Finance Committee
Wednesday, 9:00 a.m., Nov. 6, 2002
Commission Hearing Room4200 Smith School Road
Austin, TX 78744
| Item No. | Subject | Public Hearing Agenda Item No. |
|---|---|---|
| Approval of the Committee Minutes from the previous meeting | ||
| Summary of Minutes | ||
| 1. | Chairman's Charges (Oral Presentation) | Committee Only |
| 2. | Financial Review and Update Staff: Suzy Whittenton |
Committee Only |
| 3. | Artwork Approval Staff: Frances Stiles |
4 |
| 4. | Commission Policy Resolution Staff: Emily Armitano |
3 |
| 5. | Other Business |
Summary
of Minutes
Texas Parks and Wildlife
Commission
Finance Committee
August 28, 2002
BE IT REMEMBERED that heretofore on the 28th day of August 2002, 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 10:11 a.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.
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 May 29, 2002 meeting. Minutes were approved.
IV. THE FOLLOWING ITEMS WERE PRESENTED TO THE COMMITTEE:
1. Chairman’s Charges
Presenter: Mr. Robert L. Cook
Mr. Cook updated the Commission on the status of the Chairman’s Charges for the Finance Committee. The Natural Leaders team created a department business plan for statewide commercial projects as required by Sunset. The Administrative Resources Division is currently implementing this plan. As far as an update to the Business Practices Improvement Plan, we have had staff from the State Comptroller’s Office assisting with us in addressing one of the items identified in the plan. We have held two legislative awareness briefings for our oversight agencies and legislators which have been very well received. As for the reconciliation backlog, we will have the backlog reconciled by the close of the current fiscal year. We will then begin working on the 2002 reconciliation process and anticipate being through with it before the end of the year. By the time the Legislative Session begins our books will be balanced, backlogs will be reconciled and we will have policies and procedures in place to preclude this from happening again. We anticipate by the time the Legislative Session begins we will have completed 75%-80% of the work items in our planning document. The other 15%-20% will have plans in place that will be credible and defensible.
2. FY03 Operating and Capital Budget and Texas Parks and Wildlife Investment and Budget Policies
Presenter: Ms. Suzy Whittenton
Ms. Whittenton presented the recommended internal operating budget for fiscal year 2003 and the requests for additional funding for the FY2004-2005 biennium. The Legislature uses a performance based budgeting system that integrates our Strategic Plan into our budget. The strategic plan is for a two-year period and we submitted our most recent plan in June of this year. From that we will be funded by strategy as well as by a method of finance. The General Appropriations Act limits capital budget spending, limits our FTEs and provides additional guidelines through our riders. So each year we begin reviewing what the Legislature has directed us to do. When you look at the authority to spend by strategy, the main difference between 2002 and 2003 is the addition of the Proposition 8 bonds.
Because we are funded by general revenue dedicated funds, we can’t spend more than what’s available in cash balances and projected revenue regardless of our appropriation authority. We estimate that our total revenue and cash balance will be approximately $315 million this year. Our largest shortfall lies in Account 64, State Parks Account. We have the authority to spend $57 million from that fund; however we project that we will only collect $54 million in revenue, thus leaving a $3 million difference. Our goal is to maximize available cash and appropriation authority since we have more needs than funding. We are attempting to fund most operations at the same level as FY02. We are also recommending funding the stamp funds at the same level as FY02. The agreement was that for the two years that we were studying this and surveying the super-combo holders that we would hold those allocations level. By this time next year we will have completed our analysis of the surveys and will be able to recommend changes to the allocation.
In FY03 we are allocating funding for a few new items. We set aside funding to replace some boat equipment and to purchase some computers for game wardens. We have also set aside money to fund a game warden cadet class which is scheduled to begin in January 2003. We are looking at the feasibility of developing an in-house license system to be used as a contingency or as an alternative to use at the end of the current WorldCom contract. We have asked divisions to set aside funding for the intern program in advance rather than from lapsed salaries as we have done in previous years. Other items that we have set aside funding for include money to administer the motor pool, Microsoft site-licensing agreement, and the safe boating campaign. We have also included $3.8 million in the budget for federal funds we will receive for the State Wildlife Grant Program (SWIG). These funds will replace the CARA funds we received in previous years. We will be able to fund some of the World Birding Center operations out of these funds as well as adding additional staff in the Wildlife Division and do some coastal monitoring. Finally, we allocated some funding to be used to deal with the Business Practices Improvement Plan costs.
The BPIP costs include the addition of new staff, including accountants for monthly reconciliation and an auditor for the point-of-sale system. We are implementing a reorganization of the Revenue Branch of the Finance Department. This will allow the completion of the process improvement and improve some of the controls in the revenue area. We have added staff to code credit card purchases since the Comptroller’s Office is now requiring more detailed information for each transaction. We also added staff to serve as a system administrator so that as we have turnover we can have someone else step in and perform the job with the written documentation we have on how to administer the system.
The total recommended operating budget is approximately $203 million, which includes salaries, fringe benefits, and operating costs. The capital budget totals $53.9 million and includes Proposition 8 bond funds in the amount of $36.68 million, while the grant budget totals $29.5 million. Therefore the total recommended Department budget which includes operating, capital, grants, debt service and revenue bonds is $292 million.
As for FTEs our legislative cap is 3,035; however we recommend to budget at 3,148 positions, which is 3.7% over our cap. We have over-budgeted in previous years and have not exceeded the cap due to the Departments turnover rate and the amount of time it takes to fill vacated positions.
Ms. Whittenton discussed the methodology for allocating overhead costs among funds and the methodology for allocating Super Combo revenue to stamp funds.
Each year we have you approve our Budget Policy. This year the only change we’re recommending is to allow for expenditures related to bond projects be incurred prior to the time that we actually get the bond proceeds because of the way that the bonds will be sold. We may not get our bonds until possibly late September, but it could be as late as November. We would like to begin the projects the beginning of September, so we may have to reimburse construction project costs later with the proceeds of the bonds. This has been approved by the Texas Public Finance Authority so we wanted it to be included in our budget policy.
As required by statute for all agencies, the governing board must renew the Investment Policy annually. The Investment Policy basically says that all funds must be deposited in the State Treasury and that the bank accounts must be authorized and approved by the investment officers that are on staff. It also states that adequate collateral exists on the bank accounts. The policy also states that stocks can be sold. Last summer we discussed the possibility of selling our stock which we received via the Varner Hogg endowment back in the 1950’s. The stock is worth about $36,000. The legal opinion that we received when we looked into selling the stock was that the deed that transferred title of the stock to Parks and Wildlife may prevent us from selling the stock unless we get a waiver from the Hogg family. We are going to look into the situation and see if we can obtain a waiver from the family to sell the stock.
We are currently finalizing our appropriations request for the 2004-2005 biennium. We are limited to asking for an amount equal to what we spent in 2002, plus the amount we budgeted in 2003. Anything over that amount is considered an exceptional item and we have to ask for those specifically. Our exceptional items will include a request to fund the salary and benefit cost increases that were passed last session. Although we did get additional appropriation authority for those costs, we didn’t have the revenue in our funds to cover it. The second request is for additional general revenue for park operations. We are asking for $4 million per year to operate state parks, along with 43 new positions. The third request addresses the need to fund a game warden class of 35 cadets in FY04 from general revenue and to continue to fund those positions in FY05. Our game wardens are currently funded out of Account 9, the Game, Fish and Water Safety Account. We believe general revenue funding is needed to cover some law enforcement activities that are not related to hunting and fishing due to the statutory limits on the use of hunting and fishing license fee revenue. We are looking at $2.5 million the first year and $1.3 million the second year, plus the 35 full-time equivalents. The next item is to deal with land acquisitions. In order to take advantage of gifts, grants, or deferral funds that are given to us to acquire new land, we’ve requested a rider that would exempt land purchases from the restrictions on the capital budget rider that are financed entirely from outside sources. Also included in that request it would state that any of these purchases would be subject to Commission approval and subject to the Agency’s ability to certify that additions of land wouldn’t increase our ongoing operating costs. In the last session the Legislature directed us to start funding some of our project-related salary costs and infrastructure to bond funds. What they did was cut $350,000 of general revenue in each year and asked us to replace the funding with bond funds. Because bond covenants and IRS code restrictions regulate the percentage of bond proceeds that can be used for indirect costs, we’re asking to get the general revenue funds back for these purposes. We are also asking for the authority to enter into an interagency contract with the Comptroller’s Office on boat and motor boat sales tax collections. Game wardens frequently encounter situations where there’s boat dealer fraud or other violations where they’re failing to remit sales and use taxes on boat sales, and because the Comptroller’s Office has the authority to collect these sales taxes and we only get five percent of those collections, we want to enter into an agreement where if our game wardens are able to increase the sales tax collected by the State that we should at least have our costs reimbursed to us by the Comptroller’s Office from those collections. We have talked to the Comptroller’s Office about this idea and they are in favor of proceeding with that, but we would have to ask for appropriation authority to get those reimbursements. Lastly, we want to ask to clarify the floating cabins program. Last session, Senate Bill 1573 authorized a floating cabin program which created two new dedicated general revenue accounts. One of those was for permit fees that could be used to clean up illegal or abandoned floating cabins and the debris in the coastal waters or to refund the money back to the permit holder if the permit holder gave back their permit. What happened was the fund didn’t survive the funds consolidation bill and so the money ended up going to straight general revenue. Therefore, if it’s not used by the end of the year, it lapses. So we basically lost the money that we collected back to general revenue. We are asking for the authority to get the money back and to be able to spend it to do the clean up. That represents approximately $112,000 a year.
In regards to the damages that occurred due to the floods during the July 4th weekend, it didn’t adversely impact our revenue. We lost approximately $700,000 in revenue; however until that time we were ahead on park revenue for the year, so it actually balanced out. It looks like we are going to be close to achieving the original revenue estimate in parks. On the expenditure end, we are having to spend some money to fix the locations that were affected. The FEMA inspectors were out to look at what they could reimburse us for and we are expecting about $350,000 from FEMA out of approximately $2.5 million in damages. The staff had the affected parks back in operation and full again within about 17 days.
It was recommended that this item be moved to Thursday’s agenda for the public comment and action by the Commission
3. WorldCom Update
Presenter: Ms. Suzy Whittenton
We began selling licenses for the new license year on August 15, 2002. The first day we experienced some problems with the PC version of the application, which is used primarily for law enforcement offices and at a few low volume agent locations. The system would go down for periods of time, but the problem was corrected and we didn’t have any problems occur the following day. The first day we also experienced a high call volume at the WorldCom help desk. Some calls were not getting answered. The problem has reoccurred recently; however it was due to New York State going live with their WorldCom licensing system without running a pilot program. We are trying to assist with a recommendation to help with the problems at the help desk and have some calls diverted to us. We also had some sales being made off-line on that first day. We did well however and sold over 21,000 licenses the first day.
Over the summer we traveled to nine different locations to conduct agent training. We had approximately 300 individuals attend. We plan to send a follow-up survey to get feedback from those who attended. We also met with our license agent advisory committee and had Bob Parker from WorldCom attend and explain to the agents what the bankruptcy meant to WorldCom, the system, the agents and that basically there would be no disruption of services. We also showed them our paper license contingency plan. The agents seemed to be receptive to the contingency and asked that we provide clear instruction if we had to implement the plan. Our agents also asked for some enhancements to our current web site so we are planning some enhancements there.
As far as revenue, it is currently down approximately 21%. We believe that is due to not offering a promotion like we did last year. If you compare our current sales to sales from 2 years ago when we didn’t run the promotion, we are actually up approximately 5%. We believe our sales from this year will catch up to last years’ by the end of Labor Day weekend.
4. License Legibility Rules
Presenter: Ms. Suzy Whittenton
Section 30 of the Sunset Bill required Parks and Wildlife’s rules to specify the standards for licenses, including legibility. The proposed rules were posted in the Texas Register on July 12, 2002. They include that licenses must be printed on durable paper, must be waterproof, tear resistant, and the print must be indelible. The print must be of reasonable size and in no case less than a 6 point font. Also the print must be a color that contrasts with the background. These provisions do not apply to licenses sold over the internet and printed directly by customers. There is also a provision in the rules that states that the executive director may waive the provisions in case of unforeseeable events or emergencies. We did not receive any public comment.
It was recommended that this item be moved to Thursday’s agenda for the public comment and action by the Commission
5. Grants
Presenter: Tim Hogsett
Outdoor Recreation Grant Program – This program is our $500,000 maximum grants for local governments. We have approximately $6 million available each six months for your consideration. We received 38 applications by the January 31 deadline requesting a total of $15.7 million. We have reviewed and scored all of those projects using the scoring system that the Commission adopted. We recommend you consider approving the top 15 applications for a total of $6,607,022.
Small Communities Grant Program – This grant program is for small communities of 20,000 or less. They are 50% matching grants. We received 62 applications by the April 30 deadline requesting $2.7 million in matching funds. We recommend funding for the top 22 projects in the amount of $980,293.
Regional Park Grants – This grant program is a new program and is designed to support multijurisdictional projects, cooperation between local governments and public and private sector, and projects of regional significance in metropolitan areas. This grant is intended to be used for either intensive use recreation or projects that have a strong conservation element to them. We received 5 applications by the July 1 deadline requesting $7.27 million. We are only recommending funding for the first project in the amount of $2 million.
Recreational Trails Grant – These are pass through federal funds that are an 80/20 matching program. They are funds from gasoline tax on off-road recreational vehicles. We can fund both motorized and non-motorized trails. We received 83 applications requesting $6.6 million. We are recommending funding the top 32 projects in the amount of $2,072,937. It was requested that Mr. Hogsett check to see if our funding allocation is accurate based on the formula of consumption of off-road fuels by state.
National Hunter Education Target Range Program – These are grants for either public entities or the private sector. They are federal pass-through funds and are a 75% matching funds. We are only recommending 2 projects be funded at $60,000 each.
It was recommended that this item be moved to Thursday’s agenda for the public comment and action by the Commission.
V. ADJOURNMENT: Commissioner Ernest Angelo, Jr. adjourned the Finance Committee.
Committee Agenda Item No. 1
Finance
Committee
Chairman's Charges
November 2002
(This item will be an oral presentation.)
Committee
Agenda Item No. 2
Presenter: Suzy Whittenton
Finance Committee
Briefing
Financial Review Update
November 2002
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.
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