Texas Parks and Wildlife Commission
Finance Committee

Aug. 28, 2002

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

      6      BE IT REMEMBERED, that heretofore on the 28th day of 

      7   August, 2002, there come to be heard matters under the 

      8   regulatory authority of the Parks and Wildlife 

      9   Commission of Texas, in the Commission Hearing Room of 

     10   the Texas Parks and Wildlife Headquarters Complex, 

     11   Austin, Texas, beginning at 9:00 a.m. to wit:

     12   

     13   APPEARANCES:
          THE TEXAS PARKS AND WILDLIFE COMMISSION:
     14   
          FINANCE COMMITTEE:
     15   
          CHAIRMAN:    Katharine Armstrong, Austin, Texas
     16                Ernest Angelo, Jr., Vice Chairman, Midland, 
                       Texas
     17                John Avila, Jr., Fort Worth, Texas
                       Joseph B.C. Fitzsimons, San Antonio, Texas, 
     18                Committee Chair
                       Alvin L. Henry, Houston, Texas
     19                Philip Montgomery, Dallas, Texas
                       Donato D. Ramos, Laredo, Texas
     20                Kelly W. Rising, M.D., Beaumont, Texas
                       Mark E. Watson, Jr., San Antonio, Texas
     21   
          THE TEXAS PARKS AND WILDLIFE DEPARTMENT:
     22   Robert L. Cook, Executive Director, and other personnel 
          of the Parks and Wildlife Department
     23   

     24   

     25   





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                                                                 2
      1                  CHAIRMAN ARMSTRONG:  We will now go on to 

      2   the Finance Committee.  Chairman -- Vice Chairman 

      3   Angelo, Chairman of the Finance Committee.

      4                  COMMISSIONER ANGELO:  Our first item is 

      5   approval of committee minutes.  And I had one small 

      6   typographical correction on page three of the -- of our 

      7   booklet here.  It has the Boner report, B-o-n-e-r.  We  

      8   certainly want to change that to be correctly spelled to  

      9   Bomer, B-o-m-e-r.  Just thought that might be 

     10   appropriate. 

     11                  Are there any other corrections?  Or, if          

     12   not, do we have a motion that they be approved?                          

     13   (Inaudible)  Motion to second. (Inaudible)  All in favor 

     14   say, I.  Opposed?  The minutes are approved.  

     15                  And I guess the next item is the   

     16   Chairman's Charges.

     17                  ITEM 1: CHAIRMAN'S CHARGES.

     18                  MR. COOK:  I don't know if I

     19  can follow that one.  Thank you, sir.  As discussed 

     20  in a regulation committee, our natural -- part of

     21  our Natural Leaders program this year was to present 

     22  a project completion report that addressed part of 

     23  this Committee's charge.  This was a creation of a 

     24  department business plan for statewide commercial 

     25  projects.  The Administrative Resources Division is 





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                                                                 3
      1  currently implementing this plan, which was developed 

      2  by our Natural Leaders program.  I'll take just a 

      3  second here to plug this program. 

      4                  We gave these young people, these 

      5  people in our agency, the opportunity to take 

      6  assignments from our Sunset charges and address those 

      7  charges, develop programs, and develop plans for us.  

      8  They have done an incredible job, and it is much 

      9  appreciated. 

     10                  In addition, Mr. Chairman, I will ask   

     11  that Scott Boruff and Suzy Whittenton brief you at 

     12  this time on the status of our Business Practices 

     13  Improvement Plan, which is also part of the 

     14  Chairman's Charges.  I want to specifically recognize 

     15  the direct assistance provided throughout this spring 

     16  and summer from the State Comptroller's Office.  They 

     17  didn't just -- they didn't just talk to us, they sent 

     18  people over here and put them to work.  And they've 

     19  been a real asset to us and are very much 

     20  appreciated. 

     21                  We have had -- and I'm going to 

     22  preempt Suzy and Scott some.  They have made an 

     23  immense effort to the entire group, very closely 

     24  coordinating, very -- keeping everybody up-to-date 

     25  with oversight agencies, oversight committees, 





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                                                                 4
      1  individuals that have been helping us, including LBB,           

      2  Sunset Commission, State Auditor's Office, and many 

      3  more.

      4                  We have had so far two legislative 

      5  awareness briefings down at the capitol in which 

      6  we've invited every legislative aid and every 

      7  legislator who is involved in our business through 

      8  the -- through the finance committees and the 

      9  oversight agencies.  Those have been very well 

     10  attended and have gone very well.  We addressed any 

     11  questions they have and provide the information that 

     12  they request and provide some probably that they 

     13  don't request.  They've done a tremendous job.  And 

     14  I'd appreciate it if -- when they get up here, 

     15  they'll brief you on that plan.            

     16                  COMMISSIONER MONTGOMERY:  While 

     17  they're coming up, I have a question on the business 

     18  planning.  Will we see results of that analysis on 

     19  the different business projects?

     20                  MR. COOK:  Absolutely.  Absolutely.             

     21                  COMMISSIONER MONTGOMERY:  Will those 

     22  be presented to us at some point?

     23                  MR. COOK:  Absolutely.             

     24                  COMMISSIONER MONTGOMERY:  Okay.

     25                  MR. COOK:  I would say --  





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                                                                 5
      1  Commissioner Montgomery, I would say you probably can 

      2  do 50 percent or more -- well, we can give you a 

      3  really fairly detailed report in November.  And 

      4  possibly a final report in January might be more 

      5  appropriate.

      6                  MR. BORUFF:  Commissioners, for the 

      7  record, my name is Scott Boruff, Deputy Executive 

      8  Director of Operations, starting next week.  We don't 

      9  really have a formal presentation here.  This is kind 

     10  of off the cuff.  But we would like to let you know 

     11  that the Business Practice Improvement Plan is moving 

     12  forward rapidly.  This is a plan that we put together 

     13  some five months ago or so, which is addressing all 

     14  the business practices from top to bottom in the 

     15  agency. 

     16                  We -- particularly, we're focused on 

     17  some of the items that we had taken some recent 

     18  criticism for.  For example, our reconciliation, our 

     19  backlog of revenue and expense reconciliation.  We're 

     20  proud to report to you today that by the time that we 

     21  close this year, we will be finished with the 

     22  reconciliation of the backlog.  We will then begin to 

     23  work on the 2002 reconciliation process. 

     24                  And we anticipate being through with 

     25  that before the end of the year.  So that by the time 





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                                                                 6
      1  we roll into the session, our books will be balanced, 

      2  backlogs will be reconciled, and we'll be headed 

      3  forward with new policies and procedures that will 

      4  preclude this from happening to us again. 

      5                  The plan is quite detailed.  And 

      6  certainly not now, but at your leisure, if you'd like 

      7  to learn more about the plan and the specific work 

      8  activities that we have involved, I will share it 

      9  with you.  This is a fairly comprehensive effort, and 

     10  there are several hundred work items that we are 

     11  working on currently.  About a third, 35 or 40 

     12  percent, of the items that we started out to fix have 

     13  been completed and are off the table.  The remaining 

     14  two-thirds are well underway. 

     15                  We do anticipate, by the beginning of 

     16  the session, to be completed with some 75 or 80 

     17  percent of those work items.  The remaining 15 or 20 

     18  percent will have plans in place that will be 

     19  credible and defensible, so that as we move into the 

     20  session, we hope to be looking at a complete 

     21  re-engineering of the business practices of the 

     22  agency.

     23                  MR. COOK:  There's another gentleman 

     24  here that I want to recognize who has been assisting 

     25  me for several months.  T.C. Mallett, if you would -- 





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                                                                 7
      1  I want them all to see your smiling face.  This 

      2  gentleman is a veteran of state government, of 

      3  business, of finance, how we conduct business, and 

      4  which we're always looking for options to make it go 

      5  smoother, make it work better for everyone, make it 

      6  more effective, more efficient. 

      7                  T.C. Mallett is an absolute expert in 

      8  that area and has helped us throughout this entire 

      9  process, starting in February, I guess.  And the 

     10  reason I wanted to recognize him -- I'm fixing to -- 

     11  he said he had some real important business to do.  

     12  We've got it narrowed down to -- it's something 

     13  between chasing his cows around and fishing.  But 

     14  he's -- he's going to be leaving us soon.  And I 

     15  appreciate your help very much, T.C.  Thank you.

     16                  MS. WHITTENTON:  The only other thing 

     17  I would add to that is that we, in addressing the 

     18  Business Practices Improvement Plan items, have added 

     19  some new staff that will help us make sure that all 

     20  of the recommendations are implemented.  Some of them 

     21  are here today and some I don't think are.  We added 

     22  a new Budget and Planning Director, who started about 

     23  a month ago.  And that's Patsy Henry.  Patsy is here 

     24  and will be in charge of strategic planning, 

     25  performance measures and budgeting. 





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                                                                 8
      1                  We've also, back in January, added a 

      2  new Finance Director, Brenda Dille, who has done a 

      3  fabulous job of helping us streamline our operations 

      4  and make things run more efficiently. 

      5                  And I -- I'll say that on the 

      6  reconciliation that we're almost finished with, we do 

      7  owe a big thanks to Commissioner -- I mean, 

      8  Controller Rylander for loaning us some people.  She 

      9  loaned us a guy by the name of Wilson Day, who we put 

     10  in charge of the revenue side of the reconciliation. 

     11  I was skeptical that it couldn't be done by August 

     12  31st. 

     13                  And I think we owe him a lot of 

     14  credit for making sure that it got done.  And he'll 

     15  be going back to the Comptroller's Office next week 

     16  to his regular job.  He was here about three and a 

     17  half months.  And they didn't charge us a dime for 

     18  his time or Tom Zapata, who they also loaned us.  And 

     19  Tom has returned back to the Comptroller's Office 

     20  back in -- at the end of July, and has since retired 

     21  from state government.  So we really do appreciate 

     22  their help.

     23                  COMMISSIONER ANGELO:  Any questions 

     24  or comments?

     25                  CHAIRMAN ARMSTRONG:  I have a 





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                                                                 9
      1  comment.  It's been a long six or seven, eight months 

      2  now since we started in January doing the evaluation 

      3  and receiving the report in March and implementing 

      4  our plans.  The staff has done a tremendous job 

      5  responding to the recommendations.  I can't imagine 

      6  that anybody could have done it any more quickly than 

      7  Parks and Wildlife has done.  I've heard comments to 

      8  that effect from people that have been through these 

      9  things before.  

     10                  Parks and Wildlife has responded 

     11  admirably, and I'm very, very pleased and very, very 

     12  proud of the work that you-all have done.  Thank you.

     13                  COMMISSIONER ANGELO:  I certainly 

     14  echo every one of those words.  It's been a great 

     15  effort.  Thank you.

     16                  ITEM 2:  FY03 OPERATING AND CAPITAL 

     17  BUDGET AND TEXAS PARKS AND WILDLIFE INVESTMENT POLICY              

     18                  Okay.  We'll then move on to item 

     19  number two, which is the operating and capital budget 

     20  and our investment policy, budget policy, and 

     21  legislative appropriations request.  And Suzy will 

     22  bring us up-to-date on that.

     23                  MS. WHITTENTON:  Thank you, 

     24  Mr. Chairman, Commissioners.  For the record, I'm 

     25  Suzy Whittenton, Chief Financial Officer.  Today I'm 





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                                                                10
      1  going to present the recommended internal operating 

      2  budget for fiscal year 2003.  And I'll also present 

      3  requests for additional funding for the coming 

      4  biennium, fiscal years 2004 and 2005.  

      5                  Today's discussion will include 

      6  direction provided by the legislature through the 

      7  General Appropriations Act.  We'll talk about the 

      8  revenue and cash available to fund the 2003 budget 

      9  and present the staff's recommended budget.  Also, we 

     10  will include a discussion on FTEs and the allocation 

     11  of the super combo revenue to the stamp funds.  And 

     12  I'll also need your approval on both the budget 

     13  policy and the investment policy.  And then I'll wrap 

     14  up with a quick discussion on what the highlights are 

     15  in the appropriations request.

     16                  October provides a blueprint for us 

     17  to look at what we're allowed to spend.  And that's 

     18  provided by strategy.  The Legislature uses a 

     19  performance-based, achievement-based budgeting system 

     20  that combines -- integrates our Strategic Plan into 

     21  our budget.  We submit our strategic plan every other 

     22  year.  In June, we just submitted our most recent 

     23  plan.  And from that, we're funded by strategy, as 

     24  well as by a method of finance. 

     25                  The General Appropriations Act limits 





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                                                                11
      1  capital budget spending and it limits our FTEs and 

      2  provides some additional guidelines through our 

      3  riders.  So each year, when we look at our internal 

      4  operating budget, we start here in reviewing what the  

      5  legislature has directed us to do. 

      6                  And when you look at the authority to 

      7  spend by strategy, the main difference from 2002 to 

      8  2003 is the addition of the Proposition 8 bonds.  

      9  You'll see in the capital programs line there, the 

     10  number goes way up in the second year.  We're 

     11  expecting $36 million in Proposition 8 funds this 

     12  year, which we've included in our recommended budget.  

     13  That's the primary differences -- difference here.  

     14  There's some minor -- other minor differences between 

     15  strategies. 

     16                  They also break out the -- the 

     17  appropriations request by the -- appropriation 

     18  authority by method of finance, straight general 

     19  revenue, and then general revenue dedicated, which 

     20  includes our Accounts 9 and 64 and our Local Parks 

     21  Account -- most of our funds are in general revenue 

     22  dedicated.  And then it also includes estimates for 

     23  things like federal funds. 

     24                  Now federal funds are estimated 

     25  appropriations, which means that we can -- if we 





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                                                                12
      1  bring in more than what was expected, we can still 

      2  spend it.  So we'll actually be looking at a budget 

      3  that's more than this $247 million.  As the rider 

      4  appropriations are also -- many of them are 

      5  estimated. 

      6                  The capital budget rider on the 

      7  appropriations bill is very restrictive.  It allows 

      8  for these amounts to be spent only for specific 

      9  purposes -- for these purposes.  And it also limits 

     10  the amount that can be transferred between any of 

     11  these items.  So we do have authority to spend up to 

     12  $4.2 million in vehicles.  We have authority for land 

     13  -- specific authority for land acquisitions, 

     14  technology purchases, equipment items, and 

     15  construction and major repairs.

     16                  In the past, we have defined -- used 

     17  a different definition for the capital budget 

     18  internally than is included in the appropriations 

     19  bill.  And it's caused a lot of confusion, I think.  

     20  And so what we're going to do -- what we've decided 

     21  to do is use that term consistently so capital budget 

     22  will refer to all of these items.  In the past, 

     23  internally our -- when we talked about capital 

     24  budget, we were really only talking about 

     25  construction.  And we'll include these other items in 





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                                                                13
      1  our capital budget this year.

      2                  Because we're funded by general 

      3  revenue dedicated funds, we can't spend more than 

      4  what's available in cash balances and projected 

      5  revenues, regardless of what our appropriation 

      6  authority is.  So we have to look at what our cash 

      7  flow is going to look like.  Total revenue and cash 

      8  balances available should be right around $315 

      9  million this year. 

     10                  Those -- sources of funds are broken 

     11  out in this pie chart.  You can see that nearly half 

     12  of all of our funds are in Account 9, the Game, Fish 

     13  and Water Safety Account.  Account 64 is our State 

     14  Parks Account.  And that is where our biggest 

     15  shortfall lies.  We have been given authority to 

     16  spend $57 million from that fund, but we don't think 

     17  we'll have that much cash there from revenue earned 

     18  there.  We think we'll have about $54 million.  So 

     19  there's about a $3 million difference. 

     20                  And that's probably the -- one of the 

     21  themes of this year's budget, is that there's just 

     22  not enough state park money available.

     23                  What we did here is lay out the 

     24  difference between revenue and cash available and 

     25  appropriation authority.  And what we're doing in 





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                                                                14
      1  most cases is -- and this is a very simplified 

      2  version of this.  But we're taking the lowest amount 

      3  and budgeting to that the lower of cash available or 

      4  appropriation authority.  And really, you'll see 

      5  here, the biggest problem is in that fund 64, again. 

      6                  The budget strategy for the year was 

      7  that we started by prioritizing base funding with 

      8  each division, with the requested supplemental 

      9  projects requested by each division.  And we are 

     10  attempting to fund most operations at approximately 

     11  the same level as in fiscal year 2002. 

     12                  Our goal is to maximize available 

     13  cash and appropriation authority so that -- because 

     14  we have more needs than we have money for.  So we 

     15  need to take advantage of all the possible resources.  

     16  We are using all general revenue, undedicated general 

     17  revenue towards parks and park overhead.  And we are 

     18  going to recommend funding the stamp funds at the 

     19  same level that we did in 2002.

     20                  COMMISSIONER ANGELO:  Suzy, on that, 

     21  you might say what the reason for doing that is.

     22                  MS. WHITTENTON:  I do have a slide 

     23  later --

     24                  COMMISSIONER ANGELO:  Oh, you're 

     25  going to say that later?





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                                                                15
      1                  MS. WHITTENTON:  --in the --

      2                  COMMISSIONER ANGELO:  Okay.

      3                  MS. WHITTENTON:  -- that I'll do.

      4                  COMMISSIONER ANGELO:  Okay.  That'll 

      5  be fine.

      6                  MS. WHITTENTON:  What's new in 2003?  

      7  We set aside some funding for replacement for boating 

      8  equipment for the Law Enforcement Division.  We've 

      9  set aside a small amount of money for computers for 

     10  game wardens.  I think we've heard for a few years 

     11  that the game wardens in the field don't have 

     12  computers.  Most of them.  So we're going to start 

     13  trying to get them some -- some resources, as funding 

     14  permits. 

     15                  We've also set aside money to fund a 

     16  game warden cadet class that will start in January.  

     17  Those selections are being made right now.  So that 

     18  class will be funded from January through August.              

     19                  We're also looking at the possibility 

     20  or feasibility of developing an in-house license 

     21  system for contingency purposes, or possibly for 

     22  those years beyond the WorldCom contract.  What we 

     23  really wanted to do is just set aside enough 

     24  resources to evaluate alternatives there. 

     25                  We also set aside some money to 





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                                                                16
      1  administer the motor pool at the headquarters.  We're 

      2  funding the student intern program up front, rather 

      3  than -- in previous years, where we've had to fund it 

      4  from lapsed salaries or saved budget throughout the 

      5  year, we're going to fund it up front. 

      6                  We have allocated some money for a 

      7  Microsoft site-licensing agreement, which will allow 

      8  our computer users to standardize on Microsoft 

      9  products.  The users can then upgrade to the newest 

     10  releases of the software -- the operating system or 

     11  the software.  And it'll also help us ensure that we 

     12  don't get into an audit problem where we've got 

     13  unauthorized versions of software on people's 

     14  computers.  One of the other state agencies had 

     15  problems with that earlier this year.

     16                  There's also some money included for 

     17  a safe boating campaign.  And one of the new federal 

     18  funds is called the State Wildlife Grant Program.  

     19  Internally, we call it the SWIG Program.  There's 

     20  about $3.8 million in the budget.  These are 

     21  replacing CARA funds.  And we've been able to fund 

     22  some World Birding Center operations out of these 

     23  funds and -- as well as adding some people in 

     24  fisheries and wildlife, such as a coastal wetlands 

     25  eco supervisor position, borderlands biologist, and a 





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                                                                17
      1  wildlife planner out of these funds, and also doing 

      2  some coastal monitoring through coastal fisheries 

      3  through those funds. 

      4                  And then finally, we've added some 

      5  funding to deal with Business Practices Improvement 

      6  Plan costs.  Now, what that includes -- that will 

      7  enable us to basically beef up our resources in -- in 

      8  the finance area and to address areas that have been 

      9  identified as weaknesses.  So we are adding 

     10  accountants for an ongoing monthly reconciliation, so 

     11  we won't ever get in the position that we've been in, 

     12  where we've had a backlog.  They'll be able to keep 

     13  those reconciliations up timely and complete them 

     14  accurately. 

     15                  We've also added a point-of-sale 

     16  system auditor to ensure that revenues are collected 

     17  timely and in the right amounts, so we don't have to 

     18  do that after the fact, as well. 

     19                  We're also implementing a 

     20  reorganization of the revenue branch, effective 

     21  September 1st.  That will allow completion of process 

     22  improvement and improve some of the controls in the 

     23  revenue area.  If you'll remember the -- in the audit 

     24  report that we got last year, there was mention of 

     25  some nonvalue added activities.  Those   were -- 





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                                                                18
      1  pertained mostly to the boat registration and titling 

      2  area and the cashier's office.  We are redesigning 

      3  systems and procedures in those areas.  

      4                  We've -- on the boat system, we've 

      5  implemented an interim work flow change that has 

      6  helped streamline operations there while we're 

      7  waiting for development of our new boat system.  

      8  We're rewriting the whole boat system.  Once that's 

      9  implemented, then we'll really be able to register 

     10  and title boats more efficiently.

     11                  We've added some property auditors so   

     12  that we can correctly identify and account for 

     13  property assets.  These positions used to be here on 

     14  staff.  And over time, as we ran short of money, they 

     15  were deleted.  We'd like to get those back so that we 

     16  can keep our construction in progress and numbers 

     17  up-to-date and current in the accounting system. 

     18                  We have added some staff to code 

     19  credit card purchases.  The Comptroller's Office is 

     20  now requiring that those purchases be coded at a more 

     21  detailed level than they were required to be coded 

     22  before.  So we're needing to add someone to help us 

     23  keep that current.

     24                  And finally, what we're trying to do 

     25  is document the internal accounting system, the 





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                                                                19
      1  system administration, and the structure of that 

      2  system so that we -- as staff leave and we have 

      3  turnover, we can hand that over to someone where 

      4  there's -- documentation is written up on how to 

      5  administer that system.  It's a very complex Oracle 

      6  financial system. 

      7                  And then we are adding an accountant 

      8  for financial reporting to improve responsiveness of 

      9  the financial reporting area and to provide some 

     10  additional management reports, financial reports, and 

     11  change some of the reporting formats.

     12                  So those are the main changes to the   

     13  budget.  And the total recommended operating budget 

     14  is about $203 million, which includes salaries, 

     15  fringe benefits, and operating costs, which includes 

     16  travel, supplies, and that sort of thing.  And then 

     17  the minor repair program in parks is part of the 

     18  operating budget.

     19                  Recommended capital budget by type.   

     20  Again, the capital definition is a little different 

     21  this year.  It includes vehicles, equipment, 

     22  computers, and construction.  The bulk of this is in 

     23  construction.  And that is mostly made up of the 

     24  Proposition 8 funds.  It also includes a little bit 

     25  of money for projects such as River Center, Goose 





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                                                                20
      1  Island, Mustang Island, and the railroad projects.  

      2  There's a number of repairs going on at the state 

      3  railroad.  Those are federally funded repairs. 

      4                  Proposition 8 bonds, the $36.68 

      5  million, that we're expecting consists mostly of 

      6  repair money.  If you remember, we had $15 million 

      7  that we'd identified as backlog of repairs.  We'll be 

      8  getting that money to start addressing those repair 

      9  items, and then also to set up an ongoing scheduled 

     10  repair program.  We had asked for $8 million per year 

     11  to set up a scheduled repair program.  But as -- as 

     12  it worked out in legislation, we didn't get any of 

     13  that money in fiscal year 2002, but got both years in 

     14  2003.  So that repair program will be set up. 

     15                  There is also park specific funding 

     16  set aside that was included in Proposition 8.  The 

     17  San Jacinto location has $2 million dedicated to it.  

     18  The Admiral Nimitz Museum, Sheldon Lake, and Levi 

     19  Jordan are projects that will begin in 2003.

     20                  Grant budget totals $29.5 million.  

     21  This is pretty similar to what you've seen in 

     22  previous years.  Last year, the main difference was 

     23  that we didn't have -- last year, we had Balcones 

     24  Canyonlands funds.  We don't have those this year.  

     25  Other than that, it's -- I guess the land and water 





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                                                                21
      1  money is a little bit higher this year, but these are 

      2  our ongoing grants that we fund each year.

      3                  So the total staff recommended budget 

      4  is $292 million.  That includes operating, capital, 

      5  grants, and the debt service on our revenue bonds.  

      6  Also, in full-time equivalents, we are recommending a 

      7  budget -- to budget 3,148 positions.  The legislature 

      8  caps the number that we can have at 3,035.  We are 

      9  over-budgeting by 3.7 percent. 

     10                  We don't think we're at risk of 

     11  reaching that cap with our -- the amount of turnover 

     12  that we have and the lapsed salary, time it takes to 

     13  fill a vacant position.  The law just requires that 

     14  we don't exceed the average of any four quarters -- 

     15  that average of the four quarters all together don't 

     16  exceed that cap. 

     17                  And that cap was increased last 

     18  biennium -- from last biennium by 81 positions.  Just 

     19  to show what happened last -- in the current year, in 

     20  2002, we budgeted -- we also over-budgeted.  We 

     21  budgeted 3,118 positions.  And we don't think we'll 

     22  even hit 3,000 for the whole year.

     23                  This year, we're also formalizing the 

     24  methodology for allocating overhead between our 

     25  funding sources.  And this was included in the budget 





.

                                                                22
      1  packet that we sent out last month.  Basically, what 

      2  it does is lays out exactly how we're going to fund 

      3  the administrative costs.  We start by pulling out 

      4  components of administrative costs that can be 

      5  specifically attributed to one or the other funding 

      6  sources. 

      7                  For example, the people that sell 

      8  hunting and fishing licenses are in Administrative 

      9  Resources, and the people who register and title 

     10  boats are in Administrative Resources.  Those are 

     11  fund 9 activities.  So we can directly charge those 

     12  people to that fund. 

     13                  Once we've pulled out those 

     14  components, we apply a general allocation which 

     15  parallels the funding for administrative divisions to 

     16  the funding mix of the program divisions that they 

     17  support.  And there are some exceptions to that 

     18  general allocation. 

     19                  An example of that would be the Human 

     20  Resources Division.  Because the Human Resources 

     21  Division serves people, we are allocating that 

     22  division based on the number of -- the ratio of FTEs 

     23  in parks versus FTEs in the fund 9 program divisions.  

     24  So the allocation is a little bit different than 

     25  applying this general allocation formula.





.

                                                                23
      1                  Also, as you'll recall, we are 

      2  attempting to study the species that the super-combo 

      3  holders are hunting and fishing.  We are doing a 

      4  two-year survey of super-combo holders so that we can 

      5  evaluate whether the allocation of those super-combo 

      6  revenues needs to be changed. 

      7                  The stamp funds are dedicated, can 

      8  only be used for certain activities, certain 

      9  purchases.  And we -- the agreement was that for the 

     10  two years that we were studying this and surveying 

     11  these super-combo holders, that we would hold those 

     12  allocations level with the fiscal year 2001 

     13  allocations.  And then by this time next year, we 

     14  will have completed our analysis of the surveys and 

     15  will be able to recommend changes to the allocation.

     16                  Budget policies are approved by you 

     17  each year.  The only change we're recommending this 

     18  year is to allow for expenditures related to bond 

     19  projects to be incurred prior to the time that we 

     20  actually get the bond proceeds because of the way 

     21  that Proposition 8 -- the general obligation bonds 

     22  were packaged. 

     23                  The bonds have to be sold one agency 

     24  at a time, for each agency at a time.  So we may not 

     25  actually get our bonds until as late as November, but 





.

                                                                24
      1  we want to go ahead and incur expenditures right -- 

      2  starting the first of September.  So we may actually 

      3  have to reimburse construction project costs later 

      4  with the proceeds of the bonds.  And just to be real 

      5  clear with Texas Public Finance Authority that this 

      6  was approved by the board, we included it in the 

      7  budget policy. 

      8                  Also, each year, the investment 

      9  policy is required by statute for all agencies and 

     10  must be renewed annually by the governing board.  

     11  Investment policy basically just says that all funds 

     12  must be deposited in the state treasury and that the 

     13  bank accounts must be authorized and approved by the 

     14  investment officers that are on staff, and that 

     15  adequate collateral exists on the bank accounts. 

     16                  One item here worthy of mentioning is 

     17  that the policy states that existing stock may be 

     18  sold.  Last summer, we talked to you about possibly 

     19  selling the stock that we have.  We have a small 

     20  amount of stock in our Varner Hogg endowment.  It 

     21  totals about $36,000 worth.  It's Tenaco and El Paso 

     22  Natural Gas stock that was given to us back in the 

     23  1950s by the Hogg family, Ima Hogg. 

     24                  The legal opinion that we got when we 

     25  looked into selling this was that the deed that 





.

                                                                25
      1  transferred the title of the stock to Parks and 

      2  Wildlife may prevent us from selling the stock unless 

      3  we get some sort of a waiver from the Hogg family.  

      4  So with all the other priorities that we had going on 

      5  this year, this one kind of took a back seat.  And 

      6  we'll look at it again this year and see if we can 

      7  possibly get a waiver from the family to sell the 

      8  stock, just for simplicity, to not have to deal with 

      9  it.

     10                  The investment policy also requires 

     11  that we report to you regularly on what's in our 

     12  funds and what kind of stock we have.  That's all I 

     13  have on the budget.  And if you don't have any 

     14  questions on that, I'll --

     15                  COMMISSIONER HENRY:  Before you do, I 

     16  have a question, but want to make a statement first.  

     17  At the last legislative session, we were taken to 

     18  task fairly severely on several points.  One, for 

     19  example, I remember very clearly was vehicles.  This 

     20  is a general question.  And in developing this 

     21  budget, have we adequately addressed the concerns -- 

     22  for example, the Senate Finance Committee, I'm 

     23  thinking, particularly raised, because they were 

     24  probably more critical than the House. 

     25                  Are we on safe ground going forward, 





.

                                                                26
      1  given the concerns that were raised?  Take vehicles 

      2  as an example.

      3                  MS. WHITTENTON:  Okay.  Well, what 

      4  they ended up approving was, they gave us the 

      5  authority to spend $4.2 million per year in vehicles.  

      6  And actually, our operating budget for vehicles -- 

      7  recommended budget is only $3.4 million.  And I think 

      8  some of the concerns about vehicles were that they 

      9  didn't want us buying vehicles necessarily for 

     10  headquarters. 

     11                  I think it's been a pretty long time 

     12  since we have replaced many of our headquarters 

     13  vehicles.  The majority of the vehicles in the budget 

     14  are for law enforcement officers and field staff in 

     15  the field divisions, such as wildlife and in some of 

     16  the fisheries areas.

     17                  MR. COOK:  As I recall, Commissioner, 

     18  the primary concern during the legislative session 

     19  and following the legislative session was in regards 

     20  to number of vehicles assigned to the Austin 

     21  headquarters area.  As a matter of fact, we started 

     22  addressing that prior to the session, have cut the 

     23  number substantially, and are on a -- on a fleet 

     24  management plan to further reduce that number.  And 

     25  we will do so.





.

                                                                27
      1                  COMMISSIONER HENRY:  I'm -- I've been 

      2  extremely pleased reading about it.  There's not much 

      3  you can do except read and watch the stupid 

      4  television.  But I've been very pleased, Madam 

      5  Chairman, with the kind of progress that's been made 

      6  in implementing the Bomer report. 

      7                  I raise this question because I would 

      8  hate to see you get beat up in the next session, and 

      9  the rest of us, over -- since we've made some fine 

     10  progress in that area, over issues that were 

     11  specifically raised with regard to the Department.  

     12  Knowing -- given the conditions that are going to 

     13  exist next session, what's likely to come back, if we 

     14  could assure them that not only have we -- the report 

     15  corrected these deficiencies, but through their 

     16  concerns, stepped up to the plate, as well.  I think 

     17  we would be in much better shape going forward.  And 

     18  that's the only reason I raise that.

     19                  CHAIRMAN ARMSTRONG:  I think that's a 

     20  good point.  I'm happy to report that I'm confident 

     21  in the implementation plan, that not only -- well, so 

     22  much of the Bomer report did deal with issues that 

     23  were raised by others, as well, not only Mr. Bomer 

     24  and his team. 

     25                  Scott Boruff and Suzy Whittenton have 





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                                                                28
      1  put together a comprehensive implementation plan that 

      2  addresses the issues, specifically vehicles.  And I'm 

      3  pleased with the progress we've made.

      4                  COMMISSIONER WATSON:  Suzy, I think 

      5  that, you know, the process you've gone through seems 

      6  to be, you know, very comprehensive.  And it looks 

      7  like it's pretty tight.  What do you do, and what was 

      8  the extent of the damages that, you know, we had on 

      9  July the 4th weekend?  I mean, that was very 

     10  significant numbers, as I understand.  And how do you 

     11  provide and what did you do about that?

     12                  MS. WHITTENTON:  It's interesting.  

     13  We've been tracking very closely the difference 

     14  between what the estimated revenue was and the actual 

     15  revenue.  And for the entire fiscal year, we were -- 

     16  or most of the fiscal year, we were ahead on park 

     17  revenue.  We were up.

     18                  COMMISSIONER FITZSIMONS:  For July?

     19                  MS. WHITTENTON:  Before July.  And so 

     20  when the floods hit, we did take a hit in revenue.  

     21  And I believe it was about -- I think that we lost 

     22  about $700,000 in revenue.  Was it more -- I can't 

     23  recall the number.  But as it -- it all seemed to 

     24  even out.  And it looks like we're going to be pretty 

     25  close to actually hitting the original revenue 





.

                                                                29
      1  estimate in parks.

      2                  Now, on the expenditure end, we did 

      3  -- we are having to spend some money to fix those 

      4  locations.  And since we have bond money, we've been 

      5  able to shift the projects that the bond money was -- 

      6  some of the bond money was set aside for to deal with 

      7  those locations.  And we also are -- I think this 

      8  week the FEMA inspectors were coming out to look at 

      9  what they could reimburse us for.  But I think we're 

     10  looking at -- expecting about $350,000 from FEMA.  

     11  But overall, it looks like we weren't hurt as badly 

     12  as we could have been, because our revenue was up.

     13                  COMMISSIONER FITZSIMONS:  How much 

     14  damage did we have?

     15                  MR. BORUFF:  $2.5 million.

     16                  MS. WHITTENTON:  Most of that was at 

     17  Garner.

     18                  COMMISSIONER WATSON:  But $300,000 is 

     19  not much recovery.

     20                  MS. WHITTENTON:  No.

     21                  MR. COOK:  We are getting great help 

     22  from TxDOT.  You know, we really are.  They always 

     23  come through.  And they have again here.  The guys 

     24  there at the park, I got to tell you, and surrounding 

     25  parks, they all kind of combined resources and people 





.

                                                                30
      1  and -- from different areas of the -- within the 

      2  agency -- had the park back in operation and 

      3  virtually full again within about 17 days.  So it was 

      4  just like the flood record.  It was just incredible.

      5                  COMMISSIONER ANGELO:  Commissioner 

      6  Avila --

      7                  COMMISSIONER AVILA:  Suzy and Scott, 

      8  this might be for you.  The park specific funding 

      9  that you briefed on, San Jacinto, $2 million, and 

     10  Admiral -- San Jacinto, Admiral Nimitz, $600,000, is 

     11  that -- is that design or is that construction?

     12                  SPEAKER:  Short of -- in a way of 

     13  asking, where are we on the development of those 

     14  things?

     15                  MR. BORUFF:  Those park specific are, 

     16  in most cases, Commissioner, both.  Primarily design, 

     17  I will say.  I mean, most of those funds that were 

     18  allocated for, those funds were not significant to go 

     19  to full-fledge construction. 

     20                  So, for example, at Levi Jordan, 

     21  we're going to use the money that was allocated there 

     22  to stabilize the structure so that they won't fall 

     23  into any worse disrepair.  And we're going to use 

     24  some of that money to do a master plan to kind of 

     25  give us direction.  So those are typically what we're 





.

                                                                31
      1  going to use most of those funds for. 

      2                  Some -- the construction that will 

      3  occur out of those funds are going to be fairly 

      4  minor.  There may be some restroom facilities, for 

      5  example.  There may be some vertical construction.  

      6  But most of that money is going to be in planning and 

      7  restoring what's there and doing infrastructure 

      8  that's not going to be very visible, under the ground 

      9  infrastructure, water, wastewater systems, and those 

     10  kinds of things.

     11                  COMMISSIONER AVILA:  Are they going 

     12  to represent moving ahead full fledge with any of 

     13  them because we just don't have the money yet.  

     14  Right?

     15                  MR. BORUFF:  Yes, sir.  That is going 

     16  to be our strategy in the future.  We will only do 

     17  what we have money to do.

     18                  COMMISSIONER AVILA:  Okay.  Thanks.

     19                  COMMISSIONER ANGELO:  Commissioner 

     20  Montgomery.

     21                  COMMISSIONER MONTGOMERY:  Quick 

     22  question.  How are we funding the projects that we're 

     23  commencing prior to the issuance of the bonds?

     24                  MR. BORUFF:  If you're talking about 

     25  the major legacy project, Commissioner, we continue 





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                                                                32
      1  to work with the Parks and Wildlife Foundation and 

      2  other resources to try to secure funding to complete 

      3  those projects.

      4                  COMMISSIONER MONTGOMERY:  

      5  Specifically, but we're going to start projects 

      6  before the bonds are sold.  I just didn't know --

      7                  MR. BORUFF:  That was a phenomena 

      8  that fell out of some information that we had early 

      9  on, that the TPFA might not be able to make the funds 

     10  available until sometime after the 1st of September. 

     11  At first flush, we were hearing maybe in October.  We 

     12  now are hearing that probably the money will be 

     13  forthcoming late in September.  However, we do want 

     14  to go ahead and start the design process September 

     15  1st. 

     16                  We -- you know, we're trying to get 

     17  ahead of the curve.  And we want to go ahead and 

     18  start the design for most of those major projects 

     19  September 1st, knowing that later in September the 

     20  money will be forthcoming.

     21                  COMMISSIONER MONTGOMERY:  Just a 

     22  month window, then.

     23                  MR. BORUFF:  It's just a timing 

     24  issue.

     25                  MR. COOK:  These guys have been 





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                                                                33
      1  Working really, really well with TPFA.  And they have 

      2  cleared this thing.  I mean, it's a go.  It's just 

      3  when they get to the point in the stack.

      4                  MR. BORUFF:  There are eight other 

      5  agencies that are having money issues.  And so we 

      6  don't know exactly where we're going to fall in that 

      7  priority during the month of September.

      8                  MS. WHITTENTON:  I think your 

      9  question was, if we had to pay a bill prior to the 

     10  time we got the funds in, where would we pay it from.  

     11  And we would probably have to look and see what funds 

     12  we had available at the time probably.

     13                  MR. BORUFF:  I don't see that 

     14  happening.  We're not that fast at design.

     15                  COMMISSIONER ANGELO:  Any other 

     16  questions or comments?

     17                  MR. BORUFF:  I might just give you a 

     18  little piece of information relative to your question 

     19  earlier, Commissioner Henry.  The report that went 

     20  downtown last session that started us down the road 

     21  relative to vehicles and the response we got showed 

     22  us 247 vehicles here at headquarters.  Within a few 

     23  months after that, we had reduced that number to 114, 

     24  less than half.  The Fleet Management Plan is in its 

     25  draft and will be presented to Mr. Cook and the 





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                                                                34
      1  Commission in a briefing form at the next Commission 

      2  meeting.  But we will have a fully endorsed Fleet 

      3  Management Plan in place before the session.

      4                  COMMISSIONER ANGELO:  Let's move on 

      5  to the appropriations request, Suzy.  Thank you, 

      6  Scott.

      7                  MS. WHITTENTON:  Our appropriations 

      8  request for the next biennium, 2004-2005, is actually 

      9  due this Friday.  We are putting the finishing 

     10  touches on it.  And if you'll recall, what we're 

     11  limited and asking for is the amount that we -- an 

     12  amount equal to the amount we spent in 2002, plus the 

     13  amount we've budgeted in 2003.  And that anything 

     14  over and above that, they call them exceptional 

     15  items.  And so we have to ask for those specifically. 

     16                  And what we're looking at asking for 

     17  is -- our first priority is to fund the salary and 

     18  benefit cost increases that were passed last session.  

     19  Although we did get additional appropriation 

     20  authority for those costs, we didn't have the revenue 

     21  in our funds to cover it.  So the cost increases had 

     22  to be absorbed within our base level funding out of 

     23  our operating costs.  So we're going to ask them to 

     24  make that right and give us the money.

     25                  Our second request is for additional 





.

                                                                35
      1  general revenue for park operations.  Since the parks 

      2  contribute to the local economies and since the 

      3  potential revenue increases are not -- are not really 

      4  there, we are asking for $4 million per year to 

      5  operate state parks, along with 43 new positions. 

      6                  The third request addresses the need 

      7  to fund a game warden class of 35 cadets in fiscal 

      8  year 2004 from general revenue, and to continue those 

      9  -- to fund those positions in 2005.  Our game wardens 

     10  are all funded currently out of Account 9, the Game, 

     11  Fish and Water Safety Account.  And we believe 

     12  general revenue funding is needed to cover some law 

     13  enforcement activities that are not related to 

     14  hunting and fishing, due to the statutory limits on 

     15  the use of hunting and fishing license fee revenue.  

     16  And also to increase the number of the game wardens 

     17  we have in the field.  So that's -- what we're 

     18  looking at there is $5 million in the first year, 

     19  $1.3 million in the second year, plus the 35 

     20  full-time equivalents.

     21                  The last item on the slide is to deal 

     22  with land acquisitions.  In order to take advantage 

     23  of gifts, grants, or federal funds that are given to 

     24  us to acquire new land, we've requested a rider that 

     25  would exempt land purchases that are financed 





.

                                                                36
      1  entirely from outside sources, exempt them from the 

      2  restrictions on the capital budget rider, because the 

      3  capital budget rider doesn't allow any more to be 

      4  spent than what's in that rider.  And we don't know 

      5  two years out whether we're going to have any of 

      6  these gifts. 

      7                  If you'll remember the Government 

      8  Canyon purchase, the Kallison piece that was 

      9  purchased, we didn't have the authority to do that, 

     10  even though we were given the money from the City of 

     11  San Antonio and also from the Land and Water 

     12  Conservation funds.  We couldn't actually do it 

     13  without asking for extra approval. 

     14                  So what we're asking for here is an 

     15  exemption from that rider in those cases where it 

     16  doesn't cost the State anything.  And included in 

     17  that request is that it would be subject -- any of 

     18  these purchases would be subject to Commission 

     19  approval and subject to the Agency's ability to 

     20  certify that additions -- additions of land wouldn't 

     21  increase our ongoing operating costs.  So we have 

     22  asked for that. 

     23                  And we've also got a few more here.       

     24  We -- last session, the legislature directed us to 

     25  start funding some of our project-related salary 





.

                                                                37
      1  costs in infrastructure to bond funds.  So basically, 

      2  what they did was they cut $350,000 of general 

      3  revenue in each year and asked us to replace that 

      4  funding with bond funds. 

      5                  But because bond covenants and IRS 

      6  code restrictions regulate the percentage of bond 

      7  proceeds that can be used for indirect costs, we're 

      8  asking that the -- we get the general revenue funds 

      9  back for these sources.  Making this a little 

     10  uncomfortable having to fund that out of bond funds. 

     11                  And we are asking for authority to 

     12  enter into an interagency contract with the 

     13  Comptroller's Office on boat and motor boat sales and 

     14  use tax collections.  And what that is about is that 

     15  our game wardens frequently encounter situations 

     16  where there's boat dealer fraud or other violations 

     17  that -- where they're failing to remit sales and use 

     18  taxes on boat sales.  And because the Comptroller's 

     19  Office has the authority for collecting these sales 

     20  taxes, we only get five percent of those collections.  

     21  We want to enter into an agreement where, if our game 

     22  wardens are able to increase the sales tax collected 

     23  by the State, that we should at least have our costs 

     24  reimbursed to us by the Comptroller's Office from 

     25  those collections. 





.

                                                                38
      1                  We have talked to the Comptroller's 

      2  Office about this idea, and they are in favor of 

      3  proceeding with that.  But we would have to ask for 

      4  appropriation authority to get those reimbursements.  

      5  That's a zero -- net zero cost to the bill, so I 

      6  think that would have a good chance of flying. 

      7                  And lastly here, we want to ask to 

      8  clarify the floating cabins program.  Last session, 

      9  Senate Bill 1573 authorized a floating cabins program 

     10  which created two new dedicated general revenue 

     11  accounts.  And one of those was for permit fees that 

     12  could be used to clean up illegal or abandoned 

     13  floating cabins and the debris in the coastal waters.  

     14  And what happened -- or to refund the money back to 

     15  the permit holder, if the permit holder gave back 

     16  their permit. 

     17                  But what happened was the fund didn't 

     18  survive the funds consolidation bill.  And so we 

     19  actually -- the money ended up going to straight 

     20  general revenue.  And if it's not used by the end of 

     21  the year, it lapses.  So we basically lost the money 

     22  that we collected back to general revenue.  So what 

     23  we're asking for is the authority to get the money 

     24  back and be able to spend it to do the clean-up.  And 

     25  that -- that's about $112,000 a year.  That probably 





.

                                                                39
      1  was confusing. 

      2                  It's confusing, because the way 

      3  general revenue dedicated accounts work is they have 

      4  to have specific authority to be dedicated.  And if 

      5  -- there's a funds consolidation bill that 

      6  consolidates most funds into just straight general 

      7  revenue.  And if you're not exempted -- if your fund 

      8  is not exempted from that bill, then it can't be 

      9  treated like we treat Account 9 and Account 64, as 

     10  dedicated sources where we don't lose the cash in 

     11  there. 

     12                  But because of an oversight during 

     13  the session, that account ended up being treated just 

     14  as straight general revenue.  So we want to recoup 

     15  those revenues.

     16                  COMMISSIONER ANGELO:  So 

     17  theoretically, that's just a technicality?

     18                  MS. WHITTENTON:  It is a 

     19  technicality.  We have talked at length with the 

     20  Comptroller's Office, the Senate Finance Committee, 

     21  and the House Appropriations Committee about this 

     22  problem, and had asked to get that -- get an 

     23  exemption.  They weren't willing to do that.  And so 

     24  we'll deal with it next session.  So this is our 

     25  request, to deal with it next session.  It's not a 





.

                                                                40
      1  lot of money, but we do want to have the authority to 

      2  do the clean-up.

      3                  COMMISSIONER ANGELO:  Any other 

      4  questions for Suzy on this item?  Commissioner 

      5  Montgomery.

      6                  COMMISSIONER MONTGOMERY:  At the 

      7  budget briefing, we talked about requesting authority 

      8  to set up specific dedicated repair replacement 

      9  reserves.  And I couldn't remember if we decided that 

     10  was definitely going on the legislative agenda or 

     11  not.  Did you-all...

     12                  MS. WHITTENTON:  Construction repair.

     13                  COMMISSIONER MONTGOMERY:  Yeah.  So 

     14  that we weren't put in the box of having, every ten 

     15  or 15 years, the issue that rather than reserve in 

     16  advance.  I know it's not budgeted.

     17                  MS. WHITTENTON:  Right.  We do 

     18  have --

     19                  COMMISSIONER MONTGOMERY:  We're 

     20  trying to get the authority to do that, I thought.

     21                  MS. WHITTENTON:  We do have it in 

     22  Proposition 8.  That was one of our requests that 

     23  went in last session.  We asked for $8 million a year 

     24  to set up a scheduled maintenance program.  And they 

     25  -- it was granted to us through Proposition 8, 





.

                                                                41
      1  through the general obligation bonds.  And we do have 

      2  $8 million a year set aside through those bonds up 

      3  through the year 2006, assuming we get authority for 

      4  the bonds.  And, of course, we have asked for the 

      5  proposition -- the appropriation of those bonds for 

      6  the next biennium, as well.

      7                  COMMISSIONER MONTGOMERY:  Why do we 

      8  get that?  There's no additional need that we need to 

      9  address.

     10                  MR. BORUFF:  In the half.

     11                  COMMISSIONER ANGELO:  The request 

     12  that we're making in the legislative session, these 

     13  exceptional item requests, are really very modest.  

     14  And probably that's -- hopefully, that will be 

     15  appreciated, considering the financial situation that 

     16  this state is predicted to be in.  And, of course, 

     17  it's also -- the salary issue is the number one 

     18  priority and may be the most difficult to get.  But 

     19  by making an overall modest request, I would hope 

     20  that we would be able to convince the legislature 

     21  that that's appropriate.  Commissioner.

     22                  COMMISSIONER FITZSIMONS:  From a -- I 

     23  attended the briefing at the Appropriations Committee 

     24  where Scott and Bob did an excellent job of 

     25  presenting this to the Appropriations Committee 





.

                                                                42
      1  members.  And I wanted to ask Scott if I could get a 

      2  copy of that.  You were complimented on the charge 

      3  you gave on the capital expenditures and how those 

      4  come through time over the bond issues.  And if I 

      5  could get another copy of that. 

      6                  It was very well received by the 

      7  committee, and they did an excellent job of laying 

      8  out support in those issues.  And it hasn't always 

      9  been a happy time at the Appropriations Committee.  

     10  And I just want to tell you they did a great job.  

     11  Bob, you're to be commended.

     12                  COMMISSIONER ANGELO:  Any other 

     13  comments or questions?  If there's no objections, 

     14  we'll place this item on the agenda tomorrow for 

     15  public comment and action by the Commission.  We'll 

     16  move on to item number three, which is an update on 

     17  our point-of-sale license system.

     18                  ITEM 3:  WorldCom Update.

     19                  MS. WHITTENTON:  Thank you, 

     20  Mr. Chairman.  The good news is the system seems to 

     21  be stable and the Hypercom units are working very 

     22  well.  We began selling licenses for the new license 

     23  year on August 15th, which is now almost two weeks 

     24  ago.  The first day, we experienced some problems 

     25  with the PC version of the application, which is used 





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                                                                43
      1  primarily for law enforcement offices, and also at a 

      2  few of the low volume agent locations. 

      3                  Problems were pretty troublesome in 

      4  that the system would go down for periods of time, an 

      5  hour or two hours at a time.  And so our law 

      6  enforcement offices handled it very well, but it was 

      7  a problem that existed only on that first day.  The 

      8  problems were cleared up by the second day. 

      9                  We also had experienced a high call 

     10  volume at the WorldCom help desk that first day, a 

     11  lot more than they expected.  So there were some 

     12  calls not getting answered.  That problem has 

     13  reoccurred recently.  And it seems to be due to a 

     14  problem in New York.  New York state just rolled out 

     15  a new WorldCom system, as well.  However, they didn't 

     16  run it through a pilot phase like we did ours.  They 

     17  just turned it on when they were ready to sell 

     18  licenses.  And they are experiencing huge call 

     19  volumes. 

     20                  And so the same help desk is 

     21  answering the calls for New York as they are for 

     22  Texas.  So we are having -- we were having problems 

     23  yesterday with this, as well.  We also had some sales 

     24  being made off-line on that first day.  But all in 

     25  all, it went -- it went pretty well.





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                                                                44
      1                  We sold over 21,000 licenses that 

      2  day.  And what's interesting is this chart -- we 

      3  charted out the number of licenses sold by day last 

      4  year compared to this year.  The blue line is this 

      5  year.  The red line is last year.  You remember we 

      6  ran that promotion last year to try to shift sales to 

      7  before Labor Day, which worked.  We got a lot of 

      8  people to buy early.  We didn't run that promotion 

      9  this year because we were uncertain as to what was 

     10  going to happen with WorldCom's bankruptcy.  And we 

     11  were a little gun shy, so we didn't run the 

     12  promotion. 

     13                  And I thought this was real 

     14  interesting, the way the numbers tracked, that we 

     15  must be creatures of habbit, because on each of the 

     16  days you're seeing the exact same pattern.  And what 

     17  my theory is - and I think the license staff agrees - 

     18  is that we think that we're going to catch up.  The 

     19  blue line is going to catch up with the red line 

     20  Labor Day weekend.  Actually, it will be starting 

     21  Thursday, starting tomorrow.  Our biggest days are 

     22  Thursday, Friday, and Saturday of Labor Day weekend.  

     23  And it looks like, since people didn't buy -- as many 

     24  people didn't buy early, we're going to be 

     25  experiencing some big volumes on those days.





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                                                                45
      1                  And we also have fewer agents this 

      2  year.  I don't think that that's having a big effect, 

      3  but it could.  We also put this in -- I'm sorry.  No.  

      4  We also put this in bar graph form, looking at the 

      5  numbers sold, and also by the amount of revenue.  

      6  Numbers sold is the orange column.  And the revenue 

      7  is in the blue column.  Revenue is down as of the end 

      8  of day yesterday, down 21 percent.  But, again, we'll 

      9  know by the end -- by Tuesday whether the theory 

     10  holds true, that people just didn't buy early this 

     11  year.

     12                  And when I compared this year to two 

     13  years ago, when we also didn't run the promotion, 

     14  we're actually up this year over two years ago, by 

     15  about 5 percent.  So I think that -- there's some 

     16  reason to believe that that's the case, that we'll 

     17  catch up over Labor Day weekend.

     18                  As I mentioned, the historic peek 

     19  sales are -- in the next few days, we expect to sell 

     20  over 300,000 licenses in the next five days.  So far, 

     21  the most sold in any one day was yesterday.  We sold 

     22  28,000 licenses yesterday.  And we should average 

     23  about 70,000 a day over that next five-day period.  

     24  And there will be some days we'll probably go over 

     25  90,000, maybe even over 100,000 each day.  So 





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                                                                46
      1  hopefully our system will continue to be able to 

      2  handle these volumes. 

      3                  We're also trying to assist with a 

      4  recommendation to help with the problems at the call 

      5  center, at the help desk, so that we might be able to 

      6  take some of those calls at our office here, divert 

      7  some of them, just so we don't have any of our agents 

      8  out there not getting their calls answered, or not 

      9  getting them answered promptly.  So far, things are 

     10  going pretty well, though. 

     11                  We did have -- held training sessions 

     12  throughout the summer at nine different locations.  

     13  We had a really good turnout.  This was to train 

     14  agents on any questions they had on the Hypercom 

     15  device.  We had about 300 people attend.  And we plan 

     16  to send a follow-up survey to see what they thought 

     17  about it, if they want to continue these future 

     18  training programs. 

     19                  We also met with our license agent 

     20  advisory committee on the 6th of this month.  We had 

     21  nine members attending.  It was a pretty good 

     22  meeting.  We had a representative from WorldCom, Bob 

     23  Parker, come and explain to the agents what the 

     24  bankruptcy meant to WorldCom, to the system, to the 

     25  agents, and that there would be basically no 





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                                                                47
      1  disruption of services just because WorldCom is in 

      2  bankruptcy. 

      3                  We also showed them our paper license 

      4  contingency, and didn't get too many of them -- get 

      5  too alarmed with that.  They just asked that they be 

      6  given some clear instructions if we ever had to go 

      7  that route. 

      8                  And then some of the license agents 

      9  asked for some changes to our web site.  So we have 

     10  changed some of our web site information.  We've -- 

     11  currently, we've already got available a section on 

     12  frequently asked questions and places they can go to 

     13  look up what the rules are.  There's even a place 

     14  where you can go look up how to load your paper into 

     15  the printer.  And it shows pictures, step-by-step, 

     16  how to get that done.  It's a pretty good web site. 

     17                  There's a -- one section for the 

     18  public to go to and another section for the agents to 

     19  go to.  One of the enhancements that the agents asked 

     20  for was a searchable database that would search by 

     21  agent within city and county.  So we are planning an 

     22  enhancement there. 

     23                  That's all I have on the update on 

     24  that system.  I'd be happy to take any questions.

     25                  COMMISSIONER ANGELO:  Any questions 





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                                                                48
      1  from the Commission?

      2                  CHAIRMAN ARMSTRONG:  I'd like to make 

      3  a comment on this.  It's, here I go again.  The last 

      4  year has been an experience for the staff dealing 

      5  with this WorldCom issue and whatnot.  And my 

      6  compliments, again, to Bob and the staff for the 

      7  perseverance they showed in tackling each obstacle as 

      8  it came up and doing so successfully.  And my 

      9  compliments to WorldCom, also, and the folks that 

     10  worked almost on a daily basis. 

     11                  I know that from Bob on down, this 

     12  was a day-to-day deal.  And nobody seemed to be 

     13  totally sure that when the switches were turned on, 

     14  whether the lights were going to go on.  And they 

     15  did.  And things are going smoothly.  And it's not by 

     16  accident.  There was a lot of very hard work that 

     17  went into this.  Thank you all very much.

     18                  MR. COOK:  I second that, also.  I 

     19  saw John Wilson come in a while ago.  I know that 

     20  John was confident it would go on just like that and 

     21  work like a charm.  And he never showed a bit of 

     22  anxiety at all.  And -- but we made it.  And I 

     23  appreciate the group very, very much.

     24                  COMMISSIONER ANGELO:  Any other 

     25  comments?  If not, we'll move on to item number 4, 





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                                                                49
      1  which is the license legibility rules.  A very 

      2  exciting item.

      3                  ITEM 4:  LICENSE LEGIBILITY RULES:

      4                  MS. WHITTENTON:  At least we can make 

      5  this one really quick.  Section 30 of the Sunset 

      6  Bill, Senate Bill 305, required Parks and Wildlife's 

      7  rules to specify the standards for licenses, 

      8  including legibility.  So we talked about this at the 

      9  May Commission meeting, adding to the rules for 

     10  legibility. 

     11                  The proposed rules were posted in the 

     12  Texas Register on July 12th.  And they include -- 

     13  they say that licenses must be printed on durable 

     14  paper, must be waterproof, tear resistant, and the 

     15  print must be indelible.  The print must be of a 

     16  reasonable size, given the constraints of the overall 

     17  size of the license, and in no case less than 6 point 

     18  font.  Also, the print must be a color that contrasts 

     19  with the background. 

     20                  These provisions do not apply to 

     21  licenses sold over the internet and printed directly 

     22  by customers.  In case we ever go to that, we 

     23  considered that with our contingency, as well.  And 

     24  there's also a provision in the rules that says that 

     25  the executive director may waive the provisions in 





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                                                                50
      1  case of unforeseeable events or emergencies.  We did 

      2  post this on July 12th and have received no public 

      3  comment, surprisingly.

      4                  COMMISSIONER ANGELO:  Do we have any 

      5  comment or questions from the Commission?  If there's 

      6  no objection, I place this item on the agenda for 

      7  tomorrow's meeting for public comment and action by 

      8  the Commission.  And we'll move on to item number 5.  

      9  And thank you, Suzy, for all your good work. 

     10                  Tim Hogsett will present the 

     11  information on different grants.  Mr. Hogsett.

     12                  ITEM 5:  GRANTS.

     13                  MR. HOGSETT:  Good morning.  I'm Tim 

     14  Hogsett, Director of Recreation Grants Program in the 

     15  State Parks Division.  Item 5 is a preview of 

     16  proposed funding that we'll be bringing to you 

     17  tomorrow for 5 grant programs, the first being the 

     18  Outdoor Recreation Grant Program.  This is our 

     19  typical $500,000 maximum grants to local governments.  

     20  It's the largest program -- grant program that we 

     21  have. 

     22                  We have approximately $6 million 

     23  available each six months for your consideration.  We 

     24  have received 38 applications for the January 31st 

     25  deadline, requesting $15.7 million.  We have reviewed 





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                                                                51
      1  and scored all of those projects using the scoring 

      2  system that you have adopted.  And you can find on 

      3  page 87 of the full item the list of projects, rank 

      4  ordered.  And we're going to be asking you tomorrow 

      5  to consider approving the first 15 applications for 

      6  $6,607,022. 

      7                  A couple of things I might note.  We 

      8  had record high scores this time.  That seems to be a 

      9  continuing trend, that projects are scoring higher 

     10  and higher.  And also, the lowest project that we're 

     11  recommending for funding, its score is also a record 

     12  high, if that makes any sense.  The bottom line is 

     13  competition is getting more and more keen, and we're,   

     14  unfortunately, not able to fund a lot of folks.  

     15  That's all I have on that one.

     16                  COMMISSIONER ANGELO:  Any questions?  

     17  Move on to the next one.

     18                  MR. HOGSETT:  Okay.  The next program 

     19  that we're going to bring you recommendations for 

     20  tomorrow is our brand new Small Communities Grant 

     21  Program, the one which you've just approved recently 

     22  as a permanent program.  It's for small communities 

     23  of 20,000 or less.  They are 50 percent matching 

     24  grants.  Very similar to the larger grant program.  

     25  We hope that we have a simple application process.  





.

                                                                52
      1  It's been an extremely popular program. 

      2                  As we did in the pilot - we got about 

      3  60 applications that time - we've received 62 

      4  applications for our April 30th deadline, requesting 

      5  $2.7 million in match.  And again, we used the 

      6  scoring system that you've adopted for rank ordering 

      7  these projects.  And that list can be found on page 1 

      8  -- page 87. 

      9                  And those -- tomorrow we're going to 

     10  be recommending to you funding for the first 22 

     11  projects in the amount of $980,293.  That's about 

     12  double what we did in the pilot.  We -- you set aside 

     13  $500,000 for that pilot.  And the program was so 

     14  popular and so successful that we're recommending now 

     15  that we take some of our federal land and water 

     16  conservation fund money and supplement that and about 

     17  double the amount that we're going to recommend.

     18                  COMMISSIONER ANGELO:  Any questions 

     19  on this one?  If not, we'll move on to the Regional 

     20  Park Grants.

     21                  MR. HOGSETT:  Regional Park Grants.  

     22  This is also a new program which you just adopted 

     23  final rules for.  It is now a permanent part of our 

     24  arsenal for helping local governments.  It is 

     25  designed to support multijurisdictional projects, 





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                                                                53
      1  cooperation between local governments and public and 

      2  private sector, and projects of regional significance 

      3  in metropolitan areas.  And the kinds of projects 

      4  that we accept applications for can be either 

      5  intensive use recreation or projects that have a 

      6  strong conservation element to them. 

      7                  We received -- and I was a little 

      8  surprised at this.  We received only five 

      9  applications for the June 1 deadline, requesting 17 

     10  -- I'm sorry -- $7.27 million.  We used the scoring 

     11  system that you adopted to rank order those.  And 

     12  that list is on page 153.  As you can tell, there's a 

     13  dramatic difference between the highest scoring 

     14  project and the second one and the other -- the four. 

     15                  And so, based on that, we're 

     16  recommending that we only fund one project, that 

     17  being the LCRA project.  And that's what we're going 

     18  to be bringing to you tomorrow, is a recommendation 

     19  for funding that project in the amount of $2 million, 

     20  $1 million of which will come from the Texas 

     21  Recreation's Parks account and $1 million from the 

     22  Land and Water Conservation funds.

     23                  COMMISSIONER ANGELO:  I think that, 

     24  based on some comments that I've heard from some of 

     25  the folks that made application, not only 





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                                                                54
      1  coincidentally, because one of them is from Midland, 

      2  but from others, through the people in Midland, 

      3  there's going to be some -- there may be some people 

      4  present who are going to be concerned about our 

      5  scoring system. 

      6                  And I thought maybe tomorrow it might 

      7  be good if you would, again, brief the Commission -- 

      8  or very quickly run through what the scoring system 

      9  is.  And if you have -- maybe after they make their 

     10  comments, if there's someone there --

     11                  MR. HOGSETT:  Okay.  Be glad to.

     12                  COMMISSIONER ANGELO:  -- address what 

     13  changes might or might not be appropriate to make it 

     14  more fair.  It seems that some of them feel that 

     15  there's some -- they have some concern about whether 

     16  or not the system, as we've got it set up, gives 

     17  everyone an equal opportunity to compete.  So if you 

     18  might be prepared to do that tomorrow, I think that 

     19  would be helpful.

     20                  MR. HOGSETT:  Sure.  Be glad to.

     21                  COMMISSIONER ANGELO:  Are there any 

     22  other questions or comments on this one?  Move on to 

     23  the Recreational Trail Grants, Tim.

     24                  MR. HOGSETT:  Recreational Trails 

     25  Grant.  These are passed through federal funds.  It's 





.

                                                                55
      1  an 80/20 matching program.  They're funds from 

      2  gasoline tax on off-road recreational vehicles.  We 

      3  can fund both motorized and non-motorized trails.  We 

      4  received a record number of applications, 83, 

      5  requesting $6.6 million.  The projects were reviewed, 

      6  and, again, were prioritized, and prioritized by the 

      7  Trails Advisory Board. 

      8                  And the recommendation tomorrow is 

      9  for funding 32 projects in the amount of $2,072,937.

     10                  COMMISSIONER ANGELO:  Any questions 

     11  or comments?

     12                  COMMISSIONER HENRY:  I noticed you 

     13  said Trails Advisory Board.

     14                  MR. HOGSETT:  Uh-huh.

     15                  COMMISSIONER HENRY:  Is that a 

     16  condition from the prior?

     17                  MR. HOGSETT:  No.  That -- and that's 

     18  a requirement of the federal law.

     19                  COMMISSIONER HENRY:  Okay.  But 

     20  that's the only one where we use an advisory 

     21  committee?

     22                  MR. HOGSETT:  At this time, yes.

     23                  The final program this morning is the 

     24  National Hunter Education Target Range Program.  

     25  These are grants to either public entities or private 





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                                                                56
      1  sector, like shooting associations, et cetera.  

      2  They're federal pass-through funds.  They're 75 

      3  percent matching funds.  The third bullet is an 

      4  error.  There are only two projects being recommended 

      5  instead of three, each of them being $60,000.  Just 

      6  noticed this a few minutes ago. 

      7                  And the two projects that will be 

      8  recommended to you for funding tomorrow are for 

      9  Archer County, the Archer County Shooting 

     10  Association, and the Eastland, Eastland Rifle and 

     11  Pistol Association.

     12                  COMMISSIONER ANGELO:  Any questions 

     13  or comments?  Hearing none, this item will be -- or 

     14  these items will be placed on the agenda for 

     15  tomorrow.

     16                  COMMISSIONER MONTGOMERY:  On the 

     17  trails program, Tim, just looking at the percentage, 

     18  we get $2.2 million out of $50 million.  Are we being 

     19  allocated fairly on the federal level?

     20                  MR. HOGSETT:  It's based on a formula 

     21  based on the consumption of off-road fuels.  It's 

     22  really -- it's like similar to the Land and Water 

     23  Conservation fund.  It's an apportionment based on a 

     24  percentage that we really don't have any -- any say 

     25  over.  And...





.

                                                                57
      1                  COMMISSIONER MONTGOMERY:  I just 

      2  wondered if we're seven or eight percent of the 

      3  population of the country and getting four percent of 

      4  funds of that program.  I just want to -- ought to 

      5  ask our representatives to look at the funding 

      6  formula.

      7                  MR. HOGSETT:  I agree.

      8                  COMMISSIONER ANGELO:  Is there any 

      9  way to look into it and make sure that it's being 

     10  handled fairly?

     11                  MR. HOGSETT:  Absolutely.  Sure.  

     12  We'll do that.  (Inaudiable).

     13                  COMMISSIONER ANGELO:  Any comments or 

     14  questions?  If not, this item will be placed on the 

     15  agenda for tomorrow's meeting for public comment and 

     16  action by the Commission.  Thank you, Mr. Hogsett.

     17                  MR. HOGSETT:  Thank you, sir.

     18                  COMMISSIONER ANGELO:  Okay.  Unless 

     19  there is some other business to be brought before the 

     20  committee, that concludes the work of the Finance 

     21  Committee for this morning.  Madam Chairman?

     22                  (HEARING ADJOURNED)

     23  

     24   

     25   





.

                                                                58
      1                REPORTER'S CERTIFICATE

      2   STATE OF TEXAS   )

      3   COUNTY OF TRAVIS )

      4   

      5        I, SHANA R. WISE, a Certified Court Reporter in and 

      6   for the State of Texas, do hereby certify that the 

      7   foregoing pages constitute a full, true, and correct 

      8   transcript of the minutes of the Texas Parks and 

      9   Wildlife Commission on August 28, 2002 in the Commission 

     10   Hearing Room of the Texas Parks and Wildlife 

     11   Headquarters Complex, Austin, Travis County, Texas.

     12        I FURTHER CERTIFY that the proceedings of said 

     13   public meeting were reported by me and accurately 

     14   reduced to typewriting under my supervision and control.

     15        WITNESS MY HAND this the 1st day of November, 2002.

     16   
          
     17   
                                                               
     18                SHANA R. WISE, CSR NO. 6642    
                       Expiration Date:  12-31-02
     19                7800 IH 10 West
                       Suite 100
     20                San Antonio, Texas  78230
                       (210) 377-3027
     21   
          
     22   EBS NO. 133345

     23   

     24   

     25   

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