Texas Parks and Wildlife Commission
Finance Committee

May 26, 2010

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

BE IT REMEMBERED, that heretofore on the 26th day of May 2010, 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:

APPEARANCES:

THE TEXAS PARKS AND WILDLIFE COMMISSION:

THE TEXAS PARKS AND WILDLIFE DEPARTMENT:

P R O C E E D I N G S

COMMISSIONER HOLT: There was no Executive Session held today so we will now reconvene the meetings this afternoon and move on to the Finance Committee.

Chairman Falcon, please call your committee to order. COMMISSIONER FALCON: Thank you, Chairman Holt.

I now call this committee to order. First item of business is the approval of the previous committee minutes. Do I hear a motion for approval?

COMMISSIONER MARTIN: So moved.

COMMISSIONER HIXON: Second.

COMMISSIONER FALCON: Commissioner Martin and second by Commissioner Hixon. All those in favor say aye.

(A chorus of ayes.)

COMMISSIONER FALCON: Opposed?

(No response.)

COMMISSIONER FALCON: The first committee item, Item Number 1, Update on Texas Parks and Wildlife Department Progress in Implementing the Texas Parks and Wildlife Department Land and Water Resource Conservation and Recreation Plan. Mr. Smith?

MR. SMITH: Thank you, Mr. Chairman. Just a couple of things. There are no specific action items resulting from the Land And Water Plan that I've got to report on but just a couple of things I want to mention. By statute we're required to provide a report or an update on the activities of our Internal Affairs office at each meeting. I guess sort of two substantive things I want to mention. You all will recall Jeff Gillenwaters, who is one of captain investigators. He applied for a position of major with the Law Enforcement Division. This was Rolly Correa's old position and was promoted to that job and Jeff, from all accounts, has hit the ground running and doing a great job so we're real proud of Jeff and his new role and I'm sure you'll see him in that capacity.

We have hired Chris Davis who was a special investigator with our Special Operations team under Law Enforcement to come on as a new captain investigator with Internal Affairs. Chris is a very, very bright man and an exemplary officer and I think he'll do very, very well as a part of the Internal Affairs team and you'll have a chance to get to know him.

A couple of things I just also want to report on. Actually, Mike Jensen is going to, I think, cover the landscape pretty well on the status of license sales. We have seen some increases in April, particularly on the resident fishing, which has been an area that we've been very concerned about. April was really a banner month and May looks real good too and so Mike will share that with you but we're real pleased on that front, where that's going. We've made up a lot of ground.

Also, our Law Enforcement team relies heavily on the Recreational Boating Safety grant to help fund specialized Law Enforcement and Outreach and Education work. They just completed all of their paperwork and got notice that they're going to get a $4 million award coming back to support the work of the Division. So, an excellent partnership with the Coast Guard and LE does a really, really good job there.

The last thing I want to mention ‑‑ most of you, on May 12th, were at the dedication of the Game Warden Training Center, which I hope you all enjoyed as much as we did. We're very, very proud to see that facility get rolled out and looking at the quality of cadets, it sort of spoke for itself as to why something like that was needed ‑‑ a real inspiration.

That date was also important because at 5:00 a.m. that morning, we rolled out the new automated registration and revenue system in State Parks called TxParks and this was an extraordinary, collaborative effort with Information Technology, George Rios' team, AR, Mike Jensen's team and State Parks. Scott Boruff led it from the EO. A lot of folks involved in creating this new system. It is now up and running in State Parks. We're in our, I guess, third week. The first day we had a record 6200 reservations made on that system through the internet. We feel like it's working pretty well. Like any new system, there are always some issues that come up, some inadvertent double bookings or charges and our team is working aggressively to resolve any individual item that comes up to try to address customer satisfaction issues and IT is working very hard with the contractor to fix any just technical issues that have emerged.

But I had the opportunity to be out last Saturday at Blanco State Park for the first weekend in which it was implemented and clearly our colleagues, working in the office, thought very highly of it ‑‑ very functional ‑‑ they were processing people very quickly and all to a one thought it was a significantly better improvement over the previous system. So, great development ‑‑ got a few issues we're going to work through. If you hear any complaints, know we're taking it seriously and trying to address them quickly but I just wanted to give you that update on that, Mr. Chairman.

COMMISSIONER FALCON: Thank you very much. Committee Item Number 2 — Financial Overview, Mike Jensen and Julie Horsley.

MR. JENSEN: Good afternoon, Commissioners; my name is Mike Jensen, Division Director for Administrative Resources and we're going to give you a financial overview, similar to what we did at the last meeting. We'll talk about the revenues that came in. We'll look at first the State Park revenue, then the boat revenue, then licenses and then we'll look at how we compare to the Comptroller's revenue estimate for the biennium and then we'll do you a quick budget summary, where we're at with the adjusted budget now and then a couple of notes on the Department's Natural Agenda and the Legislative Appropriations Request process.

We'll go ahead and start with State Parks receipts. As Carter had mentioned in his introductory comments, we are actually up 2.4 percent so we're up about $519,000 compared to this time last year. Out of that, park passes are up 3.9 percent ‑‑ that's approximately $127,000. Each of the categories are actually up, so we're doing very well.

Carter also mentioned the TxParks system. We do have some minor issues but the month of April was a very strong month and we're anticipating that May, so far, is very strong, based upon the revenue that we've seen come in to date.

Boat revenue is also up, almost 16 percent; $1.62 million and as we discussed and presented during the previous commission meeting, most of this increase is tied to the increase in fees that were effective on September 1st, with registration.

There has ‑‑ sales of new boats and used boats have been very flat so when we look at these figures here, the taxes are actually down almost 6 percent, about $64,000. Titles are up almost 1 percent, which is $18,000 and registration accounts for most of this increase, $1.67 million, and this is the peak period so we're expecting to have a strong May, as well. This weekend is going to be a very peak period to get boats back on the water, with the holiday.

COMMISSIONER DUGGINS: How can titles be up if the sales are down?

MR. JENSEN: That was ‑‑ the explanation I got for that ‑‑ we kind of went over the last commission meeting; what has happened is when people were transferring ownership, some of them were reluctant to actually transfer title until there was enough water to put the boats into the water so there was a backlog of people holding on to titles. They were having sales transactions but they weren't consummating that transaction with transferring title until there was water because the drought just broke now so people are putting the boats back in the water. That was a very good question that I asked Frances Stiles before ‑‑ a couple of months ago because we noticed that trend as well. It looks odd that the taxes are down but the titles are about even. That is the explanation that she provided. She said that was an anomaly.

License sales revenue ‑‑ this is the same format as the last meeting where we were comparing to both 2009 and 2008. This slide presentation represents all licenses, including Lifetime License sales, the revenue, so you can see we're doing better than both '09 and '08. Most of that, again, is contributed to the fee increases that took place September 1st.

The strongest performers are combination licenses and resident hunting licenses. This slide ‑‑ we've added the ‑‑ this is a variance slide that shows you the variance from 2010, compared to '08 and '09. The last meeting I didn't have the dollar amounts but I felt that it would more helpful for you to be able to see the dollar

amount rather than me reading it to you. You can see that we're up, when we include all licenses against '09, $3.71 million; against 2008, we're up $1.67 million. But if you pull out the Lifetime License sales, we're up in 2009, $2.6 million and we're up in 2008, $476 million? ‑‑ which is very good.

We get a weekly report each week ‑‑ the fish and sale licenses and a laundry list of miscellaneous licenses are going up so this is a very favorable outlook for the Department, in light of the fee increase that took place in September.

MR. SMITH: Mike, just a quick aside. 2008 was our banner year so we do use that as a benchmark but it really was an extraordinary year so I just want you to know that.

MR. JENSEN: So, overall, we have pretty good performance with continual improvement with fishing licenses. This slide shows you the count, the number of licenses sold and the interesting thing here is we're tracking almost even with 2009 and we're slightly behind '08 ‑‑ we're only behind about 1 1/2 percent. The estimate was that when we increased fees that we'd be behind 2008 by 2 to 3 percent so we're actually doing better than we had projected.

This slide will show you the variance in terms of the count; the differences in number of licenses issued and when you look through the slide and you look down there at the bottom of the other, which embeds within it, the Lifetime License sales, you can see that a very small percentage of the population ‑‑ these licenses ‑‑ account for a significant amount of revenue, from the previous slides.

For example, in 2009, we're ‑‑ our Lifetime Licenses are ‑‑ we're about 947 more in '10, as opposed to '09 and about 1,050 more as compared to 2008 and most of the number in ‑‑ increase against 2009 is tied to the timing. We had a huge wave of people at the old rate coming in and the revenue did not get recorded until the middle of September, so it showed up in this fiscal year. But you can see that ‑‑ just the value of those licenses that really skews the revenue figures, which is why it's good to pull them out for you in these slides.

This slide here shows how we're comparing towards the Comptroller's biennial revenue estimates and, similar to the last presentation, we're tracking fairly well for Fund 9 and we're improving on Fund 64. Fund 69 ‑‑ I mean, Fund 9 ‑‑ we're not collecting as fast as in prior years because the BRE, the revenue estimates from the Comptroller increased for oil and gas royalties. They also increased for interest earnings and the slide that you saw earlier on boat sales and tax, that is also a Fund 9 event so that revenue, while it's increasing because of the fee increase, it's not increasing as much as if we had the type of boat sales that historically we've had.

Fund 64 was tracking slightly behind the fiscal year 64 percent ‑‑ 67 percent to the fiscal year elapsed. Again, two of the reasons for the decline is because of the revenue estimates for interest are very high, from the Comptroller and the estimates for gas royalties are actually very high. But we are improving the ‑‑ we've had a very strong month of March, April and we're anticipating May for State Park fees. So we're actually believing that we can achieve the BRE for Fund 64. At the beginning of the fiscal year we weren't sure that we were going to be able to achieve that. So, things are looking favorable for Fund 64, as well.

The Local Park Fund, 467, the primary reason that is where it's at is we had a collection of federal funds to the tune of approximately $4 million so we are going to achieve the BRE there and the other ‑‑ that's a collage of a number of different accounts, which includes artificial reef money and it includes some capital funds for wildlife and it also includes Lifetime Licenses, which is why we've already exceeded the BRE. If you notice the starting budget in February was $497.1 million. The big adjustment that's showing up in the month of April are the bonds ‑‑ the $38 million that we've been awaiting approval through TPFA and the bond review board. They've finally been approved and the commercial paper has been issued, not the full amount but the full amount is available for the Department to use. So that is the biggest adjustment. There are a couple other small appropriated receipts; two other agency contracts, one with DPS and one with the Historical Commission. That I also added to the increase in the adjusted budget.

On this slide, this shows you how we're faring when we look at the object of expense. As usual, and because we have almost 3200 employees, a large expenditure component is salaries and fringe but also, with the bonds that we have ‑‑ the bond funding and construction work that we have, capital expenditures also account for a fairly large percentage of our budget. With 67 percent of the year elapsed, we still have 53 percent of the budget remaining.

Just want to give you a quick update on the Strategic Plan. We did meet with the Legislative Budget Board staff, as well as the governor staff to discuss some structured change requests. We had a number of clean-up requests and they were okay with most of those that were just clarifying definitions. We did have a couple of requests for the Inland Division and the Coastal Division Fisheries. They wanted to merge their strategies. It doesn't look like the LBB want to do that so we probably will not be able to do that.

One other current concerns that we have as a Department is transferability between strategies. Historically, they have been 25 percent but when they made us ‑‑ when they made different state agencies increase the number of strategies they also reduced transferability between strategies, by half. So, we can transfer only twelve and a half between strategies, as opposed to previously as 25 percent. That could pose to be a challenge, for example, if we have to do a response in the Gulf for kills and spills and the problem with the LBB in accepting that is we've never had an example we could point to, as to why we would have transferability problems. We may have an example coming up this summer, unfortunately.

The draft of the Natural Agenda has been routed to the different divisions and executive staff for review and we're getting comments. Julie Horsley, who will be up next, is coordinating that effort and the importance of the Natural Agenda ‑‑ just a quick summary for you ‑‑ is, you know about the Land And Water plan. That is really the Department's strategic plan, vision, operational vision. This strategic plan, which we call a Natural Agenda, is very prescribed. We have to follow a format by the legislature so that they can compare one state agency with another.

So we have to submit this data in a really ‑‑ detailed structure, in order for them to make an apples-to-apples comparison by agency. So it's important that we do this correctly and that we give them the best available information. This provides the groundwork for the Legislative Appropriations Request that we'll be doing ‑‑ preparing this summer for the Department so, as part of this review, when we get these comments back to Julie Horsley and her team, this will also give executive staff an opportunity to talk to the divisions about potential exceptional request items and to also talk about different rider provisions that might assist the Department with its fulfilling its mission and its responsibilities.

One last slide ‑‑ a quick update on the Legislative Appropriations Request. We were promised by informal sources at the LBB that we'd be getting instructions no later than Sunday, which would be May 31st. We're anticipating significant changes to those instructions ‑‑ what we've seen in previous years. We're anticipating an instruction where we will create a base budget at some percentage of a reduction. We'll probably make it 90 percent of what our current budget is ‑‑ that's what we've heard through the grapevine. As soon as we know, we'll pass that on to you all, Commissioners, so you'll understand what the constraints are for building the budget, but right now our best estimate is there'll be an additional 10 percent reduction on top of the 5 that we already did, this fiscal year.

COMMISSIONER HOLT: You're talking about on top of the 5.

MR. JENSEN: Yes, sir, and when we prepare that and follow those instructions, we're anticipating a due date of approximately August 20th but that's subject to whatever the instructions are but that would be similar to what it's been in the past. I know I went through this fairly quickly, but I value your time. If you have any questions or if there's anything I could provide, I'd be happy to do so.

COMMISSIONER HOLT: And hopefully as many people can make it to the July meeting as they can, so we can keep going through this budget process.

MR. JENSEN: Yes, sir.

COMMISSIONER HOLT: The Legislature that's ‑‑ at least the leadership, what are we, 18 billion in the hole, whatever the number is today? Yes.

MR. JENSEN: That's what we heard from the Speaker of the House, with his announcement.

MR. SMITH: Mr. Chairman, it might be good ‑‑ just for a quick update on the 5 percent reduction that was asked of the Agency, we did get notice back from the Legislative Budget Board, regarding the acceptance of most parts of our plan. You know, our total proposed cut was just under $25 million. The LBB came back ‑‑ they've asked us to cut ‑‑ I think it's $21.7 ‑‑ approximately $21.7 million. They were particularly interested in seeing about $3 million in capital authority ‑‑ capital construction authority, largely associated with the Fund 9 divisions. It's not entirely, but largely, associated with it, be restored back and we look for ways to expend those funds. So the cut was a little bit less than what we had expected and I wanted to let you know that.

MR. JENSEN: And we did make an inquiry as to what the rationale was. They gave us an exemption for $3.38 million. The Legislative Budget Board ‑‑ analyst did not know. The governor's analyst did not know so, as soon as we know, Carter will know and you all will know because we were concerned as to what that was tied to.

MR. SMITH: We're glad to have it back.

COMMISSIONER HOLT: Be careful how deeply you probe. Ignorance can be bliss.

COMMISSIONER FALCON: Any questions? Julie, are you going to do the rest of it?

MR. JENSEN: I think I covered her portion on the Natural Agenda. She'll be the next item, if you're ready for that.

COMMISSIONER FALCON: Okay. So this will be Committee Item Number 3. Julie, is that the one you will present?

MS. HORSLEY: Yes.

COMMISSIONER FALCON: Fee Schedule Rules Recommended Adoption of Proposed Changes. Miss Horsley.

MS. HORSLEY: Good afternoon, my name is Julie Horsley. I'm in the Planning and Analysis Section of the Administrative Resources Division. This item covers a number of different fee issues that affect multiple divisions and, similar to how we presented this at the last commission meeting, rather than have each division come up to the table separately, I'll be presenting all the items on their behalf and if you have questions at the end, I'll defer to the audience ‑‑ the staff members in the audience for their responses.

The first item is the clean-up that affects several different permits, including the triploid grass carp scientific research, educational display, zoological collection and protected non-game sales permits. Currently in our rules, all of our fee amounts are located in Chapter 53, for permits and licenses. We recently discovered some outdated fee references in other sections of our rules and this proposal would basically ask that we eliminate those obsolete references to fees in those other sections.

The next item is related to fees for falconry permits. Right now, our rules establish fee amounts for apprentice falconry and falconry renewal permits, covering a one, two or three-year period of validity and there were some recent changes at the federal level that now allows states to issue falconry permits with a period of validity for up to five years. This proposal would establish fee amounts for falconry permits based on a four or five year term of validity and the proposed fee amounts don't, in any way, represent a fee increase. They were merely structured to cover the longer time frame of validity for the permit.

The third item deals with fees for Department-sponsored events. From time to time, the Department sponsors special activities or events and charges a participation fee to either fully recover or partially defray the cost of hosting that event. This proposal would more clearly authorize imposition of such fees by providing generic authority to recover costs for these types of events. And then, the fourth item relates to fees that are charged for bat viewing at the Old Tunnel Wildlife Management Area. Regulations currently provide a variety of fee ranges for visitors wanting to access the lower viewing area, depending on age or type of group.

To simplify fee collection and bookkeeping, the proposed amendment would implement a flat $5 admission fee, regardless of age or type of group and, as I mentioned, the fee would be for access to the lower viewing area only. Access to the upper viewing area would still be free of charge.

And then, the final item relates to deer breeder permit renewal fees. Senate Bill 1586, that was passed last session, required the Parks and Wildlife Department to work in conjunction with the Animal Health Commission and develop a shared database for deer breeder information. The bill also specified that the two agencies should provide incentives; among them, reduced fees to deer breeders whose cooperation results in reduced costs and increased efficiency. This proposal would reduce permit renewal fees for deer breeders who file at least 85 percent of their required information electronically. The reduced fee would be $200, as opposed to the $400 that is currently being charged.

We expect that providing this adjusted fee will encourage more deer breeders to use the online system and will also result in greater efficiencies and lower costs to administer the program. The 85 percent criteria was selected to account for factors beyond the control of the deer breeder, such as technical issues or other unavoidable circumstances that might require them to report certain information over the phone or in hard copy.

In terms of public comments, the Department received a total of 12 comments on the fee proposals. This slide deals with all the fee changes, except for the deer breeders so I'll be talking about the deer breeders on the next slide. Six comments support adoption of all proposed changes, three comments oppose adoption of all changes and three comments oppose adoption of specific amendments.

Two of the commenters oppose adoption of all the proposed amendments but didn't offer any reason for opposition. One commenter misunderstood the proposed amendment to the falconry fee, believing that the Department was proposing to increase fees, which is not the case, for those permits. And then two commenters oppose adoption of the amendment to implement a flat $5 fee at the Old Tunnel WMA and stating that it would discourage visitation by families.

For the deer breeder proposal, the Department received a total of 178 comments. 160 commenters agreed completely with the proposal, 14 disagreed completely and 14 opposed adoption of specific amendments. Of the commenters that were in complete agreement, most expressed appreciation that the Department was working towards greater efficiency and were supportive of the new online system and the fee.

As for those disagreeing, either in whole or in part, one commenter said we should just have a flat fee, with no discount. Several appeared to oppose deer breeder permits in general and felt that lowering the fee might lead to more permits and/or that the fees should be increased rather than decreased in order to discourage the activity and then, one commenter noted that the proposal seemed to run counter to the idea that the Department is needing to raise more revenue and increasing funding for the Department, and that concludes my presentation.

COMMISSIONER FALCON: Any discussion or questions by the Commission? Yes, sir.

COMMISSIONER DUGGINS: Looking at page 55 of the notebook, why do we charge $400 for a deer breeder permit and $1,000 for a deer management permit. Why is there such a difference between the two?

MS. HORSLEY: I'm going to have to defer.

MR. LOCKWOOD: For the record, my name's Mitch Lockwood, White-tailed Deer Program Leader and Acting Big Game Program Director. The deer breeder permit fee at $400 is something that was set in regulation much more recently than the DMP fee was and where the deer breeder permit fee, we actually increased the fee from, I believe it was $180 to $400 and that increase was based on our calculations and our estimates on the amount of ‑‑ on the cost to the Agency, based on our time spent.

The deer ‑‑ the DMP permit, rather ‑‑ that fee was set at an earlier date and the statute, as I recall, requires that a fee cannot exceed $1,000 and, at that time, I do not believe much time went into determining the cost to the Agency and the fee was just set at $1,000, without much justification on what it actually cost the Department.

COMMISSIONER DUGGINS: Okay.

COMMISSIONER FALCON: Any other questions or comments? Thank you, Mitch. If there are no further questions or discussion, I will place this item on the Thursday Commission meeting agenda for public comment and action. Committee Item Number 4 — Advisory Committees ‑ Request Permission to Publish Proposed Changes in the Texas Register — Ms. Ann Bright.

MS. BRIGHT: Good afternoon, Commissioners. I'm Ann Bright, General Counsel. As you know, there are a number of requirements that, as a state agency, we have to require ‑‑ we have to comply. One of them concerns advisory committees. The Parks and Wildlife Code authorizes the Commission chairman to appoint advisory committees and the Government Code, Chapter 2110, imposes certain requirements on advisory committees. We have to have a rule for each advisory committee, we have to annually evaluate them, the committee members select the presiding officer, we cannot have more than 24 members on an advisory committee and they all have a four‑year life, unless extended by rule.

Last year, we extended ‑‑ the commission extended advisory committees for one year so all advisory committees right now will expire on October 1st, 2010. Staff recommends that the following advisory committees be extended for another four years so they would expire October 1, 2014.

In Coastal Fisheries Division, the Coastal Resources Advisory Committee, the Freshwater Fisheries Advisory Board from the Inland Fisheries Division, the Historic Sites Advisory Committee and the State Parks Advisory Committee in the State Parks Division and then several in the Wildlife Division, one of them involving bighorn sheep, migratory game birds, private lands, upland game birds, wildlife diversity and white-tailed deer.

There are a few that are statutorily required and these would not be impacted by the proposal. One of the rules to get basically certified as an agency that trains peace officers, is the Game Warden Academy has to have an advisory committee. Others are statutorily established, San Jacinto Advisory Board and then federal law requires that we have a Texas State Trailways advisory ‑‑ Trails Advisory Committee as a condition for receiving certain federal funds. So staff recommends permission to publish the proposed rule, extending the listed advisory committees for public comment. I'd be happy to answer any questions.

COMMISSIONER FALCON: Any question or comments by the Commission? If there are no further questions or discussion, I will authorize staff to publish the proposed changes in the Texas Register, as required, for the public comment period.

Mr. Chairman, this committee has completed its business.

COMMISSIONER HOLT: Okay. Thank you, Chairman Falcon.

(Whereupon, the committee meeting was adjourned at 1:35 p.m.)

C E R T I F I C A T E

MEETING OF: Texas Parks and Wildlife Commission
Finance Committee
LOCATION: Austin, Texas
DATE: May 26, 2010

I do hereby certify that the foregoing pages, numbers 1 through 26, 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.

06/08/10
(Transcriber) (Date)
On the Record Reporting, Inc.
3307 Northland, Suite 315
Austin, Texas 78731


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