percent, and I think they feel like

         11   they do a lot for that 5 percent.  They also were very

         12   used to, in the Transactive system, having a customer

         13   service representative come out there and set up their

         14   machine and fix their problem for them.  You know,

         15   they may have complained about it; they may not have

         16   gotten it done as quickly as they wanted it, but at

         17   least they had another person come and look at that

         18   terminal.  With this new system and -- and frankly

         19   there are really only two major players in this

         20   industry; it's WorldCom and another company alled

         21   ALS -- they just do service by mail, service by phone

         22   and so they're not going to see a customer service

         23   representative come into their store to help them out,

         24   and so I think for some of them that's an issue.

         25                 CHAIRMAN IDSAL:  Do we have new


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          1   businesses that would like to adopt our system or take

          2   on our system?

          3                 MS. BURGDORF:  Yeah.  And they're --

          4   they're coming on.  We actually -- you know, this new

          5   system is costing us more money.  Again, you know,

          6   Transactive is not going out of business because they

          7   did really well in this industry; so this system is

          8   costing us more money.  And what we are doing with new

          9   agents is we are asking them to pay the monthly lease

         10   fee on the equipment.  We are not doing that -- in

         11   order to encourage getting coverage in some of these

         12   areas where we don't have agents right now, we are not

         13   charging them the lease fee if they are in a location

         14   where we don't have an agent within a ten mile

         15   radius.  So that's what we are trying to do to

         16   encourage more folks.  But I -- I think we've probably

         17   added about 30 or so folks since we've started the new

         18   system.

         19                 CHAIRMAN IDSAL:  Just following up on

         20   that, can you give me sort of a bottom line feel for

         21   how these two systems compare and your ex -- how

         22   they -- the new one is living up or not living up to

         23   your expectations and to the agent's expectations?  It

         24   sounds very positive.

         25                 MS. BURGDORF:  In general, I would say


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          1   it is very positive.  I think that the -- the biggest

          2   issue we have right now is just change.  People in

          3   general just don't like change and it is a new

          4   system.  We've heard some comments that they think

          5   it's a little slower; and part of that might be

          6   getting used to it; part of that might be the fact

          7   that they have to put in a little bit more

          8   information, like, of course, we're -- at the same

          9   time we're requiring a Social Security number as a

         10   follow-up to one of the State Auditor's

         11   recommendations.  So are they combining that with the

         12   WorldCom system and perceiving it as the same?  The

         13   other issue is, the Transactive system had one long

         14   dial up:  The machine called the host and stayed on

         15   line until it connected and got all the information.

         16   The new system has two separate calls, and I think

         17   some agents are perceiving that as being a little

         18   slower.  In general, from -- just from a data accuracy

         19   standpoint, from the standpoint of being able to have

         20   a new license, from customer friendly, the little

         21   screens that you can see on the terminal are much more

         22   user friendly.  So if you're one of the agents that

         23   has high clerk turnover, such as a Wal-Mart or an

         24   Academy, this is going to be a much easier system for

         25   you to learn.  The -- the sweep process -- when we


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          1   started with Transactive it took probably six months

          2   before we had the sweep process down.  WorldCom

          3   balanced on day one at our front counter, and has

          4   continued to do so.  So we are really -- from a

          5   financial management standpoint and a control

          6   standpoint we're extremely pleased with the system.

          7   We think we are getting a very high quality system.

          8                 COMMISSIONER FITZSIMONS:  I have a

          9   couple of questions, Jayna.  You mentioned Academy and

         10   Wal-Mart.  The last time I looked at these numbers

         11   they accounted for, help me, 65 percent total license

         12   sales; is that right?

         13                 MS. BURGDORF:  They're -- they're at

         14   least over 50 percent; I know that.  And that's --

         15   that's really only about -- 250 stores are over

         16   50 percent of our license sales.

         17                 COMMISSIONER FITZSIMONS:  All right.  So

         18   focusing on that fact, what has their response been to

         19   the new system, since that's relatively a small number

         20   of the thousands of agents who are selling the

         21   majority of the licenses?

         22                 MS. BURGDORF:  In general, I think

         23   they've been very happy.  As a matter of fact, Academy

         24   is extremely proactive.  They sent us -- they've got

         25   this guy who e-mailed his stores, you know, they have


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          1   lots of really good communication, asked every store

          2   to give him feedback, positive or negative, and copied

          3   us on all of the responses, and then if there were any

          4   issues in there we could escalate them to the help

          5   desk.  But there were probably more positive

          6   responses -- we like this system; it's working for

          7   us -- than there were concerns.  And if there were

          8   concerns, they were, in general, very small ones.  We

          9   had an issue when we first started out about having

         10   trouble getting duplicate licenses out of the system,

         11   and we've resolved most of that by finishing up all

         12   the Transactive data loads.

         13                 COMMISSIONER FITZSIMONS:  You gave some

         14   numbers as to one-third of the total agents were not

         15   using the new system.  That's based on -- you --

         16   you're counting Academy and -- and Wal-Mart each store

         17   as an agent?

         18                 MS. BURGDORF:  Yeah.  I'm -- Right.

         19   Right.  And I'm not basing it on -- on dollar sales or

         20   anything; I'm just basing it on the pure number that

         21   were in the system.

         22                 COMMISSIONER FITZSIMONS:  Right.  And

         23   I'm focusing where -- on the -- on where the real

         24   numbers are sold are in these -- how many? -- 250

         25   stores.


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          1                 MS. BURGDORF:  Probably.

          2                 MS. LEWIS:  Only eight Wal-Marts right

          3   now are not selling.  And one is a new store that has

          4   yet to open and the other seven have some -- some

          5   equipment problems that are being resolved by WorldCom

          6   at present.

          7                 COMMISSIONER FITZSIMONS:  Out of those

          8   250, just those small handful you mentioned, less

          9   than --

         10                 MS. LEWIS:  Right.  Those are the only

         11   ones that are not out of Wal-Mart and Academy.

         12                 COMMISSIONER FITZSIMONS:  All right.

         13   Okay.  What is the -- what -- what is the fee, the

         14   monthly lease fee, for the new WorldCom system, if you

         15   do just to start out?

         16                 MS. BURGDORF:  $40 a month.

         17                 COMMISSIONER FITZSIMONS:  That's not --

         18   that's not significant.  For the high volume or the

         19   low volume -- and I've -- I've described that as a --

         20   a small sporting goods store that may sell several

         21   thousand a year compared to an Academy, do they have

         22   the exact same system as the high-volume sellers in

         23   the low volume?

         24                 MS. LEWIS:  Yes, sir.

         25                 COMMISSIONER FITZSIMONS:  All right.


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          1   And when the low volume mom and pop, I'll call -- I'll

          2   call them, when they -- when they're ask -- calling in

          3   for help, and I've had a few comments, from -- from

          4   some of these store owners, how -- walk me through

          5   the -- the help -- the help desk.  They go straight to

          6   WorldCom or they come through Parks and Wildlife or --

          7                 MS. LEWIS:  We -- we request that they

          8   actually call the WorldCom help desk first.  There may

          9   be an issue in which they just need some assistance in

         10   setting up or getting ini -- initialized or they may

         11   have some equipment problems; you know, these things

         12   were, of course, shipped out and could have been

         13   dropped or broken.  So first we request that they call

         14   the WorldCom help desk.  If it is an issue that

         15   requires an open remedy ticket, i.e., someone needs to

         16   get back to them -- little bit more research -- they

         17   will give them a -- a ticket number and WorldCom

         18   will -- will contact them back.  If they do not get

         19   satisfaction from WorldCom, they can call us, and then

         20   we handle it here through our license help desk and we

         21   call those agents back -- see if we can assist, maybe,

         22   you know, escalate the issue with the WorldCom help

         23   desk, or it may be they just need some assistance in

         24   understanding how the system functions.

         25                 Sometimes what we've found is that they


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          1   just needed some reference back to the training

          2   materials, the users manual, and the -- the video to

          3   help them in some of their questions as to where we --

          4   where -- where will I find this license, how do I set

          5   up a clerk, how do I make a sale?  And then that's the

          6   type of assistance that we provide; we either escalate

          7   with the help desk or try and answer questions their

          8   through the phone.

          9                 MS. BURGDORF:  I will say this.  And --

         10   and Bob Parker from WorldCom is here with us and he

         11   can correct me if I'm wrong, but I think that actually

         12   a large percentage of the calls that the help desk is

         13   not getting are now program related as opposed to

         14   equipment related.  Now, the -- like Terri was saying,

         15   you know, where do I find this license?  Maybe -- you

         16   know, we have, what, over 215 types of licenses, so

         17   finding the right one is sometimes an issue.

         18                 COMMISSIONER FITZSIMONS:  All right.

         19   Just so I'm -- I'm clear when you've mentioned that

         20   one-third of the -- of the agents are not using the

         21   new WorldCom system, less than, what would that be, 4

         22   or 5 percent -- in other words, you have more than

         23   90 percent compliance, if that's the right term, in

         24   the two retailers that are the majority of sales.

         25                 MS. BURGDORF:  Oh yes.


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          1                 MS. LEWIS:  Yes.

          2                 VICE-CHAIRMAN ANGELO:  It's not

          3   one-third, is it, that are not using it?

          4                 MS. BURGDORF:  One -- one-third have not

          5   sold --

          6                 VICE-CHAIRMAN ANGELO:  Had a sale.

          7                 MS. BURGDORF:  -- a license yet.

          8                 MS. LEWIS:  A real license, a production

          9   license.

         10                 MS. BURGDORF:  It's -- you know, really

         11   it's a much higher proportion, you know, like -- more

         12   like almost 85 percent that have connected their

         13   equipment, so we know that they're -- they intend to

         14   be on board with the system.

         15                 VICE-CHAIRMAN ANGELO:  They're

         16   functioning, but they just haven't sold any yet?

         17                 MS. LEWIS:  Right.

         18                 MS. BURGDORF:  Right.

         19                 COMMISSIONER RAMOS:  You had a slide

         20   that -- red, blue and white counties, and I thought

         21   there were a lot of white counties with non-coverage.

         22                 MS. BURGDORF:  Right.

         23                 COMMISSIONER RAMOS:  Are we proactively

         24   going after those or is there a reason for that why we

         25   have so many?


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          1                 MS. BURGDORF:  Well, a lot of those are

          2   low populated areas, and historically we haven't had

          3   agents there.  You know, we'd like agents there and,

          4   like I said, we're -- as calls come in we are -- if --

          5   if they are agents in those areas we're not going to

          6   charge them a lease fee, we're encouraging them to get

          7   on.  We're -- we're trying to kind of work through the

          8   issue here of making sure that all the folks who used

          9   to to sell with us continue to sell with us.  But one

         10   of the things that I think we're going to focus on as

         11   soon as we get over that hump is, can we almost seek

         12   out a retailer in that area that can -- in those white

         13   areas that can give us statewide coverage there.

         14                 COMMISSIONER RAMOS:  Yeah.  So in those

         15   white areas we're really -- we're not actively going

         16   after them at this point?

         17                 MS. BURGDORF:  Not at this time, but

         18   that is our intent.

         19                 COMMISSIONER RAMOS:  Okay.  Thank you.

         20                 COMMISSIONER MONTGOMERY:  Jayna, can you

         21   tell yet how this new system is handling the lost

         22   transaction and audit problems that the State Auditor

         23   was so upset about?  Can you -- can we tell yet?

         24                 MS. BURGDORF:  Well, I guess there's two

         25   aspects to that.  One, it goes back to just kind of


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          1   the financial controls that are put in this new system

          2   are so much -- so much better than what we had with

          3   Transactive.  But also one -- the primary reason that

          4   we had issues with the Transactive system was the

          5   off-line capability.  We haven't instituted off-line

          6   capability in the WorldCom system yet.  We -- we will

          7   be.  Probably, within the week we'll be putting the

          8   software out there so that agents can sell off line.

          9                 When that happens, what WorldCom will

         10   have that -- that Transactive didn't really have is --

         11   is more of a clean handshake and -- and I can best

         12   explain it, being a really technical person, in that,

         13   you know, the host says, you know, "this is what I

         14   have for sales for you terminal," and the terminal

         15   says, "no, host, that's not right.  I have a few more

         16   sales; you need to upload these."  And so they do,

         17   what's called, a two-phase commit to make sure that

         18   they are in sync when the system -- when the terminal

         19   does come back on line.

         20                 The other thing that we have built in

         21   here is, we have an incentive for WorldCom to not go

         22   off line.  I think the merchants got to a point where

         23   Transactive would go down, they didn't want to or --

         24   and -- and let me -- sometimes it was even that the

         25   system went down, it was just that the volume was so


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          1   high they couldn't get through, so they'd just unplug

          2   their machine instead of waiting for the terminal to

          3   try and connect and they'd take it off line.  We have

          4   an incentive with WorldCom that -- that the system not

          5   go down, which means the -- the agents won't have any

          6   need to use the off-line functionality.  They get half

          7   price for every transaction that's off line.

          8                 COMMISSIONER MONTGOMERY:  This may be an

          9   abundance of caution.  Before we go off line and

         10   create that potential gap, can we be sure we've got

         11   our audit procedures clear so that we don't create

         12   that problem over again?

         13                 MS. BURGDORF:  Yeah.  We have -- we have

         14   tested that off-line capability to make sure that that

         15   works and that all transactions are uploaded, and --

         16   and that is working, and we've got the internal

         17   auditors involved in this whole process.  And as a

         18   matter of fact, they're starting -- they've been

         19   looking at pieces along the way, but they are also

         20   going to start an audit on the WorldCom system right

         21   away.

         22                 COMMISSIONER MONTGOMERY:  I just want to

         23   be sure that our -- in going off line that the

         24   retailers are given a procedure to follow that -- that

         25   is approved by our auditors.


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          1                 MS. BURGDORF:  Right.  Okay.

          2                 COMMISSIONER MONTGOMERY:  So that

          3   there's -- there's no -- the technical side I

          4   understand, it's got its own procedures, but to me

          5   we've got to button that audit piece down right up

          6   front so it never gets away from us.

          7                 MS. BURGDORF:  Uh-huh.

          8                 COMMISSIONER MONTGOMERY:  Or to the

          9   extent it does, we can measure how much it is getting

         10   a -- it -- it's there, so we don't get back into that

         11   same problem we had before.

         12                 MS. BURGDORF:  Right.

         13                 COMMISSIONER MONTGOMERY:  The other

         14   question I had, will the PC -- will the internet

         15   capability -- explain how that's going to work to me.

         16   Because if that drops the cost and it opens the

         17   access, does that solve the access problem?  But then

         18   how do we allocate who gets to use internet and who

         19   gets to use the other system?  Is one more expensive

         20   than the other or one of them -- costs.

         21                 MS. BURGDORF:  Well, I think you're

         22   talking about the PC system, and that's actually for

         23   our law enforcement offices and low-volume retailers.

         24   And that -- and when I say "low volume," I mean they

         25   sell less than a hundred licenses a year.


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          1                 Internet actually means that you could

          2   go on line, just like you could call the 1-800 number,

          3   you as a customer, and directly get your own

          4   authorization number through the internet to do

          5   hunting and fishing activities that don't require a

          6   tag.  And so that's the piece that we -- we never had

          7   before; and it's going to be a new offering, basically

          8   a customer convenience.  So it'll really just

          9   substitute for someone going to an agent; they will

         10   use their PC.

         11                 COMMISSIONER MONTGOMERY:  So I can go on

         12   line and buy my own license?

         13                 MS. BURGDORF:  Yes.  Uh-huh.

         14                 COMMISSIONER MONTGOMERY:  And WorldCom

         15   does not have an exclusive to control it, so in thoery

         16   anybody in the state that can get on the internet will

         17   be able to buy their own license.

         18                 MS. BURGDORF:  Yes.  And the only thing

         19   they can't permission for at that time and they have

         20   to wait for the license to be fulfilled is for any --

         21   hunting any tag species.

         22                 VICE-CHAIRMAN ANGELO:  And those could

         23   be -- those will be handled and they'll receive it by

         24   mail; is that the process.

         25                 MS. LEWIS:  Yes.


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          1                 MS. BURGDORF:  And they'll pay a $5

          2   convenience fee for doing that.

          3                 COMMISSIONER MONTGOMERY:  Is there a

          4   reason why that shouldn't be available on the internet

          5   also?

          6                 MS. BURGDORF:  Why --

          7                 COMMISSIONER MONTGOMERY:  Those special

          8   tags shouldn't be available if the license is

          9   available to.

         10                 MS. BURGDORF:  You know, we talked to

         11   our customers about that; at this point it's been

         12   probably close to two years ago.  And there really is

         13   just no good way for them to be able to print out a

         14   license that has tags that can't be duplicated.  And

         15   there was a huge concern in areas of the state, you

         16   know, that -- that have large deer populations, that

         17   that would lead to abuse.  So at that -- at this point

         18   we haven't crossed that hurdle and we're simply going

         19   with the authorization number.

         20                 VICE-CHAIRMAN ANGELO:  Madam Chairman, I

         21   believe you have a comment you'd like to make.

         22                 CHAIRMAN IDSAL:  Well, I'm told by Bob

         23   that Mr. Parker is here, Jayna mentioned him, Bob with

         24   WorldCom.  And I know he's been working with us for

         25   sometime now on a day-by-day, hourly-by-hourly basis.


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          1   Thank you very much.

          2                 MR. PARKER:  Thank you very much.

          3                 VICE-CHAIRMAN ANGELO:  Are there any

          4   other questions or comments?  Jayna, Terry, thank you

          5   you all.

          6   ITEM 7.  NONPROFIT PARTNERS, EMPLOYEE FUNDRAISING &

          7   YOUTH APPROPRIATE ADVERTISING.

          8                 VICE-CHAIRMAN ANGELO:  Next item is

          9   No. 7 on our agenda, and it's the item that was

         10   mentioned by Bob Cook in the charge, that's the

         11   non-profit partners, employee fundraising, and youth

         12   appropriate advertising.  And we'll here a

         13   presentation from Gene McCarty on this.

         14                 MR. McCARTY:  Mr. Chairman.

         15   Commissioners.  Good morning, my name is Gene McCarty;

         16   I'm chief of staff for the agency.

         17                 TPWD's Sunset Bill, Senate Bill 305,

         18   requires the Commission to adopt best practices for

         19   official non-profit partners and other non-profit

         20   partners.  The bill also requires that the Commission

         21   adopt guidelines for the solicitation of sponsorships

         22   by the official non-profit partner and policies for

         23   TPWD employee fundraising and rules for youth

         24   appropriate advertising.  Let me see here.  I would

         25   like to go over the proposed rules as they were


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          1   published in the December 14th issue of the Texas

          2   Register.

          3                 Best practices for the non -- for the

          4   official non-profit partner were developed based on

          5   recommendations made in the Sunset staff report.

          6   These best practices include adopting a conflict of

          7   interest policy, publishing an annual report, and

          8   making the current IRS return audit and exempt status

          9   available.

         10                 Partners must comply with the standards

         11   and safeguards for accounting:  These include adopting

         12   financial procedures for the acceptance of funds and

         13   prohibiting TPWD employees from spending or obligating

         14   partner funds.  Partners must also comply with state

         15   and federal requirements governing TPWD spending for

         16   expenditure of state funds.  TPWD employees may not

         17   hold paid positions or receive direct benefits from

         18   partners.  However, the partners may reimburse

         19   employees for documented expenses, as well as award

         20   scholarships to employees.  Lastly, employee

         21   fundraising on behalf of the partners must comply with

         22   the employee fundraising activities elsewhere in this

         23   title.

         24                 Sunset Bill -- the Sunset Bill allows

         25   the Commission to name one non-profit partner as the


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          1   official non-profit partner of the agency.  This

          2   official non-profit partner must adopt the best

          3   practices previously mentioned, as well as the

          4   following best practices based on the recommendations

          5   of the Sunset staff report.  They must provide that

          6   the Chairman of the Commission appoint a majority of

          7   the official non-profit board.  They must prohibit

          8   TPWD employees from serving as voting members of the

          9   official non-profit board, and prohibit the official

         10   non-profit from using state funds to infen -- to

         11   influence legislative action.

         12                 An independent accounting firm shall

         13   audit the official non-profit partner annually and a

         14   copy of the audit shall be sent to the Department.

         15   State funds received by the official non-profit

         16   partner shall be subject to audit by the State

         17   Auditor's office.  And no later than three years

         18   following the selection of the official non-profit

         19   partner, the Commission must assess whether the

         20   official non-profit partner is still needed.

         21                 In addition to best practices for the

         22   official non-profit partner, Senate Bill 305 requires

         23   the Commission to develop sponsorship guidelines.

         24   These allow the official non-profit partner to solicit

         25   and accept corp -- corporate sponsorships when they


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          1   are consistent with the mission of TPWD and comply with

          2   following sponsorship requirements:  The official

          3   non-profit partner may not accept sponsorships from

          4   entities that conflict with the Department's mission

          5   or legislative mandates, are regulated by or in

          6   litigation with the department at the time of

          7   consideration and would result in the role of TPW

          8   being less prominent than that of the sponsor.

          9                 The official non-profit partner may

         10   recognize sponsors solely in the context of the TPWD

         11   program, event or material that the sponsor has

         12   supported, and only when the contribution is greater

         13   than the cost associated with providing that

         14   recognition, and may not include signage of any kind

         15   on any state-owned vehicle or trailer.

         16                 Sponsorship recognitions by the official

         17   non-profit partner shall be based on the contribution

         18   amount, scope and duration.  The Department will,

         19   however, have final approval of levels and terms of

         20   recognition on a case-by-case basis.  A report must be

         21   prepared and submitted to the Department by the

         22   official non-profit partner annually.  And finally,

         23   payment of sponsorship financial contributions shall

         24   be made directly to the official non-profit partner.

         25                 Sunset required the Commission also to


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          1   adopt Department/employee fundraising guidelines for

          2   all gifts equal to or greater than $500.  These would

          3   include allowing employees to solicit and accept

          4   donations as part of their official duties; requiring

          5   the employee to report their fundraising activities

          6   quarterly; prohibiting employees whose jobs -- job

          7   duties include regulatory oversight of an entity from

          8   soliciting or accepting donations from that entity and

          9   prohibiting employees from soliciting or accepting

         10   donations as a consequence of administering or

         11   enforcing State law or Department regulations.

         12                 And lastly, Sunset required that the

         13   Commission adopt rules related to youth appropriate

         14   advertising.  This would limit advertising that is

         15   appropriate for youth viewing to advertising that did

         16   not include alcohol or tobacco products.

         17                 We published this in December.  Received

         18   six comments as of today.  The bulk of these comments

         19   requested that we amend the requirement for the

         20   independent audit as it applies to all non-profit

         21   partners, and only apply that independent audit to the

         22   official non-profit partner.

         23                 We would agree with that.  I think

         24   that -- that many of these very, very small non-profit

         25   partners, fringe groups and so forth, can't really


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          1   afford that independent annual audit, and in -- in

          2   looking back over the legislation and the attempt --

          3   the intent for that annual audit was to apply

          4   specifically to the official non-profit partner and

          5   not the -- not all non-profit partners.  So the staff

          6   would concur with those -- with those comments from

          7   the public, and would -- would amend the proposal

          8   accordingly to -- to not require an annual audit of

          9   all non-profit partners, only the official non-profit

         10   partner.

         11                 VICE-CHAIRMAN ANGELO:  The official

         12   non-profit partner is -- is -- is more than likely or,

         13   I guess, certainly going to be the foundation; is that

         14   correct?

         15                 MR. McCARTY:  Well, that will be up to

         16   the Commission.  What we have to do is adopt the

         17   guidelines first.

         18                 VICE-CHAIRMAN ANGELO:  First, I know.

         19   But that's -- that's the perception that that's what

         20   it'll be?

         21                 MR. McCARTY:  Right.  Yes, sir.

         22                 VICE-CHAIRMAN ANGELO:  All right.  And

         23   how much is this going to affect the other -- like the

         24   fringe groups and whatever, do you think?  I mean is

         25   this --


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          1                 MR. McCARTY:  Well, I think it is -- it

          2   is going to be a little more onerous than -- than --

          3   than what we have.  But I think it's important that

          4   we -- there have been issues concerning non-profit

          5   partners:  What they're doing, how -- what their

          6   relationship is to the agency.  And, you know, this --

          7   this will go a long way towards allowing us to all get

          8   together on the same page.  I don't think there's

          9   anything that's in there that's a -- that's -- that's

         10   a real killer.  And it -- and what we've proposed here

         11   pretty well follow -- follows right down the line of

         12   what was -- what was brought forth through Sunset.

         13   And you know, we've -- we've been working with all

         14   the -- all the other non-profit partners discussing

         15   these issues and I -- I think, for the most part,

         16   they're -- they're okay with it except for this --

         17   this one issue.

         18                 VICE-CHAIRMAN ANGELO:  The youth -- the

         19   youth advertising, do you have any comments further

         20   on -- on exactly what the impact of that's going to

         21   be?

         22                 MR. McCARTY:  Well, the intent was the

         23   contract and/or the -- the an -- the outdoor annual

         24   and the fact that we produce a certain number of

         25   outdoor annuals that are youth -- that have youth


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          1   appropriate advertising.  And the question came about,

          2   what is youth appropriate advertising, you know, in --

          3   in that regard.  And the -- and Sunset wanted us to --

          4   or at least -- or the -- the legislation wanted us to

          5   define that.

          6                 VICE-CHAIRMAN ANGELO:  Well, now, is

          7   that going to apply to the ones that didn't have youth

          8   appropriate advertising or do -- in other words --

          9                 MR. McCARTY:  No.

         10                 VICE-CHAIRMAN ANGELO:  -- across the

         11   board there will still be -- there will still be

         12   annuals produced as they were before?

         13                 MR. McCARTY:  No.  The -- the way the

         14   bill says -- the legislation says that a certain

         15   number will be -- that our contract with -- for the

         16   production of this must require a certain number to

         17   have youth appropriate advertising, and then requires

         18   us to define that.

         19                 VICE-CHAIRMAN ANGELO:  Do you have a

         20   question, Phil?

         21                 COMMISSIONER MONTGOMERY:  Yeah.  Just a

         22   request really.  When we adopt our policy and

         23   procedure with respect to fundraising, can we also

         24   have a very clear statement of how donations are to be

         25   handled, whether they're a cash, check with us -- so


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          1   when we get back to the audit that we have a very

          2   clear signal and a policy of what our handling

          3   procedures are so we don't get --

          4                 MR. McCARTY:  Yes.

          5                 COMMISSIONER MONTGOMERY:  -- back into

          6   the same problem we had before?

          7                 MR. McCARTY:  Right.

          8                 VICE-CHAIRMAN ANGELO:  Those have

          9   already been implemented.

         10                 MR. McCARTY:  Yeah.  Those have already

         11   been implemented.  We've already implemented changes

         12   in mail room policy that -- that do not allow anyone

         13   except the cashier to take those monies.

         14                 COMMISSIONER MONTGOMERY:  Why don't we

         15   just take that -- whatever that statement is and put

         16   it in there too so it's repeated and very clear that

         17   anybody that reads it knows where it is?  I know it's

         18   a little redundant, but --

         19                 VICE-CHAIRMAN ANGELO:  Okay.  Do have an

         20   appropriate spot to put that?  I mean you --

         21                 COMMISSIONER MONTGOMERY:  Maybe, it's

         22   overkill, Gene.  I just wanted to be sure we were

         23   attending to that one.

         24                 MR. McCARTY:  Yeah.  I think it's --

         25   it's a difference between agency policy and what we're


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          1   doing here which is rule -- required rule making of

          2   Texas Administrative Code.

          3                 COMMISSIONER MONTGOMERY:  Okay.  That's

          4   fine.

          5                 VICE-CHAIRMAN ANGELO:  Any other

          6   comments or questions?  If not, as Chairman of the

          7   Finance Committee we'll place this item on the

          8   Thursday Commission meeting agenda for public comment

          9   and action.  Thank you, Gene.

         10   ITEM 8.  GRANTS.

         11                 VICE-CHAIRMAN ANGELO:  Move on to Item

         12   No. 8, Grants for local park funding and indoor

         13   recreation grants to be presented by Tim Hogsett.

         14   Tim?

         15                 MR. HOGSETT:  Good morning,

         16   Mr. Chairman.  Members of the Commission.  I'm Tim

         17   Hogsett from the Recreation and Grants Branch and the

         18   State Parks Division.  This item is preparation for

         19   your consideration tomorrow of funding from the Texas

         20   Recreation and Parks account for our outdoor and

         21   indoor recreation grant programs.

         22                 First, for outdoor recreation grants we

         23   received 39 applications for the July 31st, 2001

         24   deadline requesting a total of $16.2 million in

         25   matching funds.  We have ranked all of those projects,


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          1   prioritized them by ranking, and that is the Exhibit A

          2   which you can find just behind Page 162 in your -- in

          3   your agenda book.  And we are proposing tomorrow to

          4   recommend to you that we approve the top 13

          5   applications for $5,750,962 in matching funds, which

          6   is the current amount that's available for granting.

          7   And I'll be glad to answer any questions.

          8                 COMMISSIONER MONTGOMERY:  I had a

          9   question looking through your grants.  What's our

         10   philosophy behind the amount?  It seemed like we -- on

         11   both that we had a cut-off of either half a million or

         12   three-quarters of a million, and we -- rather than do

         13   20 grants at hundred thousand we did five at half a

         14   million.  What -- what's the --

         15                 MR. HOGSETT:  The -- you mean $500,000

         16   figure itself as a -- that is something that has been

         17   subject to public comment.  It was adopted the last

         18   time the Commission adopted rules.  It is a Commission

         19   policy, and you're -- you're free to consider changing

         20   that if you like.  But basically it is working with

         21   the people that we work with -- local park directors,

         22   Texas Recreation Parks Society, etcetera -- they seem

         23   to feel that that's probably an appropriate amount

         24   given the level of competition that we have for the

         25   limited amounts of money.  You raise the cap; you make


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          1   the competition even more keen than it already is.

          2                 COMMISSIONER MONTGOMERY:  I guess to

          3   me -- have we considered or should we consider a

          4   measure which looks at the -- the leverage we're

          5   getting for our dollars?  In other words, if -- if

          6   people will contribute ten to one other dollars to our

          7   dollar -- in other words, can we treat ours as

          8   challenge grants rather than just as allocation?

          9                 MR. HOGSETT:  That would require a

         10   change in -- in the State law.  Chapter 24 of the Code

         11   mandates Texas Recreation and Parks account says

         12   50 percent grants are to be awarded.

         13                 COMMISSIONER MONTGOMERY:  So we're

         14   limited by law to figures --

         15                 MR. HOGSETT:  Yes.  At this point we

         16   are.

         17                 COMMISSIONER MONTGOMERY:  Well, in order

         18   to be more effective with the use of that money than

         19   maybe should we pursue a legisla -- would -- should

         20   the Commission request a legislative change so that we

         21   could treat these as challenge grants and try to get

         22   more leverage for State dollars?

         23                 MR. HOGSETT:  Certainly worth

         24   considering and --


         25                 COMMISSIONER MONTGOMERY:  Would it be


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          1   more effective?

          2                 MR. HOGSETT:  -- and getting with our

          3   constituents and see how they feel about it.

          4                 COMMISSIONER MONTGOMERY:  How to -- how

          5   use the dollars most effectively.

          6                 COMMISSIONER FITZSIMONS:  I agree with

          7   Mr. Montgomery's comments.  I'm unclear though as to

          8   the statutory requirements.  That's a cap of

          9   50 percent.  It doesn't you from leveling --

         10                 MR. HOGSETT:  It says, if I recall

         11   correctly, Chapter 24 of the Code says that these

         12   shall be 50 percent matching grants.  The only

         13   exception to that is the Community Outdoor Outreach

         14   Grant Program.

         15                 COMMISSIONER MONTGOMERY:  When you look

         16   at the list --

         17                 COMMISSIONER FITZSIMONS:  That certainly

         18   seems to limit the creativity that -- that Phil's

         19   referring to.

         20                 MR. HOGSETT:  Right.

         21                 MR. COOK:  Tim, I think it might be

         22   worthwhile to -- and -- and the -- many of these total

         23   projects -- for instance, the project may be a two or

         24   three or so million dollar project.  We -- our cap for

         25   any individual project is $500,000 or whatever that


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          1   limit might be.  Tim, would you speak to that a little

          2   bit?  I think this is the same issue.

          3                 MR. HOGSETT:  Most -- particularly, in

          4   the indoor recreation grants, nearly all of those

          5   involve a much larger local investment than just

          6   50 percent.  A typical recreation center, you know,

          7   five, six million dollar facility.  And in that

          8   program, the indoor program, we have a cap of

          9   $750,000.

         10                 Another option that we might have in

         11   terms of addressing that would be through the scoring

         12   system.  We could potentially change the scoring

         13   system to give some additional priority to projects

         14   that do have higher levels of outside contributions

         15   that don't -- over and above the match.  So that would

         16   be another way to --

         17                 COMMISSIONER FITZSIMONS:  I'm not clear,

         18   Bob.  The statute says shall be 50 or is capped at 50

         19   percent.

         20                 VICE-CHAIRMAN ANGELO:  I'd have to ask

         21   Tim.

         22                 MR. HOGSETT:  I'd have to -- I'd have to

         23   look at the actual law, but if I'm not mistaken it

         24   says "shall".

         25                 COMMISSIONER FITZSIMONS:  If you don't


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          1   need to change -- it's capped at 50, you can make your

          2   point it be 10 or 25 total.

          3                 COMMISSIONER MONTGOMERY:  Yeah.  It

          4   just -- I'm new to this area and I don't know it all

          5   and I'm not -- in no way pretending to, but it just --

          6   it raised the question to me of are we using the

          7   granting capability to its most effective means to

          8   cause the things we want to happen to happen with the

          9   fewest dollars.

         10                 MR. HOGSETT:  I understand.  And we --

         11                 COMMISSIONER MONTGOMERY:  And the other

         12   question I had is, how do indoor recrea -- how do

         13   funding indoor recreation centers fit our mission and

         14   why are we doing that?

         15                 MR. HOGSETT:  I can't specifically say

         16   that it does fit our mission, but it is a legislative

         17   mandate.

         18                 COMMISSIONER MONTGOMERY:  That the

         19   indoor -- well is it --

         20                 MR. HOGSETT:  Yes.  There is -- in -- In

         21   Chapter 24 of the Code, it says that when the amount

         22   of the Texas Recreation and Parks account exceeds, I

         23   believe, it's 15 and a half million that three -- at

         24   least 3.3 million a year must go to indoor recreation

         25   grants.


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          1                 MR. MONTGOMERY:  Okay.  But my question

          2   is this, can we -- can we limit those and still comply

          3   with the law to indoor recreation that fits the

          4   mission of Parks and Wildlife?  Because the things

          5   we're funding to me, just looking at the list, look

          6   like things that cities ought to fund, city rec

          7   centers, you know, racquetball courts and things that

          8   really have nothing to do with our mission.

          9                 MR. HOGSETT:  Well, that's -- this is

         10   based on legislation -- legislative intent that we do

         11   just what you've just said that we do.  I would think

         12   that it would be an unpopular decision to make that

         13   sort of a change, but we have that within our --

         14   within our power -- within your power as make --

         15   rule-making authority for the program.

         16                 COMMISSIONER MONTGOMERY:  We're in the

         17   kitchen.  I don't know if we can stand the heat on

         18   that one or not.  We ought to look at it, I guess.

         19                 COMMISSIONER FITZSIMONS:  I'll take some

         20   of that heat.  Let me take a little bit of that heat.

         21   Let me ask again, it's mandate when Texas Parks and

         22   Recreation -- Recreation and Parks account exceeds

         23   what amount?

         24                 MR. HOGSETT:  I believe that it's 15 and

         25   a half million, but -- I wish I had brought the Code


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          1   book with me this morning.

          2                 COMMISSIONER FITZSIMONS:  All right.  I

          3   think you have -- that a certain amount go to the

          4   indoor recreation.  But I think

          5   Commissioner Montgomery's point is that doesn't mean

          6   it can't be still consistent with our mission --

          7                 COMMISSIONER MONTGOMERY:  Right.

          8                 COMMISSIONER FITZSIMONS:  -- and be

          9   indoor.  It just doesn't say any indoor that applies

         10   shall be --

         11                 VICE-CHAIRMAN ANGELO:  What -- what

         12   function of our mission would you suggest that we

         13   would require for an indoor facility?

         14                 COMMISSIONER MONTGOMERY:  I don't know.

         15   But, you know, environmental education centers,

         16   natural history museums, educational centers of some

         17   kind, training centers, I -- maybe there's other

         18   things.  I really don't know the answer to my

         19   question.  But I also don't feel --

         20                 MR. HOGSETT:  We have done --

         21                 COMMISSIONER FITZSIMONS:  He's just sure

         22   that racquetball is not on line with --

         23                 COMMISSIONER MONTGOMERY:  Well, I -- I

         24   guess I'd like to have us look at that and review it

         25   more carefully if -- if -- is there a -- city of


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          1   Athens you know, wants to put an education add on to

          2   the fishery center in Athens, does that count --

          3                 VICE-CHAIRMAN ANGELO:  The Chairman --

          4   the Chairman's got a comment with -- in respect to

          5   what you --

          6                 COMMISSIONER MONTGOMERY:  She'll

          7   probably tell me to quit asking questions.

          8                 CHAIRMAN IDSAL:  No, Phil.  I'll put it

          9   another way.  Tim, I think we have some new

         10   Commissioners here and aren't -- they are not

         11   completely familiar -- and I can always stand a review

         12   of what you do and some of the regs and rules and the

         13   missions and the whatnot, it might be helpful to

         14   provide a briefing for all of us on -- to go over

         15   that.

         16                 MR. HOGSETT:  Yeah.  Absolutely.

         17                 CHAIRMAN IDSAL:  And there have been

         18   some changes made recently that you can incorporate in

         19   that so that we can all get up to speed again with

         20   this very important work that you do.

         21                 MR. HOGSETT:  Yes.  Absolutely.  We'll

         22   be happy to do that.

         23                 COMMISSIONER MONTGOMERY:  Could we

         24   include -- I'm sorry, Donato.  Go ahead.

         25                 COMMISSIONER RAMOS:  No.  My only


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          1   comment, it seems to me that we ought to be trying to

          2   help as many people as we can or cities or

          3   municipalities, and we don't necessarily have to give

          4   everyone a half a million dollars.  In other words, if

          5   you were to take what you've done here and give $250-

          6   to each you could -- you could double the number of

          7   people that you're helping.  And it -- and my question

          8   to you is, are we mandated by statute to give a

          9   maximum or do we have the discretion?

         10                 MR. HOGSETT:  No.  We are not mandated

         11   by statute.  That is a Commission policy.

         12                 COMMISSIONER RAMOS:  That's -- we could

         13   give them a hundred thousand.

         14                 MR. HOGSETT:  Yes.

         15                 COMMISSIONER RAMOS:  My only concern

         16   under this system, we're not helping as many people.

         17   Out of 39 applicants we're only helping 13.

         18                 VICE-CHAIRMAN ANGELO:  I believe, the --

         19   the theory, though, was -- that as long as you've got

         20   the even 50/50 matching the theory was that if you --

         21   you set too low a number it's really not significant.

         22   I mean, a hundred thousand dollars is a lot of money,

         23   but it's not that significant in a -- in a million

         24   dollar project for instance.  Whereas, if you can go

         25   to the larger amount you'd make -- it makes the


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          1   competition keener and -- but it also is more -- more

          2   significant to the particular entity that's requesting

          3   the money.

          4                 COMMISSIONER RAMOS:  There's some

          5   projects here like Crawford City Park, you know,

          6   $153,000, you know, if you have matching funds you

          7   could cover that project very easily.  All I'm saying

          8   is I don't think that the trend should be to where

          9   we're helping the bigger projects.  I think the

         10   smaller projects are being compromised, it appears to

         11   me, but anyway that's -- that's my only comment.

         12                 VICE-CHAIRMAN ANGELO:  In the process

         13   of -- of following up on the Chairman's comment you

         14   could, maybe, go through the rationale for these

         15   things, and if the Commission wants to change them

         16   they can.

         17                 MR. HOGSETT:  Absolutely.

         18                 VICE-CHAIRMAN ANGELO:  Okay.  We have

         19   this divided into two items for the agenda for

         20   tomorrow.  Is there any further comments on the local

         21   park funding grants?

         22                 COMMISSIONER MONTGOMERY:  Just in that

         23   review could we request the staff to lay out options

         24   they see by which we might have a higher impact with

         25   our dollars than our current policy, and ways in which


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          1   we can make sure that the dollars as much as possible

          2   go to things that fit our mission?  Just options.

          3                 VICE-CHAIRMAN ANGELO:  Tim, did you --

          4   I'm sure all of that will get recorded but did you

          5   hear that?

          6                 MR. HOGSETT:  No.  I didn't hear.  I'm

          7   sorry.

          8                 COMMISSIONER MONTGOMERY:  In the review,

          9   I guess, what I would like to see us do is make sure

         10   that we -- you come back with options to consider

         11   which would cause us to maximize the impact of the use

         12   of these dollars, whether or not they require

         13   legislative changes, and options we have for insuring

         14   that the grants are as close to fitting our mission as

         15   possible.

         16                 MR. HOGSETT:  There are a number of

         17   highly-weighted criteria in both the indoor and

         18   outdoor scoring systems already for

         19   conservation-related types of projects.

         20                 We -- we typically about every four or

         21   five years will go through the rule-making process on

         22   the entire program.  It's getting close to the time to

         23   do that again anyway, so I think this is a -- you

         24   know, a welcome opportunity.  I would think that the

         25   Chairman's mandate that we form a local park advisory


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          1   board can also be helpful in that regard.

          2                 And I also will -- will remind you about

          3   the small communities program that we're going to ask

          4   you to adopt some permanent rules for later today.

          5   That is a -- a new initiative setting aside some

          6   additional money just for smaller communities in a

          7   small amount.  We welcome the comments.  And this

          8   slide indicates what we're proposing to recommend

          9   tomorrow.

         10                 VICE-CHAIRMAN ANGELO:  Excuse me, Tim.

         11   Do we not have to separate those two for the --

         12                 MR. HOGSETT:  Do you?

         13                 VICE-CHAIRMAN ANGELO:  -- agenda?  I

         14   mean, they are separate.

         15                 MR. HOGSETT:  They are separate items on

         16   the public hearing agenda tomorrow, yes.

         17                 VICE-CHAIRMAN ANGELO:  Okay.  Well -- so

         18   I'll -- I'll go ahead and -- with -- if there's no

         19   objection that we'll place the item for local park

         20   funding on the agenda for tomorrow's meeting for

         21   public comment and action, and then we'll move on to

         22   the indoor grants.

         23                 MR. HOGSETT:  The -- the Indoor

         24   Recreation Grant program we take applications once a

         25   year for it with the deadline being July 31st of each


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          1   year.  This year we received 22 applications

          2   requesting about 13 and a half million dollars.  We

          3   have approximately $3.3 million available, and but --

          4                 I have the answer to your question

          5   related to the Code.  It says, when revenues from the

          6   Texas Recreation and Parks account exceed $14 million

          7   per year an amount not less than 15 percent shall be

          8   made available to local governments for up to

          9   50 percent of the cost of acquisition or development

         10   of indoor recreation facilities.  That may provide

         11   some clarity.

         12                 And we will recommend to you tomorrow

         13   funding of the projects that have been rank ordered

         14   prioritized behind the agenda item at Page 204, and we

         15   are recommending approval of the top six applications

         16   for that available amount of $3,325,000.

         17                 VICE-CHAIRMAN ANGELO:  Any other

         18   comments on the indoor grants other than those we've

         19   already had?  If not, we'll place this item on the

         20   agenda for tomorrow's meeting for public comment and

         21   action.

         22                 And then we'll take up Item No. 9 on our

         23   agenda, which is the small community grant projects

         24   and regional grants, and again, we'll ask Tim to

         25   present this item


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          1   ITEM 9.  SMALL COMMUNITY GRANT PROJECTS and REGIONAL

          2   GRANTS.

          3                 MR. HOGSETT:  Thank you, Mr. Chairman.

          4   Once again, I'm Tim Hogsett from the Recreation Grants

          5   Program and the State Parks Division.  This item is a

          6   request that you consider adopting as permanent two

          7   programs that we have had in pilot form.  The one --

          8   for one pilot review, the small communities pro --

          9   program, and the other we've had two pilot awards that

         10   you have -- have made for regional park grants.

         11                 And I'll address first the authority

         12   that you have under the Texas Parks and Wildlife

         13   Code.  Says that you have the authority to adopt

         14   programs and rules and changes to the -- how the

         15   program is administered under Chapter 24 of the Texas

         16   Parks and Wildlife Code.

         17                 As I said, we have conducted pilot

         18   programs for both of these; they have been both very

         19   successful in our opinion, very well received.  And

         20   today -- actually tomorrow we're going to propose the

         21   adoption of rules to make these permanent pieces of

         22   our arsenal, if you will, to assist local governments

         23   in providing recreation opportunities.

         24                 To effect this proposal, we had six

         25   public hearings around the state.  We would conduct


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          1   one public hearing in the morning for the small

          2   communities program and another program in the

          3   afternoon for the regional parks.

          4                 Total attendance over all of those 12

          5   hearings, if you will, was about 200 people.  The

          6   majority of the participants came to the small

          7   communities program; the regional parks were not as

          8   well attended.

          9                 This was well advertised.  Statewide

         10   mailing to all local governments that were potentially

         11   eligible, publication through the Texas Recreation and

         12   Parks Society magazine, Counsel of Governments

         13   assisted us in getting the word out.

         14                 First, the small communities program.

         15   This is a -- a outgrowth of the last time we did rule

         16   making.  One of the things that we heard consistently,

         17   and continued to hear, is that small communities which

         18   only need one or two facilities and only may need a

         19   small amount of money typically cannot be competitive

         20   in the larger outdoor recreation grant program.  I

         21   would agree with that based on the analysis of -- of

         22   what -- of what we have seen historically and

         23   especially in the last few reviews where the score

         24   seems to continue to go up for outdoor recreation

         25   grants.


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          1                 So we asked and the Commission agreed to

          2   set aside the equivalent of one of those grants, or

          3   $500,000, for a statewide competition among, at that

          4   point, governments of 50,000 population or less to

          5   make $50,000 maximum 50 percent matching grants to

          6   those local governments.  Hopefully, we had a simple

          7   application process, and it was a pilot, and we said

          8   at the time that we would evaluate the results of that

          9   pilot and come back to you with a recommendation about

         10   the future of that program.

         11                 The results of the pilot were that in a

         12   very short period of time, in about two months, after

         13   again getting the word out statewide to all potential

         14   eligible sponsors at 50,000 or less, we got 64

         15   applications requesting $2.2 million for the available

         16   approximately $500,000.  We developed a -- a scoring

         17   system that was reasonably similar to our indoor and

         18   outdoor scoring system but were more tailored to the

         19   goals of the program being small communities and one

         20   or two facilities being the need.  And evaluated those

         21   and then brought to you last August recommendations

         22   which you approved for the funding of the top 12

         23   applications out of those 64.

         24                 When we did our public hearing we tried

         25   to make them as facilitated as possible.  In other


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          1   words, bring out the issues that we thought were out

          2   there and then listen to other issues which might be

          3   on the minds of potential applicants.  One of the

          4   obvious issues is the size of the cap on the

          5   population.  It was frankly rather arbitrary at the

          6   time we set it for the pilot at 50,000.  Some data on

          7   what we actually received in the pilot:  Out of the 64

          8   pilot applications, 57 of those were communities of

          9   20,000 or less.  And the average population of those

         10   64 was about 9,000.

         11                 The next issue that we heard -- and this

         12   was not something that we put on the table, but was

         13   brought to our attention by sponsors -- in the pilot

         14   we did not -- because of the small amount of money

         15   available, $50,000, we did not allow for acquisition

         16   of property.  We heard fairly consistently in our

         17   public hearings that we ought to consider doing that,

         18   particularly when it involved donation of real

         19   property and that donation being allowed to be used as

         20   part of the match for the project.

         21                 Administrative issues:  The application

         22   cap of $50,000 was discussed.  And it so happens that

         23   in the pilot almost all of applicants asked for that

         24   maximum amount of $50,000.  We asked if the guidelines

         25   were easy to understand, and whether the numbers of


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          1   review cycles were appropriate, and whether web site

          2   accessibility was -- was sufficient.  And we got an

          3   affirmative answer in all three of those cases.

          4                 So the proposal that we're going to ask

          5   you to consider tomorrow will do several things.  It

          6   will, first of all, decrease the population

          7   eligibility from 50,000 to 20,000.  That was

          8   consistently what we heard throughout our public

          9   hearings and in the public comments that were

         10   received.  As I said, these were posted in the

         11   Texas -- or I may not have said -- these rules --

         12   proposed rules were posted in the Texas Register, and

         13   up until yesterday we had received no comments related

         14   to that Texas Register posting.  Yesterday we did

         15   receive two letters, one from the City of San Benito,

         16   which is in the Valley, approximately 23,000

         17   population, and then second -- secondly, a letter from

         18   their state representative, Ms. -- Representative

         19   Solis, both of which are requesting that you consider

         20   leaving the population cap at 50,000 as opposed to

         21   reducing it to 20,000.

         22                 VICE-CHAIRMAN ANGELO:  Your second

         23   bullet wouldn't -- wouldn't apply to those

         24   communities?

         25                 MR. HOGSETT:  It would not, no.  Because


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          1   they are in -- I believe they are in Cameron County

          2   and they are an incorporated community.

          3                 What that second bullet is about that in

          4   particularly rural parts of the state there may be

          5   unincorporated areas who are not really served by any

          6   government other than the county government but that

          7   county government's pop -- that -- the entire

          8   population of that county may be well over 20,000.

          9   Example, might be a colonia in the El Paso County

         10   area.  A small unincorporated community, needs some

         11   assistance, but obviously El Paso County is much

         12   larger than -- than the 20,000 or 50,000 dollars --

         13   the population.  I'm sorry.

         14                 VICE-CHAIRMAN ANGELO:  Other than the

         15   fact that -- other than the fact that you got mostly

         16   requests from communities that were less than 50,000

         17   or less than 20,000, what -- what is the other

         18   rationale for lowering the number?

         19                 MR. HOGSETT:  That -- we think that that

         20   is closer to what the need is out there.  That really

         21   truly small communities, particularly more rural

         22   communities, that have little or no facilities and

         23   have very small needs that those -- those are the

         24   kinds of folks that we think really need this kind of

         25   a program.  You get into the 50,000 population, for


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          1   example, you include a lot of the municipal utility

          2   districts in the urban areas.  You include the cities

          3   that have greater resources potentially, or sponsors

          4   that have greater resources, at their command that

          5   possibly can be more competitive in the larger

          6   programs.  It's just a guess, frankly.

          7                 VICE-CHAIRMAN ANGELO:  So 20,000 is an

          8   arbitrary number also?

          9                 MR. HOGSETT:  Yes.  Yes, it is.

         10                 VICE-CHAIRMAN ANGELO:  And we could just

         11   as easily say 25- and --

         12                 COMMISSIONER MONTGOMERY:  My question on

         13   that, though, is, why -- why have a floor if we're

         14   tying to help the small communities?  Because I -- we

         15   can all think of counties with less than 20,000 that

         16   fit the description you just gave.  Why --

         17                 VICE-CHAIRMAN ANGELO:  If you make it

         18   50,000 you're getting communities that have got

         19   greater capabilities and they're going to out

         20   commit -- out compete the --

         21                 COMMISSIONER FITZSIMONS:  They'll have

         22   other options.

         23                 VICE-CHAIRMAN ANGELO:  Isn't that the

         24   reason?

         25                 MR. HOGSETT:  That's my feeling, yes.


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          1                 COMMISSIONER FITZSIMONS:  The idea is

          2   that they have other options, the bigger ones.

          3                 VICE-CHAIRMAN ANGELO:  The bigger ones

          4   can go for the $500,000.

          5                 COMMISSIONER MONTGOMERY:  Well, no,

          6   that's the ceiling.  I'm talking about the floor.

          7                 COMMISSIONER FITZSIMONS:  This is the

          8   ceiling.

          9                 VICE-CHAIRMAN ANGELO:  This is the

         10   ceiling.

         11                 COMMISSIONER FITZSIMONS:  There's no

         12   floor.  It's not the floor.

         13                 VICE-CHAIRMAN ANGELO:  You've got to be

         14   less than 20,000.

         15                 COMMISSIONER MONTGOMERY:  Okay.  All

         16   right.  Excuse me.  I missed the point then.  Okay.

         17                 COMMISSIONER FITZSIMONS:  So for those

         18   that are left in the -- if I may --

         19                 VICE-CHAIRMAN ANGELO:  Sure.

         20                 COMMISSIONER FITZSIMONS:  -- those that

         21   are left in the gap, so to speak, like San Benito --

         22   and you have to understand, I'm from a part of the

         23   world where 20,000 is a lot -- town of 5,500 so it --

         24   yeah -- 20- is a pretty big number, it sounds like to

         25   me.  But in those -- in that gap like San Benito, they


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          1   are -- would traditionally or presumably be in the

          2   bigger program, correct?

          3                 MR. HOGSETT:  Well, we have had a number

          4   of successful applications from small communities in

          5   the larger program.  The thing is, though, that they

          6   typically are asking for the five -- they have the

          7   ability to match a $500,000 grant.

          8                 COMMISSIONER FITZSIMONS:  My point is

          9   that an area of 50,000 is normally going for more than

         10   a $50,000 grant and would -- and would presumably be

         11   more appropriate to be in our larger program, is

         12   that --

         13                 MR. HOGSETT:  Well, that seems to be

         14   carried out in the -- in the example of the pilot

         15   where nearly all of the communities that did apply

         16   were -- were 20,000 or less.

         17                 COMMISSIONER FITZSIMONS:   So the market

         18   has told you that.

         19                 VICE-CHAIRMAN ANGELO:  I mean, I think

         20   that's a logical conclusion.  Any other comments or

         21   questions?

         22                 COMMISSIONER MONTGOMERY:  It's sort of

         23   based on the -- 20,000 is based on the data of what

         24   we're seeing.

         25                 MR. HOGSETT:  The other things that we


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          1   are proposing is, as I said, the allowing of use of

          2   donated property to be used as part of the sponsor's

          3   match and to give additional priority points to

          4   communities of population of 2,000 or less to really

          5   try to even up the playing field a bit.

          6                 VICE-CHAIRMAN ANGELO:  Any other

          7   comments or questions?

          8                 COMMISSIONER FITZSIMONS:  I have one

          9   question on the last -- on the third bullet point

         10   about the matching.  You said earlier that in the

         11   previous program you could not use the -- the funds

         12   for acquisition, and this would allow them to use the

         13   funds for acquisition only in the event that there's a

         14   match of donation?

         15                 MR. HOGSETT:  Correct.

         16                 COMMISSIONER FITZSIMONS:  Okay.  I

         17   understand that.

         18                 MR. HOGSETT:  Correct.

         19                 VICE-CHAIRMAN ANGELO:  Any other

         20   comments or questions?  If not, we'll put this item on

         21   the agenda tomorrow for further comment and action.

         22   And, Tim, again, I want to thank you for all the great

         23   work you do on this area.

         24                 MR. HOGSETT:  Thank you.

         25                 VICE-CHAIRMAN ANGELO:  This is, as the


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          1   Chairman mentioned earlier, an extremely significant

          2   part of what we do, and I think it's highly

          3   commendable the manner in which you and your staff

          4   handle it and make it a fair and competitive

          5   competition that gives everybody a chance.  Thank

          6   you.

          7                 Madam Chairman and Members of the

          8   Committee Committee, I believe that concludes our

          9   action and Committee work for this morning.

         10                 MR. HOGSETT:  So we -- we need to

         11   discuss the regional park program?

         12                 VICE-CHAIRMAN ANGELO:  Oh, did I skip

         13   one?

         14                 MR. HOGSETT:  I'm sorry.

         15                 VICE-CHAIRMAN ANGELO:  I'm sorry.  I

         16   thought we were finished.  I commend you again, Tim.

         17                 MR. HOGSETT:  Okay.  I'll run through

         18   this real quickly.

         19                 CHAIRMAN IDSAL:  He re-commends you.

         20                 MR. HOGSETT:  Regional parks were also a

         21   pilot program.  You've made a couple of awards under

         22   that program.  This was an outgrowth of a -- of a

         23   review and a study that was done for the Department by

         24   Texas A&M University a couple of years ago.  That

         25   study revealed that there was apparent need for large


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          1   regional kinds of grants for either very

          2   conservation-oriented projects in the urban areas of

          3   the state and/or intensive recreation types of

          4   projects in the urban area of the state.  And that

          5   that could also apply to indoor recreation

          6   facilities.

          7                 We've made two -- You have made two

          8   pilot grant awards, both approximately $3 million for

          9   projects that are very similar in character, in that,

         10   with the only exception being McAllen, all of them are

         11   very conservation oriented, Greenbelt types of

         12   preservation and development projects.  And in the

         13   case of McAllen, that is a renovation of a building

         14   for one of the sites -- satellite sites of the world

         15   birding center.

         16                 Again, we -- in our hearings -- went

         17   through issues such as application caps.  We have not

         18   had one under the regional park grant program.  The

         19   consensus was that that be the case continue, that

         20   those be open-ended applications and that we then as

         21   staff come to you with some recommendations on what we

         22   think would be appropriate award.  The amount of the

         23   grant awards, same thing.  That -- that although we've

         24   done -- been doing about million dollar grants, we --

         25   and this public has said, let's don't limit ourselves


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          1   to -- to that.  The other issues are -- are similar to

          2   the other program, the guidelines and number of review

          3   cycles.

          4                 We propose to make changes from the

          5   pilot, and when we adopt the permanent program, to

          6   give priority in the evaluation criteria for projects

          7   that use publicly-owned non-parkland as a portion of

          8   their local match.  That was a recommendation by a

          9   couple of the large metropolitan areas who had some

         10   surplus property that they thought would potentially

         11   qualify for the development of a regional park, and to

         12   give priority to projects that have a -- give

         13   additional priority, actually, to projects that have a

         14   significant natural resource conservation element;

         15   hopefully, more in line with the mission of the

         16   Department.

         17                 COMMISSIONER MONTGOMERY:  Excuse me,

         18   Tim.  The first bullet, I don't --

         19                 MR. HOGSETT:  I'm sorry.  Can I go back?

         20                 COMMISSIONER MONTGOMERY:  You're first

         21   priority for publicly-owned non-parkland as -- in

         22   other words, the -- a public entity is converting land

         23   to parkland; is that what we're trying to encourage

         24   here?

         25                 MR. HOGSETT:  A good example would


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          1   probably be the Houston project that we did.  It was a

          2   cooperative effort between the City of Houston and the

          3   Houston -- Harris County Flood Control District.  It

          4   really accomplished two goals.  It allowed the -- in

          5   that case they were not allowed to use the value of

          6   the land as match.  But it was property that was being

          7   developed for flood control purposes, but with an

          8   environmentally friendly way of developing it.  We had

          9   not in the pilot allowed that kind of land to be used

         10   as --

         11                 COMMISSIONER MONTGOMERY:  Now, the

         12   intent is to converge -- is to encourage the

         13   conversion of publicly-owned land to parkland.

         14                 MR. HOGSETT:  Yes.

         15                 COMMISSIONER MONTGOMERY:  My question

         16   is, why limit it to publicly owned?

         17                 MR. HOGSETT:  I'm sorry.  Why is it --

         18                 COMMISSIONER MONTGOMERY:  Why limit it

         19   to publicly owned?  Why wouldn't we just encourage the

         20   use of the conversion of any --

         21                 MR. HOGSETT:  There already are some

         22   criteria in the scoring system that give a lot of

         23   cri -- a lot of priority to donations of private

         24   property.  So I think what I guess I'm saying is, I

         25   think it's already covered.


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          1                 COMMISSIONER MONTGOMERY:  This is

          2   collapsing the two things to one criteria so the

          3   donation of land from any --

          4                 MR. HOGSETT:  No, this would be a

          5   separate -- a new criteria to give some additional

          6   priority to those kind of projects.

          7                 COMMISSIONER MONTGOMERY:  Does public

          8   conversion to park land give a greater priority a

          9   project than private conversion of land?

         10                 MR. HOGSETT:  No.  No.

         11                 COMMISSIONER MONTGOMERY:  Are they

         12   equal?  Is the conversion of land from -- regardless

         13   of ownership -- I'm just trying to filter out, to me

         14   it doesn't matter who owns it.  If it's converted to

         15   our use we should be happy; it should be equally

         16   treated.

         17                 MR. HOGSETT:  I believe they are

         18   equivalent in points.

         19                 COMMISSIONER MONTGOMERY:  That's all I'm

         20   asking.

         21                 MR. HOGSETT:  I -- I will check to be

         22   sure that that's the case.  But I believe that that's

         23   what we were recommending.

         24                 COMMISSIONER MONTGOMERY:  Yeah.  Okay.

         25   That's all I was trying to get at.


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                                                                       91



          1                 VICE-CHAIRMAN ANGELO:  Any other

          2   comments?  If not, we'll go through this exercise

          3   again, and place the Item No. 9, the Grant Projects

          4   and Regional Grants item on the agenda for public

          5   comment and action tomorrow.  And again, Tim, thank

          6   you very much.

          7                 MR. HOGSETT:  Thank you.

          8                 VICE-CHAIRMAN ANGELO:  Now, is there any

          9   other business to come before the Committee?

         10   Madam Chairman, that completes the Finance Committee

         11   activity for the morning.

         12                 CHAIRMAN IDSAL:  Thank you, Mr. Angelo.

         13   I would like to take a ten-minute break.  And when we

         14   resume Mr. -- Commissioner Fitzsimons, Chairman of the

         15   Regulations Committee will take up that business.

         16                 (WHEREUPON, a short break was taken.)

         17   

         18   

         19   

         20   

         21   

         22   

         23   

         24   

         25   


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                                                                       92



          1   THE STATE OF TEXAS    )
              COUNTY OF BEXAR       )
          2   

          3                 I, DICIE LEE EYTCHESON, a Certified

          4   Court Reporter in and for the State of Texas, do

          5   hereby certify that the above and foregoing 91 pages

          6   constitute a full, true, and correct transcript of the

          7   minutes of the TEXAS PARKS AND WILDLIFE COMMISSION on

          8   JANUARY 16, 2002, in the Commission Hearing Room of

          9   the Texas Parks and Wildlife Headquarters Complex,

         10   Austin, Travis County, Texas.

         11                 I FURTHER CERTIFY that a stenographic

         12   record was made by me at the time of the public

         13   meeting and said stenographic notes were thereafter

         14   reduced to computerized transcription under my

         15   supervision and control.

         16       WITNESS MY HAND this the      day of

         17                   , 2002.

         18   

         19   

         20                 DICIE LEE EYTCHESON, Texas CSR 5392
                            Expiration Date:  12/02
         21                 7800 IH-10 West, Suite 100
                            San Antonio, Texas 78230
         22                 (210) 377-3027

         23   

         24   

         25   


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          1                      ________________________
                                 ERNEST ANGELO, JR., CHAIR
          2   

          3                      ________________________
                                 DONATO D. RAMOS
          4   

          5                      ________________________
                                 PHILLIP MONTGOMERY, III
          6   

          7                      ________________________
                                 JOHN AVILA, JR.
          8   

          9                      ________________________
                                 KATHARINE ARMSTRONG IDSAL
         10   

         11                      ________________________
                                 JOSEPH FITZSIMONS
         12   

         13   

         14   

         15   

         16   

         17   

         18   

         19   

         20   

         21   

         22   

         23   

         24   

         25   


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