Texas Parks and Wildlife Commission
Finance Committee Meeting

April 5, 2006

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

BE IT REMEMBERED, that heretofore on the 5th day of April, 2006, 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 FITZSIMONS: I will convene Finance at 2:25. The first order of business, approval of previous Committee meeting minutes, which have already been distributed. Is there a motion for approval?

COMMISSIONER BROWN: Moved.

COMMISSIONER FRIEDKIN: Second.

COMMISSIONER FITZSIMONS: Moved by Brown. Second by Friedkin. All in favor, aye.

(A chorus of ayes.)

COMMISSIONER FITZSIMONS: Any opposed?

(No response.)

COMMISSIONER FITZSIMONS: Hearing none, the motion carries.

Item 1. Land and Water Plan Update. Mr. Cook?

MR. COOK: Thank you, Mr. Chairman. One of our Land and Water goals as you may recall, is to improve the financial systems that we use to conduct business with. The Department is currently developing two Requests for Offer for system improvements. The first relates to our Department's accounting system. We plan to acquire and implement a grants module that would allow us to better manage our various grants. I have got a little more information for that, on that. We also plan to reprogram the general ledger to better integrate with all of the other portions of that system. The second RFO relates to our license point-of-sale system. We talked in the last meeting about our current license system contract expiring at the end of August, of 2008. This Request for Offer will solicit further feedback from interested vendors. We have been in contact with many of them. You will hear more about our license system plans in the agenda item for our license assessment efforts. I am going to hand you this. It is some information that we received just this week on federal aid apportionment, and again, it goes back to our grants, our grants module that we are talking about. And it kind of shows you the significance of keeping up with these funds and being able to account for them.

We recently received a draft report from the State Auditor's Office on their Fund 9 audit, which involves these dollars that you are looking at in these appropriations. The report includes recognition for establishing an effective process for collecting revenue from the sale of hunting and fishing licenses and for collecting boat registration and titling fees in Texas. The report also includes some recommendations relating to our license systems control, and allocating super combo revenue. And I think as time goes by, you will be hearing more about that. Once the report is final, we will provide more detail to you on how we are going to respond and what we are going to do.

Take a quick glance, if you would, at the two pages that I handed you. It just gives you a little background on the top sheet on our sportfish restoration appropriation history — apportionment history, for five years, for six years there. And you can see that Texas, this time, was granted $14.7 million which ties with Alaska and with California. And those numbers again, are based on the number of fishermen, population, size, area size and those kind of things. And you can see how Texas compares to other states that you may or may not be familiar with.

On the wildlife restoration apportionment, I just gave you 2005, and the total amount of money that has come to wildlife from the Pittman Robertson, from the tax on the firearms and ammunition — that gives you an idea of how important that is to this agency. And that is important, that we are able to account for those resources to the State Auditor's Office, to the federal audit, and the whole bit. We anticipate that we may get some additional sportfish later on this fall, but we will see out that goes.

Finally, approximately 500,000 copies of the third edition of the State Park Guide has been printed thanks to an underwriting sponsorship by Toyota and advertising sales. This new guide features Lost Maples State Park on the cover and is scheduled to arrive in parks, and travel information centers by the end of March. Parks will also deliver copies to their local chambers of commerce and central visitors bureau for distribution to the visitors. A recently completed onsite survey of 11,000 state park visitors included questions about the guide; we found that it was one of the primary ways that visitors received information about the parks. With 43 percent of park visitors stating that they had a park guide, and 61 percent of these visitors saying that it had influenced their decision to visit a Texas State Park. So one of the things that we have done in this process with this State Park Guide is to evaluate — is it a good product? Is it a successful product? Are people using it? And we feel like so far, it had done very well. Great product, very popular. And I hope, if you don't have yours, just pick it up and put it in there.

Thank you, Mr. Chairman.

COMMISSIONER FITZSIMONS: Thank you. That is very interesting, looking at that list.

COMMISSIONER MONTGOMERY: The apportionment is by —

COMMISSIONER FITZSIMONS: License sales, area.

COMMISSIONER MONTGOMERY: Number of fishermen, hunting? Phil?

MR. DUROCHER: It is — there is a formula. But the most any state can get is 5 percent of the total pot.

COMMISSIONER FITZSIMONS: So that is a cap.

MR. DUROCHER: Yes. We are always at the 5 percent level. There are several other states that also —

COMMISSIONER FITZSIMONS: That is why they tie at the top.

MR. DUROCHER: Five percent is the most any one state can get.

COMMISSIONER HOLT: Okay.

COMMISSIONER MONTGOMERY: We have got to work on busting that cap.

COMMISSIONER HOLT: Yes.

(All talking at once.)

MR. COOK: You know, and one of the key things here to always remember about these dollars here is that we qualify for these dollars. The projects, the money comes back in as a reimbursement. We spend those dollars first and are quote "reimbursed." So we can keep those funds rolling in those various divisions. Primarily we are talking here, are most entirely, the Wildlife Division on the wildlife apportionment, Coastal Fisheries and Inland Fisheries. That is where you can use it, and that is it.

COMMISSIONER FITZSIMONS: And the wildlife is capped also?

MR. BERGER: Yes.

MR. COOK: Wildlife is capped at five.

COMMISSIONER FITZSIMONS: Okay.

MR. BERGER: I believe so.

MR. DUROCHER: I think it is interesting that we are capped at 5 percent, which is the maximum on both funds, but no other state that I am aware of gets the cap of both.

COMMISSIONER FITZSIMONS: We do. We are the only one that maxes out the cap on both.

MR. BERGER: I believe that is correct.

COMMISSIONER FITZSIMONS: That is interesting.

MR. DUROCHER: We are expecting another three [inaudible] over on this sportfish side. We have got some extra fuel tax that was added to the system, so that is technically another $3 million.

MR. COOK: We certainly are able to qualify projects, surveys and research for every dollar available. We have never ever failed to utilize or qualify for every single federal aid dollar available. And we use them wisely, and we are very picky about how you use it, and we try to be very careful of what we are able to account for those dollars and the results of those studies. There was a little bit of discussion this morning about one of the wildlife areas. And you know, the fact that that wildlife area was funded with federal aid dollars. And so you get in some commitments when you use those dollars. That you will do certain things with those properties, or with those people, or with those trucks, or whatever it is. There are some commitments made. But we are pretty careful of that.

COMMISSIONER FITZSIMONS: You do a good job.

MR. COOK: Thank you, sir.

COMMISSIONER FITZSIMONS: Thank you.

Next up, financial review. Mary Fields.

MS. FIELDS: Good afternoon, Commissioners. For the record, I am Mary Fields, Chief Financial Officer, and I am here to provide the financial overview. The focus of our presentation will be to provide a revenue and budget status for the first half of fiscal year 2006, review Rider 27 of the General Appropriations Act, and the Commission's proposed request to exceed the capital budget transfer limit, and finally, to provide a status update for the development of our Strategic Plan and the Legislative Appropriations Request or LAR.

So let's start with the revenue and budget status. When comparing State Park gross receipts through February 28, at $11.68 million, we are up 7.9 percent or $859,000 over last year's collections. In reviewing the categories of park receipts, all of the categories exceed the prior year at this time, except for the smallest category there, miscellaneous revenue. And that is only behind by about $50,000. Facilities and concession revenue were fairly close to last year's receipts, while entrance fees are up 13 percent, and the park pass sales are up a whopping 36 percent from the prior year. So overall, we continue to do well with revenues in our state parks and I hope to see this trend continue.

Our boat revenue as of February 28 is at $5.8 million. This is down by 3.6 percent or $214,000 compared to last year at this same time. There are decreases in all of the categories of revenue except sales tax, which is up 1 percent over the prior year. Revenue for boat registrations is down by 5.3 percent and revenue for titles is down by 1 percent.

While we have made progress in closing this gap since the first quarter — I reported last time we were down, I think, 6.3 percent — we are closing the gap, but we will continue to watch this very closely. Of course, we are thinking that the drought and the related water levels could be impacting the boating. So, we will watch it. We also continue to transfer 15 percent of registration and titling revenue to Fund 64 which amounts to $760,000, based on revenues through February.

Our license sales revenue is also down as of the end of February. At $67.3 million, we are down $1.7 million in revenues as compared to last year, or 2.5 percent. The combo revenue is down 1.9 percent, fishing is down 12.1 percent, hunting is up at 1.9 percent, and our other category is up by almost 4 percent. We will continue to watch the fishing license revenues which have fluctuated between 10 and 12 percent below the prior year. So we will watch that. And I will talk a little bit more about that in a minute.

In reviewing the number of licenses sold at 2.1 million, we are down 1.1 percent as of the end of February. Hunting is down 3.5 percent and you will recall that doesn't really correlate with the revenue category. We talked about that last meeting. That is because the number of non-residents sold is actually up and that license brings in more revenue. The fishing is down 12 percent which correlates, and the total number of combo licenses are up 1.1 percent. That number of combo licenses includes those super combo military licenses, and those do not bring in revenue. They are free to the military.

COMMISSIONER MONTGOMERY: If you took those out, what would the change be?

MS. FIELDS: Well, they are not in there. If they were paying for them, it would be about $1.5 million of revenue. There is about 25,000 super combos out there. When comparing our fiscal year 2006 revenue collections as of February 28 to the Annual Revenue Estimates, we are progressing as expected. With 50 percent of the year elapsed, we have collected 55.7 percent of our Fund 9, Game Fish and Water Safety Funds. And that is why I want to talk a little bit about these license sales and boat sales declines. I have been looking at the projections. Assuming we stay roughly in the same area, we still will meet our revenue projections by the end of the year if we continue at this pace. Of course, we all hope it picks up, but if it doesn't, it still looks like we will be where we need to be.

COMMISSIONER BROWN: Why do you think it is being impacted? You probably told us before, but what is driving that?

MS. FIELDS: The license sales decline? The hunting and fishing license sales? Right now, it is more fishing license sales decline, and then the boat revenues are also down a little bit, as we just discussed. Both of those categories go in Fund 9.

MR. COOK: Hurricane impact.

COMMISSIONER MONTGOMERY: Hurricane and drought.

MR. COOK: Every time it is down, we have always got several good reasons why it is down. And when it is up, we sometimes don't know why it is up.

COMMISSIONER FITZSIMONS: We take credit when it is up.

MR. COOK: I think in all honesty that you couldn't have hurricane events like we had, and the timing that we had them, and not have some impact. It clearly had some impact. We are watching those fishermen pretty closely, because this time of year, is when that really will start picking up. You will see that line go like that.

COMMISSIONER BROWN: Hopefully, it does.

COMMISSIONER RAMOS: Will that also occur in the state park area, that most of our revenues come during the summer?

MR. COOK: Oh, yes.

COMMISSIONER RAMOS: So even though it has been 50 percent —

MR. COOK: It is up now, but it will really — you know, the bulk of our revenue will come in.

COMMISSIONER FITZSIMONS: Are the boat registrations off for new boats, or just registrations in total?

MS. FIELDS: I don't have that information with me on this report, but we have the new system in, so we are still pulling some of these —

COMMISSIONER FITZSIMONS: But it will differentiate between renewals and your — the system.

MS. FIELDS: Yes, it will. Between renewals, and the — yes. It does.

COMMISSIONER FITZSIMONS: Right. Interesting economic indicator.

MS. FIELDS: I will report on that next time. And yes, the State Park Fund, really, it is tracking fairly well, where it needs to be. We receive most of our revenue for state parks in the spring and summer, so we are just now heading into that cycle here at the end of February. So that is in good shape. And the Local Park Fund at 64 percent and other category at 47.2 is pretty much where we need to be.

In reviewing our fiscal year 2006 budget versus expense, you can see that our budget is at $307.9 million. We have $179.5 million or 58.3 percent of the budget remaining with 50 percent of the fiscal year elapsed. You can see in all the various categories there that we are basically on track. Steve just talked quite a bit about the capital projects that are in place. So, we will see that number going down as the year progresses.

And our overall budget has increased by $14.1 million since November 30, when I last reported on the budget. The adjustments were made during the months of December, January and February, and they are summarized here on the slide. The most significant adjustment really occurred in our grants area. There was a $9.5 million endangered species grant that was brought into the budget and then passed through to Travis County for the Balcones land acquisition. So that is a pretty good piece of the adjustments. So that concludes the revenue and budget status.

I would like to review Rider 27 of the General Appropriations Act. You will recall that this rider allowed us to bring in additional appropriations this year, so I was asked to kind of review this rider with you. In reviewing the requirements, I am just going to hit the highlights. The rider appropriates amounts in excess of the Comptroller's Biennial Revenue Estimate for each year of the biennium. The rider requires that we prepare an annual estimate and get approvals for each year. So this first estimate that was done covered fiscal year 2006. And at midyear, the Comptroller reviews the estimate and issues a finding of fact. We will go through this same process for next year. The rider also requires that the revenue be earned to be spent, in this particular case, and furthermore, any revenues that we earn in excess of the estimate will also be appropriated to us. So, if we earn more than what we thought we would, then we will get the appropriation. And the good news with that is, we can carry that forward into fiscal year 2007 if need be. There is some specific direction on how the revenues are to be spent. For Fund 64, the first $1.57 million is to go to state park operations and park support. And the first $1.32 million of Fund 9 is directed to the warden training academy and law enforcement programs. We followed that direction for both funds, and actually for Fund 64, all of the estimate is going to go to state parks to assist with their operational needs, not just this first portion. And preparing the revenue estimates, our method was to generally use a five-year average. We did use more detailed methods for estimating state park fees and our recreational license fees, but I am not going to go into a lot of detail on that.

Our estimated revenues in Fund 64 totaled $38.5 million and exceeded the Comptroller's annual estimate for '06 by $4,882,000. Our Fund 9 estimate at $113.7 million exceeded the Comptroller's annual estimate by 3,602,000. We did receive certification from the Comptroller. She issued her finding of fact in January of 2006, and these revised estimates and related appropriation were added to the budget at midyear. So you will see their impact on the budget in the March reports and in the future.

COMMISSIONER BROWN: Mary, can I ask a question? There is a lot of speculation that there is going to be a huge surplus. She has been kind of holding back, the Comptroller has. But it could be pretty excessive; $4 to $6 billion, something like that. In the event that is the case, how can we — what do we need to do to position ourselves, especially with our situation with our parks, to try to get in line to get some of that excess money?

MR. COOK: Well, I — of course, we will receive the final legislative appropriation instructions soon. We will have to follow that process. Our ability to request exceptional items will be there. But I guess I would say to you, Commissioners, that we are, we are working that angle almost every day now. And we appreciate your help when we need to get that opportunity. It sounds like what we are hearing from downtown — Chairman Hildebran is absolutely committed to working towards receiving additional funding for state parks primarily, and has in fact expressed that in open session. We had a legislative update session a week, ten days ago, downtown. We had a great turnout for that. Mr. Kercheval was there and made a few comments on those lines. Mr. Dabney is on the road. His road show is much in demand and he is not making an appeal, but is presenting — this our situation and here is where we are.

COMMISSIONER FITZSIMONS: He will be in Houston on Friday, and I will be with him. It is a full day forum on funding.

MR. COOK: Texans for State Parks.

COMMISSIONER FITZSIMONS: But the most direct answer to your question is, we have appointed an advisory committee that is chaired by former Chairman Senator John Montford to make the recommendations for funding.

COMMISSIONER PARKER: Joseph, tell them about that meeting Friday.

COMMISSIONER FITZSIMONS: Well, Friday will be, that is the Sierra Club and Texas Conservation Council.

COMMISSIONER PARKER: Tell them about that.

COMMISSIONER FITZSIMONS: Just bringing in other states to tell us what they have done. We should get some pretty good coverage with Houston Chronicle, all those papers. To answer your question, you know, directly as it relates to the projected surplus, there will be a lot of people in line for that surplus. It seems to me that the best way to pursue this is to allow that surplus, make it easier to understand the impact that taking the cap off the existing sporting goods sales will have.

In other words, don't go for a new strategy. Stick with your — remove the cap from the sporting goods sales strategy. All the surplus does, is it makes the impact less on general revenue when you do that. I wouldn't get off the — this is just my opinion, because it is so logical for sporting goods to be tied to parks. I think if you go off into some other area, you lose that logical nexus between that constituent person buying the mountain bike or the canoe and expecting a place to use it. If you go off on some new deal that you lose it.

MR. COOK: I believe everybody is consistently supportive now.

COMMISSIONER FITZSIMONS: Yes.

MR. COOK: I mean, everything we hear from the various friends groups, the various legislators who are interested in [inaudible] and people that you folks have been talking to, have all been [inaudible] get that cap off.

COMMISSIONER FITZSIMONS: And the Governor's Office is committed to getting a solution. They endorse the idea of the advisory committee. Just to briefly give you kind of a — people that are on it: John Montford is there, and he is taking it seriously. He has a mandate from his employer to do something about this, because it impacts all legalized for the major employers, like AT&T. Al Henry, our old friend Al Henry will be on that group, and George Bristol who just works so hard. So I think it is going to be a pretty — very specific recommendations that come from there, that aren't going to be very easy to avoid.

COMMISSIONER PARKER: That meeting Friday is going to include the states represented by the park people of Florida and Arkansas. And those two states are the premier park developers in the nation at the present time.

COMMISSIONER FITZSIMONS: The important thing is to keep it on the front burner until the end of the next session.

(All talking at once.)

MR. COOK: I have heard also some folks say not just to take the cap off, but to appropriate those dollars for that purpose.

COMMISSIONER FITZSIMONS: That is important too.

MR. COOK: I heard that.

COMMISSIONER FITZSIMONS: The difference between seeing and doing. Yes. We have got you off of there, Mary.

MS. FIELDS: That is okay. I am very interested in it.

COMMISSIONER FITZSIMONS: And you will be making I am sure, at some time, Mary, you and Walt a presentation to that advisory, State Park Advisory Board, explaining to them the nitty gritty.

MS. FIELDS: Okay. Yes.

COMMISSIONER FITZSIMONS: Great.

MS. FIELDS: Okay. Well, let's move ahead to the next item here. With the additional appropriation from Rider 27 that I just talked about, particularly on the Fund 9 side, and considering our vehicle and capital budget and equipment needs, we would like to spend some of the additional appropriation on capital. But there are some limitations that we need to address. Article IX, Section 6.16 of the Appropriations Act outlines capital budget expenditure limits and requirements. And within our capital line item, such as the transportation items and capital equipment, we cannot transfer more than 25 percent from or to a particular capital line item. So we can grow a line item up to 125 percent. But if we want to spend in excess of that 125 percent, we need to get approval from the Legislative Budget Board, or you will hear me refer to them as LBB, or the Governor's Office. So for example, our capital equipment line item right now is at $274,000. We have already grown it to $342,000, the 125 percent limit. But for us to go beyond that $342,000, we are going to have to get approval from the LBB and the Governor's Office. And that request, actually to exceed the limit, needs to be submitted by the Commission, as the Agency's Governing Board. And it has to include certain elements, including the date the request was approved, the justification for exceeding the limit, the source of funds, and an explanation as to why these purchases cannot be deferred. So I have prepared Exhibit A, which I believe Carole just handed a handout to you guys for Action Item 19. And behind that, there is an Exhibit A and an Exhibit B. I would like to talk a little bit about Exhibit A first. That exhibit basically lists the capital items that we are requesting. We have additional capital equipment needs documented there of $268,000 and vehicles, boats and motor needs of almost $1.3 million.

We are requesting in that request another 52 trucks and sedans, eight boats and 12 motors. So our total request is $1,544,832, of which $1,502,604 is the Fund 9 portion. That $42,228 of Fund 64 is coming from the support divisions. Basically, we are funded by both 64 and 9, so this is our operational 64 piece that we are bringing up to ask for the authority. So, if you approve of this list of items here, as documented as Exhibit A, we will plan to formally ask for your approval of that exhibit in tomorrow's meeting.

Now, on Exhibit B, there is an actual letter from the Commission to the LBB and Governor's Office. In there, we are justifying these capital needs and I have included some statistics provided by fleet management. And basically, the state's fleet management plan suggests that vehicles be replaced at six years or 100,000 miles. We have 2,289 vehicles. And the average age of those is 8.4 years old, with 87,000-plus miles. So 65 percent of our fleet exceeds the recommended replacement age, and 43 percent exceeds the replacement mileage. So we are basically documenting here that our vehicles are aging. And some of our other equipment is basically obsolete. And we are incurring a lot of expense to keep the things running, and it is impacting our field operations. And we don't think it is wise to defer these expenditures any longer. So tomorrow again, if you approve of this Exhibit B as documented there, we will ask for your formal approval of that as well tomorrow. And those will be basically the items. There is a motion, that includes that. So that pretty much covers that request.

Moving on to the status of our Strategic Plan for fiscal year 2007 through 2011, this is the report we call the Natural Agenda. Since we have some new Commission members, I thought I would just quickly review the background and requirements of the Strategic Plan. The requirement for strategic planning was established in 1991. Provisions in the Government Code require all state agencies to engage in strategic planning and to submit a five-year Strategic Plan every two years. The statute, as well as more specific instructions that come from the LBB and the Governor's Office, specify the basic elements that go into the plan. And basically, it includes the Agency mission, philosophy, our goals, objectives, strategies, and assessment of factors impacting the Agency, et cetera. So the goals and strategies set forth in the Strategic Plan comprise the budget and planning structure for the Agency and that provides the framework through which we request our legislative appropriations.

The LBB and Governor's Office issued their strategic planning instructions in early March and these instructions specify that proposed changes to the structure must be submitted to the two offices by April 7. The final plan, including the other required elements, is due July 7. Following the submission of the proposed structure changes, there are generally a number of meetings with those two offices to negotiate our requested changes, and final approval really rests with them as to whether we get those changes or not. So we began soliciting division input on those proposals, basically in late January. So let's talk about those structure changes briefly here. We have — before I get started, we have been informed by the LBB that they do not expect us to really submit significant changes to our budget structure since we underwent a major overhaul of the goals, and strategies, and the measures, last time around. However, we do feel like we need to do some cleanup and fine tuning, and so we are moving forward with a few requests.

First, we are asking for a change to a total of four strategies. The more significant one really is to consolidate the strategy specific to the artificial reef program with the existing strategy for coastal fisheries management, habitat conservation, and research. And this consolidation of coastal habitat enhancement-related activities is really more consistent with the ecosystem-based management approach. So we feel like it is just the best thing to do. And the other three changes really are minor changes to wording just to kind of clean those strategies up. On the measures side, we are — we have a total of 76 measures, and we are requesting deletion of three of them as follows — they are up there on the screen: The first one, we really feel that this measure isn't necessary since we already have a new minor repair strategy that reports the same information. The second one up there, the number of local assistance planning projects requests fulfilled, that formal program has been discontinued due to budget reductions, so we are going to request deletion of that measure. And the last one up there, really, and we have made some other changes in the educational components and so we feel like this measure really doesn't capture the significant numbers, so we are also proposing revisions to 17 other measures. And those are mostly non-substantive, again, and they are really to clarify or update measures.

So we are currently working on drafting the actual text of this strategic plan, including sections outlining key events, legislative initiatives, and strategic priorities which we are tying to our Land and Water Plan. We will provide you with more detail on these sections at the next Commission meeting. Hopefully, by that point, we will have a draft that will be circulated to our division reps, and directors, and executive management, and you guys will get a copy also for your review and comment. And once all the edits have been in and we have a final, it will be approved by the Executive Director and the Chairman.

So let's see. The last item here is to provide a status on the LAR. And again, just for the new members, just a couple of key points here on the LAR. Our base budget for 2008 and 2009 is based on our 2006 projected expenditures and our 2007 operating budget. The LBB and the Governor's Office establishes the limits to the base. Last biennium we were asked to limit our general revenue and GR-related funds to 95 percent. And while the directive is not official yet, we have heard that there is a possibility that we will be asked to limit our base again with this LAR at that level. But it is not official yet. And the LAR, as we discussed earlier, it includes the base budget, and any items that we want to ask for above the base, are referred to as exceptional items. Last time around, we had 17 exceptional items in our LAR. That really was a lot of ground to cover with the members. And typically, we talked about the top five, and that was it. So I would suggest this time that we really limit the number of items that we have to roughly five, and cover those extensively during this session.

As far as developing the LAR, we are beginning the 2007 operating budget process, and that is part of the base. And we are working on our timeline for the actual preparation of the document. It will go from April into August. We anticipate receipt of those instructions from the LBB and Governor's Office in April or May, and the LAR is generally due the first week or two of August. There is a schedule for the Agency, so we will see. And that is all I have. That concludes the presentation. Are there any questions?

COMMISSIONER FITZSIMONS: Well done. Very well done, as usual. I will place your request to exceed capital budget transfer limitations on the Thursday Commission meeting agenda for public comment and action. If you don't have anything else that requires action for tomorrow's agenda, other than that, we will proceed.

MS. FIELDS: That is it. Just the Action Item 19.

COMMISSIONER FITZSIMONS: All right. Next up, license assessment efforts. Larry McKinney and Kim Dudish.

MS. DUDISH: Mr. Chairman, members of the Commission, for the record, I am Kim Dudish, License Manager. A hunting and fishing license sales system Request for Information was issued on November 30, 2005. This is in anticipation of our current license sales system contract expiring August 2008. Vendors provided written response to our RFI. Responding vendors have experience with license systems, and working with a state government. Onsite demonstrations of the equipment and software were given in February to the team of TPWD staff. As expected, advancements in equipment technology were exhibited, ease of use dominated the presentations, and all vendors seemed to be able to accommodate the 1,900 sales agents in the State of Texas. Advancements in equipment technology were displayed. Web-based, thin client equipment, and 15-inch flat panel screen dominated the displays. And I have an example here, as you can see. This is a thin client, and it will attach itself right to the back of this screen. And then this is the printer. This is what we are using today. This is the printer. And if you can see the screen size that the agents are using today, versus this screen size, the thin client option is a preferable web-based choice, because it will fit on a store counter, it has a longer life than a personal computer, and it does not have the limitations to new software designs that our current equipment has. Printer options are easier to load; the paper just drops in rather than currently, the agents have to thread it. No ribbon printer options were shown. And this is an improvement, provided that the print quality still is the same. So we still need to ensure that.

Equipment choices continue to evolve so we expect to see more advances. Ease of use dominated the presentations. Most sales screens were easy to maneuver and find the correct license. I anticipate that this web screen layout will be well received compared to the system that we have now. I could have showed you, but it is very small for the agents to scroll through. Licenses can be displayed in a logical order rather than the current system, which utilizes numerical order. The numerical order creates some confusion for our agents as we add and delete licenses. Real time agency catalog changes can be made easily by agency staff. This refers to the products we offer, and making changes to price, business rules, effective dates, et cetera. This contrasts to our current system which requires vendor intervention and a 45-day lead time for changes.

Our next steps are we expect to issue a Request for Offer this summer, and we expect to be able to locate a qualified vendor. As a parallel path, we continue the feasibility study of Department-owned and operated alternatives. Any questions?

COMMISSIONER MONTGOMERY: Does this choice — does the choice of equipment move us quicker to going online for license sales?

MS. DUDISH: Absolutely.

COMMISSIONER MONTGOMERY: I assumed that flat screen would.

MS. DUDISH: Right. Yes.

COMMISSIONER MONTGOMERY: They are in use in some other state around the country?

MS. DUDISH: Yes. There are many states that are using that.

COMMISSIONER MONTGOMERY: It is working just fine?

MS. DUDISH: Yes.

COMMISSIONER FITZSIMONS: This is a little bit off this hardware and software discussion, but Bob and I had a question just the other day about our 24-hour license availability. We used to have a toll-free number you could call 24 hours. Do we still have that?

MS. DUDISH: Not as a telephone, but online is available 24 hours.

COMMISSIONER FITZSIMONS: It is available online 24 hours, but no longer on the telephone.

MS. DUDISH: Correct.

COMMISSIONER FITZSIMONS: Why can't you do both?

MS. DUDISH: That would be staffing. Yes.

COMMISSIONER FITZSIMONS: Well, we didn't do the telephone did we? Wasn't that somebody else?

MS. DUDISH: We are doing the telephone now.

COMMISSIONER FITZSIMONS: Oh, I thought that was contractors or sub-contractors.

MR. COOK: Well initially, let's go back. Initially, with transaction — it was never, and Gene, you will have to help me out here, it was never a 24-hour service. It was a seven day a week.

MR. MCCARTY: It was 24 hours during the early transacting contract. Then it shifted to seven days a week.

COMMISSIONER FITZSIMONS: Look at Gene.

COMMISSIONER PARKER: Mr. Know-It-All.

(All talking at once.)

COMMISSIONER FITZSIMONS: Let's just go ahead and go straight to Gene.

MR. MCCARTY: Yes. When we were with Transactive, they operated a call center 24 hours a day.

COMMISSIONER FITZSIMONS: That wasn't our call center.

MR. MCCARTY: It was theirs. It was their call center. When we moved to MCI, in part of the process of cost cutting and so forth and so on, we went to a call center that was operating Monday through Friday, 8:00 to 6:00, and on Saturday, 8:00 to noon, 8:00 to 12:00.

MR. COOK: That was in 2003.

MR. MCCARTY: This last year, and by the way, that call center is also our State Park Reservation Call Center. It is all the same.

COMMISSIONER FITZSIMONS: Right.

MR. MCCARTY: And we brought it in-house.

COMMISSIONER FITZSIMONS: Okay.

MR. MCCARTY: Okay. This last year, with additional problems we were having in funding, with state parks and so forth, we had to cut down. We had to cut the call center some more. So we went. The call center was cut to five days a week, 8:00 to 5:00 or something like that.

COMMISSIONER HOLT: In-house, or is it still with MCI?

MR. MCCARTY: It is still in-house.

COMMISSIONER FITZSIMONS: So we can do it on the phone five days a week, 8:00 to 5:00 or online 24 hours a day?

MR. MCCARTY: That is correct.

COMMISSIONER FITZSIMONS: I guess I am the only person who knows anybody who gets the urge to buy a license at 1:00 in the morning. That would be the crowd I run with.

(All talking at once.)

MR. MCCARTY: At the time we shifted from the 24-hour-a-day phone bank call center, which we were paying a lot of money for, we also brought up our 24-hour-a-day online license sales system. So we just kind of traded off one for the other and we saved a lot of money. We save a tremendous amount of money. We still have the convenience for the customer, although the one customer that wants to get up at 1:00 in the morning, he doesn't want to get online; he wants to get on the phone.

COMMISSIONER FITZSIMONS: I think I am going to give my answer to him. Bob and I have his e-mail address. We can tell him to roll over and turn on his computer instead of picking up.

COMMISSIONER PARKER: Right. BlackBerry or something.

COMMISSIONER MONTGOMERY: How many states now sell licenses online, so that you can just buy them off your PC?

MS. DUDISH: I don't have the number. It is a majority of the states.

COMMISSIONER MONTGOMERY: So it is more than 25?

MS. DUDISH: Yes.

COMMISSIONER MONTGOMERY: Okay. And how many years of history do they all have? And are they generally operating successfully?

MS. DUDISH: From the states I have discussed with, yes. And I have quite a network of states.

COMMISSIONER MONTGOMERY: And have you all done any research on how many of them have problems with tagging?

MS. DUDISH: We are starting to work on that. Yes.

COMMISSIONER MONTGOMERY: Do you have any sense of that? How that is working in those states that operate with online sales?

MR. MCKINNEY: We may talk about that in my next segment. So if you will kind of hold that.

COMMISSIONER MONTGOMERY: Oh, I am sorry. I thought you were through.

MR. MCKINNEY: We are not through yet. That is okay. We weren't necessarily going to talk about tags, but we are now. That is clear. Which is fine.

COMMISSIONER MONTGOMERY: Undelivered effort to tee you up.

MR. MCKINNEY: Just fine. I appreciate that. And coincident with what this work group was looking at, the technical parts of it, Mr. Cook put together another group which he asked me to oversee representatives from all the divisions. We were to take a look at that license catalog of the commercial and recreational licenses that are sold online. By which, by the way, we have 161 items that we sell on that system. It is quite a bit. All licenses sold on the — as well as a few other little things in there — 161 items that are sold on that point-of-sale little screen machine. And you can see the charge that you gave us, which is up there, as to what we were charged to take a look at.

I really enjoyed working with this group. Like I said, it was representatives of all the divisions. Kim was a great part of that. I would tell you, it is a pretty tough group, which I appreciated, because the way I kind of went at it, I basically went and I sat down. All of these 161 items were Sunsetted, they were gone. And what we need to do is to come — those individuals in the Agency that are responsible for those licenses need to come back in front of this group and justify why they need to be there, what they need to do with them. I made sure that we didn't constrain staff as to ideas. And when we looked at new ideas and what needed to come and go and modify, I tried to get some direction to not be constrained by statutory or regulatory limits on these licenses, or even policy limits.

If we had to go to the Legislature to get changes, that is something we would deal with. But you come up with ideas of what we need to do, so they came at it in that direction. We didn't deal with pricing issues, but we did try to make sure that any recommendations or modifications on the proposals were at least, at this point, revenue neutral. It is kind of a reality check to make sure we didn't go too far out on a limb. But they were in line with what we needed, revenuewise. We did not question programs about the need for a license. We basically looked at licenses to say, okay, if you had a particular license or an item on that point-of-sale that we were selling on there, was the purpose for getting information? Do you still need that information? Is it not needed any longer? Was it a revenue source? Whatever. That was what we came at.

We didn't ask the programs themselves to justify themselves, although I will tell you that going through this review, there are some activities and programs that certainly came up that are going to be looked at in another part of the process. But as I said, it was an interesting — an idea, an approach. We had a good time with it. Basically, as I said, our current catalog included 161 items. Our work group recommended eliminating 61 licenses. We are modifying 26 others, and we did add three more. And we are going to talk about some of those a little bit. We left 16 licenses alone. Those are the alligator issues that you have been dealing with, and will deal with. So we didn't know what was going to happen there. So we just left those alone until you all made some decisions on it.

But that is kind of where we were. Basically, what we are talking about is our recommendation at this point with the representative reduction of 46 percent of the licenses and a lot of complexity. Now, I want to make it real clear, these are just draft ideas. There is a lot of iterations to go through, and more thought that needs to be looked at, but this was our first cut at it. And it did meet the requirements. One of Mr. Cook's requirements was to give Kim and her group a tool to go forward with. And we are looking at the new contract just to get a better idea of what we might be looking at, to see if we can keep the complexity down and the cost down, because all of these things are programming costs and all those kinds of issues. So we looked at programming costs, complexities, and also trying to take a shot at making things a little more simple for our constituents, where we could.

So, what I want to do is just go through some examples of what we did. And they will be primarily fisheries examples, as you might expect. I know those a little bit better. But we had them across the board. For example, one of our goals is: Could we come up with just a single fishing license in which we had our stamps, saltwater and freshwater stamps, of a comparable level, incorporated into that license. So, when you went to fish in the State of Texas, you just pushed fishing, you bought it. You could fish anywhere, any time. That was one of the goals that we worked forward to. Now whether we can get there or not, that was the goal we were looking at. Can we do that? So that was one recommendation we put in there.

One of the most complicated parts of our point-of-sale are the temporary fishing licenses, of which we had 12. And it was very complicated. So basically, we kind of said, look, let's just do two. If you are a resident, it is $10 a day. For a non-resident, it is $15 a day. You can buy as many of those as you want, until you get to the point where you wanted to buy a resident or other license. But you know, have at it. If you just want to go that way. So now, we would reduce those from 12 to 2 — $10 or $15 a day. Just push the button as many times as you wanted to push it and write the check or put it on your credit card. We had a summer fishing license that we tried for a while. It didn't work. We recommend just eliminating it. That was a — it never really sold. So let's just —

COMMISSIONER FITZSIMONS: A bad idea.

MR. MCKINNEY: It sounded good when we first did it. I was okay with it, too. I said to do it.

MR. MCCARTY: I said it was, but it wasn't mine.

MR. MCKINNEY: It wasn't my idea, either.

(All talking at once.)

COMMISSIONER FITZSIMONS: All I remember is that Gene had a strong opinion about the summer fishing license. I can remember that.

MR. MCCARTY: It was a marketing tool.

MR. MCKINNEY: We were on the boat, but it sank. Or at least we think it should sink. It just didn't work. But you know, you have got to try these things.

MR. COOK: I'll tell you, it is a good example of how we get 12 licenses, temporary licenses or whatever we get, because we are willing to try them, and I think that is good; I think that is worthwhile.

MR. MCKINNEY: And that is — that is the plus side.

(All talking at once.)

MR. COOK: But then step back and go —

MR. MCKINNEY: It doesn't work. Let's go someplace else.

COMMISSIONER FITZSIMONS: You must be going like the devil.

MR. MCKINNEY: My shoes are on fire.

(All talking at once.)

MR. MCKINNEY: All right. Let's continue with some of the examples. Let's see, this one. Another area is the hunting and fishing combo licenses have been steadily declining because of people switching up to super combo. At this point, let's just go ahead —

COMMISSIONER FITZSIMONS: If you eliminate that, you will sell more super combos.

MR. MCKINNEY: They are either going to go super combos, or they are going to go to the individual licenses. But we think they are going to go up, because that is just the trend. It has just been a steady decline since we started. Which is a good plug for the super combo. Here is one where we would ask to create a license. You know, we have what is called a special hunting license which basically allows for those 65 and older and 17 and younger to get the tags. And that is, in order to do that, we always like to know more often how we are doing with our youth participation and you ask these questions all the time. Kim had the idea, and everyone thought it was a good one; let's just go ahead and separate those out. Let's have a youth hunting license, so it is really easy to track. You just push a button and we will know how many we are selling every year. So it is just a way to help us keep up with that information. It is a little hard to tease out right now between the older and the younger buyers. And this will be a good tracking mechanism. Hopefully, it will show some progress in increased youth participation. So it was a good idea we thought.

COMMISSIONER RAMOS: In just hunting, or hunting and fishing?

MR. MCKINNEY: Well, they don't need the tags on the fishing side, now. But I will have — I am about to hit one little part there.

COMMISSIONER RAMOS: In line with what you are saying, where we can find out how the youth is fishing —

MR. MCKINNEY: Well, they don't need to do anything, though. That is a problem.

COMMISSIONER RAMOS: That is true.

MR. MCKINNEY: We don't want to add a requirement to make it more difficult for them to go fishing, to go get a license, but this is for the tags. At least we can track that. So we don't really have an equivalent mechanism to do a split on them. We do have one small thing that could help a little bit, and that is for example, on the red drum. Talking about tags, Commissioner Montgomery, this is one area for example, on the red drum tag. One of the complicating factors in the red drum tag license is that once you have used one tag, you can ask for another one and get it for free. And basically, we would say let's just drop that complexity of that issue. So you just have that one tag that you get free. And then if you want to buy additional tags, you purchase those tags. And that would also allow us to set up tags so that youth, or seniors, or temporary license holders who now don't qualify for those large red drum tags could get one themselves. So that would be another way of dealing with it.

And other tags, we left alone at that point. And we can have that discussion if you want to, about where we are in looking at that. And we did some evaluating on it, but it is up to you. So that basically is just kind of an obviously — a kind of shot at what we did on some of these recommendations, and where we are going with it. So I would certainly be glad to answer any questions, or entertain any comments at this point.

COMMISSIONER MONTGOMERY: In response to your invitation, I would like to have a discussion of where we are and where we are going, particularly on the tagging matter, and how soon we can get the internet sales. When you look at declining and flattening sales, just as a business proposition, your inclination is to want to make it as easy as possible to buy it.

MR. MCKINNEY: Well, and clear. And that is an issue. And Captain Sinclair is here. I am hoping he is back here behind us somewhere. Is he? He is hiding back there, but he is ready. If he will come on up, we kind of need to take care of this. One of the — just as he is coming up, just to answer — when we looked at the tag deals, it basically boils down to this: as long as you have a requirement, an annual bag limit for deer, then you are going to have to have some method to associate a hunter with a carcass. Basically, it is what it is. And so from our perspective, we are trying to simplify the licenses. As it stands now, if you keep that requirement, don't go to a daily, or something like that — you keep that annual requirement, then you either have this system that we have, or you can have — there is some alternative systems, telephone, phone-in systems and others. But you are still going to have to create that. You have to have a structure to go and do it. So it is not going to save us any money. We will have to create a whole new tracking system to deal with that. Or you go and sort of keep tags on the license. Then your alternative to taking the tags off, is to have hunters come up with their own tags. Do their own type of tags. And there are problems with that — you will kick in with. But also, if we are trying to be convenient for our hunters, it is much easier just to hand them their tags so all they have to do is cut them, and fill them out, and don't create them or anything like that.

Now we are getting into a whole issue with Internet, and Sinclair went through and looked at all of these states, and he may want to give a summary.

COMMISSIONER MONTGOMERY: Before David, let me just ask you one more question on that. How soon could we go online if we chose to?

MR. MCKINNEY: Well, that would be more of a Kim question. Online, moving to online.

MR. COOK: We are online now.

(All talking at once.)

COMMISSIONER MONTGOMERY: So that I could buy them at home on my PC?

COMMISSIONER FITZSIMONS: Print your tags on the internet, online.

MS. DUDISH: That would be looking at the new license system for August 2008.

MR. MCKINNEY: That is part of what Kim's group is looking at — 2008 would be the earliest, because that would be the next —

COMMISSIONER MONTGOMERY: Contractually and technologically.

MR. MCKINNEY: Technologically is not an issue.

COMMISSIONER MONTGOMERY: By 2008.

MR. MCKINNEY: And we anticipate, I can't say what extent we can address tags, but that is part of it. Okay.

COMMISSIONER RAMOS: Larry, have we ever looked at the option, kind of like your driver's license, that automatically renews, or you get something to where once you are in the system, you are in the system, as compared to having to get into the system every year. Do you see what I am saying?

MR. MCKINNEY: Uh-huh.

COMMISSIONER RAMOS: In other words, I don't know the economics of that, to where for example, if I have had a hunting license for 20 years, the odds are that I am going to continue to have it for 30 years or whatever to where we would just automatically say, look, you have had Super Combo and here is the bill. In the absence, you know, if you pay it, you have got it, to where we take the initiative. I don't know if that makes economic sense, and we could keep more people in the system.

MR. MCKINNEY: That would be an issue that others could —

MR. MCCARTY: Renewal, much the way we do boat registration renewals.

COMMISSIONER RAMOS: Yes. Just renewals. And if one year, if I didn't pay it, I then fall out of the system. But it seems to me that most of us are creatures of habit. Just like with our driver's license. And if we got it out there, it could be a lot easier.

MR. MCKINNEY: I think that is worth looking at. As Phil was telling me and Lydia, we have this churn. You know, some people buy them one year, and then don't. And some of us, they just — no one tells them to do it.

COMMISSIONER RAMOS: Well, they forget. As compared to the convenience of getting it and just renewing it.

MR. MCKINNEY: I think there is some real possibility. Yes, sir.

MR. COOK: I think all of these issues, we have put them all on the table, talked to a lot of other states. You know the issue about tags, and David and law enforcement, like Doc says, as long as we have an annual bag limit, we pretty well have come to the conclusion that we are going to have to have tags. There is a lot of different ways to do tags, and there is technology advances. We'll get there. But for example, a hunter, even if I get to that point, which I can do right now, of buying my hunting license, my super combo over the Internet, that is just a matter of fulfillment. Of getting that actual bulletproof document with tags and all that stuff in my hands, two to three days is about what we are fulfilling now. So you know, it is a very doable thing, and we feel like it is — I mean, we looked at everybody. We looked at some states that have got little cute peel-off things that they wrap, and glue, and stick, and I don't know. We have looked at a lot of different options. We have got a pretty good product. And the volume of licenses, and people that we deal with, just like I showed you in that dollar apportionment, we deal with a larger volume and a larger variety than most other states deal with. Our vendor right now, we go to the mat with him four or five times, you know, really seriously. But right now our vendor is providing us excellent service. We are getting really good service. And Kim and her people don't have any hair left. But they wore themselves out on it.

But in this process of looking at, okay, do we stay with MCI Verizon? Which we have that option. Do we go to a new vendor? Do we change our tagging system, our entire system? Do we develop our own system? I saw George Rios here, and Bridget Wolf, and a bunch of the folks. We have been working on this thing from about three different major angles and all of these groups, the group that Doc has led, and Mary's involvement. You know, linking together to do this far enough out front that we can make some really good decisions about where we are going to be on September 1 of 2008. What that license is going to look like. So we will try to keep you posted on that regularly. Our RFOs are due back in, in June; Kim, is that right?

MS. DUDISH: We haven't submitted that yet. We haven't put that out yet.

MS. FIELDS: We are going to be working at that option. I think the earliest we could get those RFOs back would be the end of July. So we are reviewing timing on those.

MR. COOK: So again, we are looking at those options and suggestions like Commissioner Ramos here, are worthy of serious consideration and we will do so. We would appreciate any thought and input you have got.

MR. MCKINNEY: And to follow up on your —

COMMISSIONER MONTGOMERY: Well, I would like to hear David's thoughts.

MR. SINCLAIR: I am Major David Sinclair, Chief of Wildlife Enforcement. I can't believe that Larry called me up here and demoted me to Captain.

MR. MCKINNEY: I know. What did I say? It was a tough task force; we took no prisoners. A couple of times, he didn't agree with me, so I just demoted him.

COMMISSIONER MONTGOMERY: He is bound to violate some law soon.

MR. MCKINNEY: He has got a gun. I am kind of worried about it.

MR. SINCLAIR: The Law Enforcement staff recently contacted, or attempted to contact all of the states. I think the only response we didn't get, was information from Oregon. From those states — and by the way I would be glad to provide this spreadsheet to you, it has got a lot of information — we asked about ten questions related to whether they had a web-based application, the point-of-sale, paper licenses, those types of things. And we got some good information, as well as the number of licenses that they sell, and the revenue. So I think it will be some good information for you.

With regard to the tags, Alabama, Louisiana and Mississippi do not have tags. And as Mr. Cook indicated, they have a daily bag limit, just like we have a daily bag limit here for quail and pheasant. So that is not an issue. But with that annual bag limit, like we have, the other states do have the tags. There was one state, Kentucky, that has Tele-check. It is where they call in and they are given an authorization number. That number they write on a piece of paper, and that accompanies the carcass until it is disposed of. And then with Tennessee, they have a temporary tag that they make up, and then they have a check station that they have to go to, and they are given a tag there. So those are the only states that have an exception now.

COMMISSIONER MONTGOMERY: And I guess it is obvious, but just so I understand it, I don't always get the obvious points here. The reason you can't just print it off the internet, obviously, is fraud. It is a very similar occurrence. You have got some special paper to do it.

MR. SINCLAIR: Fraud.

COMMISSIONER MONTGOMERY: Systems like what Bob is describing, where you would actually sign up and within three days you would have in the mail, how are those working out in places? How many states do that sort of thing?

MR. SINCLAIR: It has been working okay, and we are doing that here currently, as well. Our Internet system is set up just like that.

COMMISSIONER MONTGOMERY: Okay.

MR. MCKINNEY: You know, the fraud and then the durability. You know, someone doesn't have a proper type of paper; well that license is going to dissolve the first time it gets wet. So that is certainly a concern. And that is an inconvenience for the hunter.

MR. COOK: Most of the states that have internet sales of some variety or other, which it looks like ours — I forget the number, and Kim or somebody could probably tell you who is like that, but it is — are we at 2 or 3 percent now?

MS. DUDISH: We are at 2 to 3 percent.

MR. COOK: Yes. And you know, some of the highest, the states that have been in it the longest, some of the smaller states, I have seen some numbers where they talk about maybe 12 to 14 percent of the total sales being on the internet. I think the best option, like the Chairman was talking about a while ago, the telephone thing, where if you can get that number, you can get that unique number, you can go bird hunting that morning. And that is an incredible convenience that a lot of people don't realize they have. And you know, that is just us getting that word out. And people learning that that opportunity is available to them. You know, they get that unique number, they can go bird hunting.

COMMISSIONER RAMOS: But Bob, that unique number would be a unique number that you would keep for the rest of your life. In other words, just like your driver's license number, your Social Security number. You become Texas — your Texas hunting and fishing number is 4044. And for the rest of your life, you are 4044 and you keep a database on 4044. And then all you do every year is —

MR. COOK: I'm watching my programmer over there, and he is like —

MS. FIELDS: I'm not —

MR. COOK: Yes. But I understand.

COMMISSIONER RAMOS: See what I am saying. Because the way it is now, we each get a different number.

COMMISSIONER FITZSIMONS: It is always easier when we describe it. Doing it is a lot harder.

COMMISSIONER RAMOS: But it is like your DL number, your Social Security number. It doesn't change every year.

MR. COOK: Of course, we key off — you know, when you do that swipe now, we are keying off your driver's license number now.

MR. MCKINNEY: We use that now. The numbers exist.

COMMISSIONER RAMOS: Well, maybe your DL number could be the permanent hunting number.

MR. MCKINNEY: It could be someways like that.

COMMISSIONER FITZSIMONS: Your PIAPS number is your Social Security number.

MR. MCKINNEY: But you don't want that floating around on a piece of paper, and everybody knows that.

COMMISSIONER FITZSIMONS: No, I wouldn't say you could use that, but you could use your driver's license number.

MR. MCKINNEY: Sure. As a substitute.

COMMISSIONER FITZSIMONS: Youth don't have that. But what's wrong with the idea of the unique number.

MR. SINCLAIR: We actually have a customer number that is issued whenever you purchase. But that can change if they use some other identification to purchase.

COMMISSIONER FITZSIMONS: And then we have people who don't buy a license every year. We shouldn't allow that. We should make them buy one.

COMMISSIONER HOLT: There you go.

COMMISSIONER MONTGOMERY: Is it an objective of this effort to have some mechanism, Internet mechanism for individual sales in the 2008 cycle then, that is readily printable and made in form? Because it is a business proposition to me. If you think of where we have our biggest shortfall, it is young people and cities. And probably you all are the same way. Everybody under 20 does, it seems like they are all ready to do everything over the Internet now. So we certainly want to make that as easy as possible.

MR. MCKINNEY: Well, we have it now.

COMMISSIONER MONTGOMERY: Yes. I understand.

MR. MCKINNEY: And it will continue, hopefully. And as Kim reminded me, when you look at these two machines up here, and what is, in another year, who knows what capabilities you all will have to deal with. So it is going to be there, when you do it.

MR. COOK: Commissioner Montgomery, the last time Verizon was in the office talking to me, my pitch to him was, why can't I have that number, that information on that cell phone, or where it is just there. They indicated to me that that was exactly the type of thing that they are working on now. It will be a paperless — completely paperless availability. That is another option. If you have got a cell phone, you can get that number.

(All talking at once.)

COMMISSIONER FRIEDKIN: And that solves the any time of day issue.

MR. MCKINNEY: I was going to say, eventually when we get our implants, we can do Commissioner Ramos — we'll just buzz them, and it will just buzz them in their head and tell them to go get a license.

COMMISSIONER FITZSIMONS: Just automatically deduct from their account.

MR. COOK: I think it is about that time.

MR. MCKINNEY: I appreciate Major Sinclair coming up with that information. I re-promote him. Reinstated. Good job.

MR. SINCLAIR: Just one additional comment. I just want to make you aware that the tag, the information that is on that tag now is very valuable and the Wildlife Division uses that. A lot of their data is obtained from checking those tags in locker plants where they get the ranch name and the county. And you know they sex, and weigh, and age deer. So it is important.

COMMISSIONER FITZSIMONS: That is a good point.

MR. SINCLAIR: There needs to be some kind of a document there, whether it is a resource document or whether it is a tag. It is very important to enforcement, as well as the Wildlife Division.

COMMISSIONER FITZSIMONS: Right. Good point. So you have to find a way to still gather that data, to do something different with the tags. All right, thanks. The next up, let's see. That's just a briefing. No action reports. All right.

Item 4. Target Range Grants. Steve Hall.

MR. HALL: Good afternoon, Mr. Chairman. Members of the Commission. My name is Steve Hall, Education Director. I oversee the hunter education and the Target Range Grant Programs. Tomorrow, we will bring you two new grant projects. Under Item 2, and as a reminder, the Target Range applicants provide 25 percent of the match and the 75 percent of the match does come from the Wildlife Restoration Federal Aid Funds. The criteria are extensive in terms of what we require each grant application to submit. They were patterned after the original Land and Water Conservation Grants. So obviously, they include lots of things. But first and foremost, is a resolution of some sort from the local authority that oversees either the land that the applicant is on, or if it is a private land, certainly, a community resolution. Assurances are part of those criteria, as is, of course, the project application. We fund ranges, roads, classrooms, and essentially storage facilities related to the Target Range facility. They have to provide certification of that 25 percent match.

And in some situations, if it is a new range project, or a new type of range, whether it is an indoor facility or an outdoor facility, we typically require an environmental assessment also, construction plans and BMPs or Best Management Practices, for those ranges. There are national and state — well actually, in this case, there is a national association that does help ranges as well with things like the criteria for range construction. That would be the NRA, the National Rifle Association.

And then there is a National Association of Shooting Ranges, which helps ranges essentially with BMPs or Best Management Practices. The two new range projects that we will have for you tomorrow, actually, one is an amendment of an existing range. That is the Elm Fork Sporting Clays Range. It is actually called Elm Forks Clay Sports, right there in Dallas proper, and it is reaching the second most number of people in the shotgun sports in Texas. Certainly, it is actually reaching for us, the most hunter education students of any range that we have participated with as well. We are asking for an additional $120,000 to complete their project. This would be the Phase 4 amendment and that would essentially complete the road pavement project into their facility, which right now, is pretty much potholes and some other things. Here you have a great range facility, and yet, the way in is pretty rocky right now.

A new project tomorrow will be the Brenham Independent School District which is proposing to relocate their indoor range. They have an extensive set of youth programs, including ROTC and 4-H. They want to relocate their range on the ISD facility at the Brenham High School. And in doing so, they also want to open that to the public. So we thought that that would have been a — that is a good model project for us to deal with the schools. In this case, the first one in Washington County as well. So tomorrow, we will be essentially asking for approval to execute those contracts. We do make that approval pending availability of those funds, and certainly federal approval. We do go through federal aid in Region 2, and the primary things that we go forth with are things like the Natural and Cultural Resource Clearances. I will be happy to address any questions that you have.

MR. COOK: Steve, I am glad you mentioned that business about the clearances, because some of you may have gotten contacted about some opposition to a range or proposed expansion of a range, existing range in the Kerrville area. And that is one of the issues we have to deal with. And we are very careful with it, and work hand-in-hand with the communities, and with fish and wildlife, TCEQ, all of those kinds of groups. Another thing, Steve, in this apportionment thing I handed out to you, that I gave you, of that 10 million in Pittman Robertson, is it about a million and a half?

MR. HALL: A little over a million.

MR. COOK: That is specifically for this program.

MR. HALL: Well, it is for hunter safety apportionment, which funds hunter education and target range programs.

MR. COOK: Right.

MR. HALL: In Texas, we currently choose to do target ranges as a third party contract. Other states either build their own ranges, staff their own ranges, and certainly, there are situations where they have self ranges, or self-manned ranges, as they call them. But some of those are nightmares at times. But there are options of the way that we can spend those funds, certainly, I think in Texas, and being a private land state, and those kinds of issues, it has been, I think, fairly efficient for us to pass those funds through our Agency to somebody that is willing to put up that kind of money in some cases, and be a benefit to all shooters.

MR. COOK: They need to put up at least a 25 percent match.

MR. HALL: Correct. And if it is a $400,000 grant, that is significant funds. And if it benefits the shooters of the state, then it ultimately comes out and benefits the wildlife restoration apportionment, and the whole cycle continues.

COMMISSIONER RAMOS: John?

COMMISSIONER PARKER: Steve, and I am not going to really get into it right here and now, hopefully, the Chairman will allow me time at the May meeting.

COMMISSIONER RAMOS: Two minutes.

COMMISSIONER PARKER: This is with regard to the multistate Commissioners meeting that I went to last week. I came away from there with three ideas that I want to share with our group here, that other states are doing. And one is the State of Tennessee. They are making huge strides in youth shotgun competition. And what they did, they went to the public schools, and said, in order to combat our Jonesboro incident, this is what we would like to do. And the school system, they went from 286 participants in two years, they are already up over 2,000 participants. It is what Texas calls a UIL. I don't know if they call it UIL in Tennessee or not, but it is a UIL competition, school-sponsored event.

And the American Amateur Trap Association got so interested in it, that they have invited Tennessee to come bring their kids to the ATA grand championships in Ohio this summer. And they are going to showcase those kids up there in hopes of inspiring other states and other school districts within the states to jump on board. And I am going to leave some material with Lydia for her to try to orchestrate and organize me a presentation in May. And you can see part of it. What I am going to leave is a DVD from the State of Tennessee that they gave to me. But it is an incredible — they have kids that — one child, one young man was — could not hear. He reads lips. And he also wears earplugs when he is shooting. And he is on his way this year to being the state champion trap shooter.

COMMISSIONER RAMOS: I have been reminded you are on the two-minute rule.

COMMISSIONER PARKER: Oh, okay.

COMMISSIONER RAMOS: No, John. No. With all due respect to you, and to everyone, we need to be more innovative in finding sports of that type — and Steve, to try and access and get the youth involved.

COMMISSIONER PARKER: And they now are, Tennessee, they have got school districts on a waiting list to get into the program.

COMMISSIONER RAMOS: Any other questions or comments of Steve?

MR. HALL: I might add that that is the Scholastic Clays program in Tennessee. They have certainly taken it probably further than any other state. And then Kentucky has a similar one, with the National Archery in Schools Program, which is the same kind of philosophy of UIL sanctioning of the shooting sports, getting back into the school systems. And certainly, we are involved in the latter. And Charlie Wilson knows full well of the Scholastic Clays system and is on their board. So certainly, we will be anxious to look at those, and see how we can improve our systems.

COMMISSIONER FITZSIMONS: And thank you, Steve, for finding areas that perhaps we need to penetrate, that we haven't. Especially in the youth area.

Unless the Commission members have any other questions, I will place this item on the Thursday agenda for public comment and action.

And I believe the last item is Item 5. Ms. Darcy Bontempo.

MS. BONTEMPO: Good afternoon, Chairman and Commissioners. My name is Darcy Bontempo. I am the Marketing Director for Texas Parks and Wildlife, and I am here to present recommended changes to the Commission policy on naming Department lands and features, which was developed to provide guidance about the naming of TPWD lands and features. The proposed changes are to first provide criteria for naming rights for Department facilities. Not just for lands and features. To allow for instances where monetary contributions might be a consideration. And to address other updates.

The recommended changes are that the Texas Parks and Wildlife Executive Director may grant limited naming rights for Department facilities to corporate sponsors, foundations, or individuals, when there is a significant sponsorship fee or donation provided to the Department where the limited term naming right is defined in advance, and does not exceed ten years. And the naming right becomes null and void, if the facility does not continue to be operated by the Department. Staff further recommends that the title of the policy be changed or revised to include facilities, such as to be called the naming department Lands, Facilities and Features Policy. And that the references to John J. Stokes San Marcos River Park be deleted, as this park is no longer in our inventory.

And that concludes my presentation, which I will be presenting again tomorrow for formal approval. Short and sweet. Unless there are any questions.

COMMISSIONER MONTGOMERY: What was the reason on the ten-year term?

MS. BONTEMPO: I believe that was just to set what we felt was a reasonable limit.

COMMISSIONER MONTGOMERY: We could except that, if we chose to. If somebody really was hung on a longer one and it was a big donation.

MS. BONTEMPO: Right. But we wouldn't want to exceed that.

COMMISSIONER MONTGOMERY: Yes.

COMMISSIONER HOLT: Are we talking about aggressively going out and selling naming rights?

MS. BONTEMPO: I think that that is what we intend to do, is try to raise additional funds, so that we can — and one of the ways to do that would be to again, limited naming rights, is what we would be interested in pursuing.

COMMISSIONER FITZSIMONS: One of the charges to the State Parks Advisory Board, public/private partnerships, and different ideas for sponsorships, and endowments, and parks. You might remember Nolan Ryan, when he was on the Commission, worked hard on the whole legacy program with people donating to specific parks.

COMMISSIONER HOLT: Right.

COMMISSIONER FITZSIMONS: This is sort of an expansion of that. I don't know where it is going to go. I think they are going to discuss it with folks like yourself, I hope, who know something about —

COMMISSIONER HOLT: Yes. And that is why I was asking, is what level are we trying to do this? Because you start naming and you start doing those kind of things, and then why be in the business.

COMMISSIONER FITZSIMONS: Yes. Well, I think that is an important comment. You now, if you are going to ask somebody, do you want every boat ramp to be the Johnny Morris Boat Ramp or Bass Pro Boat Ramp or something like that, you may not want to have those limitations.

COMMISSIONER HOLT: That is right. And to try to draw the dollars out of the market, I think you are going to have to be very aggressive to do it. But I believe there is real potential there.

COMMISSIONER FITZSIMONS: I would defer to a guy who knows something about it.

COMMISSIONER HOLT: Just trying to limit ourselves before we even get started, I guess is what I am asking.

COMMISSIONER MONTGOMERY: What are your thoughts on term? I have not sold naming rights. You have. I am concerned that ten years isn't going to raise a significant amount of money for a facility.

COMMISSIONER HOLT: Ten years on a commercial operation is going to be short. I mean, that is the most or people won't be interested. So it depends on what it is. If it is an individual who wants to name the local park that is next door to their ranch, because they have lived there 100 years, that is one thing. But no, I am trying to sell the, you said, Pro Bass boats. Okay. They are definitely going to want longer than ten years. So I guess what I am asking is how are we approaching this, and is there kind of — are we laying this out, one? I am a believer too; you have got to look at what others are doing.

So I don't know if other states are doing this or not. And if they are, at what level, and how aggressive have they been? And then how have they done it? Has it been their marketing department? Do they actually have people that do this? Have they hired consultants? I am in the sports business, and in the sports business, I don't know anybody who didn't go hire a consultant to help them sell their naming rights.

COMMISSIONER MONTGOMERY: Well, and the Foundation does designation and sponsorships. They can't sell the naming rights by law. But the Foundation has our support, and the Foundation is there to do that. I guess to me, the issue is —

COMMISSIONER HOLT: Now you are talking about the Parks and Wildlife Foundation?

COMMISSIONER MONTGOMERY: The Parks and Wildlife Foundation, yes. The issue to me on the term really is price. At some price you would sell a permanent name.

COMMISSIONER HOLT: Yes. I understand.

COMMISSIONER MONTGOMERY: If you attach it with endowment.

COMMISSIONER FITZSIMONS: But I think it's a good point. Why put the term limitation in here now?

COMMISSIONER HOLT: That is right. That is what I am saying. And I think then, you know, you kind of have to slice and dice, too.

COMMISSIONER FITZSIMONS: Yes.

COMMISSIONER HOLT: Ten years for the park that is next to the family homestead might be fine, but it is not going to be worth the Pro Bass boats.

COMMISSIONER FITZSIMONS: Lydia?

MS. SALDANA: I am Lydia Saldana, Communications Director. As Commissioner Montgomery mentioned, we do work very closely with the Foundation on our corporate sponsorship efforts. And this issue has actually come up. And one of the reasons we are bringing it up now is because it has come up. When might it be appropriate to offer these naming rights. Clearly, we need to be careful as we proceed on this.

I mean, we want to be careful and make sure we do this in a way that is appropriate for the sites and the facilities that we have. We just, for example, completed a toolkit of sponsorship options that we have worked with all of the divisions on. And we are going to be very deliberate about this, and make sure that we are very consistent in how we do it, and how we move forward.

COMMISSIONER HOLT: Yes, because you could also run into the controversy, of course.

MS. SALDANA: Absolutely.

COMMISSIONER HOLT: Selling a state-owned member. In our case, we were selling an arena. In this case, you are trying to sell something that is — I can see us selling that Battleship Texas here. We can slap names all over that dude.

COMMISSIONER RAMOS: Would it be unreasonable to put it back on the Commission? In other words, that the Executive Director shall on a case-by-case

basis, because I don't want us to — I mean, on the one hand, if someone makes a contribution that is nominal, you don't want lifetime for something.

COMMISSIONER HOLT: You don't want to give it away.

COMMISSIONER RAMOS: It almost seems to me that to protect you, Bob, that perhaps it ought to fall back on the Commission, and that the Commission would determine that. I don't know how you have historically have done that.

COMMISSIONER FITZSIMONS: I think you have to be — I think Lydia hit the nail on the head. You have got to be very careful with this. You could very quickly devalue and cheapen the Department and its image, if you are not careful. But then —

COMMISSIONER HOLT: There is real potential there.

COMMISSIONER FITZSIMONS: — there is real potential. I mean just look. Do you think Texas A & M and the University of Texas shy away from the concept of putting somebody's name on something?

COMMISSIONER HOLT: No.

MR. COOK: There is a real difference to them naming a new facility, let's say like a building. Let's just say like the new center at Athens. There is obviously a real opportunity there. A permanent naming opportunity. On the other hand, like a piece of property, and it has been rare. When you look at the list, it is rare. Walter Buck gave us the Walter Buck and the South Llano State Park. We chose, the Agency at the time, and that was 25 years ago, chose at the time to name the Wildlife Management Area after Mr. Buck. But to name the part that we were going to make into a park, because of recognition and because of identity purposes, it is South Llano State Park. So even within a single donation, there is — you know, we have donors who do not want their name affixed to the donation at all. Elephant Mountain and Mason Mountain are classic examples of that.

COMMISSIONER FITZSIMONS: Lydia?

MS. SALDANA: I wanted to add just one comment. The one issue that came up during our Sunset policy, was the issue of the contract in perpetuity with Texas Monthly.

COMMISSIONER FITZSIMONS: Right.

MS. SALDANA: So that is another issue I think we should be thinking about.

COMMISSIONER FITZSIMONS: Yes. They were critical of the fact that it was an actual —

MS. SALDANA: The fact that it was — right. And I think that was another, certainly in my mind, having gone through that process, that was something in my mind that I think we need to be careful about.

COMMISSIONER FITZSIMONS: Well, couldn't you, as Vice-Chairman Ramos says, that if you looked at the — go back one slide. If you were to make it Commission approval, and the issue of whether the term, if any —

MS. BONTEMPO: I was going to say, one thing that I think that this allows us, is some flexibility to renew a ten-year agreement, like we do with most agreements. If an existing sponsor always has first rights of refusal for renewal. And that gives you an opportunity to it is long enough that the investment you make in the naming of a building, for example, the signage, et cetera, is going to pay off. And yet, it is not so long that you have issues that might come up with changes and with that particular sponsor, or with the facility, that you could always renew it, for an additional amount.

COMMISSIONER FITZSIMONS: Right. But do we really need that underlying "does not exceed ten years"? I think that is Peter's point, is that it is in the discretion and it is a limited term. And naming right, the term is defined. I would even strike the term, limited. Term naming right is defined in advance.

COMMISSIONER MONTGOMERY: I would suggest that it say, with a term and a pricing and endowment schedule developed with the approval of the Executive Director and his recommendation to the Commission. I know you turn that into a sentence and not a series of pauses.

MR. COOK: I think we are mixing apples and oranges here. You may need to help me out. But we are talking here about limited naming rights to begin with. We are not talking about permanent naming rights.

(All talking at once.)

MR. COOK: Right now, we don't have sort of, in the policy, if I understand —

MS. SALDANA: Yes.

MR. COOK: — we don't have in our policy a provision for this limited naming right.

COMMISSIONER HOLT: You don't have anything for permanent, either. I mean, for permanent naming rights.

MR. COOK: Yes.

COMMISSIONER FITZSIMONS: What is that? A Commission action?

COMMISSIONER MONTGOMERY: I have just been through this for a school. And the standard school formula, is if you get 50 percent of the costs, and put up a permanent endowment of probably 25 to 30 percent of the total costs, that buys you the name of the building. And to me, it is a question of price. If we can get buildings financed and endowed on a permanent basis, we ought to be willing to give a permanent name. You know then you are really taking it off the books of the state. You put up the money, and you earn the right for the name. Any less than that, you may go to a more limited term.

You may go to some other variation. But to me, it is a continuum from a short term sponsorship to a permanent name, that really, we could have develop guidelines that universities or a lot of schools do. Or we could just say, our policy is, we are willing to give those. Executive Director should come with a schedule and a pricing, and an endowment program, and get Commissioner approval from them, so that we are very careful, because I agree, if you do it wrong, it could end up real bad.

COMMISSIONER HOLT: And because that kind of situation could also make the difference of whether you are going to build a building or not.

COMMISSIONER MONTGOMERY: Absolutely. And that is really what the Lone Star Legacy Campaign was all about. It was without the naming, but it was attempting to find private capital.

MR. COOK: I just wanted to point out to you, we have in place, in policy, the authority for permanent naming rights.

MS. BONTEMPO: For lands and features, yes.

MR. COOK: This simply, I think, adds limited naming rights.

MS. BONTEMPO: This is for facilities. This all is speaking to adding facilities, and making that a limited right.

MR. COOK: If the Commission desires, it would be to put this whole thing out, shake it out, and go through it, and revise, update, add criteria, we can do that. That wasn't where this was going.

COMMISSIONER MONTGOMERY: The other element, personally, I prefer to see us do that and add the Foundation in the mix, and determine what role they are exactly going to play. Because we have got them — at one point, Mark chaired the campaign in the Lone Star Legacy and you raised $40-odd million dollars to fund a whole bunch of projects. We are doing rifle shots now. But it is out there, playing a role. Having looked at the naming question, with the [inaudible], it is confusing what the state's rights are, what the Foundation's rights are. It is very tricky. On the one hand, we want endowment. Can the state keep it? Does the Foundation keep it? What is our master policy on that. I think it would be good to address all that as a package and clarify those roles, so that everybody knows what they are, so that Darcy, Lydia and the Foundation jointly can have a coherent marketing program. And it does not have confusion with the menu they can offer.

COMMISSIONER FITZSIMONS: Do you have a time frame problem here that you have to have this for some purpose in the short term?

MS. BONTEMPO: No. There is certain opportunities involving naming rights that we will just wait to offer until we have got those resolved.

COMMISSIONER FITZSIMONS: But you can't do those under existing policy?

MS. BONTEMPO: Well, they are for facilities. Some of the ones that we are looking at are for facilities, and that is actually what prompted this presentation.

COMMISSIONER MONTGOMERY: Why don't we pass up that. I hate, having said what I would propose as a sort of a grand approach, I don't think we want to miss an opportunity. If somebody is interested in naming the facility at the right price, we need to empower the management team to go pursue that opportunity.

COMMISSIONER FITZSIMONS: The only thing I would add is you need to strike that "does not exceed ten years," and leave the flexibility to Bob to negotiate. The whole point is, I think Peter said, is that you are limiting the negotiation. If you are going to get more money.

MR. COOK: And I would recommend that we get — I appreciate Commissioner Montgomery's suggestion to move forward with whatever adjustment, but I would recommend that we kind of lay this whole naming thing out, and like you said, coordinate marketing, the Foundation, get some input from some of those who have done a whole bunch of this stuff.

COMMISSIONER FITZSIMONS: Okay. So then if I understand, we are going to go forward then, and strike the term "limited," and strike the term, "does not exceed ten years." And you are going to come back with a briefing and another proposal of how we integrate Foundation naming rights, and any recommendations from the State Parks Advisory Board monitoring this, people, because I am sensitive to this one. I think there is a great opportunity, but I think you have to be, as Lydia said, you have got to be really careful that you don't turn this into a NASCAR.

COMMISSIONER HOLT: A wholesale sale.

COMMISSIONER RAMOS: I think Bob has the inherent power, since he can grant a permanent, I think he has the inherent power and the discretion to do limited. And what I am saying is, let's not hold up in pursuing whatever is available, because I think Bob has his authority. In the meantime, we can refine it like Phil is suggesting. But let's not hold off. I think you can do that.

(All talking at once.)

COMMISSIONER FITZSIMONS: He's got some special little places that he would like to name.

COMMISSIONER MONTGOMERY: This is going to be like presidential pardons, the day before he retires.

COMMISSIONER HOLT: We'll change the name of the Battleship.

COMMISSIONER FITZSIMONS: Okay. All right. And that is the end of the discussion. The recommendation is we go forward with the elimination of the term "limited," and the "does not exceed ten years." And it will now read "the term naming right is defined in advance," period.

MS. BONTEMPO: We can do that. Thank you.

COMMISSIONER FITZSIMONS: All right, thank you. It goes to the agenda for tomorrow, right?

MS. BONTEMPO: Thank you, sir. Thank you, Commissioners.

COMMISSIONER FITZSIMONS: Thank you, Darcy. Sorry to throw you all those curve balls. Staff ought to be used to it by now. I will place the item on the Thursday Commission meeting agenda for public comment and action. That was Item 5.

Any other business to come before the Finance Committee?

MR. COOK: No, sir. That is it.

COMMISSIONER FITZSIMONS: We are adjourned. Thank you.

(Whereupon, the meeting was concluded.)

C E R T I F I C A T E

MEETING OF: Texas Parks and Wildlife Commission Finance Committee

LOCATION: Austin, Texas

DATE: April 5, 2006

I do hereby certify that the foregoing pages, numbers 1 through 78, 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.

4/17/2006

(Transcriber) (Date)


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