Finance Committee

Wednesday, 9:00 a.m., May 28, 2003

Commission Hearing Room
4200 Smith School Road
Austin, TX 78744
Item
No.
Subject Public Hearing
Agenda Item No.
  Approval of the Committee Minutes from the previous meeting.  
  Summary of Minutes  
1. Chairman's Charges (Oral Presentation) Committee Only
2. Legislative Update
Staff: Bob Cook
Committee Only
3.

Financial Review and Update
Staff: Mary Fields

Committee Only
4. Fee Changes
- Hunting and Fishing License Fee Changes
- Boat Fees
Staff: Gene McCarty



2
3

 

5. Boat Registration Revised Decal
Staff: Frances Stiles
Committee Only
6. Other Business  

Summary of Minutes
Texas Parks and Wildlife Commission
Finance Committee
April 2, 2003

BE IT REMEMBERED that heretofore on the 2nd day of April 2003, there came to be heard matters under the regulatory authority of the Parks and Wildlife Commission of Texas, in the commission hearing room of the Texas Parks and Wildlife headquarters complex, Austin, Travis County, Texas beginning at 2:00 p.m. to-wit:

I. FINANCE COMMITTEE:
Ernest Angelo, Jr., Chair
Phillip Montgomery, III
Katharine Armstrong
John Avila, Jr.
Joseph B. C. Fitzsimons
Alvin L. Henry
Donato D. Ramos
Kelly M. Rising, M.D.
Mark E. Watson, Jr.
Lee M. Bass, Chairman Emeritus

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

III. APPROVAL OF MINUTES: Commissioner Ernest Angelo, Jr. asked for a motion to approve the minutes from the January 22, 2003 meeting. The motion was moved by Commissioner Fitzsimons and seconded by Commissioner Rising. The motion passed unanimously.

IV. THE FOLLOWING ITEMS WERE PRESENTED TO THE COMMITTEE:

I. Chairman’s Charges
Presenter: Mr. Robert L. Cook

Mr. Cook introduced Ms. Mary Fields, Texas Parks and Wildlife’s new Chief Financial Officer, to the Commission. He then proceeded with updating the Commission on the status of the Chairman’s Charges for the Finance Committee. Two presentations will be given during the Finance Committee which will provide updates regarding the status of the Business Practice Improvement Plan and the proposed license fee increase.

2. Legislative Update
Presenter: Mr. Bob Cook
We are currently half way through the legislative session. Some of the items that are being heard are items such as the 4x4 legislation to protect river beds and Senate Bill 1374/House Bill 3340 by Armbrister and Puente, respectively, would create a blue-ribbon study committee to study and recommend the best way to protect the in-stream flows and freshwater inflows into our bays and estuary. As proposed, the committee would include the chair of the three regulatory and resource agencies: Texas Water Development Board, Texas Commission on Environmental Quality and the Texas Parks and Wildlife Department, in addition to representatives of conservation, river authority, municipalities, water districts and legislators.

There is also a freshwater fisheries stamp bill that has been proposed in the Senate by Senator Staples and Representative Ellis of the House. It would establish a freshwater fisheries stamp that would be required if you were to fish in the fresh waters in the State of Texas. The fee would be set by the Commission. The revenue from the fee would be designated for fish hatchery renovation or replacement and for the purchase of fish for stocking purposes. The stamp would have a ten-year sunset (2014). The bill proposed that we eliminate the archery, trout and muzzle loader stamps. Financially, we do not anticipate this to be an issue and the potential to fund hatchery renovation and rebuilding is a big issue for TPWD.

Another bill that we are monitoring is Representative Hupp’s bill relating to the landowners’ killing of certain depredating animals. To allow landowners and/or their agents to hunt feral hogs without a hunting license sounds reasonable; however we have some enforcement concerns that we have expressed.

There is also a bill that has been laid out regarding the establishment of a program to provide grants to make voluntary purchases of development rights in real property. The bill is referred to as the PDR bill. It could potentially be funded by bonds; however that is not clear at this time. Current discussions mention the possibility of providing funding of $500 million over a long period of time.

Bill 1304, relating to the receipts from the sale of land by TPWD, would direct all revenue received from the sale of TPWD land to General Revenue. The bill was dropped from the committee schedule, but is still being reviewed.

House Bill 1529 by Robby Cook relates to the inspection of wildlife resources and devices used to catch and hunt wildlife resources. This bill would allow our wardens to inspect and search game bags or live wells or the stringer hanging off the side of the boat, etc. in the field. The concerns with this bill relate to constitutionality issues. We do feel that this would be beneficial. Currently, if a warden asks a hunter if he can look in his game bag, the hunter has every right to say no.

Senator Janek has introduced a bill that would create four separate fishing guide licenses – resident freshwater, resident saltwater, nonresident freshwater and nonresident saltwater. It sets the bottom line at $75 or as high as the Commission would like to set it.

There was also a bill that was submitted that relates to the prohibition of commercial fin fishing, crabbing and shrimping, that basically eliminates commercial fishing in the bays and estuaries of the State of Texas.

Other bills that have made us take notice and watch include a bill that would have TPWD acquire and operate the Odessa Meteor Crater and another that would prohibit the use of croakers for bait.

In the appropriations bill we have riders that have been submitted to fund research on golden algae in the amount of $1.2 million and another rider to fund oversight and administration of aquatic vegetation control in the amount of $500,000. There is another rider that has been filed that states that debt service amounts of $850,000 for FY04 and $907,000 for FY05 shall be allocated for the payment of debt bond service at the Nimitz. During the last session there was $8 or $9 million in bonds approved for the Nimitz, but the debt service was not funded. We sought and we now have the funding mechanism proposed as a rider out of the existing funds.

Discussions are taking place, particularly in appropriations, of sweeping dedicated accounts – Fund 9, the stamp accounts – as possible sources of funding. We enacted a hiring freeze as of January 23, 2003 and currently have over 200 vacancies. We are filling only those vacancies that are mission critical. We have reduced in-state and out-of-state travel and have cut back on our capital expenditures.

3. Financial Review and Update
Presenter: Mr. Drew Thigpen
Mr. Thigpen gave a financial review which covered the Fiscal Year 2003 budget status, 7% reduction plan for 2003 and the Fiscal Year 2004-2005 funding request. Mr. Thigpen provided the Commission a set of financial reports which provide greater detail of the information that was presented. Each month additional reporting requirements will be added.

When comparing license revenues as of March 26, 2003 to prior year, total revenues have increased approximately $500,000. In 2003 we are currently at $58.4 million compared to $57.9 million last year when compared to the same time period. Hunting Revenues are up approximately $700,000, while fishing revenues are down approximately $200,000. The combination license revenues are up approximately $300,000; therefore total license revenues are currently down approximately $300,000.

Historical sales information shows that in 1997 we sold approximately 157,000 super-combo license. Its popularity has increased and as of March 26, 2003 we have currently sold 375,000 super-combo licenses, which is an increase of approximately 13,000 from last year.

In State Parks our revenue is down approximately $700,000 when compared to prior year. That is in part due to weather conditions and other factors such as Garner State Park not being open during part of the fiscal year.

Boat registration and titling revenue as of February is relatively flat. There has been approximately a $30,000 increase in revenue.

As far as expenditures, approximately 50% of our current fiscal year is completed. Our total agency operating budget is about $320 million. So far we have expended approximately $136 million, leaving approximately $184 million or 57 1/2% remaining. As far as the division operating budgets, we have 49% of our budget remaining, with 50% of the year remaining. Those are skewed a little by primarily the grants that we approve on the front end each year and the fact that we have certain types of contracts that are heavily front-end loaded. So we feel that we are right on track with our expenditures at the divisions. Capital projects is the opposite. We have 83% of the funding remaining primarily due to the capital projects are multi-year kinds of activities.

In January we received a letter from state leadership asking us to reduce our budget by 7% in our general revenue-related funding which includes our Accounts 9 and 64 (often referred to as Fund 9 Fund 64). Roughly, 82% of the reductions came out of Fund 9 and 13% out of Fund 64; the others contributed approximately 5%. Seventy-one (71%) percent of that reduction was taken out of capital expenditure-related types of funding, 15% came out of salaries, and 13% came from operating funds.

At this point in the legislative appropriations process for our Fiscal Year 2004-2005 funding, in January we received instructions to revise and resubmit our Legislative Appropriations Request (LAR) that we submitted last summer. The deadline only gave us a couple of weeks to submit the revised LAR. The revised budget for FY04-05 was $521.2 million. As part of our building blocks submission, the Legislature also had us cut our general revenue by $16.1 million, which we had initially shown that reduction in the Local Park Grants. The House Appropriations Committee is currently recommending a budget of $436 million while the Senate Finance Committee is recommending $442 million. On the Senate side a rider was added that would allow the Agency to restore up to $31.5 million contingent on our Commission adopting fees or revenue increases which would create balances that would be available to TPWD the next biennium. The House and Senate reductions would eliminate new bond funding for the next biennium which would account for $34 million, and reduce the budget for Local Park Grants and capital equipment. The Senate Finance Committee recommended acquisitions not to exceed $3.3 million a year while the House Appropriations Committee recommended them not to exceed $1.8 million. This concerns the agency due to the fact that we generally receive approximately $5 million a year in federal funding that can be used for acquisitions. When we submitted our revised building blocks they were broken into approximately 31 separate building blocks. On the House side they reduced them by $27 million, while the Senate recommended a reduction of $15 million out of all the building blocks other than capital. It has been made very clear that we will not have any Proposition 8 funds provided at this time. We currently have enough workapproved in the first tranche to keep us busy on 40-50 projects for the next couple of year, but after that we would be out of money to do the critical repair bond-type projects.

There is a possibility that additional riders could be introduced that would shift funding from TPWD to another state agency. One recommendation that was published in a local newspaper suggested transferring funding from TPWD to health care or some other area that has a great need.

4. Business Improvement Plan
Presenter: Mr. Drew Thigpen

Mr. Thigpen noted that when the Commission was briefed in January we had 49% of the items listed in the Business Improvement Plan (BIP) completed as of January 15. As of March 15, we currently have 57% of the items completed. We have completed 8 additional items since the last update. Those items include monitoring TPWD deposits for timeliness, economic impact multiplier, review of bank accounts and the reconciliation process, creating a magazine account reconciliation process, developing a standardized bank reconciliation report, coordinating bank reconciliations electronically, adopting policies for procurement cards and to use coding to reduce the number of procurement cards. It is important to mention that we have reduced the number of cardholders from over 1,700 to approximately 1,000.

We are using this report as a dynamic management tool; that is, as additional items come to our attention we would like to put them on this document and manage them this way. We feel this is an effective manner of tracking that information and making sure it’s addressed and readily available to communicate the status of various projects effectively.

5. Boat Ramp Funding
Presenter: Mr. Tim Hogsett

Mr. Hogsett explained that for the first time in a couple of years that two requests for boat ramp funding will be presented to the Commission. Over the last couple of years the federal pass-through money that the Agency has received from the Fish and Wildlife Service has been used to supplement our bond and critical repair program by doing some major rehabilitation in state park and wildlife management areas boat ramp facilities. We receive approximately $1.8 million annually from this program.

The boat ramp program was authorized by the Texas Legislature in 1975 at which time it was funded with Fund 9. Since then, we have begun to receive revenue from the federal government through the Sport Fish Restoration Act. This money is eligible to be used for a 75% match grant to local governments or within our own system for acquisition and development of boat access facilities. We enter into an agreement with the local government when we agree to provide matching funds that states that they agree to take on the facility as their own and permanently operate and maintain it.

We have two applications that have been on hold since approximately 2001 requesting $669,739. The proposed facilities would be in Aransas and Jefferson counties.

This item was placed on the Thursday commission meeting agenda for public comment and action.

6. Fee Changes
Presenter: Mr. Gene McCarty
Mr. McCarty briefed the Commission on hunting and fishing license fee and boat registration fee increases. License fees were last increased in 1996. In 2001 we completed an evaluation of the impact of inflation rates since 1996, comparable license fees and other states, attitudes and opinions of anglers and hunters and a means of addressing additional demands on TPWD. At that time it was decided that instead of increasing fees we would look at ways to improve operational efficiency as outlined in the Business Practices Improvement Plan. Having done that, there is a continuing need to address growing demands on the Agency such as inflation, increased utility expenses, the need for additional law enforcement, the continuing need for additional technical guidance on private lands, and the aging infrastructure of our fish hatcheries.

In 2001 TPWD contracted with Mark Duda from Responsive Management to survey hunters and anglers. He found that over 90% were either very satisfied or somewhat satisfied with TPWD as a government agency and that over 70% said that TPWD’s efforts to provide recreational opportunity were excellent to good. In addition, nearly have strongly to moderately supported and increase in fees to increase funding for TPWD. Based on this support and the average inflation rate of about 2.5% per year since 1996, we have developed a fee increase proposal.

We are not proposing a fee increase in all licenses. We have about 215 different licensed actions, or about 162 different license sets. We are only proposing to look at about 100 of those. We are not proposing to change the senior super-combo, resident special fishing or hunting, or the stamps. As an example, we are proposing the following increases based on the 7-year inflation value: Super-combo package is currently $49 and would increase to $59; resident hunting would increase from $19 to $23; nonresident hunting from $250 to $300; resident fishing from $19 to $23 and non resident fishing from $30 to $50. This proposal would generate approximately $10.2 million per year in funding.

As far as the increase for boat registration and titling fees, they also haven’t been increased since 1996. Texas ranks among the top five states in terms of the number of boats registered and titled. TPWD has experienced numerous increased costs for boating-related functions, including titling and registration, boat theft enforcement, boat accident investigation, training, redesign of our boat registration system, DWI enforcement, equipment and many more.

Boat registration fees are a two-year fee and we are proposing that they be increased as follows: vessels less than 16 feet would increase from $25 to $30; vessel that’s between 16-26 feet would increase from $40 to $50, which is where most of our revenue comes from; and vessels that are 26-40 feet would increase from $55 to $70; and then vessels over 40 foot would increase from $70 to $90. There are also a number of different registration transactions and duplication fees that would increase slightly. This proposal would generate an additional $3.6 million per year.

There is some legislation that is proposing to allocate as much as 15% of boat registration and titling fee revenue to Fund 9 in an effort to try to provide some assistance to the state parks that offer water-related activities. In conjunction with the proposed fee increase, this will increase our revenues into Fund 9 by approximately $1 million and Fund 64 by approximately $2.5 million.

Chairman Armstrong suggested that the Commission consider the possibility of raising the age on the youth license from age 17 to 21. This would hopefully encourage individuals to experience hunting or fishing. The current fee charged for a youth license is $6. If we were to increase the youth hunting license age from 17 to 19 to 21 or straight from 17 to 21 then we would be looking at about a $1.5 million dollar impact. The research that was presented by the future of hunting indicated that that is an age group we are losing. Commissioner Ramos also suggested that if our goal is to get more of the youth involved then we need to be more aggressive at providing hunting opportunities by expanding or prioritizing the public hunts we offer.

Chairman Emeritus Bass asked if we had the authority to create a nonresident lifetime license. Mr. McCarty stated that California offered an out-of-state-lifetime license and that possibly Colorado did too; however, we would have to check into the logistics.

The proposal to increase fees was authorized to be published in the Texas Register.

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


Committee Agenda Item No. 1

Finance Committee
Chairman's Charges
May 2003

(This item will be an oral presentation.)


Committee Agenda Item No. 2
Presenter: Bob Cook

Finance Committee
Legislative Update
May 2003

I. Discussion: Staff will provide an update on issues relating to the legislative session to include legislation and appropriation.


Committee Agenda Item No. 3
Presenter: Mary Fields

Finance Committee
Financial Review and Update
May 2003

I. Discussion: Staff will present a financial review for the year to date FY2003, including an update on Account 9, Game, Fish and Water Safety and Account 64, State Parks. This presentation will focus on the sale of hunting and fishing licenses, boat registration and titling fees, and state park fees. Updated budget and expenditure information will also be presented.


Committee Agenda Item No. 4
Presenter: Gene McCarty

Finance Committee
Fee Changes
May 2003

Hunting and Fishing License Fee Changes – (This is Public Hearing Agenda Item No. 2.)

Boat Fees – (This is Public Hearing Agenda Item No. 3.)


Committee Agenda Item No. 5
Presenter: Frances Stiles

Finance Committee
Boat Registration Revised Decal
May 2003

I. Discussion: This item is a briefing to the Commission to introduce and familiarize the Commissioners with the revised design of the boat registration decal. This new design will be incoprorated for use January, 2004.


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