Texas Parks and Wildlife Commission
Finance Committee

April 3, 2002

Commission Hearing Room
Texas Parks & Wildlife Department Headquarters Complex
4200 Smith School Road
Austin, TX 78744
                                                                        1


           5            BE IT REMEMBERED, that heretofore on the 3rd day 

           6   of April, 2002, there came to be heard matters under the 

           7   regulatory authority of the Parks and Wildlife Commission of 

           8   Texas, in the Commission Hearing Room of the Texas Parks and 

           9   Wildlife Headquarters Complex, Austin, Texas, beginning at 

          10   9:30 a.m., to wit: 

          11    

          12   APPEARANCES: 

          13   THE PARKS AND WILDLIFE COMMISSION: 

          14    

          15   FINANCE COMMITTEE: 

          16   CHAIR:   Ernest Angelo, Jr,  Midland, Texas 
                        Donato D. Ramos, Laredo, Texas 
          17            Philip Montgomery, III, Dallas, Texas 
                        John Avila, Jr., Fort Worth, Texas 
          18            Alvin L. Henry, Houston, Texas (Absent) 
                        Katharine Armstrong Idsal, San Antonio, Texas 
          19            Mark E. Watson, Jr., San Antonio, Texas 
                        Joseph Fitzsimons, San Antonio, Texas 
          20            Kelly W. Rising, M.D., Beaumont, Texas 
                        Lee M. Bass, Chairman Emeritus, Fort Worth, Texas 
          21    

          22    

          23   THE TEXAS PARKS AND WILDLIFE COMMISSION: 
               Robert L. Cook, Executive Director, and other personnel of 
          24   the Parks and Wildlife Department 

          25     


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           1                 CHAIRMAN IDSAL:  We will now convene the 

           2  Finance Committee meeting and Ernie Angelo, I will give you 

           3  the gavel. 

           4                 CHAIRMAN ANGELO:  Thank you, ma'am. 

           5                 CHAIRMAN IDSAL:  Before we do that, hold on.  I 

           6  want to introduce our new -- our newest commissioner, Kelly 

           7  Rising from Beaumont, Texas, we're going to welcome him 

           8  aboard.   

           9                 (Applause.)   

          10                 CHAIRMAN IDSAL:  And I would also like to 

          11  welcome our Chairman Emeritus, Lee Bass.  Thank you for 

          12  coming. 

          13                 CHAIRMAN EMERITUS BASS:  Good morning. 

          14                 CHAIRMAN IDSAL:  Good morning. 

          15                 CHAIRMAN ANGELO:  Ready?  The first item of 

          16  business for the Finance Committee will be approval of the 

          17  committee minutes from the previous meeting.  Does anyone have 

          18  any corrections or additions?  Hearing none, is there a motion 

          19  that they be approved as submitted?   

          20                 CHAIRMAN IDSAL:  So moved. 

          21                 COMMISSIONER FITZSIMONS:  Second. 

          22                 CHAIRMAN ANGELO:  All in favor say aye. 

          23                 ("Aye.") 

          24                 CHAIRMAN ANGELO:  Oppose?  The minutes are 

          25  approved.  Now, Mr. Cook, the Chairman's Charges please. 


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           1   ITEM 1.  CHAIRMAN'S CHARGES 

           2                 MR. COOK:  Thank you, sir.  I have a couple 

           3  that I would like to cover with you.  One of the Chairman's 

           4  Charges was to identify and assess nonprofit organizations 

           5  that partner with the Department and establish an official 

           6  nonprofit partner.  In Item 7 of the Regulations Committee, 

           7  I'm pleased to report that we have addressed this charge.  

           8  Staff will propose a Commission policy amendment that names 

           9  the Parks and Wildlife Foundation of Texas as the Department's 

          10  official nonprofit partner.   

          11                 Another charge was to adjust rates charged for 

          12  licenses and commercial fisheries programs to provide funds 

          13  necessary to recoup all department costs associated with the 

          14  management of each program.  Staff has published proposed fee 

          15  increases in the Texas Register for public comment.  Item 9 

          16  will ask for adoption of proposed fee increases of 

          17  approximately 20 percent.  This is part of a gradual approach 

          18  to reaching full cost recovery.  And finally that we review 

          19  and implement appropriate State Auditor audit recommendations.  

          20  As you will hear later, Suzy will also address this issue in 

          21  more detail.  But we have addressed or are in the process of 

          22  addressing most of the State Auditor's Office recommendations 

          23  including, for example, developing a prototype balance 

          24  scorecard for performance measures.  We have conducted 

          25  additional audits of the point-of-sale license system, 


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           1  recommended improvements to the mailroom and cashier's process 

           2  to ensure direct and immediate deposits of all revenue.   

           3                 In addition, the Department contracted with 

           4  Elton Bomer and his assessment team to review and assess the 

           5  agency's business practices, operations, and organizational 

           6  structure and to develop recommendations to address the 

           7  findings of the State Auditor's Office.  Mr. Bomer has 

           8  completed his report as of last Thursday and is here today to 

           9  present a summary of his findings and recommendations.   

          10                 Thank you, sir. 

          11   ITEM 2.  BOMER MANAGEMENT REVIEW 

          12                 CHAIRMAN ANGELO:  Thank you.  Item No. 2 on our 

          13  agenda is the report from the management review that all of 

          14  you are familiar with by Mr. Bomer's team and I would like to 

          15  ask Elton Bomer now if he would come forward and discuss his 

          16  presentation. 

          17                 MR. BOMER:  Thank you, Mr. Chairman, Madame 

          18  Chairman and Commissioners.  Mr. Chairman, good to see you 

          19  again.  I appreciate the opportunity to be with you here today 

          20  to discuss some of the highlights of the report.  With me the 

          21  project team, T.C. Mallett and Sidney Hacker, sitting back on 

          22  my right shoulder here.  I'm going to spend about 15 minutes 

          23  talking about some of the things that are wrong at Parks and 

          24  Wildlife.  I could spend all morning telling you about things 

          25  that are good about the Department, but frankly you didn't 


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           1  hire me to talk about things that don't need fixing.  I'm 

           2  going to talk about the things that I think we could -- that 

           3  do need fixing.   

           4                 You know, as I said, there are many, many good 

           5  things; you carry out your mission very well.  You're doing a 

           6  good job for planning for future generations and I think 

           7  you're a very high profile agency and you do a really, really 

           8  wonderful job.  But let me get into some of the details of the 

           9  report.  This report concentrates mostly on financials -- 

          10  financial controls, budget development, revenue collection 

          11  practices, the Auditor's Report of 2001, and also some 

          12  suggestions in management structure rearrangement for your 

          13  consideration.   

          14                 In addition, we reviewed three prior audits 

          15  that were made by the State Auditor's Office in 1995, 1996 and 

          16  1998 that dealt with management controls, state park system 

          17  and the catalog system, and that was in 1999.  Those were in 

          18  addition to the 2001 audit by the State Auditor's Office.  In 

          19  addition to that we looked at several prior internal audits as 

          20  well.  We find a very decentralized organization at the 

          21  Department.  I think anyone who comes in like I have, you 

          22  would look at this as it's almost like ten separate companies.  

          23  Ten separate divisions.  Because these separate companies have 

          24  their own budgets, they have their own purchasing, they have 

          25  their own equipment, they have their own legal staff and we 


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           1  think there's a lack of coordination between divisions 'cause 

           2  there's not a lot of incentive for them to the coordinate 

           3  between divisions.  I didn't say cooperation, I said 

           4  coordination and there's a big difference.  It's -- I think 

           5  that our proposed organization addresses this in a very 

           6  straightforward manner.  I would be happy to discuss that with 

           7  you as well.   

           8                 Now, with respect to the many questions that we 

           9  got about doing business on the phone and on the Internet.  We 

          10  found in your call center they do a good job, about 350 to 

          11  400,000 calls a year.  We found no 1-800 number for park 

          12  reservations and we know that you know that.  And there's a 

          13  reason for that.  Parks lose a lot of money and I think the 

          14  reasoning was we give them an 800 number, we are going to lose 

          15  more money.  But people complain, that was the biggest 

          16  complaint we found in the public is that if we want to do 

          17  business with the State, we ought to be able to call a 1-800 

          18  number to be able to make the reservation.  I know there are 

          19  discussions now.  I talked with Mr. Cook about it -- 

          20  discussions now with Texas On-line to explore on-line purchase 

          21  of hunting and fishing licenses as well.   

          22                 With respect to the financial management 

          23  issues, we examined all the issues in the 2001 Auditor's 

          24  Report.  We discussed the matter in detail with the State 

          25  Auditor's Office and his staff.  We looked at revenue 


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           1  reconciliation which is a major item trying -- make sure that 

           2  we could -- or that you could reconcile your -- the entries 

           3  with respect to the internal financial system to the statewide 

           4  accounting system.  You hired four part-time staff.  Bob Cook, 

           5  we appreciate that.  That was a recommendation that somebody 

           6  needed to be down there looking at each one of these lines 

           7  that were incorrect or unreconciled.  Somebody has to be 

           8  looking at those and make the corrections so that it can be 

           9  reconciled.  Those lines have gone down significantly since I 

          10  talked to you last.  The numbers don't really matter that 

          11  much.  You remember we started at $23 million, that's an 

          12  insignificant number, a gross number.  Every day that number 

          13  changes.  It goes down dramatically or goes up dramatically 

          14  each day.  What really matters is the number of lines that are 

          15  reconciled because when you get to the end it will be zero.  

          16  So we got to get -- we got to concentrate on getting to the 

          17  end of the line.  I visited with the staff this morning down 

          18  there, those four people in that room, and I went down to 

          19  thank them for their good work.  They're part-time people, 

          20  they'll be here only until the task is completed and I think 

          21  they'll complete it in due time.   

          22                 I found something that bothers us a little bit, 

          23  180 bank accounts at the Department.  I don't think Enron had 

          24  that many.  That's a lot of bank accounts.  You got to 

          25  reconcile them.  You've got to deposit them.  You've got to 


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           1  sweep them.  There's -- there may be reasons for those.  I'm 

           2  not saying that you shouldn't have several bank accounts but 

           3  180 is probably too many.  We found some excessive charges.  

           4  We found one major bank, for example, that -- well, I'll give 

           5  you the example.  I looked at a situation where in a small 

           6  park in East Texas that had five deposits in one week about 

           7  $130 or $140 in deposits.  The service charge was 

           8  $190-something dollar.  So you went negative in that bank 

           9  account just for the charges for that week.  Then they started 

          10  charging you $20 a day because you were negative.  I just ask 

          11  you to look at that and make the appropriate changes.  It may 

          12  be that you maybe send that money to Austin and let them 

          13  deposit it here someplace as opposed to following the 

          14  regulations that you have in place.   

          15                 There are other reconciliation problems, for 

          16  example, in the expenditures that was not mentioned in the 

          17  Auditor's Report.  Those are larger numbers actually or more 

          18  lines.  We've asked the Department to concentrate on getting 

          19  revenue fixed first and then getting to expenditures.  And 

          20  they'll get that done as well.  Travel advances you know about 

          21  that.  Petty cash.  The State property was not reconciled to 

          22  the Controller's office.  There was a huge number in 

          23  difference between the value of the State property of the 

          24  Department versus what's being shown over at the Controller's 

          25  office.  That's a bookkeeping issue.  Nobody is stealing 


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           1  property that we know of.  We didn't find any evidence of 

           2  that; we didn't look for that.  But we are satisfied it's a 

           3  matter of correct bookkeeping to get that fixed and they're 

           4  working on getting that fixed.   

           5                 We found a problem that I was concerned about 

           6  that we found some lost money.  Money 500 and I think it was 

           7  $539,000, over half a million dollars, that we found in 1998 

           8  and 1999 that fell off the table.  You lost the money.  You 

           9  gave it back.  It went back to the Controller's office.  It's 

          10  called lapsed in jargon of State government.  That money 

          11  lapsed.  There was almost another $251,000 and change that 

          12  almost lapsed as well.  We worked with the CFO, she stopped 

          13  that from happening but it came close to that amount lapsing 

          14  as well.  So in a cash strapped agency, nearly three-quarters 

          15  of a million dollars over that three-year period is too much 

          16  money to let lapse.  I don't think that will happen in the 

          17  future since we've pointed it out.   

          18                 With respect to the organizational changes and 

          19  the proposed organizational chart that is in your report.  We 

          20  think that rather than making this look like ten separate 

          21  companies with the Executive Director as the president of the 

          22  holding company, we think that it ought to be more vertical 

          23  and we've tried to do that ever so slightly by inserting two 

          24  major jobs.  One is like Bob Cook's old job as COO.  We called 

          25  it Deputy for Programs.  We also inserted a position called 


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           1  Deputy for Administration which would report to the Executive 

           2  Director.  The two deputies, of course, would report to Bob 

           3  Cook.  We're strongly suggesting that you have a general 

           4  counsel.  This agency is large enough, certainly used to have 

           5  a general counsel.  It was changed for a particular reason but 

           6  I think it's time to change it back again.  And the kind of 

           7  significant reason for that is if there are ten divisions and 

           8  I don't know how many lawyers there are, let's say there are 

           9  five or six or maybe there's ten and you have them report to 

          10  the division director, you've got your legal staff reporting 

          11  directly to the person that decides how much money you're 

          12  going to make and sometimes the legal decision may not 

          13  coincide with what that division director thinks that wants to 

          14  be done.  So it's appropriate to have a general counsel at a 

          15  certain level that makes a compatible legal document -- I mean 

          16  doctrine for the entire agency.  And it certainly doesn't hurt 

          17  to have legal staff that has expertise in the different 

          18  divisions and I would expect them to continue to have that.  

          19  It's just the reporting structure that I had a problem with.   

          20                 We found that the budget staffing was pretty -- 

          21  pretty slight.  We found four people doing the budget.  You're 

          22  having some problems in the budget area.  And you're trying to 

          23  do it with -- with one hand tied behind your back.  We looked 

          24  at three different agencies, for example, that we were 

          25  familiar with.  The Department of Insurance, TNRCC and one 


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           1  other -- the Controller's office.  And the TNRCC came closest 

           2  to your agency because they're funds oriented, they take in a 

           3  lot of fees.  They have about the same number of people you 

           4  do, about 3,000 people.  They have 15 people in their budget 

           5  staff.  You have four.  We are suggesting transferring some 

           6  people -- we're not talking about increasing the number of 

           7  jobs, but transfer some people over there and give them some 

           8  help.  They're going to be behind forever unless somebody 

           9  helps them in this area.  Somebody needs to be screaming about 

          10  that.  We're screaming about it and saying give them a little 

          11  more help in there to do this work.   

          12                 Now, we are concerned about Federal funding.  

          13  Federal funding can be a big deal in an agency like yours.  

          14  The federal government, in my opinion, is friendly to large 

          15  States that do a job like you do -- that you do here.  

          16  Sometimes the financial division is surprised when a grant 

          17  rolls in the door.  They don't even know it was coming because 

          18  of lack of coordination with all the divisions.  We're 

          19  suggesting that there be a Federal funds coordinator whose 

          20  job, his or hers, is to go after Federal funds and keep up 

          21  with where they are and not be surprised when they come in.   

          22                 We're suggesting that the internal auditor 

          23  report directly to you the Commissioners.  I know that used to 

          24  be the case.  It needs to be the case now.  It needs to be the 

          25  case in every agency.  It needs to be the case in every 


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           1  business.  You need to have your own internal auditor so 

           2  you're not surprised when the State Auditor comes in and gives 

           3  you some of this stuff.  You have an excellent internal 

           4  auditor in my opinion.  He does a good job.  You've got good 

           5  cooperation from him and I've looked at some other agencies 

           6  before and I've found some that are not so good.  In this case 

           7  I think you have someone that does a good job.  In fact, he 

           8  was in my office this morning talking about something that Bob 

           9  Cook has already got him working on that was in the report.  

          10  So I was impressed with that and appreciated it.  With respect 

          11  to the fee increase proposal, I think you made an excellent 

          12  choice on that.  I think the Department heeded the Governor's 

          13  desire that we trim our budgets down a little bit.  We were 

          14  able to work with the Department in finding $7.2 million in an 

          15  operating budget balance that was largely unencumbered.  Some 

          16  of it was obligated, but largely it was unencumbered.  And the 

          17  Department, also under Bob's leadership, expressed a desire to 

          18  spend down some of fund balances to a more reasonable level 

          19  and we certainly agreed with the decision that you made.   

          20                 Now, with respect to the long-term projects, 

          21  this is -- this is an important item I think.  We worked very 

          22  close with Scott Boruff who we consider to be an outstanding 

          23  manager.  He had good experience in the private sector in 

          24  project management and that's what you need here.  And we were 

          25  impressed with the way he did his work and his staff did its 


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           1  work.  You'll see in the appendix there some of the major 

           2  projects that are out there and in that appendix you'll see by 

           3  each project where the money is coming from for each project, 

           4  what the expenditures are expected by biennium until about 

           5  2009 and beyond, the need for the project, what the schedule 

           6  is and how much money you're short.  That's an important item 

           7  for you to look at and pay attention to.  The project team I 

           8  don't know if we agree with the Legislature or not, but I want 

           9  to convince you or try to convince you that the project team 

          10  feels no new projects ought to be added to the list for a long 

          11  time, or until you just cannot stand it anymore.  You need to 

          12  pay for what you've already bought.  And that's -- so you owe 

          13  a lot of money out there for these projects and it shows 

          14  pretty much exactly what it is and it also shows the operating 

          15  expenses that are anticipated for those projects.   

          16                 We found one case where revenue was being 

          17  credited to the wrong fund.  Now, I know that you're sensitive 

          18  to Fund 64 the Parks and Fund 9, the Hunting and Fishing fund.  

          19  But for a period, a short period of time, I don't know, a year 

          20  or two money had been -- if you bought a hunting or fishing 

          21  license in a state park with a credit card, it was being put 

          22  in the Fund 64 as opposed to Fund 9.  And in the project 

          23  team's methodology, we estimate it to be around $300,000.  To 

          24  the staff's credit, they came up with a more detailed, more 

          25  precise methodology and we now expect that number to be around 


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           1  $257,000.  It probably should be transferred and correcting 

           2  that item -- it will be transferred -- be corrected in the 

           3  future as well, to get those fund balances corrected.  We 

           4  found an audit report in 1999 that addressed the question of 

           5  vehicles at the headquarters.  You have you a list in the back 

           6  of your appendix there that shows over 200 vehicles at 

           7  headquarters.  In talking with Dennis O'Neal this morning I 

           8  know that some of those vehicles aren't really here at 

           9  headquarters, but they're registered at headquarters.  Suffice 

          10  it to say the Department has been advised that it looks bad to 

          11  have -- maybe there's only 115 or 130, somewhere between 115 

          12  and 130 vehicles at the Department.  The internal audit showed 

          13  in 1999 that there's not very much use of those vehicles.  In 

          14  any one day about one-third of them are used.  Some of them 

          15  are used just to go back and forth to work.  And if that's 

          16  what you want to do with them, that's fine with me, but I need 

          17  to point that out to you.  I know the Legislature raised a 

          18  question about it sometime ago.  I'm getting back to this 

          19  question of credibility.  The list is detailed, shows where 

          20  the cars are registered.  That's not -- may not necessarily be 

          21  where they're used.  I just ask you to look at that and make 

          22  the decision on it.  I know you'll make the correct decision 

          23  on it.  May not be any change at all, but you need to be aware 

          24  of it and take a look at it.  They're low mileage, not much 

          25  official use.  We relied on the audit report and just from 


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           1  looking in the parking lot.  You might want to consider 

           2  forming a motor pool, a small motor pool for some of that 

           3  use -- not all of it, of course, but some of it.  We have 

           4  recommended to the Executive Director that he take a look at 

           5  substantially reducing the number of vehicles at the 

           6  headquarters location.   

           7                 We found a contract with Texas Monthly that 

           8  we're concerned about.  It's located in Chapter 5, Page 127.  

           9  I know the Chairman and the Attorney General's Office are 

          10  negotiating with Texas Monthly on this.  I think the contract 

          11  was probably a good contract when it was initiated several 

          12  years ago but it's time to take another look at it right now.  

          13  They print our hunting and fishing annual.  I think there was 

          14  a fee of $949,000 I think it was, plus $100,000 in the 

          15  beginning or something like that.  All the numbers are in your 

          16  report there.  And in return they get some advertising space 

          17  in the Parks and Wildlife magazine for free that they're able 

          18  to sell.  In addition, they get to sell the advertising in the 

          19  annual.  I felt it was too sensitive to talk about it in great 

          20  detail, so I'm relying on the Attorney General's office and 

          21  the Chairman, and the appropriate people here at the 

          22  Department to look at that.  And if there's a legal basis, and 

          23  if there's a good business basis, consider making some changes 

          24  in that contract.   

          25                 With respect to the catalog that was -- you 


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           1  know, looked at by the State Auditor's Office, when was it, 

           2  1999?  I believe -- was it 1999?  And you made a decision 

           3  then, probably the correct decision, to privatize the catalog.  

           4  I did some checking on it.  I think the catalog has a 

           5  distribution of over 200,000 between 2 and 300,000; 

           6  Christmastime it gets up to 5 or 600,000 so there's a lot of 

           7  distribution out there.  We make out of that contract, now 

           8  that it's privatized, no more than about $38,000 a year.  Now, 

           9  I think that unless the deal is made a lot better or we can 

          10  negotiate some other advantages in there like cross marketing, 

          11  for example, that you probably ought to get out of the catalog 

          12  business altogether.  I can't see any reason to be in the 

          13  business for -- $400 million agency -- for a $38,000 profit.  

          14  So make a better deal there, if you can, after the contract is 

          15  expired, or make some management decision about the catalog.  

          16  You need to look at it again.  You made the right decision 

          17  before to privatize it.  You need to look at it and see if 

          18  another decision has to be made on it.  And if you decide that 

          19  it's worth it to stay there, go ahead; but I know that we have 

          20  one person here, for example, that spends a lot of time on 

          21  that project.  And you deduct that from the $38,000, you're 

          22  not making very much.  You may spend 30 or 40 percent of his 

          23  time -- you may have to go to Dallas once or twice a month, 

          24  I'm not sure how much time.  Not his fault and it's your fault 

          25  if you leave it there, you know, in place.   


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           1                 I've had a lot of good discussions with the 

           2  Executive Director since being promoted to his job, which was 

           3  an excellent decision in my opinion.  He's going to propose 

           4  transferring 25 to 30 percent of headquarters personnel back 

           5  to the field.  He's going to propose increasing game wardens 

           6  to about 525.  We certainly support his effort.  This wasn't 

           7  our idea, it's his idea.  He has some other ideas as well that 

           8  I've not even mentioned here.  But some of the personnel at 

           9  the Department he feels can better be utilized back in the 

          10  field where the rubber meets the road.  But our work is 

          11  completed now and I think the Department will take the 

          12  initiative to make the changes to survive the challenges that 

          13  are there for the future and move forward.  We have an 

          14  implementation schedule in the back there, should you choose 

          15  to take us up in these recommendations.  It's really a chart 

          16  for the -- for the Executive Director to use or to designate 

          17  someone to use to kind of keep up with what we think needs to 

          18  be changed.  We certainly commend the staff and the Executive 

          19  Director for the management decisions and the observations 

          20  that have already been made ongoing.  I appreciated the fact 

          21  that we've been here 90 days and they didn't wait until the 

          22  91st day to start.  They started on it when some things needed 

          23  starting on early.   

          24                 I think the Department -- I know the Department 

          25  will regain credibility with the Legislature because I think 


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           1  they have lost some.  I intend to help.  I know you'll help, 

           2  and I think you're going exactly in the right direction.  

           3  Madame Chairman or Mr. Chairman, I'll be happy to answer any 

           4  questions. 

           5                 CHAIRMAN ANGELO:  Do any Commissioners have 

           6  questions of Mr. Bomer?  Madame Chairman? 

           7                 CHAIRMAN IDSAL:  Mr. Bomer, you've covered a 

           8  lot of territory and pointed out a lot of things that we need 

           9  to take a look at.  What do you think is the single most 

          10  important area that we need to take a look at in going 

          11  forward? 

          12                 MR. BOMER:  Well, I think you need to get your 

          13  books in balance.  I think it's the financials that I'm 

          14  concerned about.  I think you need to get your revenue 

          15  reconciled and your expenditures reconciled, the petty cash, 

          16  all the things that I talked about earlier.  I think you need 

          17  to get all the -- all the bank statements reconciled.  I can 

          18  understand why they're not reconciled, but you have a huge 

          19  backlog of bank reconciliations that need to be done.  

          20  Somebody needs to pay attention to that.  You've lost some 

          21  money in the past.  In fact the exact number I think is 

          22  $539,000 and something dollars over a two-year period, plus 

          23  another $251,000 that you almost lost.  You need to pay 

          24  attention to that.  So I'm speaking of financials.  That's No. 

          25  1.   


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           1                 No. 2 item I think is organization.  I think 

           2  the organization needs to be changed ever so slightly.  But 

           3  No. 2 is not important unless you do No. 1.  No. 2 ain't going 

           4  to make No. 1 happen.  No. 1 has to happen by itself or with 

           5  the staff and management paying attention to it.  And you're 

           6  just a little bit too decentralized, in my opinion, and need 

           7  to make it more vertical in the organization.  But I think 

           8  those two things are the most important things you could do. 

           9                 CHAIRMAN IDSAL:  I have a follow-up question. 

          10                 MR. BOMER:  Okay. 

          11                 CHAIRMAN IDSAL:  Can you go into a little more 

          12  detail for us on the things you think we're doing particularly 

          13  well. 

          14                 MR. BOMER:  Yeah, I can.  I think that all 

          15  the -- I'm familiar with all the programs, not only when I 

          16  served in the Legislature because I love the Department, but 

          17  because I spent a lot of time out here and had good staff on 

          18  my side working on it, as well and good cooperation from your 

          19  staff.  But of all the programs, I don't want to list them 

          20  all, but law enforcement is outstanding in our opinion.  The 

          21  fisheries, Inland and Coastal Fisheries, is outstanding, and 

          22  has country-wide reputations as well as the programs in 

          23  Wildlife has a country-wide good reputation.  You do a good 

          24  job on infrastructure.  We were really pleased with the work 

          25  that was being done in infrastructure by Scott Boruff, good 


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           1  project management.  You know, you have a good public 

           2  perception out there that you do a good job.  The Legislature 

           3  is looking at you, so you're not doing such a good job because 

           4  they're looking at the money -- they're looking at the 

           5  financials.  But the people, you have a good public perception 

           6  because a lot of people deal with you.  Those that get nabbed 

           7  by law enforcement may not feel so good about it, but they -- 

           8  even those I have been told as a State representative, they 

           9  treated them nicely in apprehending them.  So they have a good 

          10  reputation there.   

          11                 And game wardens have a special place in the 

          12  hearts of Legislators I think 'cause they're pretty active out 

          13  in the districts.  Not only in -- at nighttime but in daytime 

          14  as well, you know, working -- working with Legislators.  They 

          15  do a good job out there.  But I think the programs do a really 

          16  good job.  And as I said earlier, you're doing an excellent 

          17  job of planning for the future and the Department has a good 

          18  reputation country-wide.  In talking with the U.S. Parks 

          19  and -- I mean the Fish and Wildlife Service people, they speak 

          20  highly of the Texas Department and so those are the things 

          21  that I think that you do really well. 

          22                 CHAIRMAN IDSAL:  I want to ask one more 

          23  question if it's all right. 

          24                 CHAIRMAN ANGELO:  Sure. 

          25                 CHAIRMAN IDSAL:  Going forward, what -- what do 


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           1  you see is our biggest hurdle in the upcoming Legislative 

           2  session? 

           3                 MR. BOMER:  Well, I think you have to regain 

           4  credibility with the Legislature and I think that you're going 

           5  about that the right way now.  You're looking at your 

           6  problems, you're airing your problems out in the open and 

           7  you've already started doing something about it.  And you have 

           8  to get these before the next Legislature starts -- you have to 

           9  get the revenue reconciled.  You have to get these bank 

          10  balances reconciled.  You have to get the expenditures 

          11  reconciled.  You have to correctly present your budget to the 

          12  Legislature.  And I don't want to say that you haven't 

          13  correctly presented it in the past, but it's been confusing to 

          14  the Legislature in the past.  That needs to be done more 

          15  precisely and so we've already started doing something about 

          16  that, and good cooperation from your staff in doing that.  We 

          17  talked to the Legislative Budget Board and we said we've got a 

          18  three-man legislature here, meaning that me and Sidney and 

          19  T.C. acted like legislators.  We asked them, we want you to 

          20  come in and we want you to -- we want -- no, we talked to the 

          21  staff, excuse me, not the LBB.  We talked to the staff and 

          22  said treat us like we're the legislature and present your 

          23  budget to us.  And we made some suggestions after they made 

          24  their presentation.  We were acting like legislators.  We've 

          25  got the Legislative Budget Board and said we think they need 


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           1  some help in learning exactly how to present this.  This is a 

           2  complex deal.  This is not like presenting your home, your 

           3  household budget.  There's a lot of funds involved and it's a 

           4  complex budget.  But there are other agencies that do it and 

           5  you can do it as well.  And the LBB, to their -- to their 

           6  credit, sent out their executive director or whatever it is, I 

           7  believe he's called director, got involved and he got his top 

           8  people involved, as well as the people that work out here.  

           9  And I think also gained credibility with the Legislature.  

          10  Make sure you work closely with the State Auditor's Office.  

          11  Don't wait for the State Auditor to come back and see you 

          12  again, knock on your door.  Go knock on his door and say this 

          13  is what we're doing, as we did.  We went down and said these 

          14  are some of the suggestions we're going to make, what do you 

          15  think?  Are you going to be satisfied with this if we do it 

          16  this way?  And, yeah, they signed off on most everything that 

          17  I can recall.  I think you should do the same thing.  And that 

          18  gains you credibility with the Legislature because if you have 

          19  the LBB and you've got the appropriation staff and you've got 

          20  the State Auditor's Office all say amen, then you're in pretty 

          21  good shape.  Any other questions? 

          22                 CHAIRMAN ANGELO:  Elton, just a little 

          23  clarification.  Maybe everybody fully understood it, but just 

          24  to make sure, the money that you mentioned -- the $539,000 

          25  that is lost, it's not lost to the State, it's lost to the 


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           1  Department, correct? 

           2                 MR. BOMER:  That's right.  Nobody stole the 

           3  money, it went back to the State and the State still has the 

           4  money.  They used it someplace else.  You didn't get to use 

           5  it.   

           6                 CHAIRMAN ANGELO:  And we had plenty of places 

           7  to use it, so it was lost to us. 

           8                 MR. BOMER:  You've got some jobs. 

           9                 CHAIRMAN ANGELO:  I wanted to make sure 

          10  everybody realized the money wasn't gone.   

          11                 MR. BOMER:  I understand.  I think of it as 

          12  gone but you're right it went back.  It went back to the 

          13  State. 

          14                 CHAIRMAN ANGELO:  Another question I had with 

          15  respect -- you mentioned several different areas where 

          16  personnel, potentially additional personnel are involved and 

          17  you've also got in the body of the report a number of things 

          18  that could result in some cost savings to the Department in 

          19  terms maybe of personnel.  What is your opinion overall as to 

          20  the effect of the personnel changes whether it will be a net 

          21  increase or decrease department-wide? 

          22                 MR. BOMER:  No, I wouldn't increase the 

          23  personnel.  No, I wouldn't increase the FTEs.  Bob Cook has 

          24  talked about maybe transferring some people back to the field.  

          25  Some of those people you'll probably consider transferring 


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           1  within the Department here.  Not moving back to the field, but 

           2  maybe some of them down to the budget area or the revenue area 

           3  where they're needed.  The departments and organizations get 

           4  out of balance in your business, they get out of balance over 

           5  time.  I've worked for large companies and I've worked for 

           6  small companies and they all get out of balance and over time, 

           7  unless you're paying close attention, some of those transfers 

           8  have to be made.  But, no, no net increase as far as I'm 

           9  concerned.   

          10                 And I didn't mention one other area, and 

          11  probably most important, when you asked me an excellent 

          12  question -- your follow-up question.  We found outstanding 

          13  management in the parks area.  Because I didn't mention parks 

          14  it was an oversight on my part.  I want to mention parks 

          15  because I think there's some meshes there.  Dabney does a good 

          16  job.  He has a -- I haven't talked to him a whole lot but I 

          17  admire the work that he did because he got very little money 

          18  to do the job that he does.  We're like 49th in the country 

          19  with respect to per capita spending on parks.  So I've talked 

          20  to the Executive Director about this.  I also talked to Dabney 

          21  about it just a little bit.  I think that you need to start 

          22  emphasizing to the Legislature the need for some additional 

          23  general revenue in the future to take care of these parks.  

          24  Because, you know, there's millions of people that enjoy the 

          25  parks out there and they're never going to pay for themselves.  


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           1  We simply cannot charge enough fees to pay for the parks.  You 

           2  were talking about a fee increase that would raise a half a 

           3  million dollars.  It was a drop in the bucket that was needed 

           4  in parks, but when you ask the Legislature for general revenue 

           5  you need to put something along with your request.  And I call 

           6  that the economic multiplier effect which is mentioned in the 

           7  report there.  You need to start using economic multiplier 

           8  effect to the greatest extent possible to get the Legislature 

           9  to turn their head.  Because unless you can sell the idea of 

          10  economic -- the development of economic enterprise, the 

          11  economic gross increase, people that are buying gasoline in 

          12  restaurants and that sort of thing, 7-11 on the way to the 

          13  park, you're never going to get that general revenue.  But I 

          14  would -- I would try to utilize that.  That wasn't your 

          15  question but it was something that you reminded me of within 

          16  your question. 

          17                 CHAIRMAN ANGELO:  Other questions 

          18  Commissioners? 

          19                 COMMISSIONER FITZSIMONS:  I would like to thank 

          20  you, Mr. Bomer for your serious work and I know we're going to 

          21  take it seriously.  It's a big job and I appreciate it. 

          22                 MR. BOMER:  I'll be available by phone anytime.  

          23  Unfortunately, the Chairman knows how to find me day and night 

          24  now with my cell phone and everything.  I'll be happy to work 

          25  with you in the future, pro bono, because you've paid me well 


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           1  and I have a heart-felt appreciation for the work that the 

           2  Department does and intend to pay attention to the report, 

           3  myself, in the future.   

           4                 CHAIRMAN ANGELO:  Mr. Ramos, did you have -- 

           5                 COMMISSIONER RAMOS:  Yes.  Mr. Bomer, are you 

           6  satisfied now that there's adequate internal controls and 

           7  procedures available to staff to prevent the type of 

           8  historical problems that we've had? 

           9                 MR. BOMER:  Available staff to do what? 

          10                 COMMISSIONER RAMOS:  To prevent some of the 

          11  reconciliation issues and internal control issues that you've 

          12  addressed.  I mean are -- do we have the steps in place to 

          13  implement that? 

          14                 MR. BOMER:  Yeah, I think you do.  And I think 

          15  you will next week and the week after that.  It's going to get 

          16  better.  There's some of the controls needed to be improved 

          17  and we've made those recommendations.  For example, cash 

          18  coming into to the mail room you're already working on that.  

          19  And that's something that didn't have to wait until the 91st 

          20  day to start working on it.  It needed to be worked on right 

          21  away.  Yeah, I'm convinced that -- especially if you cut down 

          22  some of these bank accounts where you don't have so many to 

          23  reconcile that -- that you'll be okay.  And you just have 

          24  not -- you simply cannot let all that revenue and expenditures 

          25  to get out of balance in the future.  That needs to be done on 


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           1  a monthly basis. 

           2                 COMMISSIONER RAMOS:  And my second question is 

           3  what would be your realistic time line as to when we could 

           4  implement all of your recommendations, I mean realistically? 

           5                 MR. BOMER:  By the time the Legislature starts.   

           6                 COMMISSIONER RAMOS:  And I also want to address 

           7  Joe's comments.  I want -- also, want to commend staff for 

           8  cooperating with you and your staff in -- because this was a 

           9  joint effort.  You couldn't have done it by yourself. 

          10                 MR. BOMER:  That's right. 

          11                 COMMISSIONER RAMOS:  I think staff and Mr. Cook 

          12  need to be congratulated and we'll accept your medicine. 

          13                 MR. BOMER:  Good.  Thank you, sir.  I 

          14  appreciate it, Madame Chairman. 

          15                 CHAIRMAN ANGELO:  Any other questions or 

          16  comments?   

          17                 COMMISSIONER FITZSIMONS:  I have one question 

          18  on the structure that you mentioned -- more vertical. 

          19                 MR. BOMER:  Uh-huh. 

          20                 COMMISSIONER FITZSIMONS:  Would that include 

          21  changing the nature of the present divisions -- law 

          22  enforcement, wildlife, parks -- or is it above that level?   

          23                 MR. BOMER:  The -- the only change I suggested 

          24  in there was the Resource Protection Division which is headed 

          25  up by Dr. McKinney.  By the way, that -- that area is 


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           1  outstanding in scientific knowledge and management as well.  

           2  We didn't see a lot of need.  He's a -- he's a senior 

           3  director.  You can pay a senior director more money without 

           4  having people report to him -- report through him.  He's been 

           5  here a long time and has irreplaceable knowledge in my 

           6  opinion.  So that area we -- we did not report in our 

           7  suggestion, that the Inland Fisheries and the Coastal 

           8  Fisheries report through that resource protection and aquatic 

           9  resources area, we reported them directly to the deputy.  We 

          10  didn't see a lot of benefit to the Department reporting 

          11  through that layer of management.   

          12                 COMMISSIONER FITZSIMONS:  Thank you. 

          13                 CHAIRMAN ANGELO:  Mr. Bomer, we thank you and 

          14  your team for a good job.  We appreciate it, sir. 

          15                 MR. BOMER:  Thank you very much. 

          16                 CHAIRMAN ANGELO:  Thank you for being here this 

          17  morning.   

          18                 MR. BOMER:  Thank you very much. 

          19                 CHAIRMAN ANGELO:  We'll move on to -- you want 

          20  to finish the Finance Committee, right? 

          21                 CHAIRMAN IDSAL:  Yes, sir. 

          22   ITEM 3.  FINANCIALR EVIEW AND UPDATE 

          23                 CHAIRMAN ANGELO:  Move on to item No. 3 on the 

          24  agenda which is a financial review and update presented by 

          25  Suzy Whittenton.  Suzy. 


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           1                 MS. WHITTENTON:  Thank you.  Okay.  Thank you, 

           2  Mr. Chairman, commissioners.  For the record, I'm Suzy 

           3  Whittenton, the Chief Financial Officer.  Today's presentation 

           4  will focus on three primary areas:  Revenue collection, status 

           5  for this current fiscal year, operating budget status for the 

           6  current year, and also a time line for the development of next 

           7  year's operating budget.  And finally a report on the progress 

           8  made to address specific SAO State Auditor findings.   

           9                 Start with the report on revenue and cash 

          10  balances.  In Fund 9 or Account 9, the Game Fish and Water 

          11  Safety Account, where the two primary sources of revenue are 

          12  license sales and boat registration and titling fees.  In 

          13  looking at the total number of licenses sold from the 

          14  beginning of the license year, which is August 15th through 

          15  the end of February, we've sold nearly 2 percent more than 

          16  last year or about 2.3 million licenses, sales, and permits.  

          17  We've also sold 345,000 supercombo licenses which is up 6.5 

          18  percent over last year.  And we've also seen significant 

          19  increases in sales of the senior supercombo and the senior 

          20  combo.  Hunting license sales are up slightly over last year, 

          21  but it's less than a 1 percent change.  We've sold over a 

          22  million hunting licenses.  Fishing license sales are up over 

          23  5 percent when compared to the same period last year, and 

          24  we've sold just over 1 million fishing licenses as well.   

          25                 Now, this slide compares our annual fiscal year 


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           1  revenue estimate for license revenue to the actual amount 

           2  collected as of February 28th.  So that first bar is for 

           3  the -- what we estimate for the whole year through the end of 

           4  August and the second is how much we've collected as of the 

           5  end of February.  So we've already collected 68 percent of the 

           6  annual revenue estimate.  That's how much is actually in the 

           7  bank right now, or as of the end of the February was in the 

           8  bank.  The license revenue estimate for this year is 

           9  1.4 percent higher than last year's actual revenue.  And, at 

          10  this point, we believe we'll meet the revenue estimate since 

          11  revenue is up 3 percent when compared to last year, as of the 

          12  end of February.  The other major source of revenue in Account 

          13  9 is from boat registration and titling fees.  As you can see 

          14  from the chart, the Fiscal Year '02 revenue estimate is about 

          15  6.5 percent higher than last year's actual revenue was.  This 

          16  is the State Controller's revenue estimate, the $14.8 million.  

          17  Since most of our revenue from boats comes in during the 

          18  spring and summer, it's a little too early to know how we'll 

          19  do for the whole year on that.   

          20                 This slide again is comparing actual -- the 

          21  annual revenue estimate for boat fees to the amount we've 

          22  already collected.  And as of the end of February we've 

          23  collected 28 percent of the total annual revenue estimate from 

          24  boat fees.  At this point revenue from boats is up 4 percent 

          25  over last year.  And we'll be watching these numbers closely 


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           1  in the next few months where we'll be collecting the bulk of 

           2  our boat revenue.  And we do monitor the revenue closely so we 

           3  can manage cash flow.  In Account 9 the Game Fish and Water 

           4  Safety Account, which is our largest funding source, you can 

           5  see that we started the year with $13.6 million in cash, 

           6  available cash.  And we think we'll end the year with 

           7  approximately $8 million left over -- in that fund, which 

           8  we'll need to fund next year's operating budget.   

           9                 Now I'll turn to the State Parks Account, which 

          10  is Account No. 64, our second largest source of fees.  The 

          11  annual revenue estimate for parks was $27.6 million, but again 

          12  most of the park revenues are earned in the spring and summer, 

          13  so as of the end of February we had collected only 37 percent 

          14  of that revenue estimate which was about $10.2 million in park 

          15  fees.  Now, we've had strong park attendance since the fall.  

          16  Revenue is up nearly 18 percent over last year for that first 

          17  six months of the year.  So if this trend continues we won't 

          18  have any problem reaching our revenue estimate.  And the cash 

          19  flow in Account 64 looks like this.  We started the year off 

          20  with $2.4 million in available funds.  We think we'll end the 

          21  year with about $700,000 left over.  So that fund is -- the 

          22  fund balances are decreasing considerably.  I wanted to update 

          23  you on the current year budget status as well to let you know 

          24  what our time line is for developing next year's operating 

          25  budget, the FY03 budget, and to briefly mention that we'll be 


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           1  submitting our Legislative Appropriations Request this summer.  

           2  It's due in August.  That is our request for appropriation 

           3  authority for the next biennium, FY04 and 05.  And of course 

           4  we would like for you-all to be involved in that.   

           5                 At the end of February which is halfway through 

           6  the State's fiscal year, we had spent or encumbered 48 percent 

           7  of the operating budget.  We're right about where we'd expect 

           8  to be in terms of our spending and our cash flow on that end.  

           9  We have already started the fiscal year '03 budget process.  

          10  Each division submitted their requests and they were due in 

          11  last week to the budget section.  We've asked each division to 

          12  identify ways to cut as much as 5 percent from their budgets 

          13  so we can look at department needs.  But they're also allowed 

          14  to identify their additional needs up to an extra 2 percent 

          15  over where they are this year.  Each division will present 

          16  this information to the Executive Director and other executive 

          17  staff on April the 30th and May 1st.  And then we are hoping 

          18  to have a budget work session with the Commission sometime in 

          19  the summer so we can wrap up final decisions by preferably 

          20  late July and then we'll bring you the final budget for your 

          21  approval at the August Commission meeting.  And also this year 

          22  we'll be submitting our strategic plan which we revise every 

          23  other year just ahead of the Legislative session.  Strategic 

          24  plan is due in June and that ties in directly with our 

          25  Legislative Appropriation Request which will be due in August.  


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           1  So that's the time line there.   

           2                 I wanted to just wrap up quickly with the 

           3  briefing on the progress we've made in addressing State 

           4  Auditor findings from the revenue management audit.  Mr. Bomer 

           5  did address some of these issues but here's a little more 

           6  detail.  These are the main findings, these bullet points.  

           7  The first is the license sales system.  The auditors noted 

           8  some weaknesses in the management of the system which was the 

           9  old Transactive system.  Most of these issues have been 

          10  addressed with the new system, the WorldCom system, which 

          11  we've been using since January.  Such as, we now screen all 

          12  new license deputies to make sure they're eligible to do 

          13  business with the State.  We're in compliance now with 

          14  requiring Social Security numbers from all license purchasers.  

          15  And we've adopted stronger document retention requirements 

          16  with the new contracts.  We also hired PricewaterhouseCoopers 

          17  to audit the old system, and make sure all the funds had been 

          18  collected through that Transactive system.  But since we 

          19  really didn't have any legal remedy to collect from 

          20  Transactive if we found anything we decided, with the help of 

          21  the management review team, to shift the focus of 

          22  PricewaterhouseCoopers' work from the Transactive system to 

          23  the new WorldCom system.  And instead, to ensure that proper 

          24  controls are in place in the WorldCom system on the front end 

          25  so we don't get into a situation like we were with the old 


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           1  system.  We expect to get a report from PricewaterhouseCoopers 

           2  later this month, but we've been working with them as these 

           3  findings have -- issues have come up.  And WorldCom has been 

           4  working real hard with us as well on that and I'm sure Jayna 

           5  will talk about that more later in this committee meeting. 

           6                 CHAIRMAN ANGELO:  Suzy, excuse me, if I might 

           7  interrupt you there.  That change in the auditing process is a 

           8  change from what we all had discussed in terms of trying to 

           9  pursue funds that might have been lost from previous years 

          10  sales.  And this change was, as Suzy said, worked out with the 

          11  management team, but it was also gone over with the Auditor's 

          12  Office and they approved that.  So the thinking was that there 

          13  was less money to be gained than the cost of finding it.  So I 

          14  want to be sure everybody understood that is a change in 

          15  approach. 

          16                 MS. WHITTENTON:  Right.  That's a good point.  

          17  That's a good clarification.  We did think it was not cost 

          18  effective to continue with the old system and we did get 

          19  approval from State Auditor to shift the focus there.  We've 

          20  also asked the Controller and the State Auditor for a waiver 

          21  from that three-day deposit rule and they, in the audit, said 

          22  that we ought to collect funds from our license deputies every 

          23  three days because they are State funds.  We did disagree with 

          24  that but we asked for a waiver because the contracts that we 

          25  have with our license deputies state that we will sweep once a 


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           1  week.  And I think we'll consider this issue again when we 

           2  renew our contracts with the license deputies possibly just 

           3  with the larger vendors.   

           4                 The second issue there, the stamp funds is the 

           5  issue of allocating supercombo revenue to those stamp funds, 

           6  the dedicated stamp funds.  Now, the Wildlife Division is 

           7  collecting data to support a change in methodology.  We'll be 

           8  discussing this with the Commission each budget year on how 

           9  we're going to recommend a method -- a change in methodology 

          10  for allocation of those sales to the stamp funds.  The 

          11  mailroom processes were -- have mostly been -- the issues have 

          12  mostly been addressed.  The main issue was that not all the 

          13  mail had been opened in the mailroom at one time and that was 

          14  changed last May.  All mail is opened in the mailroom and 

          15  we're also looking at some process redesign in there and 

          16  possibly even moving people -- the physical location of where 

          17  some of these people are located within the building.  That 

          18  ties in directly with this next issue, the nonvalue added 

          19  processes.  State Auditor identified some processes that could 

          20  be streamlined.  We have hired an employee, with the 

          21  assistance of the management review team, to assist in 

          22  redesigning processes in the cashier's area, in the boat area 

          23  and also in the mailroom and that has been underway for over a 

          24  month now.   

          25                 The reconciliation issue, of course, our 


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           1  biggest issue we believe was covered by Mr. Bomer.  We have 

           2  hired temporary employees who are assisting with the backlog.  

           3  A lot of progress has been made on that.  And once the backlog 

           4  is cleaned up we will have a monthly reconciliation in place 

           5  to prevent any further backlog from happening again.   

           6                 On revenue forecasting, the auditor mentioned 

           7  that we needed to document our methodology for estimating 

           8  future revenues.  We have developed a methodology.  We will 

           9  bring that to you at the next Commission meeting for your 

          10  approval and we'll then start developing the revenue estimates 

          11  for fiscal years '04 and '05.  We'll also be working very 

          12  closely with the Controller's revenue estimators on those 

          13  estimates as we did two years ago and make sure we communicate 

          14  that well with the oversight agencies.   

          15                 And the last issue there is on the automated 

          16  systems that need to be interfaced.  Now, this is an issue 

          17  that will take some time to fully implement.  We need to 

          18  interface all of our accounting and revenue systems together 

          19  so that we're not having to do duplicate entry in these 

          20  systems which is part of our nonvalue added processes.  A time 

          21  line has been developed and this issue is in progress but it 

          22  does require some programming complexity and we are upgrading 

          23  our internal Oracle Financial System to the newest version of 

          24  that software which is required because Oracle will not 

          25  support the old system.  So we have to get our current system 


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           1  upgraded before we can get all the revenue -- the interfaces 

           2  developed.  So all the issues are aggressively being addressed 

           3  and we'll keep you updated on our progress every so often at 

           4  these Commission meetings, these briefings. 

           5                 CHAIRMAN ANGELO:  Do the members of the 

           6  Commission have any question for Suzy on this presentation? 

           7                 COMMISSIONER RAMOS:  I have one.  Do you have a 

           8  realistic time line as to when -- by when you think you can 

           9  address some of these audit issues? 

          10                 MS. WHITTENTON:  Yes.  We have a time line set 

          11  up for each of the issues.  The one that takes the longest is 

          12  the development of the automated interfaces and that's 

          13  actually going to take a couple of years to get them all in 

          14  place. 

          15                 CHAIRMAN IDSAL:  I have a question. 

          16                 CHAIRMAN ANGELO:  Sure. 

          17                 CHAIRMAN IDSAL:  Suzy, on the -- just so it's 

          18  clear, on this stamp allocation what we will do is come up 

          19  with a methodology and each year we will, as a Commission, 

          20  review the methodology and approve it.  Is that correct? 

          21                 MS. WHITTENTON:  That's correct. 

          22                 CHAIRMAN IDSAL:  And that has -- is viewed upon 

          23  favorably by the State Auditor's Office?  You've run it by 

          24  them and they're okay with that? 

          25                 MS. WHITTENTON:  Yes. 


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           1                 CHAIRMAN IDSAL:  Okay, great.   

           2                 MS. WHITTENTON:  They just wanted to make sure 

           3  that we had a methodology that was supportable and that was 

           4  discussed in open meetings. 

           5                 CHAIRMAN IDSAL:  Right.  Thank you. 

           6                 CHAIRMAN ANGELO:  Any other questions? 

           7                 MS. WHITTENTON:  Any other questions? 

           8                 CHAIRMAN ANGELO:  With respect to Commissioner 

           9  Ramos' question, you do have an August deadline for the 

          10  reconciliation that you believe you can meet, correct? 

          11                 MS. WHITTENTON:  That's right.  We're trying to 

          12  get the reconciliation completed by August 2002.  And what 

          13  we're doing on that is we're trying to hit the biggest items 

          14  that we're off first and working our way through that 

          15  progress -- that process. 

          16                 COMMISSIONER RAMOS:  But as stated by 

          17  Mr. Bomer, you have implemented and taken immediate steps to 

          18  implement the goals and other procedures to prevent what may 

          19  have worked as -- 

          20                 MS. WHITTENTON:  Yes, that's right. 

          21                 COMMISSIONER RAMOS:  Okay. 

          22   ITEM 4.  FOREIGN TRAVEL 

          23                 CHAIRMAN ANGELO:  All right, if that concludes 

          24  that item, then we'll move on to Item No. 4 which Suzy is also 

          25  going to present regarding an issue with respect to foreign 


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           1  travel expenses. 

           2                 MS. WHITTENTON:  Okay.  This issue is brought 

           3  to you just for guidance on development of an agency policy 

           4  basically.  What prompted this discussion starts with the 

           5  provision in the General Appropriations Act which states that 

           6  the Commission must approve, in advance, expenses for travel 

           7  to foreign countries other than Mexico or Canada.  We 

           8  occasionally have outside entities that offer to pay the cost 

           9  of travel for staff members to attend meetings or conferences 

          10  in other countries where they'll pay the travel which doesn't 

          11  technically fall under this provision.  But to play it safe we 

          12  really wanted to get your feeling on how you would like us to 

          13  handle those instances.  For example, right now our wildlife 

          14  director has been asked to attend a conference to represent 

          15  the southeastern states at a meeting in the Netherlands 

          16  regarding endangered species.  A private organization and 

          17  association is paying for all of his travel costs.  The only 

          18  costs to the Department would be his staff time.  The 

          19  recommendation from staff is that as a policy that might just 

          20  say that -- that foreign travel where expenses are paid by 

          21  outside entities could be delegated to the Executive Director 

          22  and in cases where we would actually have to incur travel 

          23  costs we would bring those to you for preapproval.  So we're 

          24  just looking here for some feedback on what your feeling is on 

          25  these -- these cases. 


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           1                 COMMISSIONER ANGELO:  So this is not an action 

           2  item, but the question before the Commission is whether this 

           3  presents any problem or do you-all consider this an 

           4  appropriate approach?  I would say that the Commission members 

           5  approve of this approach to the question. 

           6                 MS. WHITTENTON:  Okay.  Thank you. 

           7   ITEM 5.  LOCAL PARKS GRANTS UPDATE 

           8                 CHAIRMAN ANGELO:  That brings us then to No. 5, 

           9  which is --  

          10                 Suzy, thank you for your presentations. 

          11                 MS. WHITTENTON:  Uh-huh. 

          12                 COMMISSIONER ANGELO:  -- local park grant 

          13  update from Tim Hogsett.  Tim. 

          14                 MR. HOGSETT:  Okay.  Mr. and Ms. Chairman, 

          15  members of the Committee, I'm Tim Hogsett from Recreation 

          16  Grants Branch and the State Parks Division.  In your January 

          17  meeting Chairman Idsal asked that I prepare a briefing for you 

          18  on just some general issues of how our grant programs operate 

          19  under the Texas Recreation Parks Account.  The Grant Programs, 

          20  under the umbrella of the Texas Recreation Parks Account, 

          21  include our outdoor recreation grants to local governments, 

          22  indoor recreation facilities grants also to local governments, 

          23  the community outdoor outreach program grants both to local 

          24  governments and to nonprofits to bring the traditionally 

          25  underserved folks into the ability to have a little more 


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           1  information about the outdoors, and the programs that you 

           2  adopted final rules for last meeting, the regional park grant 

           3  and small communities grants programs.  The money for these 

           4  programs is a dedication of a portion of the sales tax 

           5  collected on sporting goods.  To my knowledge it's the only 

           6  dedication of the State's sales tax for any purpose.  It is 

           7  currently capped at $15.5 million.  The Comptroller estimates 

           8  that much more than that can be attributed to sales tax on 

           9  those sporting goods but the Legislature has chosen to cap the 

          10  amount of money we receive at $15.5 million.  Plus we are also 

          11  appropriated the earned interest on that amount of money which 

          12  typically is about from between $4 and $5 million annually.  

          13  The Commission has the authority under Parks and Wildlife 

          14  Code, Chapter 24, to make rules to administer this program 

          15  which includes administrative procedures, the scoring system 

          16  that we use to evaluate projects and all other items related 

          17  to general administration and payment from the program.  That 

          18  $15.5 plus interest is allocated as you see on this chart.  

          19  The only -- the only mandates in terms of the amount of money 

          20  that you see here from the legislature of these amounts are 

          21  for the outreach grants at $1.25 million and the indoor 

          22  recreation grants at $3.2 million.  The others are 

          23  discretionary in terms of how many money can be allocated to 

          24  the various programs.  This is what we've done traditionally.  

          25  This does not include an amount of a couple million dollars a 


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           1  year which has been appropriated to us for consideration of 

           2  facility transfers, transferring facilities that are owned or 

           3  operated by the Department and you're going to hear about one 

           4  of those later this morning. 

           5                 COMMISSIONER MONTGOMERY:  The mandatory 

           6  allocation is percentage or total dollars? 

           7                 MR. HOGSETT:  Total dollars.  Both of those are 

           8  actually riders in our appropriation act and they specifically 

           9  mandate those amounts. 

          10                 COMMISSIONER MONTGOMERY:  To be set biannually? 

          11                 MR. HOGSETT:  Yes. 

          12                 CHAIRMAN ANGELO:  Back up just a second.  The 

          13  interest, how does the interest get to be $4.5 million on 

          14  $15 million. 

          15                 MR. HOGSETT:  I think you're -- I'm going to 

          16  have to ask Suzy to help me with that question.   

          17                 COMMISSIONER MONTGOMERY:  Is it interest on the 

          18  entire sporting goods tax?   

          19                 MR. HOGSETT:  I honestly don't know.  We just 

          20  depend on what the Comptroller tells us. 

          21                 CHAIRMAN ANGELO:  Suzy, did you hear that?  

          22                 MS. WHITTENTON:  No, I'm sorry. 

          23                 CHAIRMAN ANGELO:  The grant money -- the money 

          24  coming from the dedicated sales tax is 15 millions plus 

          25  accrued interest.  How does the interest get to -- 


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           1                 COMMISSIONER MONTGOMERY:  30 percent.  

           2                 CHAIRMAN ANGELO:  -- be 4.5 million on a $15 

           3  million gross?   

           4                 MS. WHITTENTON:  Well, because we're not 

           5  earning on $15 million but on previous years' balances that 

           6  build up because it takes so long to pay out these grants.  We 

           7  pay them out over -- 

           8                 MR. HOGSETT:  Generally two to three years. 

           9                 CHAIRMAN ANGELO:  The money stays in our 

          10  account and it accrues. 

          11                 MR. COOK:  You can have that 40 in that 

          12  account.  You can have 40 in that account at any one time.  

          13                 CHAIRMAN ANGELO:  That was an extraordinary 

          14  interest rate so I -- 

          15                 MR. HOGSETT:  That amount -- 

          16                 CHAIRMAN ANGELO:  I want to see if I could get 

          17  in on that kind of transaction. 

          18                 COMMISSIONER RAMOS:  A lot of efficiency in our 

          19  Department. 

          20                 MR. HOGSETT:  That amount has decreased from 

          21  the last session.  And I'm assuming It's going to continue to 

          22  decrease.  This is -- since 1993 when the Texas Recreation and 

          23  Parks Account was first authorized by the Legislature, this is 

          24  a summary of how we've spent that money.  Please keep in mind 

          25  that these are, with the exception of the outreach grants, 


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           1  these are all 50 percent grants, so the numbers that you see 

           2  there can be doubled in terms of the impact for indoor, 

           3  outdoor, and other types of parks and recreation opportunities 

           4  for local governments.  The kinds of things that we do under 

           5  the outdoor recreation grant program are really traditional 

           6  parks and recreation facilities at the municipal level.  They 

           7  are 50 percent matching grants.  We can acquire land with 

           8  them.  We can do everything from very passive 

           9  conservation-oriented projects to some of the other things 

          10  that you see there such as swimming, playgrounds, picnic, 

          11  trails, sports fields.  This is the largest program and is the 

          12  oldest program.  It's been around in one form or another 

          13  through one funding resource or another since about 1965. 

          14                 MR. COOK:  Tim, I would like to point out to 

          15  the Commissioners to make sure they understand in our review 

          16  of this program that that 50 percent match is the required.  

          17  Oftentimes these projects may be much higher percentage of the 

          18  total investment coming from the local community.  

          19  Fifty percent is required for our match up to our amount.  The 

          20  project may be much bigger. 

          21                 MR. HOGSETT:  Particularly good example of that 

          22  are recreation -- indoor recreation centers.  Often those are 

          23  $7 or $8 million facilities and we match $750,000. 

          24                 COMMISSIONER MONTGOMERY:  Fifty percent is our 

          25  policy or is that Legislative? 


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           1                 MR. HOGSETT:  Legislative.  

           2                 COMMISSIONER MONTGOMERY:  Legislative. 

           3                 MR. HOGSETT:  It's in Chapter 24 of the code. 

           4                 COMMISSIONER MONTGOMERY:  I'm not trying to go 

           5  back over the ground, but in the allocation for indoors --  

           6                 MR. HOGSETT:  Uh-huh. 

           7                 COMMISSIONER MONTGOMERY:  -- it is a 

           8  Legislative allocation? 

           9                 MR. HOGSETT:  Yes.  It is also mandated in a 

          10  rider to our appropriations act. 

          11                 COMMISSIONER MONTGOMERY:  'Cause I know I 

          12  brought his up when you were presenting this, but what's the 

          13  definition of indoor recreation?  How restrictive is that?   

          14                 MR. HOGSETT:  How about we do this? 

          15                 COMMISSIONER MONTGOMERY:  Thank you. 

          16                 COMMISSIONER ANGELO:  Talk about having the 

          17  answer. 

          18                 MR. HOGSETT:  It is a 50 percent grant program.  

          19  Indoor recreation can go the entire spectrum from a 

          20  traditional recreation center that you would find in an inner 

          21  city that might have a basketball court and a swimming pool 

          22  and volleyball and all sorts of other kinds -- weight rooms.  

          23  All the way to very passive interpretive facilities.  I'm 

          24  going to show you a couple of them in a second that we've done 

          25  that fit more in that category.  But that is totally within to 


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           1  the Commission's discretion on how we make those grants 

           2  available and what's eligible for assistance.   

           3                 COMMISSIONER MONTGOMERY:  At the last 

           4  Commission meeting this came up and I asked this question.  

           5  This is what I was trying to distinguish.  It seems to me we 

           6  were given a lot -- things that I would expect cities to do 

           7  sports centers and athletic things that didn't fit our 

           8  mission.  Can we define these requirements that they fit our 

           9  mission better so as you do go into nature centers, 

          10  interpretive facilities, other things that fit our Parks and 

          11  Wildlife mission. 

          12                 MR. HOGSETT:  You have that authority.  I think 

          13  that it would be something that would be somewhat 

          14  controversial among the supporters of the program out there 

          15  who have been very active in front of the Legislature, folks 

          16  like the Texas Recreation and Parks Society.  They feel this 

          17  is an unmet need that State government should meet.  And the 

          18  fact that it's -- that the program resides in the Parks and 

          19  Wildlife Department it probably is not as much of an issue to 

          20  them as the fact that they feel that there's a need for those 

          21  kinds of facilities.  But we have done an awful lot of the 

          22  kinds of facilities that you're talking about.  And those 

          23  typically are high scoring in our criteria and that's one 

          24  place that we could address that relatively easy is through 

          25  our scoring criteria, the amount of weight that are given to 


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           1  those kinds of projects.  But we need your guidance on this. 

           2                 MR. COOK:  This is a part of the purpose for 

           3  this briefing is to go over these very kinds of issues because 

           4  this program, and Tim has done a great job with it, but it has 

           5  been molded through many years and many sessions and a lot of 

           6  input from those different interest groups and legislators 

           7  saying, well, we want you to do, you know, and some of that 

           8  comes down that's why.  That's why there's a mandated amount 

           9  in some of these areas now is because we want to be sure you 

          10  do this, you know, and so they give us some direction like 

          11  that.  And it is -- it is your discretion.  We can -- we can 

          12  mold this that way or this way a little bit, you know, more 

          13  but it's -- it's been carefully approached and -- 

          14                 COMMISSIONER MONTGOMERY:  I guess my answer I 

          15  would rather see it fit the mission.  I guess this is to the 

          16  law of unintended consequences.  Maybe making that request may 

          17  make it worse.  So I really leave it up to you-all for 

          18  direction how we -- 

          19                 MR. COOK:  You know, periodically --  

          20                 COMMISSIONER MONTGOMERY:  -- as we can but not 

          21  go the -- provoke the wrong reaction.   

          22                 CHAIRMAN ANGELO:  I would think the approach 

          23  that Tim has mentioned of adding a little bit more weight to 

          24  those items would be a lot more acceptable way to go about it.  

          25  And that you still don't slant the grants to the point where 


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           1  others can't succeed. 

           2                 COMMISSIONER MONTGOMERY:  Change the balance a 

           3  little. 

           4                 CHAIRMAN ANGELO:  It's clear that the 

           5  constituency wants us to be heading in more of the direction 

           6  that we've been heading rather than the reverse, wouldn't you 

           7  say? 

           8                 MR. HOGSETT:  You know, I think that 

           9  traditionally about every five years we've gone through the 

          10  process of remaking rules for these programs.  And those are 

          11  intensive public hearing, input posted in the Register like 

          12  we've just done for the regional and small communities grants 

          13  programs.  And I think that's -- I think that's a fair thing 

          14  for us to consider doing pretty quickly again and asking for 

          15  the input and see where we're going. 

          16                 CHAIRMAN ANGELO:  We might find a different 

          17  opinion than we think. 

          18                 MR. HOGSETT:  Could be. 

          19                 COMMISSIONER FITZSIMONS:  Is there an 

          20  opportunity?  Because I agree with Phil's point that you don't 

          21  want to get off your mission, but you do have those other 

          22  responsibilities.  If you're waving more toward nature 

          23  centers, interpretive facilities and you have these projects 

          24  that have a lot of -- you described one is $7 million and we 

          25  may be matching $7.5 of that, we concentrate on making sure 


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           1  that maybe that outdoor facility that has baseball and running 

           2  tracks also have a nature center and interpretive aspect to 

           3  it. 

           4                 MR. HOGSETT:  Those are the kinds of projects 

           5  that are coming to the top in the scoring system right now, 

           6  particularly in the outdoor program.  To be competitive you 

           7  really have to provide not only active recreation, but you 

           8  have to have a strong conservation element as part of your 

           9  project.   

          10                 COMMISSIONER FITZSIMONS:  I know one project 

          11  northwest San Antonio where my kids were playing soccer 

          12  there's a nature trail that just connects to the soccer 

          13  fields.  And I thought, well, you know, sometime we're looking 

          14  at this either or well, it's either softball fields and soccer 

          15  fields or it's nature trails and we can certainly, I know in 

          16  San Antonio area where they're doing some new park projects, 

          17  encourage them to include our aspect in it. 

          18                 CHAIRMAN IDSAL:  That's right.   

          19                 COMMISSIONER FITZSIMONS:  If we're going to be 

          20  matching.  Of course, there's lots of TPWD Kids Fish stuff 

          21  around there. 

          22                 MR. HOGSETT:  This is a look at the demand for 

          23  these funds since 1993, since the sporting goods were 

          24  established as the resource.  Total demand requests for funds 

          25  in the amount of $322 million and we've been able to fund less 


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           1  than half on that at $135 million.  And again these are with 

           2  the exception of outreach grants or all 50 percent matching 

           3  grants.  Another way of looking at that is the amount of 

           4  competition.  And you see a very similar ratio.  Numbers of 

           5  applications received since 1993 at 975 and numbers of 

           6  projects that we have through the scoring system, and you have 

           7  approved 375 of those.  With this kind of competition and 

           8  demand, then it's very important we think as a staff to have a 

           9  strong set of review criteria to bring recommendations from a 

          10  staff level to you as a Commission to make decisions based on 

          11  objectivity and based on what we hear from the public are 

          12  their desires in terms of priorities.   

          13                 Real quickly I want to go through the scoring 

          14  criteria for you.  The indoor and outdoor programs, the two 

          15  largest programs have virtually the same scoring criteria with 

          16  a couple of exceptions and I've highlighted those exceptions 

          17  by colors here.  So everything you see in white is the same 

          18  for either the indoor scoring system or the outdoor scoring 

          19  system.  Ensure performance, that's a gateway criteria.  We do 

          20  not bring an application forward to the Commission if they 

          21  have an active project which is not progressing adequately and 

          22  we also do not bring any forward that have postcompletion 

          23  problems.  In other words, we've gone out and done an 

          24  inspection and it's not being well maintained or have other 

          25  problem.  Both the indoor and outdoor program reward local 


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           1  planning.  If a local government goes through the process of 

           2  adopting a Local Parks and Recreation Master Plan and ask for 

           3  the highest priority needs in their own master plan, we will 

           4  award them up to 20 points additional priority. 

           5                 The next criteria is diversity and that is 

           6  simply the numbers of types of recreation opportunities that 

           7  they're providing.  A typical park might provide a trail, a 

           8  picnic unit, a swimming pool -- you know, the more types of 

           9  opportunities you provide the higher the score is in both 

          10  indoor and outdoor program.  Increased water related 

          11  recreation is exclusive to the outdoor program and that is the 

          12  access or acquisition of access to natural or any kind of 

          13  water other than swimming pools -- basically, reservoirs, 

          14  rivers wetlands, that sort of thing.  Very much a 

          15  resource-related criteria.  Improving geographic distribution.  

          16  That is within the sponsor's service area that they're 

          17  spreading out what they're doing.  That they're providing a 

          18  diverse opportunity throughout their system.  And the more so 

          19  they're doing that the higher the score we give them.  

          20  Maximize use of funds for parks and recreation opportunities.  

          21  I call that the bang for the buck criteria.  We do a ratio 

          22  calculation of their application grant request and look at the 

          23  amount in that request that is for actual recreation 

          24  facilities as opposed to support.  In other words, how much is 

          25  for the ball field versus how much is for the concession 


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           1  stand.  The higher the ratio is for actual hard recreation, 

           2  the higher the score in that particular criteria.   

           3                 The next one is your diversity criteria.  The 

           4  provision of opportunities to low income, minority, elderly, 

           5  and youth at risk citizens.  It's not a particularly highly 

           6  weighted category but an important one.   

           7                 The next one is exclusive to the indoor 

           8  program.  To provide indoor recreation facilities to a greater 

           9  number of citizens.  That's basically just looking at how many 

          10  people that recreation center or that interpretive center are 

          11  serving on an annual basis.   

          12                 Reward cooperation between government entities 

          13  and then I'll lump that with the next one, partnerships 

          14  between the sponsor and the private sector.  Those are all 

          15  about where the sponsor of the application is going out and 

          16  actually receiving a part of the match either from another 

          17  government entity or from the private sector, whether it be 

          18  land, whether it be donation of materials, equipment, labor, 

          19  whatever the resource.  It's trying to encourage 

          20  intergovernmental and public private partnerships in terms of 

          21  providing recreation opportunities.   

          22                 The last criteria are projects that preserve 

          23  significant natural resources through public land acquisition 

          24  and stewardship.  And that in both the indoor and outdoor 

          25  scoring systems are the -- I think are the highest ranking 


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           1  criteria in this those two systems.  That's what's bringing 

           2  conservation projects up higher on the list.   

           3                 Renovation, if you're renovating an existing 

           4  facility that is just simply worn out, not just lack of 

           5  maintenance but it's completely worn out then we give you 

           6  additional priority.  That's sort of a balancing criteria 

           7  between people that are doing brand new facilities versus 

           8  renovations.   

           9                 Promote wise use of natural resources.  That 

          10  is, for lack of a better term what I call the green building 

          11  criteria.  It's encouraging energy efficient and other 

          12  conservation elements in the construction of the facility.   

          13                 And the final two are exclusive to the outdoor 

          14  program.  We provide -- we give additional priority to 

          15  projects that provide for greenbelt linkages and those that 

          16  encourage the appreciation and the preservation of cultural 

          17  resources.  We can't actually fund the development of things 

          18  directly related to cultural and historical resources but we 

          19  can do park and recreation facilities and interpretation 

          20  related to those kinds of sites.  And that's the scoring 

          21  system for the two programs as it stands.   

          22                 I'll run through these real quickly.  I just 

          23  wanted to give you some examples of some recent projects that 

          24  you have approved.  This one just approved in January.  It was 

          25  the highest scoring project not only in this review but in my 


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           1  knowledge the highest scoring project ever in the scoring 

           2  system.  It scored 143 points.  It includes the acquisition of 

           3  donation of 41 acres in the City of Lakeway.  The development 

           4  of a pool, junior Olympic, and also leisure pool and other 

           5  related facilities.  It included a 24-acre of that acquisition 

           6  natural area dedication.  There are several endangered species 

           7  on this site.  So it was the -- it was the ability to take 

           8  part of the site that did not have endangered species and 

           9  other related items on it and use that for the active 

          10  recreation and then also preserve the rest of the site.  It 

          11  was a $500,000 grant and as I say, it was just approved.  Some 

          12  of you may have been to the Canyon of the Eagles, it's on Lake 

          13  Buchanan.  It is an LCRA, Lower Colorado River Authority 

          14  project.  Our involvement and this has been a few years ago.  

          15  But our involvement was the development of the outdoor 

          16  recreation facilities that are there.  It was a $500,000 

          17  grant.  It included things like trails, piers, a swimming 

          18  beach, fishing opportunities, a number of RV camp sites, a 

          19  canoe launch, wildlife viewing area, and amphitheater.  It 

          20  also designated, and these are the green areas that you can 

          21  see, two large areas exclusively for endangered species 

          22  habitat preservation in this case, the black-cap vireo.  An 

          23  indoor recreation facility that is, I think, a very fine 

          24  example of our accomplishing our mission.  We made a $350,000 

          25  grant to the City of Baytown to acquire a 2-acre site by 


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           1  donation that on the upper left corner as you can see was an 

           2  old building that actually had been a bowling alley that was 

           3  privately owned, they had gone out of business.  The City of 

           4  Baytown came back in and built the building that you see on 

           5  the right and it is called the Eddie Gray Baytown Wetlands 

           6  Interpretive and Recreation Center.  This sits immediately 

           7  adjacent to a very large, very important wetland in Baytown 

           8  and the facility itself is a building that includes a nature 

           9  display.  It has several large meeting rooms.  It has an 

          10  environmental lab and that's what you see the kids at the 

          11  microscopes.  And to my understanding is that every Baytown 

          12  Independent School District student in the fifth grade goes 

          13  through a program annually in that building.  Another 

          14  facility, indoor facility, this one was also just approved.  

          15  It is the City of Lubbock is cooperating with a private 

          16  nonprofit entity called The Science Spectrum which already has 

          17  an existing building that is partially owned by this nonprofit 

          18  and partially owned by the City which is a science interactive 

          19  interpretive facility.  Well, they want to -- they have an 

          20  unused floor of this facility that they want to develop for 

          21  a -- well, they call it a themed exhibit and it's based on the 

          22  Brazos river ecosystem.  Essentially what you will do it's in 

          23  lower right-hand corner you'll enter that display and you'll 

          24  travel along the Brazos river ecosystem from the headwaters 

          25  which happen to be in the Lubbock area all the way to the Gulf 


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           1  of Mexico and learn about the environment and the species and 

           2  just learn about water quality issues and things related to 

           3  the Brazos river.  The rest of that floor will be an 

           4  environmental classroom area, a science laboratories, computer 

           5  laboratories, a crafts laboratory and they're also going to 

           6  construct a climbing wall, an indoor climbing wall and that 

           7  was a $750,000 grant.   

           8                 Brazoria County acquired a 55-acre 

           9  privately-owned campsite that was going out of business, 

          10  beautiful piece of property along Chocolate Bayou just outside 

          11  of Alvin and the $500,000 grant that you approved will 

          12  renovate a number of the existing facilities but will also 

          13  provide things such as a new playground, some new RV camping 

          14  sites and this is really almost a state park environment.  

          15  I've just seen it a few weeks ago for the first time and it 

          16  really was an incredible opportunity that they were lucky to 

          17  be able to take advantage of.   

          18                 And then last but not least, recently the City 

          19  of Lubbock completed a project for the purchase and 

          20  development of a 116-acre site in the southwest part of the 

          21  city.  It is a ball field complex, lighted ball fields, 

          22  lighted soccer fields, sport courts but it also has an 

          23  interpretive trail and a small amphitheater and I guess it's 

          24  no secret why I included this particular site in this 

          25  presentation. 


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           1                 CHAIRMAN ANGELO:  The Chairman's already made a 

           2  comment on that.  Is there a criteria we have for former 

           3  mayors serving on the Commission? 

           4                 CHAIRMAN IDSAL:  I told Mr. Angelo that 

           5  Mr. Hogsett is incorruptible. 

           6                 MR. HOGSETT:  Some of the other things that we 

           7  do in recreation grants real quickly, we have a boat ramp 

           8  construction program that I'm sure you're familiar with.  We 

           9  provide small rural communities with planning assistance.  We 

          10  have are a couple of landscape architects that will go out and 

          11  do park site master plans free of charge to small units of 

          12  government.  That program has been very poplar over and over 

          13  again.  We have programs related to boat pumpouts and 

          14  construction of boat infrastructures.  These are pass-throughs 

          15  from Federal government.  The recreation trails grants that 

          16  you're familiar with.  And we also provide lots of technical 

          17  assistance to local governments.  And I would be happy to 

          18  answer any questions. 

          19                 COMMISSIONER MONTGOMERY:  Do I remember 

          20  correctly these grants cannot be used on state park property? 

          21                 MR. HOGSETT:  Correct.   

          22                 COMMISSIONER MONTGOMERY:  It's everything but. 

          23                 MR. HOGSETT:  Correct.  It is explicitly 

          24  prohibited by State law. 

          25                 CHAIRMAN ANGELO:  Paul? 


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           1                 MR. DABNEY:  Chairman, Walt Dabney, State Park 

           2  Director.  If I could just add one thing to Tim's excellent 

           3  answer a while ago.  The source of the revenue from sporting 

           4  goods tax is an issue that's very near and dear to the 

           5  member -- our friends in the Texas Recreation and Parks 

           6  Society.  It's not all coming from camping gear and that kind 

           7  of thing.  A whole lot of it comes from balls and bats, you 

           8  know, sports uniforms and things that the Legislature has made 

           9  it pretty clear to us needs to go back into things that 

          10  support or are directly related to that kind of money.  And 

          11  not all of this by a long shot are the total of $32 million 

          12  that comes to the State Park system, half of which basically 

          13  we distribute in these programs is all attributable to camping 

          14  and those kinds of things.  A whole lot of this is from active 

          15  sports things.  So it is probably pretty appropriate that it's 

          16  going back there and they would be very sensitive to the 

          17  notion that we would change it too far to going to other 

          18  things. 

          19                 COMMISSIONER WATSON:  That is correct.  That's 

          20  an important clarification if they're paying into the program. 

          21                 COMMISSIONER MONTGOMERY:  Do we inspect every 

          22  project we grant? 

          23                 MR. HOGSETT:  Yes.  We do a preconstruction 

          24  site visit before we bring the application forward to you and 

          25  we do periodic on-site inspections during progress and we do a 


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           1  final inspection and on-site audit before we close any of 

           2  these grants. 

           3                 COMMISSIONER MONTGOMERY:  The other general 

           4  area I have a question about when it came up last time was the 

           5  amounts.  We set arbitrary limits on the amounts that we 

           6  granted? 

           7                 MR. HOGSETT:  That's also a relatively 

           8  historical thing.  It's been the way that -- it's evolved into 

           9  that.  We started with the outdoor grant program then in 1993 

          10  the funding source changed from cigarettes to sporting goods 

          11  and also we added the indoor program.  Then since then the 

          12  community outdoor outreach program has been added and then 

          13  we've also just done the regional.  But those, with the 

          14  exception of the two requirements for the indoor amount of 

          15  $3.2 million and the co-op amount of $1.25 million, the rest 

          16  of the money is within the discretion of the Commission in how 

          17  it's allocated. 

          18                 COMMISSIONER MONTGOMERY:  Well, what I was 

          19  asking was the amounts per individual grant were set, as I 

          20  remember, as an arbitrary a quarter million and a half 

          21  million.  I just wondered whether we -- do we have the right 

          22  number limit that number for a good long time too high, too 

          23  low.  What's your opinion based on what the market for the 

          24  demand is? 

          25                 MR. HOGSETT:  Well, I would think that 


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           1  particularly in the outdoor program if we were going to go any 

           2  direction we would go down as opposed to up.  When you get 50 

           3  to 60 applications every six months and you're able to do a 

           4  dozen of them with existing resources, I think if we increase 

           5  from $500,000 to whatever, you know, a million or whatever 

           6  they might ask for, you're just going to increase that 

           7  competition even more.  We increased the indoor grant amount 

           8  about two years ago, I think it was, from $500,000 to 

           9  $750,000.  But again that is totally within the Commission's 

          10  discretion.  I think it would be a valuable thing for us to 

          11  ask when we go out and do public hearings to redo rules for 

          12  the program. 

          13                 COMMISSIONER MONTGOMERY:  What's your judgment, 

          14  Tim, about where -- at some point you disappoint everybody and 

          15  you really don't have an impact on anybody. 

          16                 MR. HOGSETT:  I think we're about right for now 

          17  honestly.   

          18                 COMMISSIONER MONTGOMERY:  That's what I'm 

          19  asking. 

          20                 MR. HOGSETT:  I think with regional grants 

          21  being able to be larger then 750 and the with the small 

          22  community grant program to help those smaller folks I think 

          23  the rest of it is probably about right. 

          24                 CHAIRMAN ANGELO:  Any other questions or 

          25  comments?  Thank you, Tim.  We've got another item for you, I 


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           1  believe, coming up Item No. 6, which is the Urban Park and 

           2  Recreation Recovery Program. 

           3   ITEM 6.  URBAN PARK AND RECREATION RECOVERY PROGRAM 

           4                 MR. HOGSETT:  The Urban Park and Recreation 

           5  Recovery Program is a grant program administered by the U.S. 

           6  Department of Interior National Park Service.  These are 

           7  Federal pass-through grants that primarily provide for 

           8  rehabilitation of parks and recreation facilities in the inner 

           9  cities.  It's for facilities that, for lack of -- for age or 

          10  for other reasons are really no longer usable, need renovation 

          11  and these are grants for either indoor or outdoor recreation 

          12  grants. 

          13                 COMMISSIONER MONTGOMERY:  Rehab only. 

          14                 MR. HOGSETT:  Rehabilitation only, yes.  The 

          15  State's role in this is that there is an incentive in the 

          16  Federal grant evaluation criteria that if a state cooperates 

          17  in providing a part of that between 70 and 85 percent match to 

          18  reduce the amount of the local match, then additional criteria 

          19  points will be awarded to those sponsors.  So traditionally 

          20  the Commission has authorized us to use part of the Texas 

          21  Recreation and Parks Account resources to set aside a 

          22  commitment of match for any projects that might be approved 

          23  for UPARR grants in the State of Texas.  There is 

          24  approximately $28 almost $29 million in this national 

          25  competition, and Texas communities are eligible for 


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           1  approximately 15 percent or $4.3 million of that.  

           2  Applications are currently being taken by the National Parks 

           3  Service.  They will then evaluate those using their criteria 

           4  including whether or not Parks and Wildlife or the State of 

           5  Texas has made a commitment of part of that match.  That 

           6  commitment could be as much as 15 percent which would 

           7  eliminate any local match requirement.  But traditionally the 

           8  Commission in the past has felt that some -- that it is 

           9  important that there be at least some local match involved in 

          10  these projects.  So we have committed a 10 percent share.  And 

          11  any of the money that is not awarded would go back into the 

          12  Texas Recreation Parks Account.  And so with that in mind, 

          13  tomorrow we're going to be asking you to authorize us to set 

          14  aside $433,500 from the Texas Recreation and Parks Account for 

          15  that 10 percent match.  It's a little complicated but I would 

          16  be glad to answer any questions.   

          17                 CHAIRMAN ANGELO:  Any questions or comments? 

          18                 COMMISSIONER MONTGOMERY:  If we don't do this 

          19  where would the money be used?   

          20                 MR. HOGSETT:  It would stay in the existing 

          21  other grant programs. 

          22                 COMMISSIONER MONTGOMERY:  The one you just 

          23  previously -- 

          24                 MR. HOGSETT:  This is something we really I 

          25  think want to do because. 


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           1                 COMMISSIONER ANGELO:  For leverage. 

           2                 MR. HOGSETT:  It gave us a huge leg up in the 

           3  last competition.   

           4                 COMMISSIONER MONTGOMERY:  I just want to 

           5  understand where the money is the coming from. 

           6                 CHAIRMAN ANGELO:  Any other questions or 

           7  comments?  If not we'll place this item on the Thursday 

           8  Commission meeting agenda for public comments and action.   

           9                 And then we'll move to Item No. 7.  Thank you 

          10  Tim. 

          11                 MR. HOGSETT:  Thank you. 

          12   ITEM 7.  LAKE RITA BLANCA STATE PARK TRANSFER 

          13                 CHAIRMAN ANGELO:  We'll move on to State Park 

          14  Transfer, Walt Dabney. 

          15                 MR. DABNEY:  Chairman, Commission, I'm Walt 

          16  Dabney, State Park Director and I wanted to talk to you 

          17  briefly on House Bill 21 and a report on a transfer that we've 

          18  been working on since the last Commission meeting.  At that 

          19  last Commission meeting you did authorize us to enter into 

          20  negotiations with the City of Dalhart to see if we could 

          21  arrive at an agreement to transfer the operation and ownership 

          22  and maintenance of Lake Rita Blanca State Park to them.  This 

          23  park is the northernmost state park in Texas.  It really has 

          24  not been developed.  We had one person from Palo Duro Canyon 

          25  assigned to liaison, keep track of it and that sort of thing.  


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           1  It's about 1,668 acres.  We've had it since 1990 in 101-year 

           2  lease.  It actually was owned by the county -- counties, and 

           3  we had it on a lease.  We've since begun a negotiation -- all 

           4  the things we had there were day use areas and no overnight 

           5  facilities, dirt roads, that sort of thing.  We weren't 

           6  collecting any fees.  The House Bill 2108 which authorized us 

           7  to look at the possibility of transfers to a subdivision of 

           8  the State which would be a county or a city applied in this 

           9  case.  We would transfer our interest if it worked out back to 

          10  either the county or the city.  We have $2 million available 

          11  each year.  The grants would be based on the proposal and a 

          12  request from the governing body of either the city or the 

          13  county that they wanted to do that.  Dalhart has submitted a 

          14  proposal that we think is acceptable in this case.  They've 

          15  asked for just under $400,000 and it would do the things that 

          16  we're talking about up here.  Three viewing towers.  This is a 

          17  very important bird migration area.  A lot of winter waterfowl 

          18  in this -- in this lake and marsh area, hiking trail 

          19  improvements, two restrooms -- there are none there now, a 

          20  large group pavilion which would be used by the people from 

          21  the city, playground equipment, and then boundary fencing and 

          22  marking and road improvements.  This would be money that is 

          23  also coming out of the Texas Recreation and Parks Account 

          24  specifically to effect these kinds of things.  I think you'll 

          25  remember that we've already entered into negotiations and done 


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           1  the transfer of Lubbock Lake Landmark, Jim Hogg site at Rusk 

           2  and Old Fort Parker over by Mexia.  We're also actually 

           3  working on a couple of others now that could happen as well.  

           4  Tomorrow we would be making a recommendation that you 

           5  accept -- we won't be doing that today, but tomorrow we would 

           6  be making a recommendation that you allow us to consummate 

           7  this agreement.  We think it as good one and we would be 

           8  making that recommendation. 

           9                 CHAIRMAN ANGELO:  Any questions or comments 

          10  from the Commission?  If not we'll place this on the 

          11  Commission agenda for tomorrow's meeting for public comments 

          12  and action. 

          13                 MR. DABNEY:  Okay, sir. 

          14                 CHAIRMAN ANGELO:  Thank you, Walt. 

          15                 MR. DABNEY:  You bet. 

          16   ITEM 8.  LICENSE SYSTEM UPDATE 

          17                 CHAIRMAN ANGELO:  Item No. 8 is an update on 

          18  our license system and we'll ask Jayna Burgdorf to present 

          19  this one. 

          20                 MS. BURGDORF:  We got it taped down this time.  

          21  Chairman Idsal and members of the Commission, I'm Jayna 

          22  Burgdorf and I'm updating you on the Texas License Connection.  

          23  This is our new license system developed by WorldCom.  Today 

          24  I'm going to cover three phases of the project.  The 

          25  Transactive closeout, the production, which is live sales 


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           1  through the license system which is what's been happening 

           2  since December and then Phase 2 and 3 for the future.  While 

           3  transactive picked up over 2,800 terminals they did have 

           4  difficulty retrieving some of these.  We are asking our Law 

           5  Enforcement Division to assist with the pick up of 

           6  approximately 150 terminals.  It is not the terminal or the 

           7  asset itself that we own.  What we own are potential off-line 

           8  sales that are inside of that terminal.  So we're actually 

           9  also contracting with two former Transactive employees to 

          10  extract these sales out of the terminal, if there are any, and 

          11  then we'll invoice the agents for these sales.  That's why 

          12  it's important that we finish out this phase of the 

          13  transactive system.   

          14                 In production right now with WorldCom system we 

          15  have what we would consider the two highest priority issues, 

          16  agent management and some findings from the 

          17  PricewaterhouseCoopers review.  And when I say agent 

          18  management, what I mean is the number of agents overall, our 

          19  coverage, their satisfaction with the system, the suggestions 

          20  that have been made by the License Deputy Advisory Committee 

          21  and agent training.  What we are doing to update -- well, what 

          22  we're going to update you on is our plans for agent training.   

          23                 This is a map that is similar to the map that 

          24  we showed you at the January meeting.  The green areas are zip 

          25  codes where we have had agent make sales through the WorldCom 


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           1  system.  The bright pink areas represent agents that have 

           2  activated their terminals they put their terminals together, 

           3  they've connected to the WorldCom system.  For whatever 

           4  reason, in general what we're hearing is they say they haven't 

           5  had customer requests, they have not made a sale.  And the 

           6  white areas are zip codes where we do not have agents at this 

           7  time.  And as you know we are working to try and get agents in 

           8  those zip code coverage areas for -- we are continuing 

           9  regularly getting applications from folks.  This is very 

          10  regular in this industry.  It's been this way since I've been 

          11  involved with this project.  You have new folks who want to be 

          12  agents in the system.  They start a new business.  And so when 

          13  they come on and they're in one of these zip code areas, we do 

          14  not charge any lease fees in our -- trying to encourage folks 

          15  to started selling in this system.  This slide here shows 

          16  where we've added these 1,250 new agents, additional agents 

          17  since the January meeting.  So we've -- we're up to 1,857 who 

          18  have made sales in the system.  If you'll remember we had 

          19  about 2,400 agents selling licenses with Transactive.  

          20  Twenty-three hundred of those turned in agreements saying they 

          21  wanted to continue with the WorldCom system.  They signed 

          22  contracts with us saying we want to participate.  We believe 

          23  that -- we've done some research on the 100 that we lost and 

          24  that's -- that was about 1 percent of our business before, so 

          25  in general these were probably very small folks who didn't 


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           1  want to learn a new system.  But it probably didn't have a lot 

           2  of license sales to support it.  We have almost 2,000 that 

           3  have activated their equipment, that would be the green and 

           4  the pink together and then we have the 1,857 who have made 

           5  sales.  Okay.  So getting to the agent satisfaction.  In 

           6  February World Com conducted -- their help desk conducted a 

           7  survey.  They called 856 agents for -- whether they couldn't 

           8  get them on the phone or they just weren't available, we got 

           9  about 510 who were willing to participate in about 14 

          10  different questions and what we've done is we've picked out 

          11  five of these questions to give you a sense of what the agents 

          12  are thinking.  Okay?  And what we've also done within these 

          13  five questions is what were the top answers.  We kind of 

          14  looked for natural breaks in the survey data.  The first 

          15  question was how many licenses have you sold and if you 

          16  haven't sold any why.  And so this is the folks, the 41 folks 

          17  of the 510 who had not sold licenses.  And the number one 

          18  reason was that they hadn't had business.  There were some who 

          19  had problems with the equipment.  And that's continuing to be 

          20  something that we're working with the help desk on.  I asked 

          21  for information, you know, before this meeting what are the 

          22  high priority trouble tickets, that's what they call them if 

          23  an agent is having trouble issuing licenses.  Right now it's 

          24  about 50 which is about 2.5 percent of our agents so it 

          25  could -- and that doesn't mean that these are the same folks 


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           1  who have had trouble since the beginning.  It could be 

           2  somebody who had a power outage two days ago and is having 

           3  trouble issuing licenses now.   

           4                 Another question, what part of the system 

           5  offers you the most challenges?  A hundred and twenty didn't 

           6  have any specific answers.  Getting the license to print was 

           7  56; too slow.  Forty-six people -- 46 agents thought it was 

           8  too slow.  Replacement licenses were a problem noted by 34 

           9  folks.  That issue has actually been resolved since the survey 

          10  was conducted.  That was an issue with making sure that all 

          11  the licenses that had been sold in the Transactive system in 

          12  the fall were available in the WorldCom system if somebody 

          13  lost it and wanted to get a replacement.  So that issue has 

          14  basically been resolved.  And then there's, you know, training 

          15  is an issue as we're going forward.  When they were asked what 

          16  part of the system do you like the most, again 103 had no 

          17  specific information.  Sixty-seven liked the license which is 

          18  consistent with our customer's comments.  Sixty-four liked the 

          19  touch screen, especially I've heard from Academy and Wal-Mart 

          20  with the younger folks who work in their stores and, you know, 

          21  maybe high school folks, college folks, they're very used what 

          22  is almost a Windows-type driven application and so they like 

          23  that.  They think it makes it very easy to train some of these 

          24  new folks.  And, of course, they have higher turnover so 

          25  they're interested in that.  This is in contrast to the last 


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           1  slide which said that printing was a problem, 56 folks thought 

           2  that printing is great, 42 folks think it's faster.  So the 

           3  folks that we have that work at Parks and Wildlife who sell 

           4  licenses have told us that they think when you get used to the 

           5  system that it actually is faster.  So hopefully those earlier 

           6  answers are more of a learning curve issue and again that was 

           7  an early February survey.  They seem to be very satisfied with 

           8  the service that they get from the WorldCom help desk.  That's 

           9  good.  And the vast majority did not have any outstanding 

          10  issues with the license system and then some of the same 

          11  problems that I've mentioned earlier, equipment problems or 

          12  feeling that the system was too slow was mentioned by a few 

          13  folks.   

          14                 And we have the License Deputy Advisory group.  

          15  They are -- you know, they represent these agents and they are 

          16  cross section of the different types of agent both 

          17  geographically and size of business.  They met on 

          18  February 11th.  They -- the focus of the meeting very much was 

          19  on the efficiency of the system.  And so from -- they had very 

          20  good suggestions.  They had a lot of suggestions and so I 

          21  don't want to at all imply that they didn't have concerns, but 

          22  they weren't concerned about the accounting.  They weren't 

          23  concerned about getting swept for too many transactions or not 

          24  enough or not having the right reports.  They were really 

          25  specific about having to do too many key strokes perhaps for 


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           1  date of birth or something like that.  So we captured all 

           2  those suggestions and we are working with WorldCom to put 

           3  those into Phase 3.  But overall it was a very positive 

           4  meeting.   

           5                 We have conducted some agent -- some training 

           6  here at Parks and Wildlife headquarters.  We think we do a 

           7  good job of that because we hear a lot of their questions and 

           8  we know what their concerns are.  We had about 30 people here 

           9  and we think they were very pleased with the training.  In 

          10  response to suggestions from the License Committee, we are 

          11  going to partner with Law Enforcement this summer before the 

          12  new license year and we're going to both train folks 

          13  regionally on the new system and also get them ready for the 

          14  new license year and also on the regulations that might be 

          15  changed, let them have an opportunity to ask a Law Enforcement 

          16  the kinds of questions they get asked by their customers.   

          17                 We have redirected the PricewaterhouseCoopers 

          18  review from the Transactive system to the new WorldCom system 

          19  which was -- you know, a really good thing as we're starting 

          20  this new system.  It is specifically related to transaction 

          21  integrity.  The two most important issues that we -- that 

          22  PricewaterhouseCoopers found in their testing was that the off 

          23  line limitations are not functioning as designed.  And let me 

          24  explain that a little bit.  If the system were to go down, the 

          25  terminal would go off-line.  So a customer would still be able 


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           1  to get a license.  The system is supposed to be set up that no 

           2  agent should be able to sell in total more than $1,000 in 

           3  off-line transactions.  Just kind of a precaution 'cause we 

           4  don't want to have, you know, any similar situation that we 

           5  did have with Transactive when some of the sales would go 

           6  off-line and we wouldn't get those uploaded to the host at 

           7  some point.  That limitation is not being enforced right now.  

           8  And that's something that WorldCom is working on.  So that's 

           9  an example of these off-line issues that we found.  The other 

          10  thing that was found were these gaps in transaction numbers.  

          11  We had been assured that there weren't any gap in transaction 

          12  numbers and there shouldn't be; that's the bad news.  The good 

          13  news is that what we have found is that all the gaps in the 

          14  transaction numbers relate to training transactions or aborted 

          15  transactions and as a matter of fact, our internal audit staff 

          16  after PricewaterhouseCoopers identified this issue, our 

          17  internal audit staff went to Academy, they looked at five 

          18  stores for a two-month period and they found no examples, no 

          19  instances where the live sale matched a gap in a transaction 

          20  number.  So that's really good news.  That means that we have 

          21  found no instances where a sale was made in the field that 

          22  didn't make it to the host system.  And that's real important 

          23  for your transaction integrity.  I guess what -- you know, 

          24  another thing I wanted to mention is that the Academy 

          25  controller told our internal audit staff that they believe 


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           1  this system is significantly better than the transactive 

           2  system.  So we're also real pleased about that.  Both of these 

           3  issues -- all of these issues that were found are being worked 

           4  on by WorldCom.   

           5                 Finally, I wanted to talk a little bit about 

           6  Phase 2 and 3.  Phase 2 includes Internet licensing, and bug 

           7  fixes, and finalization of administrative support 

           8  applications.  That is behind schedule.  Right now we're 

           9  targeting May it was supposed to be completed in April.  And 

          10  Phase 3 includes the enhancements, that would be some of the 

          11  suggestions from the Licensed Deputy Committee, some of our 

          12  suggestions as we have gotten some experience with the system 

          13  and we see some things that we would like to do differently, 

          14  and that will probably require a contract amendment.  And I 

          15  would be happy to answer any questions.  We also have George 

          16  Galindo with PricewaterhouseCoppers here and Bob Parker with 

          17  WorldCom. 

          18                 CHAIRMAN ANGELO:  Mr. Montgomery? 

          19                 COMMISSIONER MONTGOMERY:  The Internet license 

          20  you say you can bring it on-line to have it ready for this 

          21  summer? 

          22                 MS. BURGDORF:  Yes. 

          23                 COMMISSIONER MONTGOMERY:  So that you would 

          24  have an application in the field.  Can you give us a summary 

          25  of the scope of the Pricewaterhouse review?  What were they 


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           1  tasked to do? 

           2                 MS. BURGDORF:  Yeah.  They were tasked to look 

           3  at specifically transaction integrity and then also -- so 

           4  looking at are the transaction getting to the host system, 

           5  anything surrounding that.  They were also asked to look at 

           6  our controls, what controls do we have in place Parks and 

           7  Wildlife and then what are the system controls that WorldCom 

           8  would have.  And that deals with the kinds of things like 

           9  security to and access to their host system, disaster recovery 

          10  procedures.  So basically they are looking at -- it's a 

          11  control review is what it is. 

          12                 COMMISSIONER MONTGOMERY:  It addressed all the 

          13  issues that were raised in the audit then? 

          14                 MS. BURGDORF:  Yes.  They -- I mean, I think 

          15  they are looking at -- they had copies of the audit and they 

          16  know what some of the issues were in the Transactive system 

          17  and they're, I believe, specifically looking, you know, that 

          18  those aren't issues in the system.  I think that's encompassed 

          19  in their control review. 

          20                 CHAIRMAN ANGELO:  Mr. Fitzsimons? 

          21                 COMMISSIONER FITZSIMONS:  My question has -- 

          22  you mentioned Academy and Wal-Mart.  They sale the vast 

          23  majority of the license. 

          24                 MS. BURGDORF:  Fifty-two percent.   

          25                 COMMISSIONER FITZSIMONS:  Combined? 


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           1                 MS. BURGDORF:  Yes, combined.  

           2                 COMMISSIONER FITZSIMONS:  And those responses 

           3  in those surveys, I saw anywhere response from 150 to 500 

           4  bottom of the draft.  Now, are those all different types or 

           5  are those -- 

           6                 MS. BURGDORF:  Yes. 

           7                 COMMISSIONER FITZSIMONS:  All right.  Do you 

           8  break down the responses at all into those largest vendors 

           9  because I would be frankly more interested in their responses 

          10  Academy and Wal-Mart since they're selling the majority than 

          11  maybe some of the smaller ones. 

          12                 MS. BURGDORF:  You know, I don't know.  We 

          13  could ask WorldCom if they could do that.  I don't have that 

          14  information now.  They probably kept track of who they were. 

          15                 COMMISSIONER FITZSIMONS:  Right. 

          16                 MS. BURGDORF:  I will tell you this, Academy is 

          17  great the way they have worked with us on this project.  They 

          18  put one of their trainers responsible for the stores.  They 

          19  were e-mailing me daily.  They would have the agents -- each 

          20  Academy store was asked, you know, for their comments, any 

          21  problems.  And their e-mail traffic is great.  They would let 

          22  us know and they were very specific about what issues they 

          23  might -- and I'm talking mostly about December and January now 

          24  because I think overall they're really pleased with where we 

          25  are.  They were at the License Deputy Advisory Committee, both 


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           1  their vice president of operations and this head training guy 

           2  who was responsible for the implementation at the Academy 

           3  stores.  And they had some of the same comments about wanting 

           4  to make it more efficient.  But they're really pleased with 

           5  where it is and they're very good about getting us specific 

           6  information if they have any problems on a very regular basis.  

           7  They're also good and compliments about the things they like 

           8  better about the system.  So I'm real comfortable that we know 

           9  what Academy's issues are, if there are any, you know.  Again, 

          10  I think it deals primarily with the efficiency of the system.  

          11  And Wal-Mart is much bigger, of course, they have many more 

          12  stores and they don't seem to have the same communication 

          13  channels that Academy does from headquarters.  So we get 

          14  feedback from them.  I know that I've been working with a guy 

          15  in internal audit, internal affairs and he has been showing me 

          16  when a Wal-Mart isn't selling and so we're escalating those.  

          17  And at this point I believe that all Wal-Marts are selling 

          18  licenses.  We had one that, you know, they just couldn't get 

          19  the machine hooked up right.  Finally WorldCom sent them a 

          20  machine completely packaged together, so all they had to do 

          21  was plug it in and it worked and they realized -- some folks 

          22  are just so visual, you know, they really need to see it and 

          23  not just hear, not just watch a video, not look at a piece of 

          24  paper, and not hear directions over the phone, they've got to 

          25  see it. 


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           1                 COMMISSIONER FITZSIMONS:  Sounds like a 

           2  particular sporting goods manager.  Well, I would be 

           3  interested if you could look at it.  It seems to me your 

           4  example of the responses on, let's say, printers or whatever 

           5  if most of those responses are from Academy or Wal-Mart -- 

           6                 MS. BURGDORF:  Uh-huh.  

           7                 COMMISSIONER FITZSIMONS:  -- that's more 

           8  significant to me with them selling over half of the 

           9  licenses -- 

          10                 MS. BURGDORF:  Uh-huh. 

          11                 COMMISSIONER FITZSIMONS:  -- than if it's 27 

          12  small ones.  Not to discount, they're very important in the 

          13  system, but numbers matters. 

          14                 MS. BURGDORF:  Well, we can do two things.  One 

          15  we can follow-up with WorldCom and ask them if they can, you 

          16  know, segregate their survey results by type of store and the 

          17  other thing we can do is just a follow up with Academy and 

          18  Wal-Mart and say, you know, what would you say your top three 

          19  issues are right now with regard to this new system.   

          20                 COMMISSIONER FITZSIMONS:  Thank you. 

          21                 COMMISSIONER RISING:  I had a question I'm 

          22  sorry. 

          23                 CHAIRMAN ANGELO:  Go ahead. 

          24                 COMMISSIONER RISING:  I noticed earlier that 

          25  you stated that we have about 2,300 people or agents who 


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           1  intend to apply for the new system but we've got about 2,000 

           2  on line right now.  Do we feel that that 300 is just -- is 

           3  that just because it's not license season or do we expect them 

           4  to come on line and are we going to follow -- 

           5                 MS. BURGDORF:  That's what we think.  We have 

           6  made two phone calls to those folks, Parks and Wildlife has 

           7  called these folks and actually WorldCom has called some of 

           8  these folks.  And by the and large the answer we get is that 

           9  we either, A, we didn't have time to put the machine together 

          10  and that was more the answer we got back in January when they 

          11  had probably just been through their busy hunting season so 

          12  they wanted to finish up with Transactive or, two, they didn't 

          13  have any business.  So as we -- you know, we -- what was an 

          14  interesting phenomena is over kind of the Texas two-week 

          15  spring break period is whereas we had been getting probably in 

          16  February maybe one agent a day was coming on-line, we were 

          17  getting four and five agents a day during that spring break 

          18  period which kind of indicates there's some truth to the fact 

          19  when they have business maybe people were out fishing, you 

          20  know, or spring turkey hunting, when they had business they 

          21  were going to take the time to get their equipment put 

          22  together.  So what we need to do before the license year, you 

          23  know, give it another month, let's say, another month and a 

          24  half, see where we are with the number of agents, see if 

          25  they're still truly trickling on and call those folks again 


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           1  and say, you know, we have a contract with you, can we help 

           2  you get this set up.  We want you to be ready for the new 

           3  license year.  So we're very much hoping that these folks come 

           4  on line and that it truly is just that they're not -- they're 

           5  don't have customers right now.  And of course a lot of our 

           6  agents are ranch folks and they don't -- they're not having 

           7  customers come to their ranch except during hunting season 

           8  so -- 

           9                 CHAIRMAN ANGELO:  Commissioner Avila has a 

          10  question. 

          11                 COMMISSIONER AVILA:  I was going to ask how 

          12  many states now have Internet license sales and then second is 

          13  our Internet sales going to be through WorldCom, I mean, have 

          14  they got a, you know, the web site and all that? 

          15                 MS. BURGDORF:  Okay.  There are, I believe, 

          16  probably 25 states or so that have some form of what they 

          17  would call Internet licensed sales.  And sometimes that's just 

          18  a few licenses.  It's not everything.  We hope to bring up all 

          19  recreational license sales and that number is just from memory 

          20  because there is this committee that's a subset of the 

          21  International Association of Fish and Wildlife Agencies that 

          22  specifically works on licensed system.  And I can get you a 

          23  specific one later today.  

          24                 COMMISSIONER AVILA:  I just wanted to know 

          25  where we were in coming on line. 


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           1                 MS. BURGDORF:  We're probably a little behind 

           2  because we had ended up having to deal with this transition 

           3  when we could have been focusing our energies just on Internet 

           4  licensing. 

           5                 COMMISSIONER AVILA:  Right.   

           6                 MS. BURGDORF:  WorldCom is providing the 

           7  application, the back-end application.  And all Internet 

           8  licensed sales will be on-line as well which is going to be a 

           9  good thing for the system.  What they're then doing, though, 

          10  is we are giving out specifications to folks.  There's -- and 

          11  there's some examples that some of you guys might have heard 

          12  of.  A greatlodge.com, there's a fishing one.  I can't 

          13  remember the name of it right now.  There's some that are just 

          14  government-type web sites and these folks specialize in 

          15  selling hunting and fishing license and they would basically 

          16  bid with us on getting this business.  We're hoping to -- 

          17                 COMMISSIONER AVILA:  To us or to WorldCom? 

          18                 MS. BURGDORF:  To us.  We're hoping to have 

          19  three to five Internet brokers selling our licenses.  And John 

          20  Wilson, he's actually heading up that aspect of the project 

          21  and John did I answer that fairly accurately.   

          22                 MR. WILSON:  I understood it. 

          23                 MS. BURGDORF:  Okay.  All right.   

          24                 COMMISSIONER AVILA:  I understood it too.  I 

          25  guess the final part of that question is if we start getting a 


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           1  lot of use of the Internet sales the downside in quantity 

           2  doesn't have any effect on our WorldCom contract. 

           3                 MS. BURGDORF:  They will still get -- they will 

           4  still get a transaction fee because it will still be an 

           5  on-line transaction through the WorldCom system.  So -- and 

           6  actually, you know, when we first mentioned the idea of a call 

           7  center back when we first automated their original license 

           8  system, we had a lot of licensed agents who were concerned 

           9  that they were going to lose business and it ended up being 

          10  like 3 percent of our business.  It really didn't impact their 

          11  sales and the downside of an Internet license is if it's a 

          12  tag -- if you want it for a tagged species, you're going to 

          13  have to wait a few days to get that paper license.  So I don't 

          14  believe that it's going to negatively impact the agent 

          15  significantly.   

          16                 MR. COOK:  Commissioners, Jayna correct me if 


          17  I'm wrong, the Transactive point-of-sales system was one of 

          18  the first in the United States.  

          19                 MS. BURGDORF:  It was the second and it was 

          20  largest.   

          21                 MR. COOK:  Automated system. 

          22                 MS. BURGDORF:  Automated system.   

          23                 MR. COOK:  That we implemented almost six years 

          24  ago now? 

          25                 MS. BURGDORF:  Uh-huh. 


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           1                 MR. COOK:  This system brings us in how many 

           2  million dollars a year? 

           3                 MS. BURGDORF:  Sixty-five million. 

           4                 MR. COOK:  I wanted to point that out because 

           5  of the importance of the system.  It is a very, very complex 

           6  system.  And Jayna mentioned it, but I wanted to recognize 

           7  this little guy standing back there by the door.  John Wilson 

           8  and Jayna have worked through the years with these two 

           9  programs intensely.  The complexity and the detail involved -- 

          10  we learned a lot from the Transactive system, we all did.  

          11  And, you know, 20/20 hindsight is a wonderful thing and we're 

          12  trying to take advantage of it to the best of our ability at 

          13  this time to make our WorldCom system even better.  And 

          14  WorldCom has been very cooperatively, Bob, and we appreciate 

          15  that.  You know, these systems, I got really pretty closely 

          16  involved in this WorldCom system back in about March or April 

          17  of last year.  And when you sit around with these folks who 

          18  are working, we have many people within this group, Suzy's 

          19  group of folks working on this system, a number of people, and 

          20  I -- they are so capable, so competent.  When I sit around and 

          21  they're talking, I do lots of nodding and things like that.  

          22  And I try to act agreeable most of the time.  But, you know, 

          23  we are looking at this system every day with the intent of 

          24  improving customer service, improving our ability to collect 

          25  our funds.  It's -- it's an interesting challenge and I 


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           1  appreciate your -- I appreciate your involvement and interest 

           2  in it.  And without people like Jayna and John and Bridget 

           3  Wolf and the people who have just been -- there's a whole 

           4  group of them, and I don't mean to leave anybody out, but they 

           5  have done us a great job.  We're going to do better.  We're 

           6  going to continue to make this system better.  We appreciate 

           7  your help and appreciate your tolerance and we're gearing up 

           8  now.  I was talking to them the other day, I said, okay, guys, 

           9  you know, we're going to start the new year again in August, 

          10  in early August, you know, are we going to be ready?  I mean 

          11  those are the kind of issues that we've got to be -- that 

          12  August, September rush is a huge, I believe, in that first 60 

          13  days or so --  

          14                 MS. BURGDORF:  Fifty percent of our business. 

          15                 MR. COOK:  -- 50 percent of the license 

          16  transactions for year.  So we got to fill in those holes 

          17  across the State where we need to fill them in and we can 

          18  evaluate that.  We've got to find those vendors who are having 

          19  a problem and see if we can resolve them and we're doing that.  

          20  I appreciate their efforts. 

          21                 CHAIRMAN ANGELO:  Any other comments or 

          22  questions?  Thank you, Jayna.   

          23   ITEM 9.  LICENSE FEES FOR COMMERCIAL FISHERIES 

          24                 CHAIRMAN ANGELO:  We'll take up Item No. 9.  

          25  Suzy Whittenton to present the recommendation on the license 


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           1  fees for commercial fisheries. 

           2                 MS. WHITTENTON:  Thank you, Mr. Chairman, 

           3  Commissioners.  We discussed a proposal at the last meeting to 

           4  increase commercial fishing license fees in the Finance 

           5  Committee.  This originated from a State Auditor's Office 

           6  report that was published in December of 2000 that determined 

           7  that Parks and Wildlife did not receive enough revenue in the 

           8  commercial fishing fishery programs to recoup the cost of 

           9  program management.  That report became the basis for a 

          10  Legislative Appropriations Rider in the current Appropriations 

          11  Act.  That rider is pretty clear.  It states that it's the 

          12  intent of the Legislature that Parks and Wildlife shall adjust 

          13  rates charged for licenses in each commercial fishery program 

          14  accordingly to provide funds necessary to recoup costs.  You 

          15  know, in order to reach complete cost recovery we would have 

          16  to increase the fees by over 100 percent.  This would be in 

          17  addition to last year's fee increase which was up to about 

          18  50 percent already.  So the staff has been concerned about the 

          19  socioeconomic disruption to the coastal communities from the 

          20  large -- from a large fee increase.  So as a first step 

          21  towards balancing the interest of the State and the 

          22  industries, a 20 percent fee increase was recommended.  That 

          23  action would expect to generate about $663,000 in new revenue.  

          24  Here are examples of the impact of the proposed fee changes by 

          25  license type.  Now, we published this proposal in the 


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           1  March 1st issue of the Texas Register and held 22 public 

           2  hearings across the State.  We also took in public comments 

           3  through our web site, which is actually where we got most of 

           4  comments.  This is what the comments looked like; 62 in favor.  

           5  Now, those are primarily coming from people not in the 

           6  commercial fishing business.  These are coming off of our web 

           7  site.  Anybody could log in and comment.  Then we had 24 

           8  against and 44 where there wasn't really an opinion stated.  

           9  Either they were asking for clarification or making a comment 

          10  that was not a for or against.  We got a couple of alternate 

          11  proposals that they asked us to consider.  One was to increase 

          12  the fees by a greater percentage.  Again, that's probably not 

          13  someone in the business.  And then we had somebody write in 

          14  that a 5 percent increase would be more acceptable.  Those 

          15  were the comments.  Now, since then as a staff was looking at 

          16  all the fees when we were doing all our work on fee issues, we 

          17  realized that there was a need to clarify the rules associated 

          18  with transfers of licenses when a license holder passes away 

          19  and wanted to pass their license on to an heir.  The way the 

          20  current rules read the heir would have to pay the full license 

          21  fee.  And what happens actually in practice has been that we 

          22  charge them a transfer fee and so we just wanted to clarify 

          23  the rules here and propose a transfer fee of $10 for that -- 

          24  in that situation.  This would apply to licenses in that 

          25  license management program.  And that's all I had.  And we're 


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           1  just asking that this item be put on tomorrow's agenda for 

           2  public hearing consideration of adoption. 

           3                 CHAIRMAN ANGELO:  Any questions or comments?  

           4  If not, the item will be placed on the agenda tomorrow for 

           5  public comment and action by the Commission.  Thank you. 

           6                 MS. WHITTENTON:  Thank you. 

           7                 CHAIRMAN ANGELO:  Any other business to come 

           8  before this committee?  There being none, Madame Chairman, I 

           9  believe that's all that is the business of the Finance 

          10  Committee for today's meeting. 

          11                 CHAIRMAN IDSAL:  Thank you, Mr. Angelo.  We 

          12  will now reconvene the Regulations Committee; is that correct?  

          13  We need the chairman of the Regulations Committee, 

          14  Mr. Fitzsimons.  Why don't we take a couple minute break here.  

          15  I think that might be appropriate.  Be back in five minutes. 

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           1   THE STATE OF TEXAS )  

           2   COUNTY OF TRAVIS  ) 

           3        I, KIM SEIBERT, a Certified Court Reporter in and for 

           4   the State of Texas, do hereby certify that the above and 

           5   foregoing pages constitute a full, true, and correct 

           6   transcript of the minutes of the Texas Parks and Wildlife 

           7   Commission on April 3, 2002, in the Commission hearing room 

           8   of the Texas Parks and Wildlife Headquarters Complex, Austin, 

           9   Travis County, Texas.   

          10        I FURTHER CERTIFY that a stenographic record was made by 

          11   me at the time of the public meeting and said stenographic 

          12   notes were thereafter reduced to computerized transcription  

          13   under my supervision and control.   

          14        WITNESS MY HAND this ____ day of ____________________, 

          15   2002. 

          16    

          17    

          18                      ___________________________ 
                                  KIM SEIBERT, Texas CSR 4589 
          19                      Expiration Date:  12/2002 
                                  3101 Bee Caves Road 
          20                      Suite 220, Centre II 
                                  Austin, Texas  78701 
          21                      (512) 328-5557 

          22    

          23    

          24    

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           1    

           2    

           3    

           4   ___________________________ 
               ERNEST ANGELO, CHAIRMAN 
           5    

           6   ___________________________ 
               KELLY W. RISING, M.D. 
           7    

           8   ___________________________ 
               PHILIP MONTGOMERY, III 
           9    

          10   ___________________________ 
               JOSEPH FITZSIMONS  
          11    

          12   ___________________________ 
               JOHN AVILA, JR. 
          13    

          14   ___________________________ 
               ALVIN L. HENRY (Absent) 
          15    

          16   ___________________________ 
               KATHARINE ARMSTRONG IDSAL 
          17    

          18   ___________________________ 
               MARK E. WATSON, JR. 
          19    

          20    
               ___________________________ 
          21   DONATO D. RAMOS 

          22    

          23   

          24   

          25   


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