Texas Parks and Wildlife Commission
Ad Hoc Infrastructure Committee
Nov. 7, 2007Commission Hearing Room
Texas Parks & Wildlife Department Headquarters Complex
4200 Smith School Road
Austin, TX 78744
BE IT REMEMBERED, that heretofore on the 7th day of November, 2007, there came to be heard matters under the regulatory authority of the Texas Parks and Wildlife Commission in the Commission Hearing Room of the Texas Parks and Wildlife Department Headquarters Complex, to wit:
THE TEXAS PARKS AND WILDLIFE COMMISSION:
- John D. Parker, Lufkin, Texas, Committee Chairman
- Peter M. Holt, San Antonio, Texas, Chairman
- Mark E. Bivins, Amarillo, Texas
- J. Robert Brown, El Paso, Texas
- Antonio Falcon, MD, Rio Grande City, Texas
- T. Dan Friedkin, Houston, Texas
- Karen J. Hixon, San Antonio, Texas
- Peter M. Holt, San Antonio, Texas
- Margaret Martin, Boerne, Texas
- Philip Montgomery, Dallas, Texas
THE TEXAS PARKS AND WILDLIFE DEPARTMENT:
- Robert L. Cook, Executive Director, and other personnel of the Texas Parks and Wildlife Department
P R O C E E D I N G S
COMMISSIONER PARKER: The first order of business will be the approval of the previous committee's meeting minutes, which have already been distributed. Is there a motion for approval?
COMMISSIONER BIVINS: So moved.
COMMISSIONER MARTIN: Second.
COMMISSIONER PARKER: Having Commissioner Bivins make the motion for approval of the minutes and Commissioner ‑‑
COMMISSIONER MARTIN: Martin.
COMMISSIONER PARKER: Martin?
COMMISSIONER MARTIN: Yes.
COMMISSIONER PARKER: I know who you are. All in favor, say, Aye?
(A chorus of ayes.)
COMMISSIONER PARKER: All opposed?
COMMISSIONER PARKER: Motion carries. Committee Item Number 1, Land and Water Update, Mr. Cook?
MR. COOK: Thank you, Mr. Chairman. I'm proud to announce that the grand opening of the new Caprock Canyon's Visitor Center was held at nearby Caprock Canyon and celebrated at nearby Quitaque on October 19th and 20th. The Visitor Center contains reception and exhibit areas, offices, restrooms, and a gift shop. Believe me, it's a much needed facility and one that is welcomed by staff, by the folks up there in that part of the state, and the folks who enjoy Caprock Canyon State Park. I hope you get to see it soon.
Connally bond funds were used to complete three projects at Government Canyon State Natural Area prior to the end of our fiscal year. This work represented the last of the Connally bond funding that allowed park development work in the state park system. It's kind of an important milestone for us. That money is used up, gone, and been well used and very appreciated.
The Battleship Texas Foundation, in conjunction with TPWD, has received statements of qualifications from an outfit called Marine Ship Surveyors to conduct their review of the Battleship Texas hull and the structure of that ship, which will help determine the best possible solutions for dry berthing the ship out of water. The Battleship Texas Foundation funded this contract and the vendor will be selected next month with completion of the study expected in the spring of 2008. Again, this is an essential step prior to making the decision of dry berthing, and how we're going to dry berth, and how it's going to be set up. We appreciate Battleship Texas Foundation's help and funding of this study. Thank you, sir.
COMMISSIONER PARKER: Committee Item Number 2, Bond Program and Capital Projects Update. Mr. Steve Whiston joined with Scott Boruff will make this presentation.
MR. BORUFF: Thank you, Mr. Chairman, Commissioners. My name is Scott Boruff, Deputy Executive Director of Operations, Texas Parks and Wildlife. As we look at this presentation, normally we don't go into a lot of detail here. Normally, I'm not up here, but in discussing with Mr. Cook and Mr. Whiston the importance of kind of reminding not only the new folks but the other commissioners how capital program expenditures happen and what the issues are, we thought we'd go into a little bit bigger overview here.
The first couple of slides that I'm going to share with you here, I'm not going to read them, but I would encourage you to take a close look at them. Our system is pretty large. We've got 3,600 buildings and many of those buildings are many thousand square feet. We have 255 onsite water and waste water systems. Those are regulated by TCEQ. It's pretty significant. Many of those require special certified water/waste water operators that have to be certified by the state. We have over 1,000 screen shelters. We have some really interesting things like trams and railroads. Oh, we're giving the railroad away, so we don't have a railroad any more.
COMMISSIONER HOLT: Yes, we're out of the railroad business.
MR. BORUFF: We have many bridges. We have golf courses, swimming pools, and boat ramps, et cetera. Probably one of the more costly infrastructure components that we have are those 840 or so roads, trails, and parking areas that are a major issue in terms of expenditures.
I wanted to do just a little bit of a background here to let you see the significance of some of the backlog of major capital construction needs that the agency has labored under for a long time. We decided to do kind of a decade look. All these slides that you see are going to represent the last 10 years of infrastructure capital needs and expenditures. You'll notice that back in '97, 10 years ago, there was a study done by an infrastructure task force at the time, which identified over $160 million worth of backlogged repairs that needed to be done. Rather than go through each of the slides, you can see in the 10 years subsequent to that the backlog has increased pretty dramatically. It's gone to $300, then $400, and almost $500 million currently that were identified in the last legislative appropriations request.
The reason I bring this up is because we've also been fortunate in the same 10-year period of time. We've received some pretty significant money to do capital repairs, starting out in 1998 with $64 million, 2003 to 2006, another $54 million in Prop 8 bonds, and then currently, fortunately because of the bond election yesterday, there's another $52 million available coming up in the next cycle. Now, we're going to talk about how that money cycles through.
I thought it might be interesting for you to take a look at how this money gets spent. This is a 10-year, almost, nine-year, look at encumbrances and expenditures. I thought this was important to articulate to the Commission. The state government looks at expenditures and encumbrances essentially the same. They are money that has been either actually spent or are encumbered under a contract, and therefore committed to be spent. Once they're encumbered, they don't roll forward into the next year. So for purposes of what the legislature sees and what the LBB sees, those encumbrances are essentially the same as expenditures. They don't roll into the next year. We're going to talk about that more here in a minute.
What you see there really is the darker purple line is the encumbrances and the bluer line are the actual expenditures. You can see that we've done a good job over the last 10 years of expending money that we get. One of the reasons I'm doing this presentation is we have gotten the message real clearly from the chairman that we need to expend the money as quickly as we can that we received in the last session, but I wanted to demonstrate the success of ‑‑
COMMISSIONER HOLT: And wisely.
MR. BORUFF: Yes, sir, wisely and efficiently.
COMMISSIONER HOLT: Yes, thank you, sir.
MR. BORUFF: I did want to demonstrate that we have a good track record of spending money. We have not had trouble spending capital money that's come into the agency. We've been very successful. We have spent it wisely and we intend to continue to do so in the future.
This is a real important slide that I would ask you to look at, not too much the detail but the color is important. Each one of those different colors represents a different funding source for capital repairs. There are Proposition 8 bonds. There's the old Connally bonds, which Mr. Cook referenced a few minutes ago. There were revenue bonds that were issued in the year 2000. My point being if you look at any one of the colors ‑‑ pick a color and look across there ‑‑ you'll see that it takes four or five years to expend the bonds under the state bureaucracy. I'm going to talk about that in just a minute.
We are encumbered by certain rules and regulations statutorily that unlike the private sector caused these bonds to take some time to be expended. I want to give you a couple of examples. Under state rules, when we expend state dollars, we have to do cultural natural resource assessments and mitigation. So unlike the private sector, we have to go out and see if there were any Native American sites or artifacts there. We need to go out and do habitat evaluations to determine whether habitat that supports endangered species is affected. Those are things that take time and there are certain procedures and protocols that cannot be scrimped on in terms of the time.
There are regulatory issues like ADA, TCEQ. Every one of those water and waste water systems that I described earlier has to be reviewed and approved by the Texas Commission on Environmental Quality. We are encumbered by HUB requirements, historically underutilized business requirements. Those are minority-owned businesses. We are required under the contracting process to look for HUBs and with our major contractors to require them to look for HUBs. That requires them to go out and look for those. Many times when we go out to bid on a capital construction project and we get the responses in, nobody has done their homework and the HUBs aren't represented, and we have to go back out and re-post and go through the process over again.
ADA, I mentioned, I think you're probably all familiar with the Americans with Disabilities Act. You know, we have to be sure that we comply with those things. That's a time-consuming process.
We go through state procurement processes that require us to go out and do competitive bids for both the architectural and engineering components, as well as once that's done, the construction components. Typically, it could be a several-month process. Oftentimes, when we get those bids back in, for example, if the bids are too high ‑‑ and that's been a phenomenon that's been more and more frequent given escalated costs around the state, as some of you know in your businesses ‑‑ we are then forced to go back out, and re-post again, and re-bid, and therefore it eats up some more time.
Occasionally, we get no bids. Many of our facilities, as you are probably aware, are scattered around the state in places that are not really sitting right next to an urban area with a lot of construction expertise. So when you're looking to do work at Big Bend Ranch State Park, out in West Texas, it's hard to get people to bid out there. There's not many construction outfits that want to go out there and do minor projects.
I might also share with you that we typically run anywhere from 200 to 400 construction projects at any given moment. One of the strategies Mr. Whiston is going to talk about when we move forward here is that we're trying to compress that. It's one of the things we're doing in response to the chairman's charge to try to compress the time here. It's to try to run fewer projects, but you need to understand that we're talking about 100-plus state parks, 52 wildlife managements areas, eight fish hatcheries, and innumerable regional and local offices that we operate. So we typically have a lot of projects going on at one time.
I think it is important for you to understand that it typically takes four to five years to expend capital dollars. This is a slide we've been using for years. I don't want to spend a whole lot of time on it, but one of the important things here is it takes about a year from the time money is appropriated to us before we can even begin the design and construction process.
COMMISSIONER HOLT: Can you stop here because I want everybody to really understand that? Would you say that again because it took me, I had to hear it about two or three times?
MR. BORUFF: Yes.
COMMISSIONER HOLT: Walk through when we got appropriated at the end of May ‑‑ actually when does that appropriation start, September?
MR. BORUFF: Actually, I'm going to go through a slide in just a moment that covers that.
COMMISSIONER HOLT: Okay, good, when you get to it. I want us all to understand it relative to the cycles.
MR. BORUFF: This was actually a slide we started using, I believe, in the year 2000. So this slide is one that we pull back up. We use it with successive Commissions to help you understand. Now, the legislature does its thing and they decide to give us some money. It then has to be, you folks have to approve our list of projects, which is done typically in August. It then has to go before the Texas Public Finance Administration, who approves then the funding and the project list and says, Yes, this is appropriate to do. And then, it has to go before the Bond Review Board. Those things don't happen every month. TPFA doesn't meet every month. Bond Review Board only meets two or three times a year. So there are staggered timing issues that stall the actual issuance of the funds in relation to when they were approved. I'm going to go through that in a little more detail in just a moment.
What I want you to understand is that the big blue bubbles that you see across the top and at the side, the left-hand side, and you can see some time frames there. It used to take us six to eight months to get TPFA and the Bond Review Board to do their thing after the legislature and the Commission approved our projects. It then takes us about three years to actually do a project. So it takes a year to get the money, six to eight months to a year, and it takes about three years to do the project.
That curve, that red curve you see, is the expenditure curve. When you go out and start a project for any of you, like Mr. Parker and others who do construction, you know that the expenditures are lower at the front end of the curve. You're doing your planning. You're doing your architectural design. That typically runs 10 or 15 percent of the total project. So you don't actually spend the money until you get the contractor on the ground constructing the building or whatever it is. That's the piece, that center part of this chart where you see the redline. That's the piece where we believe we have some opportunity to try to compress the expenditure curve. The rest of it, we have no control over whatsoever.
COMMISSIONER HOLT: Does everybody kind of understand what we're talking about here? Relative to, so remember we got appropriated certain dollars. We okayed it in the budget in August. I'm talking about from this last legislative period which ended in the end of May '07 or whatever.
MR. BORUFF: I'll go over those dates here in just a minute.
COMMISSIONER HOLT: So you've actually got dates.
MR. BORUFF: Dates, yes.
COMMISSIONER HOLT: I'm getting ahead of you. I apologize.
MR. BORUFF: This next slide I thought would be very important for you, too. This is the issue that I suspect the Commission, and I know the chairman, has been asked questions about. This is our carryover history. I use the word "carryover." The folks in AR would use the term "UB." That stands for unexpended balances and basically describes what happens when you've got money that carries over from one fiscal year to another. We call it UB'ing here in the agency.
This chart gives you an idea of the reality over the last seven, eight, nine years, which is it is not uncommon for us to UB money over fiscal years. If you're taking projects that take from three to five years to complete ‑‑ obviously, and particularly since a lot of expenditure happens at the tail end of a project and not up front ‑‑ there's a need to carry funds over from year to year in order to get them spent appropriately and efficiently, which we have a good history of doing.
You can see there's a dip, for example, in 2006. You'll notice that that year we didn't carry over much money relative to the other years. It wasn't because we were extremely efficient. Unfortunately, I hate to report to you, but it was because we RIF'd about 30 people out of the Infrastructure shop that year. We laid off 30 people and the legislature gave us zero dollars out of Proposition 8, which had been targeted for us. So that happened to be a year we got no money and because we got no money we laid off staff. We were still efficient, but those are some of the issues that you see in that chart. It's not always just a pure UB issue. It's how much money you had to spend and how many staff you had to spend it, but we've been very efficient to use your term, Mr. Chairman, in expending this money and carrying it over appropriately to get projects done.
This chart is important because what we're trying to do here is give you a flavor for what we guess will be the UB issues in the next two years. We go through a legislative appropriation request process for the biennium, every two years. The left-hand side graph that you see here will be what we think we will UB this fiscal year, from '08 to '09. It's not going in the LAR. It's just something that happens internally and what you can see there is that we believe we're going to have half the battleship money, which we've gotten.
We're going to have some of that other money that you see described there, Prop 8, Prop 4, some federal money that comes in, that will be UB'd because of this phenomena that I have just been describing. However, because of some new models that we've put into place that Mr. Whiston is going to talk about, what you will see UB in the LAR, which is what the legislature will see, we think we'll be ‑‑ with the exception of the Battleship ‑‑ significantly reduced. The Battleship is a unique project. There's not battleship construction firms on every corner and it is a highly technical marine engineering project that's going to take multiple years.
I wanted you to see, though, the fact that the total number may look the same in the LAR. It may be up around $36 million, but a huge piece of that, $25 million, is going to be the Battleship, which is very explainable and I don't think most folks would think that's an unreasonable carryover. Most of those other funds, Prop 8, the Prop 4 that we're going to get as a result of the election yesterday, and many of the federal funds which benefit the Fund 9 shop more frequently, will be expended down to a $7 to $8 million UB, we think. Now, I'm going to describe the phenomena that occasionally occurs because this happens, we have people that ask this question.
The LAR process, Legislative Appropriation Request where we lay out to the legislature what we think we need for the next biennium, is going to start this next March. We go through the process from March up through August, in preparing that LAR. You will see it at the end of August and it includes the estimated capital construction carryover totals that we just talked about.
COMMISSIONER HOLT: Okay.
MR. BORUFF: So you may well see some number like $36 million that the legislature will also see as a carryover, unexpended balance, that may move into the next biennium. Funds that come to us after that exercise will drive up the UB, the unexpended balance, total. So we may get grants. We may get other dollars that happen to come in, typically not through the state but through other mechanisms ‑‑ federal dollars is a good example ‑‑ that may come in after August that could indeed ‑‑ so we may go down to the legislature and say, We think $36 million is going to UB. We move forward. Here's what it is.
And then, by the time you get to the session the following January, that number occasionally grows and you will get questions. What happened? Why did that grow all of a sudden? We will be presenting you data as we move forward to allow you to explain why that grew and the rationale behind it.
There's a new bubble that was added legislatively this year to this management process and that is LBB's approval. So if you take the chart that I showed you earlier, which required Texas Public Finance Administration's and the Bond Review Board's approval, this cycle we also have to go to the Legislative Budget Board and get their approval. Mr. Whiston is going to talk in more detail about that.
Here's the slide I mentioned earlier, Mr. Chairman. This is what we were anticipating would happen and may still happen. We're a little unsure and I'm going to talk about that. At the beginning, the legislature approved funding for us for capital repairs to the tune of $17 million of old Proposition 8 money and now the $52 million which passed yesterday. The bond election was successful yesterday.
Our hope, given the cycle that I just described to you, is that some of that funding will start to fall out in February, that we would get some $19 million in February to begin the expenditure process, which I showed you in the chart, the three to four-year process. We believe the second bond issue would happen in June. The last then would happen in September '08, which will allow us a quick start on trying to expend this money as quickly as possible per the chairman's charge.
There is some issue about whether that's going to happen or not. We don't have a clear answer. I would like to say that we're very happy that the LBB analyst I mentioned earlier, Tina Beck ‑‑ I think she's still out there ‑‑ is trying to help us in this regard to try to help this not happen. This is the worst case scenario. We wanted to present it to you. We don't know yet what's going to happen, but hopefully with Tina's help we can make the first slide the accurate slide. In the worst case scenario, the LBB may require that before they issue the money to us that we submit the report, which I described to you this morning.
We're having, as you recall, a private, outside vendor do a study about how the capital expenditure would drive visitation and revenues. You'll recall that from this morning's session. There is some chance that the Legislative Budget Board may say, We're not going to allow you to move forward until we approve that study which comes out next March. If that's the case, then this is what would happen. The study would be issued on March 31st or thereabouts. It would take the LBB some time to do their analysis and be satisfied that the report did what they wanted it to do. In the best case issue then, all of the money could be issued in September '08, which is only a handful of months prior to the next legislative session.
COMMISSIONER HOLT: And it's fiscal year '09.
MR. BORUFF: Yes, it's the beginning of fiscal year '09, which would then mean that the UB numbers could go up and more money may get carried into the next year. We hope not and Mr. Whiston is going to describe our efforts to try to make that not happen in any scenario. That concludes my piece of the report and I'd be glad to answer any questions.
COMMISSIONER BIVINS: So basically, just glean the examples in the worst case scenario, you've put a push back from initial funding in February to ‑‑
MR. BORUFF: Funding in September.
COMMISSIONER BIVINS: ‑‑ Okay, so nine months or more.
MR. BORUFF: It's six to eight months. I'm sorry, it's seven. Now, I do want to make it clear, our intent ‑‑ and Steve and his team have been working very hard at this ‑‑ is to do what we've been charged to do. That is, we're trying to figure out some models that would allow us, regardless of when this money gets issued, to try to encumber it as quickly as possible.
COMMISSIONER HOLT: Sure.
MR. BORUFF: However, if the money doesn't come until September, it's going to be very difficult to encumber it prior to January.
COMMISSIONER BIVINS: Aren't there also some monies that came out of this last session that we don't get until '09?
COMMISSIONER HOLT: I think there was some out of Proposition 4 that weren't appropriated until '09. So what does that mean?
MR. BORUFF: Well, you may be confusing some acquisition and development money that's separate from this capital expenditure.
COMMISSIONER BIVINS: That is land acquisition.
MR. BORUFF: Land acquisition was specifically, almost exclusively, limited to the Eagle Mountain Lake money that was realized there and was directed to be spent on the acquisition and development of a new park up in the Fort Worth area.
COMMISSIONER BIVINS: It's a small piece, you can probably [inaudible].
MR. BORUFF: Yes, sir, there was. We had a little bit of money that was available from other land sales, that was already there, that we got some authority to expend and some direction about how to spend it, but it wasn't a lot of money.
COMMISSIONER BIVINS: Now, is that '08 or '09?
MR. BORUFF: It's available in '09 for Palo Duro.
COMMISSIONER BIVINS: Right, okay.
MR. BORUFF: That piece is what you're probably remembering. That component would be available September '08, which is fiscal year '09.
COMMISSIONER BIVINS: '09, okay.
MR. WHISTON: Is that it?
MR. BORUFF: Yes.
MR. WHISTON: Commissioners, if I may ‑‑ and for the record, my name is Steve Whiston. If you could refer to the chart that's in front of you here, this also does reflect this same issue, Mr. Bivins, that you're raising. We do have appropriation authority that is not for bonds, that is not available to us until '09, until the beginning of September. So even the best case scenario described here in this slide, we are not eligible to receive $25 million for state park repairs, and the balance, the other 50 percent of funds appropriated for the Battleship Texas, until '09.
COMMISSIONER HOLT: Out of Prop 4?
MR. WHISTON: Yes, sir, out of Prop 4.
COMMISSIONER HOLT: I thought there were some issues of that.
MR. WHISTON: Yes, sir. Those are restricted and put off to '09 regardless.
COMMISSIONER PARKER: Let me ask you this, Steve. When did we find this out?
MR. WHISTON: We learned it, this issue regarding delayed appropriation authority, about a month ago. And then, we learned about the additional issue and the question that Tina is helping us resolve regarding this stricter interpretation of approval by LBB. We learned that last week.
COMMISSIONER PARKER: So what we're facing here, it looks like to me, is a year's delay in getting started with these state park repairs, which will push us to within four months of the next legislative session. We're just going to have egg on our face.
COMMISSIONER HOLT: Yes, well, of it could or couldn't, depending on this situation, and then the issue of not even being appropriated until '09. So we can't use it anyway until after September '08 for fiscal year '09. I didn't say that correctly. The problem is there's not going to be a memory of that at the legislature when you go in, in January '09 for a renewal of and continued momentum.
This is what we're going to have to be starting to educate. For example, I was going to go see Senator Ogden sometime in January about our initial audit results and these things, and remind him of that. My guess is ‑‑ we just found it out and a lot of the legislators won't remember or won't even know that about half the dollars come out of Prop 4 that we can't even use in '08, fiscal year '08. We can't touch them. We can't do anything.
COMMISSIONER PARKER: That's going to put us, notwithstanding, who knew what when. This is still going to fiscally put us a couple months behind schedule.
COMMISSIONER HOLT: On a certain amount of money, yes, that's correct.
COMMISSIONER PARKER: On park repairs.
COMMISSIONER HOLT: Yes, these are the capital expenditures. That is correct.
COMMISSIONER PARKER: Right. It's going to put us 11 months behind.
COMMISSIONER HOLT: That is correct.
COMMISSIONER PARKER: That's the reason I mentioned egg.
MR. BORUFF: Well, Commissioners, I had the luxury of just saying it this way. I started out my career with Texas Parks and Wildlife in the Infrastructure division. We've been very fortunate to have two gentlemen, Mr. John Avila before Mr. Parker and now Mr. Parker, who are experts at construction.
COMMISSIONER HOLT: That's right.
MR. BORUFF: Mr. Avila runs a big construction outfit up in Fort Worth. As you know Mr. Parker ‑‑
COMMISSIONER PARKER: I'm going to be ‑‑
MR. BORUFF: ‑‑ is the former president of the Texas Homebuilders Association. I know when Mr. Avila left, he said in front of this group ‑‑ I'm not sure how many of you were here at the time ‑‑ that he thought this Infrastructure division and this outfit ran this thing as good as all or any private construction outfit in the state of Texas. He said that we were effective at what we do, that we have not had trouble spending our money. I don't think the legislature sometimes understand. I don't think any of us that are in this understands the bureaucracy that we have to plod through in order to expend this money.
We appreciate the support of the subcommittee chair and the Commission. We thought it was important to start now educating you so that you can go down and help us educate the legislature that we don't have trouble spending this money. We've done a good job of spending our money at Texas Parks and Wildlife. We've been efficient. We've been effective. I'm not going to say it's not frustrating occasionally. You can talk to some of my division directors and they don't like the fact that it takes so long that it costs more to do it. The fact is, given the constraints which I outlined earlier, I think we do a good job of that and I think we have a track record of moving money forward effectively and spending money effectively over time, and we intend to get better at it.
COMMISSIONER HOLT: Another part of that, to be fair to Scott and Steve and everybody, is that you have so many projects because you're building a restroom, you're doing this, you're doing that. And so, you start multiplying it times all these buildings, all these parks, all these locations, a lot of them being, as you said, very hard to get to type locations. I mean, we have as many projects in a way almost as TxDOT does, but theirs are in $100,000 million increments and ours are in $25,000 and $50,000 increments and in very, very isolated areas. So you've got these multiple issues.
Part of our job, I believe as the Commission ‑‑ and I'll ask all of you to start learning about this ‑‑ is to go aback to your legislators and help them understand it. A lot of them don't understand the system. To be fair, it's very complex.
MR. WHISTON: Mr. Chairman, I do appreciate that comment. It is very accurate. A majority of bond issues that are appropriated to other state agencies are for large multimillion-dollar projects, $20 to $50 million single projects. TxDOT, like ourselves, our projects range from $50,000 up to $1.5 million or $2 million maybe. We managed up to, as Scott mentioned earlier, 100 to 200 projects at a time. So it's spread all over the state. So our issue is kind of compounded with the complexity of the number of projects, the size of the projects that we're managing within that larger bond issue.
MR. COOK: We're not presenting this to you looking for an excuse. We're going to get this job done.
MR. BORUFF: Yes, absolutely.
MR. COOK: We want you to understand and we will keep you posted. Our responsibility is to have these projects ready, have them reviewed by you, and approved by you on time, in a priority pattern that we have followed through the years of selecting the most important, the most critical project. Our responsibility is to work with the staff at the oversight agencies, and to keep them involved, and to solicit their support as we go forward working with the staff from the Lieutenant Governor's office, all the people that are involved in the LBB process, the State Auditor's Office.
That's what we've got to do and that's what ‑‑ just like our relationship with the Public Finance Bond Review Board, we have a real good working relationship with them. We're in regular contact with them. They've been very cooperative and very supportive. They reacted and helped us. So we'll continue that process, but we talked about this presentation a month ago or more. We talked about, not just with our new commissioners, but how important it is that we have a very successful legislative session. We made huge requests. We put ourselves out there to perform, and we'll do everything we can, but there are some hoops, steps, that we absolutely must go through, and we will, and we'll get there.
The quality of the workmanship, you know, is another thing that I've got to speak to. I see some of these gentlemen sitting on the back row over there. The quality of the workmanship, you know, go to Indian Lodge. Go to any site where we've spent large amounts or small amounts of money. The quality of work is excellent. Now, like Scott said, as Steve said, sometimes, we have to start over. Sometimes, contractors don't perform like we hoped that they would. Again, that's a process that we go through. The park managers, the park regional directors, like Mr. Leisure you met this morning, work with those people and the folks here, the contractors out there, and we're going to get this thing done. It's going to be first class. We appreciate the funding and we're going to do our best.
COMMISSIONER HIXON: I'm a very visual person. If I could get a copy, not necessarily this whole presentation, but if I could get a copy of the slides.
MR. BORUFF: I'll be glad to get you one.
COMMISSIONER HIXON: Going back to the unexpended balances, I know you said in 2006 obviously you had that big dip because of the cuts and everything else. Are those unexpended balances monies that are already appropriated?
MR. BORUFF: Yes.
MR. WHISTON: Yes.
COMMISSIONER HIXON: So it doesn't affect your appropriation, you said, for the next session or something like that?
MR. COOK: No. What happens, Commissioner, is that when some of the legislators who maybe haven't had the opportunity to keep up with all this, when some of them say, You've already got $40 million, what do you need more money for.
MR. BORUFF: But that money is already tagged, if you will ‑‑
COMMISSIONER HIXON: Right.
MR. BORUFF: ‑‑ to specific projects and has contracts on the encumbered pieces. Now, that's one of the things I think we can say as we go forward. That's one of the things that happens much quicker than the actual contract itself, is that we identify the projects that that money is going towards long before we actually get to the contract issues.
COMMISSIONER PARKER: Going back to what Ms. Hixon just said, what it's going to do for us, it's going to, we are going to have to make sure that we all know the answers to the questions that are surely going to be asked by our state legislators.
COMMISSIONER HOLT: That's right.
COMMISSIONER PARKER: "Why are you sitting on this money out here that we gave you two years ago?" Well, you know, if we can't get LBB approval to sell these bonds, then you know we can't spend it if we haven't got it.
COMMISSIONER HOLT: And that's why I asked them if they could run us through this. I think it will help us all understand. Then as we get closer to January '09, of course, part of my job and all our jobs is to carry that message between now and then, but be prepared for then, wherever we are.
Our goal is ‑‑ and this is where I appreciate the help from LBB and others to get these things done ‑‑ it's important for our constituents. Forget us and the legislators, it is our taxpayers and our constituents in the state of Texas who want to use these parks, use these facilities, whatever it may be, to get them right. That's what we're going to try to do.
COMMISSIONER PARKER: And you know, it goes back to Scott's very opening slide. When he was telling about the balances, the hole that we're digging ourselves. You know, the hole gets deeper and deeper and deeper. You know, when we just get a little bit, when we only get 20 to 25 percent a year, and we keep digging the hole, it's like Will Rogers said, "When you find yourself in a hole, stop digging."
COMMISSIONER HOLT: Yes, well, that's what we're trying to do.
COMMISSIONER PARKER: We can't stop digging because ‑‑
COMMISSIONER HOLT: Well, we got a lot of help from the last legislature.
COMMISSIONER PARKER: ‑‑ we want to provide for the people of Texas.
COMMISSIONER HOLT: And I agree, but we got a lot of help from the last legislature. So it's our job. I think Scott and Bob and ‑‑
COMMISSIONER PARKER: I think the legislature is turned around. I think they want to help us more and more.
COMMISSIONER HOLT: I think so. And then, Proposition 4 passed. So there's momentum. Our job is to keep the momentum going. I'm talking about the Commission's job is to keep the momentum going so these guys can do their work. It takes those funds. So why don't we keep on moving? We'd better get moving. It's been a long day.
MR. WHISTON: I'd be happy to. Thank you again, Commissioners. For the record, again, my name is Steve Whiston. I'm the Director of Infrastructure. For the record, my division is very pleased as well with the successful passage of the Prop 4 bond yesterday. We certainly recognize that we've got our work cut out for us now, facing this new $69 million appropriation.
I'd like to just kind of elaborate a little bit. I don't think I've got to provide a lot of details. I think Scott and Bob have done a great job in sharing with you the situation that we're facing. Clearly, we understand the expectation of the legislature.
We understand that our goal is to accelerate the execution of projects, to accelerate the encumbrance of funds to the extent that we can effectively and efficiently, to ensure that all our projects are done properly and comply with all state law. Ultimately, to deliver a good project and at the same time reduce the capital construction carryover. Those are the goals we've set for ourselves. This last month or so that we've been trying to develop a strategy for moving forward.
We have given a lot of thought to how we can do things differently, how we can create a different model for delivering projects. Scott alluded to specifically the direction we're taking. The new appropriation authority and a list of projects that you approved in August. The authority ‑‑ now we have money to spend ‑‑ produced a list of 98 projects.
My staff has been diligently working and we have come up with a strategy whereby we're going to bundle those 98 projects into 22 larger projects that have similar scope, that lie within a specific region of the state, and try to bundle those into larger packages. We're going to take then those bundles and roll them into larger packages and effectively try to outsource about $38 million of this new appropriation authority to a handful of very competent, well-established, qualified design and construction firms.
So instead of managing 98 projects over the course of multiple years, we're going to be managing much fewer, a subset of projects, to move those forward. We're looking at strategies to accelerate the procurement of those services, and getting those projects started. Under some different models, under construction manager at risk, considering design build, and all of that doesn't particularly lend itself to some of the projects that we have on the list this year. We're really out and trying to determine the best methodology to go forward with here.
In the past month, as I said earlier, we have taken the time and met privately with a number of very prominent, well-established design and construction firms to get their input, to get their advice. We sat down with them and said, How would you do this. How can you help us? What ideas can you offer us for getting this done quicker. We've got a lot of great ideas from them and I think we're going to be successful in going forward with this.
As I mentioned, as a net result, we're going to be issuing larger contracts, totaling well over $38 million worth of work, to firms that can help us manage and implement these projects. Unless you have questions ‑‑
MR. BORUFF: I might want to say one thing really quickly, Commissioners. This is going to result in a couple of risks to the agency that you may well hear about. The first, and probably the most significant one, is there's going to be less small vendors out there that have an opportunity to compete. You know, when you have 200 or 300 little projects out there, and you've got a big pool of vendors out there that want to do the work. When you start bundling these things into $5 and $10 million packages, it's going to preclude some of the smaller mom and pop construction companies from being able to effectively compete. You will probably hear about that. So I just wanted you to be aware of that.
It also is going to at least have some potential to negatively impact operations. Right now, when we do this, and Steve is going to talk in more detail, we schedule these smaller projects in the off season and so forth. If you start bundling these things into $10 million worth of projects, and say to an outfit, get out there and get after it, there's going to be less flexibility. Steve will talk in a little bit more detail about that.
MR. WHISTON: Yes, we have had the opportunity and the luxury to really work closely with our customers, the state parks, the wildlife, and both of the Inland and Coastal Fisheries divisions to try to time our projects so that we're not on the ground with a major construction project and interfering with their operation during high visitation or peak seasons. That is also caused some delay in getting projects actually implemented, but it is certainly well worth it in terms of the revenue that it's allowed us to continue to generate. This particular methodology has some potential to impact that. We don't know if we can stand in the way of these projects going forward. So we do feel like there's some potential, as Scott has described to you, for projects occurring during some higher visitation periods of times during the year or so. We're going to work to try to mitigate those circumstances, those situations, and try to work around them to the extent we can because obviously revenue is important to us.
Regarding our capital bond program, unless you have other questions, I'll just share with you a status or update on our current or existing FY '06 G.O. bond issue. Just to summarize our status on those, we are making great progress I believe in the execution of what remains of our Prop 8 '06 issue. You can see here that we're completed 25 percent of those projects; 71 percent or 45 of those projects are in design and construction. The remaining three projects that are still scheduled with '06 Prop 8 are going to be underway very quickly. Two of them, in fact, are smaller Force Account projects that are just awaiting our Force Account crews to finish the projects their working on and become available to initiate the work on those projects.
The good news is that we are very confident that all the remaining '06 Prop 8 funds will be fully encumbered or expended either before the end of the biennium or by the end of the biennium. There will be little to no carryover or UB of this funding source. We will be able to close this issue and move forward. That, we regard as good news.
Next up, if I may, I'd like to just summarize, and you've seen a lot of information regarding this in previous slides. Our '08-'09 bond appropriation totaling $69 million, if you look at the lower left-hand corner, the Prop 8 portion, the $17 million portion, is allocated to 38 projects totaling $17 million. Our Prop 4 authority that's outlined in the lower right-hand corner provides us $25 million for the Battleship and another $26.8 million for park repairs, totaling the $52 million.
A little bit of detail about the '08, I thought it might be interesting and appropriate to let you have an opportunity to see how these projects are allocated according to the priority, the priority criteria that you approved in August. Do you recall that we presented and you approved the subset that Scott described earlier in the morning today, a set of priority criteria? Our '08 projects break down, if you look in the lower left-hand corner, to 35 health and safety projects, one regulatory project, and two business continuity projects. Again, those are just projects like replacing roofs or doing structural repairs that will allow us to keep buildings operating and serving the public. Likewise, for Prop 4, '08 G.O. Bonds, there are 11 health and safety projects, 25 regulatory projects ‑‑ those are primarily projects that will allow us to make repairs, to bring facilities in compliance with ADA, or meet TCEQ requirements ‑‑ another 24 business continuity projects, totaling 60 projects that total $52 million.
If I may just to quickly wrap up my portion of the presentation and be available to answer questions, I'll elaborate just briefly on some of our projects that we have completed. Bob mentioned earlier our successful completion and the celebration and dedication of the Caprock Canyon Visitor Center. I wanted to share just a few brief pictures for those of you that weren't able to attend. This is the new facility at Caprock. We're really proud of it. As Bob said, it's about a 4,400-square-foot facility. It cost just a little over $1.5 million to develop.
This is the entryway into the new Visitor Center. This is just to give you a glimpse of what the facility looks like. These are some of the large windows and you'll see another slide later that gives you a better feeling of how a visitor can overlook, and look into the canyon, and have a great vista of the caprock. This is a little interior shot looking at the vestibule, the entrance to the Visitor Center with the park store on the right. This, again, is the interior shot looking ‑‑ this particular photograph doesn't give you the full impact ‑‑ but a visitor can stand at this window and really get a pretty great perspective and view of the canyon, and see the beauty and the magnitude of it.
The picture there on the right is a former member of the Texas Bison herd. That was Little Chief. He's been taxidermied.
COMMISSIONER HOLT: We know it is Little Chief?
MR. WHISTON: Yes.
COMMISSIONER MONTGOMERY: It's an alumni center.
MR. WHISTON: Yes.
COMMISSIONER HOLT: He'll never be forgotten.
MR. WHISTON: This is a shot of the park store. During grand opening, we had close to 450 people in attendance that weekend. It was a great event. Of note, I wanted to show and mention, we were fortunate and really grateful to a benefactor, Jack Sorenson, a local Texas artist. He donated this original oil artwork to Caprock Canyon. This is the second donation that Mr. Sorenson has provided the agency. His first work is on display still at Palo Duro Canyon. This has been prominently displayed in our Visitor Center. You need to have a chance when you get up there to look at it.
We were fortunate to have some very special guests at our grand opening.
COMMISSIONER HOLT: A famous guy came riding in.
MR. WHISTON: In particular, we are grateful to Chairman Warren Chisum, the second gentleman you'll recognize from the right.
COMMISSIONER HOLT: Yes.
MR. WHISTON: He joined us for the occasion and our own Commissioner Mark Bivins. Commissioner, we appreciate your support for this project.
COMMISSIONER BIVINS: Could I just be one of the 450 people there?
MR. WHISTON: Sure. To the far left is our park superintendent, Deanna Oberheu. Next to Deanna is mayor of Quitaque. Next to the mayor is Mrs. O.R. Stark. She's the wife of the late O.R. Stark who was really instrumental in the development of Caprock Canyon State Park, and the trailway, and bringing the Texas state bison herd to the park. In the middle in the green shirt, the gentleman is the current head of the local Friends group, which is a very active and very supportive, and very tenacious Friends support group for that park. I know we're pleased to have them.
If I may shift real quickly ‑‑
COMMISSIONER BIVINS: If I could just make one remark?
MR. WHISTON: Sure.
COMMISSIONER BIVINS: Well, several actually. The construction quality of this building is incredible. I mean, it is well built. It is something that we are proud of, or will be proud of, for many years. Also, I was involved initially with the funding for this project. It was not an easy thing, but that local support group had the tenacity to stick with it. They are to be honored greatly for their efforts to bring this project to fruition because without them it would not have happened. So I think if we can acknowledge that group somehow, it would be appropriate. It really is a fantastic facility and Quitaque is literally in a very remote part of the state. I think it's going to draw a lot of people even with its remoteness, but it's something we can be proud of.
MR. WHISTON: Thank you. We agree, Commissioner. I think it's well worth noting we did have a great architect, Elliott Hamill, and were particularly pleased. We had an incredible contractor, A.S.R. Enterprises out of Burleson, a superb contractor. They did a remarkable job and we were pleased to have them on board with this project. Hopefully, there will be opportunities that we can work with them again in the future.
Having said that, I'll shift quickly to the Texas Game Warden Academy, a training center, a new facility underway at Hamilton County. As Bob pointed out earlier, we are pleased that we have now selected our architectural firm to initiate the design of this facility, this campus-wide development. That firm is Brown, Reynolds, and Watford. It's a really well qualified, prominent architectural design firm out of Dallas. We executed a contract with BRW in late October and they're well underway to initiate the design of 10 new facilities and the renovation and repair of the campus of existing facilities that are out there. This is a big deal. The design contract alone for the development of this complex of facilities is about $900,000. So it's a great project, a big project, and we're really pleased to get it off the ground.
Just to give you a current status report, as we've shared with you before, our current fundraising goal for the Texas Game Warden Training Center, for phase 1 development, is $8.7 million. That's for the facility development. That's for the design and construction of the facilities that Bob elaborated on earlier. The total funds raised to date ‑‑ actually, I think these numbers come from late last week ‑‑ was $4.7. I do understand that we have received a generous donation. As we speak, more money is being made available to us so that number is growing and we are very grateful for that.
Additional phase 2 future needs includes, for fundraising purposes, an endowment of $3 million that we hope to secure to permanently endow the maintenance and repair needs for the complex and $3.1 million for the development of the infrastructure, which includes the utilities and sidewalks and landscaping and infrastructure that are necessary to operate those facilities. So we're well underway to getting this going. We anticipate that this project, we'll be completing design and beginning construction in September 2008. Contingent on our ability to successfully raise funding, we're anticipating completing the construction as early as October 2009 for this facility. I'm happy that it's underway.
Last but not least, I just wanted to take one moment ‑‑ and I know the hour is getting late ‑‑ to bring you up to speed on the Battleship Texas. As Bob mentioned, the very next step here, after the successful passage of Prop 4, is the execution of our engineering study. As Bob mentioned, the Battleship Texas Foundation is funding that study. They're managing that project. And pleased that we anticipate, as Bob mentioned, early next week, within the next week or two, being be able to make that final selection of a design consultant to initiate that study for the Battleship.
With that, I'll be happy to answer any questions.
COMMISSIONER PARKER: Any questions?
COMMISSIONER PARKER: If not, thank you for your presentation.
COMMISSIONER HOLT: Thank you all.
MR. WHISTON: Thank you.
COMMISSIONER PARKER: No action required. Mr. Chairman?
COMMISSIONER HOLT: Thank you, sir. Any other discussion?
COMMISSIONER HOLT: Mr. Cook, is there anything else for discussion?
MR. COOK: No other business.
COMMISSIONER HOLT: No other business?
MR. COOK: No.
COMMISSIONER HOLT: This Commission has completed its business. We are adjourned. Thank you all. It's been a very long day. I appreciate everyone sitting in.
(Whereupon, at 4:55 p.m., the meeting was adjourned.)
C E R T I F I C A T E
MEETING OF: Texas Parks and Wildlife Commission
Ad Hoc Infrastructure Committee
LOCATION: Austin, Texas
DATE: November 7, 2007
I do hereby certify that the foregoing pages, numbers 1 through 44, inclusive, are the true, accurate, and complete transcript prepared from the verbal recording made by electronic recording by Penny Bynum before the Texas Parks and Wildlife Commission.
On the Record Reporting, Inc.
3307 Northland, Suite 315
Austin, Texas 78731