Texas Parks and Wildlife Commission

Finance Committee Meeting

May 25, 2011

Commission Hearing Room
Texas Parks & Wildlife Department Headquarters Complex
4200 Smith School Road
Austin, TX 78744
BE IT REMEMBERED, that heretofore on the 25th day of May, 2011, 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 FALCON:  Thank you, Mr. Chairman.  The first order of business is the approval of the previous committee meeting minutes from the March 30, 2011, meeting, which have already been distributed.  Is there a motion for approval?

COMMISSIONER HUGHES:  So move.

COMMISSIONER MORIAN:  Second.

COMMISSIONER FALCON:  Commissioner Hughes.  Commissioner Morian.  All those in favor?

(A chorus of ayes.)

COMMISSIONER FALCON:  Okay.  Committee Item Number 1, Update on TPWD Progress in Implementing the TPWD Land and Water Resources Conservation and Recreation Plan.  Mr. Smith.

MR. SMITH:  Thank you, Mr. Chairman and members of the Commission.  We do have a Land and Water Action Plan update that we want to give you today on the Texas Outdoor Family.  You will recall that one of our goals in the plan was to host 650 families a year through that Outdoor Family program.  State Parks is really doing a masterful job of that.  They’ve already exceeded 600 families and expect by the end of June to have met or exceeded that goal.  So, very pleased to provide that update to you and really appreciate the job that Chris Holmes and his team are doing out there.  Really, again, a masterful program.

A couple of other things of interest that I will share with you.  Our State Parks Division had the pleasure and privilege of hosting President Bush out at Big Bend Ranch State Park a couple of weeks ago.  He’s, as you may know, a very avid mountain bike rider.  State parks are important destinations that he enjoys using when he is riding his mountain bike.  I don’t think I’m giving away any state secrets there but I want to applaud our State Parks Division and our park peace officers, our superintendent out there, some of our game wardens and then Captain Chris Davis from our Internal Affairs Division.  You really did a great job making sure that everything went well with his visit there and his protection.  So, nice to be able to host that.

We do have some rules that we want to ask your permission to publish.  You will recall, at this time, kind of at the end of a legislative session, there are a number of laws that are passed that require the Commission to adopt rules on certain things prior to September 1st.  I’m going to pass out a suite of bills that we have been tracking, most all of which have been passed or soon may be passed by both chambers and sent to the governor for his decision and some of these may require Commission rules to be developed prior to September 1st, not all of which.  So, I’ll give you a couple of examples on that front.

Bottom of the first page, House Bill 1300 by Chairman Ryan Guillen.  This is a bill that relates to us to be able to negotiate cost-related marketing partnerships with corporations to help further the Parks and Wildlife brand.  It may allow, under certain rules that you set, companies the ability to sell state park passes, the ability to engage in constructive marketing agreements with us and so we think that this is way that would help us advance the work of the agency through these corporate partnerships and Lydia and her team have worked closely with Chairman Guillen on that and so that’s something that I suspect we’re going to need to come back to you for rules on in August.

On the second page, another example by Representative Parker, HB 1395, and this requires that for the first time, mandatory boater education.  This is a very important development with respect to water safety and boater education.  Kudos to Jeff Parrish in our Law Enforcement Division for his work with the Legislature and a lot of interested constituents and Representative Parker for this bill.

For the first time, this would require individuals who were born on or after September 1st, 1993, to have mandatory boater education.  We think that’s very important, from a water safety perspective and this will require the Commission to develop certain deferral programs to allow folks under reasonable circumstances to purchase a deferral so that they don’t have to take the boater education and so there’ll be rules there that you will need to talk about.

There’s a number of other bills here that you will be asked to address; everything from potentially rules governing a stamp that will allow individuals to collect or harvest or collect snakes on public roadways, a bill that would allow for you to set rules governing noodling   ‑‑ catching a catfish by hand.  That bill’s gotten some interesting coverage nationally.

And a variety of other things that you will be asked to look at and what we’re simply asking for here is a go-ahead to get permission from you to go ahead and publish rules in advance of the August session to deal with these legislative requirements that we have and so we respectfully ask your permission to proceed with that,  Mr. Chairman.   So, with that ‑‑ and, very shortly, we’ll have an update, not only on the budget but also a number of bills and so we’ll have a chance to discuss things that you may have an interest in and so we’ll certainly come back to that but if anybody has any questions, we’ll be happy to address them.

COMMISSIONER SCOTT:  All I know is, if anybody wants to go catching catfish like that, I did it to a water mocassin ‑‑ got real close to me one time.  Anybody wants to do that for a hobby, they’re welcome to do that one.

MR. SMITH:  They’re at their own peril, Commissioner.     COMMISSIONER SCOTT:  I’m telling you.

MR. SMITH:  Yes.

COMMISSIONER DUGGINS:  Are you going to come back and talk about the snake-hunting bill?

MR. SMITH:  I was not planning on it but I’m happy to visit about that at this juncture, if you have any questions about it.

COMMISSIONER DUGGINS:  So, it has passed?

MR. SMITH:  It has passed.  Yes.  So, it’s on its way to the governor’s desk for his decision about whether or not to sign the bill or to take some other action.

COMMISSIONER DUGGINS:  Okay.

MR. SMITH:  If any of you have any questions about that, I’m happy to visit with you later on that.  Any other questions on that?

COMMISSIONER FRIEDKIN:  Next item ‑‑

MR. SMITH:  That’s it, Mr. Chairman.

COMMISSIONER FRIEDKIN:  Committee Item Number 2, unless there were any other questions?  Nope.  Legislative update for Fiscal Year ‘12, ‘13 and budget discussions.  Mr. Carter Smith and Mr. Gene McCarty.

MR. SMITH:  Thank you, Mr. Chairman and members of the Commission.  I appreciate the chance to have this discussion with you today.  Really, our hopes to talk about some of the budget-related impacts and issues associated with House Bill 1, the proposed budget bill for FY ‘12 and ‘13, at least as we know it now and I guess a couple of things before we start and, you know, this is one of the many times of the year in which Gene McCarty shines the brightest for this agency.

You can’t possibly begin to understand all of the nuances, all of the machinations, all of the calls and demands on his time from legislators and staffers, seven days a week, 24 hours a day about all of the most intricate nuances of a very complicated budget and I just want you to know how seriously Gene takes that, how thoughtfully he takes that and how well he represents this agency, making sure that our interests are as well represented.

There are innumerable times in which he is asked to make snap decisions that have multimillion-dollar implications, many of which are not particularly obvious to the uninitiated and so, he does an extraordinary job looking out for the interest of the agency and, Gene, I want to thank you for that because, candidly, you’ve just done a remarkable job and I want the Commission to know that, Mr. Chairman.

I also just want to say that what we’re going to present today ‑‑ Gene, did I embarrass you sufficiently?

I was hoping ‑‑ you’re a little deeper shade of crimson so I’m happy to keep going, if you’d like.

In all seriousness, what we know now is what we think we know.  We have not yet seen a published conference report.  We expect that to come out tomorrow.  Neither chamber has approved a budget bill and so, you know, it’s still an open question as to whether or not the budget will be approved or whether or not they’re going to have to go into special sessions.

But, what we’re going to present to you is what we believe we know and I think we’re very, very close on this but I just want to provide that caveat to you and so we look forward to getting your feedback here.

The first slide that I want to go over – and basically how we’ll start this is kind of give a little context and background of kind of where we hope to start versus where the budget started and, of course, what is proposed now.  We want to then come back and talk to you, at least at the senior staff level, kind of how we have chosen to look at key budget decisions and kind of guidelines and protocols that we have looked at to try to prioritize, to make hard decisions.

Then we want to have a discussion with you today about key and salient programs within our four land and water program goals and describe how we think they are likely to be impacted, in terms of services and outputs and products and deliverables, under the budget, at least as to how we’re looking at.

We want to talk about the time line for your approval and, obviously, this is part of a process in which we need your feedback and your guidance with ‑‑ and direction, as we go forward with some very, very important and long-lasting decisions for this agency.

So, again, where we’ll start is this budget comparison and basically, fairly self-explanatory.  The LAR ‑‑ the Legislative Appropriations Request, there at the bottom, $700 million was our request over the biennium.  In the next column, HB 1, at the bottom, what is being recommended, what we think is $555 million, a proposed reduction to the Parks and Wildlife biennial budget of about $145.46 million.  So, almost a proposed 21 percent reduction to the agency’s budget.

What I’d like to do is point out a couple of these line items.  I’m not going to talk about all of them but some that I think are particularly notable.  The second one; Capital Equipment.  We’re a field-based agency.  Seventy-five ‑‑ 80 percent of our folks are out in the field.  They are carrying out the mission.

These are our biologists, our game wardens, our park rangers, our outreach folks.  They are executing the mission.  They need trucks and trailers and boats and lawn mowers and weed-eaters to operate.  The folks here also need printers and computers and that kind of thing.

And so, you know, this capital equipment line item, you can’t overstate the importance of it.  Where we started with the proposed budget was zero and so, really, thanks to the work of Gene and this Commission, I have been able to restore 25 percent of that budget to provide almost $4 million to the agency to help with some basic capital equipment and transportation needs to sort of help bridge us throughout the next biennium.

The fourth item down is Capital Construction and you’ll see that that looks like a very significant reduction in funding from the proposed legislative appropriations request.  A lot of the funds being carried forward into HB 1 have to do with unexpended fund balances that we’ve reported on to you many times that Rich and his team are very rapidly getting encumbered and expended.  Some of the delta ‑‑ the $41 million, there’s some freshwater fish stamp funds that aren’t being appropriated going forward.  There’s a lot of Fund 9 capital construction authority and funds that are not getting appropriated and then there are also a number of ‑‑ out of one time, non-recurring costs that we had, associated with Hurricane Ike recovery that are not being appropriated going forward.

So, that Delta looks pretty big.  There are some explanations.  We’ll come back to the Fund 9 capital construction shortfall, because that’s an issue.

You will undoubtably see, in the local park grant item there, that you’re looking at, you know, almost a complete reduction in funds there and certainly that is a complete reduction in funds, in terms of no money being provided for any new grants outside of what we may get in federal land and water grants and recreational trail grants.

So, the funding basically that we have here will allow us to keep some semblance of our current staff to help administer and monitor ongoing grants, Mr. Chairman and Commissioners, that we have already allocated and disbursed so that is a very significant hit there.

If you go down to Land Acquisition, you will see that essentially all of the state funds that we have traditionally had over the biennium are proposing to be eliminated and so we’ll talk in a little bit about some federal funds and proceeds from land sales that we may have to use for land acquisition purposes but for all purposes, any land acquisition is going to be very, very limited.

Also, you’ll see in the last two items, HB 1301 ‑‑ I’ll come back and talk about that later.  This is the voluntary opt-in donation that one can make when one registers their vehicle; a $5 donation or greater that one can make to help support state parks and I’ll come back and talk about that and, of course, this Commission is very familiar with Rider 27, and so we’ll have a conversation about that shortly.  So, I wanted to give you that basic budget comparison.

The next slide gives you a context of where it is proposed we be, with respect to our FTEs or Full Time Equivalents.  Our positions, you will see, that basically the net of this is a reduction of about 169 FTEs.  The first line shows what was proposed in the base with the proposed reduction of 231 FTEs.  You’ll see in the next two lines 62.3 FTEs that we have the potential to add back to the budget.  The 60.3 in Rider 27 are associated with state parks and they’re contingent upon some things in Rider 27 and I’ll come back and talk to you about that.

But, basically what we’re looking at, kind of net/net is $145 million in reductions over the biennium and a reduction of 169 FTEs so that gives you that context.

One of the core tenets that this Commission asked to go forward in working with the Legislature was to ask for special disposition to have some flexibility with respect to our budget execution.  In other words, specific tools that we could have to prioritize where we want to make the cuts and how we could manage down to whatever number we were ultimately appropriated and so, there’s a number of riders and technical adjustments that the Legislature has proposed to approve and I’ll walk you through those that give us some flexibility.

The first one has to do with unexpended balance authority within the biennium.  Basically, if we have an unexpended balance in the first year of the biennium, we have the ability to move that into the second year.  So, that’s very important so we don’t lose those funds.

FTE cap flexibility.  Traditionally, you were required to average the number of FTEs over the four quarters of the year, to make sure that you’re consistent with the FTE cap.  This one allows us to do that average over the eight quarters of the biennium and so gives us a little flexibility there.  So, you want to add anything to that?

MR. MCCARTY:  No.

MR. SMITH:  Okay.  The third ‑‑ jump in, Gene, at any time.  So, the third one has to do with an exemption for intern FTEs and so interns don’t count against our FTE cap.  We’ve got a strong intern program.  That’s not going to be as robust, going forward.  Obviously, we want to make sure everybody knows that.  We will keep some semblance of an intern program everywhere we can but this doesn’t count ‑‑ those FTEs ‑‑ against our cap, which is a big help.

The next one is a little more complicated but a very, very important one, with respect to our budget flexibility.  In the budget there was a prohibition against transferring funds into Article 9 and – or, I’m sorry, transferring funds into Indirect Administration and Information Technology, obviously a critical part of this agency is located in our Indirect Administration and the budget, as originally contemplated, proposed that we pay for all of the additional data center consolidation fees by taking that out of our IT operating budget.

So our IT operating funds were going to be very, very disproportionately and significantly impacted and, with the prohibition on transferability, we wouldn’t have the ability to try to disperse those across other parts of the agency and so we worked with the Legislature to get an exemption for that.  We feel IT is such a critical component, managing and supporting a very dispersed agency and so we’re very grateful for the Legislature for that.

The last one has to do with Capital Budget expenditures from federal and other items.  I have mentioned land acquisition and capital equipment earlier.  Basically, what this does ‑‑ this allows us to use donations and federal funds and other certain funds to use for capital equipment and transportation and land acquisition.

So, for example, if we get an appropriation from the Land and Water Fund, that comes to the agency.  These are federal funds.  We would now have the authority to be able to use those for strategic land acquisition, as approved by the Commission.

So, again, some very important flexibility riders, very consistent with the direction, Mr. Chairman, that you had given us going forward.  So, Gene, you want to add anything on that?

MR. MCCARTY:  No.

MR. SMITH:  Okay.

MR. MCCARTY:  You’re doing good.

MR. SMITH:  Okay.  All right.

COMMISSIONER DUGGINS:  Before you leave that ‑‑

MR. SMITH:  Sure.

COMMISSIONER DUGGINS:  On this last item, does that allow the foundation to contribute funds for capital equipment and allow us to expend those funds for capital equipment?

MR. SMITH:  It would and actually we already have that authority right now.  If there are private donations that come, it brings its own appropriation authority and so ‑‑ but having that line item there would allow us then to use it to acquire capital equipment or vehicles or that kind of thing.  So.

Okay.  The next one is Rider ‑‑ budget Rider 27 and I’m not exactly sure if it’s budget Rider 27 going forward ‑‑

MR. MCCARTY:  It is.

MR. SMITH:  Oh, it is.  Okay.  All right.  So, it’s something that we talk about quite a bit.  As you know, historically, this has allowed us to be able to capture and utilize revenue that is earned through hunting and fishing license sales, other receipts, state park fees, above and beyond the comptroller’s biennial revenue estimate and in the budget, again, as we think we know it now, Rider 27 would allow us to use up to $5 million in the biennium in Fund 9, so basically $2.5 million a year.

We expect that will come somewhat through hunting and fishing license fees and we may have some additional oil and gas revenue out there that could potentially help us as well.

Account 64 have capped us at being able to use up to $6 million in additional funds over the biennium; $3 million a year.  We expect that that’s largely going to come from increased fees that we collect in our state parks.  Just as a reminder, on an annual basis, our State Parks Division does a market analysis of our fees.  At every one of our parks, our superintendents look at their fees and do a comparable analysis of other nearby parks and then recommend adjustments downwards or upwards, based upon the area market.

And so our ability to use these funds is very, very important.  It’s going to require a couple of things.  One, certification from the Comptroller this summer that the Comptroller’s office believes that we can approve this revenue so that we would have confidence in budgeting this going forward.  Or us taking a leap of faith that, based on kind of our own internal business analysis, we think that we can generate this revenue in state parks and that’s particularly important because we have 60 FTEs in state parks that are tied to that funding.

And so, if we do not budget that additional $3 million in funds a year in state parks, that will undoubtedly lead to further cuts in state parks and, candidly, I can’t imagine that we would not be able to accomplish that without looking at suspension of operations in parks and by that I mean closures.

So, this is a very, very important part of our budget element.

COMMISSIONER FRIEDKIN:  In either case, will that require certification by the Comptroller?

MR. SMITH:  Yes.

COMMISSIONER FRIEDKIN:  Okay.

MR. SMITH:  Yes.

COMMISSIONER FRIEDKIN:  So we can’t just do it on our own internal estimates.  It still requires certification.

MR. SMITH:  It still requires certification.  Without it, we could potentially bet on the come and budget it and go forward and not make the reductions in state parks, assuming we’re going to get it and it’s going to be certified.  The risk of that is, if we go forward and we don’t meet it or we don’t get that certification, we will have to likely make deeper cuts.  So, there’s some risk associated with that.  Is that a fair characterization, Gene?

MR. MCCARTY:  Yes.

MR. SMITH:  Okay.  Any other questions on that?  We’ll come back to Rider 27 too.

COMMISSIONER FRIEDKIN:  Hold on.

MR. SMITH:  Yes, sir, Commissioner Hughes.

COMMISSIONER HUGHES:  On Account 9, you talk about the oil and gas revenue.  You talking about surface damages or royalties or ‑‑

MR. SMITH:  I think either, you know, obviously, we own royalties in a number of sites and so, you know, depending on what happens with respect to wells that are drilled or may be drilled.  You know, hopefully, we’ll have the ability to capture some revenue there so, yeah, Gene?

MR. MCCARTY:  Rider 27 would only relate to the royalties.  The royalties are part of our existing revenue stream.  Surface damages will be treated separately and will bring their own appropriation authority and will be treated outside of Rider 27.  Surface damages ‑‑ we get the authority regardless.  We don’t have to have appropriation authority for it, it brings its own.

COMMISSIONER HUGHES:  Okay.

MR. SMITH:  Yes, sir, Commissioner Duggins.

COMMISSIONER DUGGINS:  In the past, this has not been capped, has it?

MR. SMITH:  It was capped last session on Fund 9 and with the specific stipulation that we use it to fund the program that the Commission had allowed us to go forward with, with respect to compensation adjustments for our fisheries and wildlife biologists and technicians and, in sessions prior, it has not always been capped.

COMMISSIONER DUGGINS:  I’ve forgotten, in our discussions, we weren’t talking about caps, were we?

MR. MCCARTY:  No, sir.  Our original proposal was uncapped.  It was an estimated amount, allow us to spend whatever we bring in.  We passed the House with an uncapped Rider 27.  The Senate capped it at the amounts we see here and then, through conference committee, the Senate prevailed, as we know it today.  I haven’t seen Rider 27 but this is what I’m being told it looks like.

COMMISSIONER DUGGINS:  Okay.

MR. SMITH:  So, this may be subject to change, as Gene said.  I think the amounts are probably pretty close.  There’s a lot of discussion in the Senate about trying to find whatever way possible they could use to try to minimize state park closures.  So they were very, very focused on that in the Senate.  And so, this was an artifact ‑‑ at least a part of that.

COMMISSIONER DUGGINS:  So, is there any chance of raising the 64 cap?

MR. SMITH:  I don’t think so.

MR. MCCARTY:  No.

COMMISSIONER DUGGINS:  In spite of that ‑‑

MR. SMITH:  Any questions on that?  The next slide I want to go through is what the leadership team here has kind of been using as our guidepost, as we’ve been thinking about strategic budget recommendations to the Commission and so I’ve kind of ‑‑ these have been kind of the guiding principles in which we’ve used to help frame our recommendations and our deliberations and so we definitely wanted to share those with you.

You know, first and foremost, you know, we believe you have given us your vision, your strategic document, with respect to the Land and Water Plan and those four over-arching goals and the clear objectives and action items in there and so everything we are proposing to budget, we’re betting against the Land and Water Plan.  Obviously, we have to focus on those statutorily required functions and core services, things that the Legislature has said the agency will do and so those are things that the Legislature expects us to do.

We are looking at, you know, funding an FT allocations, looking at how we adjust those though to meet strategic priorities and so, you know, the Legislative Budget Board has proposed a number of recommendations for how we will direct those funds.  Obviously, we are using that as guidance but there are other strategic priorities within the parameters that we can work that we are definitely trying to operate to give us as much flexibility as possible.

I think we also recognize, with budget cuts that are as deep as these are, this is going to be an iterative process.  We’re going to make a lot of decisions and we’re not going to get every decision right and we’re going to need to be able to adjust on that and there are going to be some decisions that are going to need to be made into and throughout next biennium with Commission approval and guidance and so, you know, thinking about this very clearly, from an adaptive management strategy, is very much kind of a core principle for us going forward.

Also, with respect to these last two bullets, this is unavoidable and an inescapable truth, associated with this budget.  We cannot avoid reductions in force with the budget that is on the table right now.  And so, we absolutely are going to have to do that and I think, as the Commission knows, we started that process with respect to our regional realignment in state parks.

But it is very, very important about how we go about that reduction and to make sure that we are doing that in ways that honor our core values and are as respectful to the men and women that serve this agency very, very proudly and so we are unequivocally committed to doing this in ways that honor, you know, this agency’s core values, doing this with compassion and respect.  Also making decisions that are fair, that are consistent and that we are treating our colleagues whose positions are going to be reduced with as much dignity as we can possibly give them, in these very, very difficult decisions.

In that regard, with respect to our staff reductions that we have made and will be making, one of the things that we are doing to provide, you know, some flexibility with respect to these is that colleagues whose positions are being eliminated for business reasons or for, in some cases, performance reasons, we will give them, after notification that their position is being eliminated and that notification will come from a regional director on up to a division director or a deputy executive director, that we will give those colleagues, you know, up to two days to help kind of wrap up their projects and make appropriate notifications to people about ‑‑ as they’re transitioning outside of the agency and so we spent a lot of time on that front and then, also, that we’re going to be providing 45 days of paid administrative leave as part of that, to every colleague whose job is eliminated as part of this.  They will still be eligible to receive their other benefits.

If there are those that are eligible to retire ‑‑ and that’s another issue.  There may be individuals whose positions are being eliminated but they are eligible to retire.  At the end of August and if they let us know that that’s something they want to do, we’re going to allow them to continue working through the end of August, if they so choose.

We’ve also decided that there may be some colleagues whose retirement eligibility comes after August 31st but before December 31st and if they notify us in the process that they are, for the first time, eligible to retire ‑‑ say, in September or October or November, we feel that the right thing to do is to continue to allow them to work up until that time, at which point they would retire from the agency.

So, we’re trying to approach this with as much respect and as much compassion as we can.  Obviously, we have to make some very difficult business decisions with respect to eliminating positions but we’re trying to do this in as thoughtful a way as possible and I wanted to make sure that this Commission was aware of that.  So, Gene, you want to add anything to that?

MR. MCCARTY:  No, that’s good.

MR. SMITH:  I now want to talk about some of the, I think, key issues that we’re confronting with respect to this budget and one that, you know, this Commission should be apprised of.  These are issues that are cross-cutting in effect, you know, kind of the agency as a whole for the most part ‑‑ are very prominent parts of the agency that I want to make sure that you are aware of.

I know that all of you are aware that the budget bills, as originally contemplated, called for the proposed transfer of seven state parks to local communities and the budget assumed that those ‑‑ that positions associated with those state parks, those 60 positions that we talked about and funding would then be removed from our budget and those state parks were Daingerfeld, Big Spring, Blanco, Lockhart, Sebastopol, the Wyler Tram out in El Paso and then Lake Casa Blanca down in Laredo.

Scott Boruff and Brent Leisure had discussions with all of those communities to assess what interest, if any, or capacity those communities had to potentially take on the operational responsibilities of those state parks.  Only one of those communities ‑‑ Seguin ‑‑ has asked to take on a site, that is, Sebastopol.  That is a historic site that the agency has had since the ‑‑ I think ‑‑ the mid-1970s, Brent.

It’s a historic example of out of an old limecrete architecture.  I think the house was built back in the 1850s or 1860s but Seguin would like to take on that responsibility.  In fact, there will be an agenda item today, asking for your permission to go forward with getting public comment on that.

The other six communities declined.  They were not in a position to take those on, which obviously then has budgetary implications for us in terms of where we’re going to have to reduce dollars.

I will say that we had communities like Big Spring out in West Texas that came forward with a very viable proposal in which they proposed to bring dollars and resources to help offset the cost of operating that state park and through the negotiations of our State Parks team, with the leaders of Big Spring, I think have come up with a way in which we’re going to be able to keep Big Spring open, which the community really wants but they’re providing a funding and support to help make that happen and really appreciate them formalizing that and we’re in discussions with other communities on that as well.

So, that’s an update there.  We’ll come back a little later here in the presentation about specific impacts to state parks, at least as we’re looking at it now but wanted to make sure that you were aware of that update and also, again, how important that is with respect to Rider 27 on the state park side.

COMMISSIONER SCOTT:  So, do I understand that you are going to go in depth on each of the other six that have no appetite in those communities or are you going to go line by line to talk about those?

MR. SMITH:  I wasn’t ‑‑ Commissioner, I wasn’t planning on going line by line because I don’t think we’ve quite finalized that yet in an individual park level.  What I can say about each of the other six, at least our recommendation is, that we do everything possible to keep those parks open and as well funded as they can be.  It could be that maybe one of those parks we recommend that is not open seven days a week, just because we don’t have the visitation for it or the funds to support it but certainly, as we kind of go through the detail on that, going forward Commissioner, we can certainly talk about that and get any input you may have.

COMMISSIONER SCOTT:  Oh well, I’m just ‑‑ I’m sure some other Commissioner’s going to get the same thing and I’m sure I’ll have some phone calls on a couple of them, you know, so I’m sure everybody will have some conversation so we need to know what to tell everybody out there and how they need to proceed, probably, more so than anything.

MR. SMITH:  I think ‑‑ and that’s a really good question, Commissioner, and I guess our recommendation on that ‑‑ and one of the things we’ve asked all the communities is, that if they are able to come forward with a formal, written proposal about, you know, what they can do to help with some of the operation and capital costs associated with maintaining that park, we really need to see those proposals now as we are in the throes of budgeting.  You know, we’ve had communities like Blanco and Lockhart, just to select two, which have ‑‑ are keenly interested in making sure their parks stay open and, obviously to the maximum extent possible, we want to try to support that.  I mean, it would certainly help us if we had formal proposals from those communities as to what they could bring to bear with respect to specific commitments so that then we could evaluate that and come back and make some recommendations to you in June, at the budget workshop.

COMMISSIONER SCOTT:  Specifically, Blanco is one that’s very close to my ranch where I live, you know, and it’s a big concern but I hear things commented upon in town and stuff and they perceive that they don’t have an issue.  And so I know that there’s not good information.      You know, they get something from Senator Fraser’s office that it’s all taken care of.  Well, we all know that’s not true.  So I have an idea that’s probably true in some of these other cases and I know that’s kind of what you just said is what I wanted to understand too is, when is the time and this wording ‑‑ they need to be made aware that this stuff is happening now.  It’s not happening six months or a year from now, you know, we’re trying to figure these numbers out right now.

So, somewhere in here, there’s a disconnect, at least on that one, on the public’s perception or the elected official’s perceptions as to what the realities are.

MR. SMITH:  I think that’s a great, great observation, Commissioner and, again, I think, what we’ll do, in follow-up with this is, ask Scott and Brent to follow back up with those communities which haven’t come forward with a formal proposal and let them know, we really need this.

COMMISSIONER SCOTT:  I think that’s ‑‑ okay, yes.

MR. SMITH:  So, let us follow up on that and help address that and, obviously, as you know and we’ll talk about this in a bit, I mean, one of the sentiments that we felt like we had heard loudly and clearly from this Commission was, to the maximum extent possible, try to do everything reasonable to avoid closing parks, if we had the funding and if we had the FTEs.

And so, again, going back to the Rider 27 issue, without certification of that revenue and the ability to keep those FTEs on, I have no doubt that we’ll have to come back with recommendations on potential park closures.

So, really, really important.  Good observation, Commissioner.

Commissioner Duggins, did you have anything on that?

COMMISSIONER DUGGINS:  I’m still thinking about it.

MR. SMITH:  Well, we’re going to come back to state parks.  Yeah, Gene.

MR. MCCARTY:  I was just going to say, a little later in the presentation, there’s kind of a time line of our process but at a real high level, we’re looking at a high level review of the budget.  Since the budget hasn’t even passed yet today.  Between now and June, the agency’s going to work through a number of these specific details and be talking to you at the June workshop in much more   ‑‑ in a much more detailed level and then, ultimately, the final decision comes at the August 25th Commission meeting.

MR. SMITH:  And I think one thing, if I could, I know many of you can help with this.  I mean, we have heard very explicitly and unambiguously from those other six communities that they do not want to see their parks closed so we’ve got that message and so we understand that and we have had dialogue then about what they could bring to the table with respect to help us get through these times and that’s really the part that we still need to see formalized from some of those communities.

Big Spring, again, I think, has been a leader in coming forward with a formal proposal that’s really helping us so ‑‑

COMMISSIONER DUGGINS:  But to Dick’s point, does Seguin, do they understand that the park, without some contribution from the community, that the park is likely to either close on some limited basis or close for some period of time.  I mean, how direct has our message been to these people so that they understand, this is a very real, not possibility but probability so that they get off their rears and get something in here.

MR. SMITH:  Well, I think our message has been very direct.  And, again, in fairness to those communities, they also have their own processes that they have to go through with City Council or Commissioner’s Court to get approval to make budget adjustments and so, you know, we have definitely let them know what the consequences are of, you know, the funding shortfall but we’ve also said, to be fair, you know, we want to look across the entire system at parks and if we have to propose closing any parks, we want that based on an analysis across the entire system, not look at just those seven parks that were identified by the LBB as possible transfers.

And so, those communities are aware of that, as well.  I don’t think they’re necessarily complacent about it.  It’s just ‑‑ the time is now and I think that’s, you know, Commissioner Scott’s point that we really need some more formal feedback from some of those communities.

With respect to Seguin, the city has said that they would like to take on ownership and stewardship of Sebastopol and so they have let us know that.  They are comfortable with that and so we’re going to be asking your permission today to go out for formal public comment on that to help effectuate the transfer on that front.

Yes, sir, Commissioner Hughes.

COMMISSIONER HUGHES:  Gene mentioned a June workshop.  Do we have a date identified for that workshop?

MR. SMITH:  We’re still waiting for, I think, final confirmation from Chairman Holt but I think we are looking at June 30th is the date, assuming that there’s not a special session called to deal with the budget because if there’s a special session called for the budget, we really need to have that budget workshop after we have the final budget.  But June 30th is the date and I think that worked for a lot of the Commissioners.  There may have been one or two it didn’t work for.

COMMISSIONER HUGHES:  All right.  Thank you.  Obviously, the quicker we can all know, the better it is to get on our schedule ‑‑

MR. SMITH:  Yes, sir.

COMMISSIONER HUGHES:   ‑‑ and try to protect that date.

MR. SMITH:  Absolutely, absolutely.  Yes.  And some of it is just we’ve got to see what the Legislature does with the budget and so but I think the 30th is what we’re closing in on.

COMMISSIONER HUGHES:  Good.

MR. SMITH:  I guess the third item that I want to point out and you saw this earlier in the budget, is the local park grants.  Obviously, there’s not going to be any new funding for local park grants outside of whatever federal dollars and so the last couple of years we’ve had $15 million to $16 million a year that you have been able to improve ‑‑ approve investments in the park acquisition and development and those funds are not going to be available going forward.

COMMISSIONER DUGGINS:  What about our commitment ‑‑ outstanding commitments.  Are we still able to fund those?

MR. SMITH:  Yes.  We’re going to be able to honor those outstanding commitments and we will have a team that will be still on staff to help administer those grants and make sure that they are being complied with and monitored appropriately.

The next item is bonds and this is a big deal for us.  As I think all of you know in both the original House and Senate budget bills, there was no funding that was contemplated for bonds for our capital repairs and construction and we are very, very grateful to the Legislature for restoring funding here.  $32.35 million in capital construction and repair authority.  This is very significant in order to keep our infrastructure program going on.

As you know, our Infrastructure team has really done an extraordinary job moving to get all of the past funds we have encumbered or fully expended and so we need another tranche of dollars to address all of the deferred maintenance issues we have so we can immediately start the planning and design and then construction so we do not fall further and further behind and so, for those of you who reached out to Legislators about this issue, it is hard to overstate the significance of this issue in having this restored into the budget.  So we’re very grateful for that.

The next item, a big issue is House Bill 1301 and, again, this was the issue about providing for the $5 voluntary contribution that one can make when one goes to register their vehicles.  The House Bill 1 presumes and by presume, it is built into the budget that we will earn $1,600,000 a year, based upon donations that individuals will make voluntarily when they go to register their vehicles.

That’s a leap, just to be fair and so we need to do everything we can to help try to market this program and make consumers aware that they have this option and can make this contribution when they go to register their vehicles.

In working with the Legislature and the Department of Motor Vehicles, there are some changes that I think that are going to be made to the vehicle registration form that will at least give notification to individuals about the possibility to do this, as opposed to be along the back page, in kind of a bottom corner.  This will be moved to the front page so at least it’ll have some prominence and visibility but we’re going to have to work hard to make folks aware of it.

Anything we can ‑‑ any help we can get from our tax assessor collectors, partners, the automobile industry, state park enthusiasts ‑‑ because Lydia and her team are already going to be stretched very, very thin so our ability to market this is going to highly limited and this is important for us.

The seventh item that I’ll highlight because, again, I think this is also a very important one because it’s not recognized, Mr. Chairman, and that has to do with, you know, the budget and it really never has had any provisions for inflationary pressures and so if we see the cost of fuel go up, we’ve got to absorb that in our operating budgets.

Again, a field-based agency with gas at $3.75 ‑‑ $3.80 a gallon, that has impacts on law enforcement patrols, has impacts on our fisheries and wildlife biologists out there in doing their surveys, has impacts on our state parks as the cost of fuel and electricity and commodities goes up, those are issues that we’re having to absorb.

The last one that I’ll mention as kind of a key issue for us is the Legislature’s call, as part of the budget, for a 15 percent across-the-board administrative cut.  That’s a diminution of about $8.1 million to the eleven divisions that we have, just to put that in perspective.

So, again, those are kind of some key issues that wanted to make sure that you were aware of, that ‑‑ ones that we are definitely thinking a lot about as we are going forward with budget planning.

I now want to transition into a discussion of how specific programs that we have that we have certainly heard from the Commission in the past to be very important ones to all of you and how they relate to, again, our four key land and water goals and so I want to kind of describe those programs and what kind of impacts that we’re likely to see and we’re thinking about and, again, your guidance, your direction, your thoughts on this is really important as we go forward.

Obviously, the first Land and Water Plan goal is a core function of this agency.  This is our science-based stewardship.  This is who we are as an agency.  Scientists, biologists, technicians that are out there stewarding the public’s fish and game and lands and waters.  So, this is really important.

The first one:  Private lands assistance.  We have over 26 million acres under private land program.  We see the demand for our biologists only escalating with each passing day, as more and more landowners become interested in wildlife management on their property.

With respect to this strategy or this program, we are really proposing to limit cuts to the maximum extent possible.  We are ‑‑ we just think that’s a core function.

The invasive aquatic vegetation control.  You know, this is the program that we have in Inland Fisheries to deal with water hyacinth, hydrilla, giant salvinia, now zebra mussels.  You know, our team estimates that we have, you know, well over 100,000 acres of lakes that are impacted from these infestations that obviously contracts and expands dependent upon the weather, you know, how rapidly the vegetation reproduces.

The Legislature has proposed to reduce this program by $750,000 a year.  That would basically, without finding surrogate funding, that would eliminate our ability to contract out with river authorities to do any kind of treatments that we would provide funding for.  So, at Caddo Lake or Toledo Bend or Lake Livingston or Lake Conroe.

And these are very real issues for anglers, for fishermen, for boaters, for real estate developers, for homeowners, for water quality and certainly, from us, from a fisheries perspective.  We estimate that we’d have to reduce our control efforts by about 14,000 acres that wouldn’t be treated as a function of this, is our best guess.

Gary and his team are looking at trying to find some surrogate funding to help replace this in some fashion, would probably be through federal funds, which would, in turn, require a match as well.  So, significant impacts there.

Fish stocking.  Again, a core element of this agency.  You know, one of our goals in the Land and Water Plan is to stock 39 million fingerlings a year in our state’s waters, both on the coastal and inland side.  Because of the real lack of funding in capital equipment, that’s going to have an impact on our hatcheries.  You know, those are complicated operations, with a lot of machinery and pipes.  Those on the coast are exposed to all the vagaries of coastal-related weather which is, you know, just tears in to the quality and maintenance of those facilities.

So, we are expecting to see our fish-stocking program go down, maybe by anywhere from 5 to 10 percent, is kind of our best guess on that front.

The last one that I’ll highlight on this goal ‑‑

COMMISSIONER FALCON:  Carter, dollarwise?  Dollarwise the fish stocking?

MR. SMITH:  Dollarwise for our fish stocking.  You know, we’re not looking at reducing dollars specifically in coastal fisheries necessarily to that strategy, although funds that will be granted to them for capital equipment are going to be lowered and so, again, that’s maintenance.

Inland Fisheries ‑‑ I think we’re looking at, you know, maybe a 6 percent reduction somewhere along those lines.

COMMISSIONER FALCON:  And, Carter, the long term impact of reducing the dollar amount, in terms of equipment and other things.

MR. SMITH:  It’s significant.  It is.  I mean, and as you saw ‑‑ and again, we’re very grateful for the Legislature for restoring, you know, 25 percent of the funding that we’ve historically had and, remember, we started at zero and so, there was a big push to try to get that.  We see that as kind of the bare minimum bridge to try to get us through the next biennium.

Also, we do have the flexibility to use some federal funds, if we have match, to help address emergencies, as well.  But that funding, I’ve really looked at, is just kind of an emergency bridge to get us through the next biennium.  If we go another biennium without funding for capital equipment, I think that could be significant for our fish hatcheries.

You know how old a lot of these fish hatcheries are, whether it’s our coastal one there at Palacios or Inland Fisheries up at Dundee, up at Electra.  So, there’s a lot of issues to take care of.  So the consequences long term of this could be significant.

COMMISSIONER FRIEDKIN:  I presume what we’re going through now is kind of a species prioritization for invasives and also for fish stocking to try to determine  ‑‑ minimize the impact of those decisions from a dollar standpoint as well as just species standpoint.  Is that right?

MR. SMITH:  Yeah. Absolutely.  Our fisheries biologists are looking at kind of what are the priority species, that they want to try to propagate inside those hatcheries, what can we do the most effectively, the most efficiently.  You know, I’ll remind you that we have the new John D. Parker East Texas Fish Hatchery coming online.  We’ll be having a ribbon-cutting late summer, early fall, that we hope all of you can make.  We’re hoping, over time, as we get ponds built out that we can eventually increase production there and maybe, hopefully, that will offset some of that.

But, yeah, absolutely, our teams are very much looking at that.  And, on the invasive, aquatic species, again, you know, Gary and Ross are looking hard at what other alternate sources might be there to help mitigate this effect.  But, I want to be clear, there will be effect; a significant one on our ability to address these problems in Texas waters.

The last one I’ll mention on this goal is our wildlife diversity program.  The Legislative Budget Board had called for some fairly significant reductions to that program and staff and operating resources.  Now, these are our biologists that deal with the rare and imperilled species, the non-game species.  When we have these issues, which a number of you are familiar with or have gotten involved in ‑‑ issues associated with the lesser-prairie chicken or the dune sagebrush lizard or the red-cockaded woodpecker.

These are the state biologists that are working very hard to try to keep those species off the Endangered Species list and working very hard to try to find viable solutions for landowners and industry and the state and to allow the state to continue to have the management and conservation of those species.  So, a very important part of our program.  We will be looking at some reductions here.

This is one of the programs where, you know, unfortunately, there’s not a lot of operating dollars outside of salaries and we will see some reductions in staff here but we’re sensitive to the importance of this for our state and the interest a lot of folks have had on Parks and Wildlife continue to stay as involved as possible on managing some of these species and trying to keep them off the Endangered Species list.  So, I wanted to comment specifically on that.

So, that’s a discussion of a couple of things under that kind of science and stewardship goal, to kind of give you the lay of the land on that front.  You know, we can talk about these and we can also come back and kind of talk about them in the aggregate, as well.

The second goal, as you know, has to do with how we try to do everything we can to provide access and participation in the out-of-doors, encourage youth and Texas families to hunt and fish and canoe and kayak and camp and bird-watch and enjoy, you know, our wonderful natural heritage and so, we know that there are a lot of programs here that are of great importance to this Commission.  Let me talk about a couple of them.

Public hunting.  In the bill that was originally contemplated, you will recall that they had looked at a 25 percent reduction in funding, also propose that we suspend our public hunting program for six months.  The Legislature has taken that decision off the table to level the funding off across both years of the biennium and so, you know, Clayton and his team with Linda are ‑‑ have been at ways to try to reduce the impact to our public hunting program and I think have done a really good job on that front.  One is a realization of some very significant savings, thanks to really some extraordinary marketing efforts that Lydia and her team have done to help realize savings in the marketing of the Big Time Texas Hunt Program, which you’re going to hear more about tomorrow.

I mean, have done an extraordinary job of using the best business analytics and statistical tools to cut our expenses in half for that program or more and see our revenues stay the same.  And so, those savings very important here in terms of helping offset impacts to public hunting.  I’m very grateful for that, Lydia, for you and your team and I know Clayton and Linda are, as well.

Basically, what we’re proposing here is about $100,000 reduction in fees that we would have available to lease land.  There, that’s about a 13 percent reduction overall and we would try to sort our way through that.  If we could negotiate lower per acre lease fees so that we don’t lose acreage, we’ll do that or, in some cases, we may not be able to execute leases because we just don’t   ‑‑ simply don’t have the funds.

So, we’ve tried to do all we can to try to address the public hunting thing so I wanted to kind of let you know, at least, what we’re thinking now on that front.

The next one is State Park access.  We talked, obviously, a lot about this but Brent and Scott and the leadership in State Parks have taken the charge from the Commission very seriously that we do a couple of things as we think about some very significant reductions to State Park funding.

You know, one, that we do everything possible to try to minimize possible park closures and try to do everything possible to keep our state parks open for Texas families and youth to be able to get out and enjoy them and do that in such a way in which we still are able to have some hope of coming close to meeting our revenue targets which, again, is a real trick.

So, in order to accomplish this, from a budgetary perspective, you know, we’re having to look at things like the regional office realignment that we have looked at, to look at reductions in operating funds for support programs for state parks, the interpretive, the exhibits, natural resources, our cultural resources, our law enforcement, some of our offices out in the field.  Look at reductions there so that we try to minimize the impacts on parks themselves.

The other important lesson that we learned from the last time we had very significant reductions in state parks, what we don’t want to do is to have parks that are open but which our state parks staff have no funds to operate those parks.  That is a terrible, terrible mistake, in terms of maintaining them, steward them and having an enjoyable customer experience and so Brent, Scott and the regional teams are thinking hard about that.

So, we are looking at a little over 20 parks, more or less, that we’re proposing to have some changes in their operations.  You know, we’re primarily looking at certain components that we may not keep open all the time or that we may transfer to a municipality.  For instance, we may have a swimming pool at a state park in a local community that wants to go ahead and take on the management of that swimming pool.  That will free us up to do other things associated with the park.

We may have a park in which we have a little restaurant.  We may not have that open seven days a week.  There are some parks in which we may elect not to have our office open seven days a week because you just don’t have the visitation to warrant it and we think that we can handle through the Iron Rangers or the drop-offs there, other ways to collect the fees and to be able to manage that.

There are, you know, roughly five, maybe six parks that we’re thinking about proposing changing how many days a week that they would be proposed to be open.  So certainly that’s a discussion that we’ll come back and have with you in June.  So there may be a park that we feel like could be open four days a week and still provide a lot of opportunities for folks to get out but we just can’t keep it open all seven days a week.

So, that’s how we’re thinking about state parks again, trying to minimize the impacts to the parks themself but I do think it’s important to recognize, there is a threshold here that if we don’t have a certain level of support to support our parks, it doesn’t work and so   ‑‑ and we’re bumping up against that, just to be fair in terms of where we are now.

Also, again, the plan to try to minimize closing parks is contingent ‑‑ can’t state this enough ‑‑ on the certification of that Rider 27 revenue by the Comptroller’s office, if we’re going to budget for that.  So, really, really important going forward.

I talked about the local parks grants.  I won’t spend any more time there.  The Fund 9 capital construction.  This is a big issue for our Inland Fisheries, our Wildlife, our Coastal Fisheries, our Law Enforcement because there is just a very little amount, a little over $750,000 in unexpended balances for Fund 9 capital projects that were budgeted forward into the next biennium.  We will have the ability to access certainly some of the bond funds ‑‑ the $32.35 million for certain Fund 9 capital repair projects that are critical but there are a fair amount of Fund 9 capital construction funds that were not appropriated going forward.

And so that’s going to have an impact on the things that you asked about, Chairman Falcon, with respect to maintenance ‑‑ deferred maintenance and hatcheries, wildlife management areas, law enforcement offices, et cetera, so this is an issue for us and one in which ‑‑ just like on all of our infrastructure, we’re likely to accumulate other costs going forward.

The last program that I’ll highlight that certainly we have recognized, very important to this Commission is the Texas Outdoor Family program.  We talked a little bit about that earlier.  We know this program is important to the Commission.  We are trying to limit impacts, although, to be fair, we are proposing some reductions in operating funds for the Outdoor Family program that may impact it and may very well impact our ability to reach 650 families a year, as contemplated.

I will say that I think Chris and his team are doing everything they can that you had hoped they would do to get other local parks-related offices to adopt that program, to see our resources leveraged and to see that placed and adopted in a lot of other agencies and we’re just going to have to see more of that.  So.

COMMISSIONER MARTIN:  I was just going to ask about if there was possibilities of even individuals or foundations or corporations taking on certain sponsorships of that.  Just had a lot of feedback in this particular one where the value of individuals that may not have the economic resources to go on extended holiday and also getting out and teaching the children and families from Mother, Father, et cetera and so, on the children ‑‑ coming in from the Children in Nature and the family aspect, I’ve had a lot of inquiries about that and if there are possibilities of adopting particular parks or adopting particular programs or saying, you know, this corporation or this foundation will sponsor this particular one.  I just don’t know if there’s options in that or not.

MR. SMITH:  Yeah, there absolutely, Commissioner Martin, and I think that’s a great question and I’ve heard from you on that.  Commissioner Falcon has let me know how important this issue is to him, as well.  HB 1300 gives us another tool to be able to leverage new corporate partnerships and to solicit sponsorships to help where corporations could adopt a program and could help market it.  You know, we’ll be coming back to you with some proposed rules that you can give us kind of some side-boards because, you know, the Parks and Wildlife brand is a very powerful one and it is a very valuable one and so we want to be very, very careful about who that is extended to and who we work with but, absolutely, those opportunities are there.

We also talked about this and Commissioner Duggins was present for this discussion and Gene and Lydia about, you know, the foundation taking a heightened role to help raise funds to help support programs like this that are important, that we think are fundable.

COMMISSIONER MARTIN:  And we have our Conservation dinner on September 22nd.  Right?

COMMISSIONER DUGGINS:  We do.

COMMISSIONER MARTIN:  Just thought I’d plug that in.

COMMISSIONER DUGGINS:  In San Antonio.  Everyone there.

COMMISSIONER MARTIN:  Can’t miss the opportunity to give it a plug here.

(Simultaneous discussion.)

COMMISSIONER FRIEDKIN:  It’s obviously ‑‑ it’s a great opportunity for, you know, development of more private/public partnerships and Texas Outdoor Families, you know, it’s a portal to everything this department’s about.

COMMISSIONER MARTIN:  Absolutely.

COMMISSIONER FRIEDKIN:  Along with others, obviously, but that’s what we’re about is incremental opportunity and access to the outdoors and without programs like that that are skeleton keys for getting people into what this department is about and certainly the brand, which is so valuable and so important to all of us, we’re going to start moving backward and we don’t want to do that.  So, I agree with that and I think we can leverage it through private partnerships.

COMMISSIONER MARTIN:  I do too.

MR. SMITH:  Good, good feedback for us and we absolutely agree ‑‑ we hear that.  It’s exactly the kind of guidance we’re hoping to get from you today, in terms of, you know, strategic, what you want us to be thinking more about and planning on.

Any more questions about these programs?  On this one, again, we can come back to at the end or ‑‑

COMMISSIONER DUGGINS:  What would you estimate is the dollar shortfall on this last ‑‑ the Outdoor Family?

MR. SMITH:  Right now, and again, this is all still, you know, draft, just internal planning.  We haven’t approved this.  This is just been a proposal to maybe look at reducing operating funds maybe by up to 25 percent.  I think we hear you because of how important this is, going back and taking a look at that.

COMMISSIONER DUGGINS:  What’s the dollar number?

COMMISSIONER FRIEDKIN:  What do you spend on the program currently?

MR. SMITH:  We spend ‑‑ I’m going to have to ask Brent.  I want to say it’s a little over $500,000 but maybe ‑‑

MR. BORUFF:  I don’t have that but we’ll get it for you.

COMMISSIONER DUGGINS:  Good.

COMMISSIONER FRIEDKIN:  That’s ‑‑ that gives us an order of magnitude.

MR. SMITH:  Brent, do you need a little over $500,000 a year in operating funds for Outdoor Family Programs?  Does that sound ‑‑

MR. LEISURE:  I don’t know.

MR. SMITH:  Okay.

MR. MCCARTY:  Brent’s looking for it.

MR. SMITH:  Brent, we can continue to flounder.

MR. LEISURE:  I was watching back there and I thought, should I go or not ‑‑ Chairman and Commissioners, Brent Leisure, State Park Director.  I want to tell you and just reassure you that the Texas Outdoor Family program is absolutely important to us and we have full commitment to move forward with this.  Now, we’re considering many options right now but probably in the neighborhood of about a 25 percent reduction to its operating budget.  I can’t put a dollar to that right now but I could dig it up and get it back to you.

But, we absolutely want to leverage the opportunity for partners outside of this agency and we have a history of doing that and we have a very energetic staff that’s committed to that and so I just wanted to reassure you that that program, in particular, is going to be ‑‑ it will be with us and it’s something we’re committed to.

We have been very effective at reaching a number of families; 600-plus families, as Carter mentioned earlier, annually and our goal is not to let that number go down and so, through a number of different partnerships, we intend to do that.  Any questions about that particular program?

COMMISSIONER FRIEDKIN:  A couple of questions a little more detail but are we tracking metrics on returns of those families to state parks.  I’m sure we are.  I’m just wondering how that’s trending.

MR. LEISURE:  We are and there’s several opportunities to measure the effectiveness of the program and one is the sale of the state park passes to those individuals and then, once they acquire a pass, then we have an actual detailed tracking history of how many times they visited parks and where.  We stay in really good, close communications with those individuals and they provide us information.  We go back and market to them specifically and so it has been a very effective program, in that regard.   $288,000 operating budget is what we have for the Texas Family ‑‑

COMMISSIONER FRIEDKIN:  A year?

MR. LEISURE:  $15,000 is what we’re proposing right now, as far as a reduction into the operating budget for that.  But, again, I think there is tremendous opportunity to seek other ways to replace that money with private partnerships.

MR. SMITH:  Why don’t we ‑‑ let us just take a little time outside of here and get those numbers back to you on that.  There seems to be a little confusion.  Brent made a point and you asked a great question, Chairman, about tracking the Outdoor Family users and this is probably a good opportunity to just quickly let the Commission know that we have invested really through the leadership, Gary Saul and Ross on a new business analytics program, SAS LURES, in which we are now looking at, you know, all of our customers across the agency, licensed by our state park users and then how we analyze those by households, in terms of what their interest is in various Parks and Wildlife programs and then to help us do as complete a job as we can with respect to marketing to those individuals, whether it’s a fishing license, a hunting license, the Outdoor Family program, a magazine subscription, an annual state park pass, a lifetime hunting and fishing license.

And so, this is really going to help us with elevating kind of the sophistication of our business and marketing and so we’re very excited about that growth and development going forward.

So, Gene, was there anything else on that ‑‑ on the Outdoor Family ‑‑ anything you wanted to ‑‑

MR. MCCARTY:  No.

MR. SMITH:  Okay, we’ll come with those numbers on that front.

MR. MCCARTY:  I think those numbers were ‑‑ I mean they were ‑‑ 15 percent’s about ‑‑ $15,000’s about 25 percent of the operating budget.

MR. SMITH:  Of the operating budget.  Okay.  Okay.

COMMISSIONER FRIEDKIN:  When would be a good time to come back to the Commission.  Obviously, when the dust settles a little bit.  In terms of not just this information but also how we’re tracking this information and the decisions we’re making as a department, based on the input of these analytics.

MR. SMITH:  You know, I think what would be good, Chairman, is to come back with a formal presentation here, whether it’s August or November.  You know, to come back after we’ve had a little bit more time to get this up and running.

COMMISSIONER FRIEDKIN:  Yes.

MR. SMITH:  And give kind of a full and complete presentation there.

COMMISSIONER FRIEDKIN:  Maybe in November?  Will that work?

MR. SMITH:  Okay.  Good.  Perfect.

MR. MCCARTY:  I think you’re having trouble with the math because $288 is the total budget.

COMMISSIONER FRIEDKIN:  For the program?

MR. MCCARTY:  Yes, for the program.  That’s including salaries and everything else.  And 15 ‑‑ they’re saying 25 percent of the operating budget is $15,000.

MR. SMITH:  Okay.  Yeah, I was struggling.

COMMISSIONER FRIEDKIN:  Yes, you were having trouble with that math.  Thank you for that clarification.

MR. MCCARTY:  $288 is the total operating budget.

MR. SMITH:  Okay.  Good.  Thank you for that clarification.  So.

COMMISSIONER FRIEDKIN:  New math.

MR. SMITH:  Mr. Chairman, I would like to move on to Goal 3 ‑‑

COMMISSIONER FALCON:  Yes.

MR. SMITH:   ‑‑ if that’s okay and talk about programs here and, you know, obviously a very important one, in terms of how we engage Texas citizens to help them come about supporting conservation and outdoor recreation and so I’ll highlight a number of important programs to the agency and how we see them impacted and, you know, Parks and Wildlife magazine.  I mean, this is a flagship publication.  I mean, it wins too many awards a year to even begin to mention.  Just an extraordinary publication for us.

Lydia and her team have put together a business plan for how we propose to reduce expenses associated with the magazine.  We’re still sorting through that but they’re looking at a variety of things there, everything from fewer pages in the magazine.  We may have to make some adjustments in the quality of the paper.  We may need to ask some of our in-house talent ‑‑ writers and photographers ‑‑ to carry the load of providing more collateral to help with the agency.

We may have to look at a number of issues a year and so there’s just a lot of things that are on the table right now that we’re looking at with respect to the magazine.  We believe it’s still important to produce a Parks and Wildlife magazine that is of high quality and something that the folks have expected from this agency for a long time so we’re doing everything possible to make that happen but we are looking at cuts there, obviously.

Hunter and Boater Ed.  Obviously, one of those statutorily required functions that we have, very important to the agency, with respect to safety and making sure that we get folks into the out-of-doors and they’re brought up with the right ethics and training in safety protocol.  You know, where we expect some impact here, you know, on the boater ed, largely pushing for folks to go to online boater education and working to help elevate that.  We do a lot of in-person training, obviously, in both of this but, as we’ve talked about, we’re going to maximize the use of technology wherever possible to help save dollars going forward.

So, you know, we will see impacts here but, believe me, we will continue with a strong boater and hunter ed program.

The State Parks interpretive and education program.  Again, as I’ve talked about, as we try to meet what we felt what we felt like was your direction to try to minimize, where possible, the impacts to the state parks themselves.  That means we’ve had to look at critically important support programs and so our interpretive and outreach program.  This is our very talented artists that do amazing designs and exhibits and dioramas and so forth to help and signage, interpretation, education.       Colleagues out in the field that are in regions that support various parks on outreach and education services and, you know, we’re looking at, you know, somewhere between a 30 to 40 percent reduction in those operational budgets, at least what we’re thinking about right now.

The last one on this particular goal that I’ll mention is our outreach.  Again, this is how we’re building public awareness.  This is how we’re helping to engender support.  This is how we’re trying to grow more young hunters, more young anglers, more young park enthusiasts.  But we will have impacts and, unquestionably this will mean we’re going to have to limit the number of events that we can participate in across the state.  We’re going to have to be very judicious about which ones.  We’re going to have to rely much more heavily ‑‑ although we do rely heavily but even more so ‑‑ on volunteers and volunteer partners to help staff events and we have a wonderful cadre of volunteers but we’re going to need to elevate that in terms of training and getting them more involved.

We are proposing to continue the Life’s Better Outside experience, through the direction that the Commission has given us but, again, we’re going to have to rely much more heavily on volunteers to be able to carry that out because we rely very heavily on all the divisions to provide staff to help that and all the divisions are being impacted by these cuts and it’s going to limit participation here so Lydia and her team are going to have to be very, very creative about what we can do here.

So, we’ll be an important function of the agency but there’s no doubt it’s going to impacted and our capacity to do as much as this as we’ve done in the past is going to be restricted.  So, those are kind of from Hunter/Boater Ed to the magazine to state parks interpretation and then our outreach and education programs, kind of how we see sort of the lay of the land, roughly right now, in terms of how we’re going be impacted from these budget cuts.

COMMISSIONER MARTIN:  On the outreach and education, so many that we’re reaching out are like the younger or the youth, through social media and through internet use, is there a way of having that a larger impact to even have some kind of interactive programs ‑‑

MR. SMITH:  Yeah.

COMMISSIONER MARTIN:  web-based or ‑‑

MR. SMITH:  We’re very focused on that, Commissioner Martin and, absolutely, I mean, we definitely feel like we’re going to have to rely more and more on technology to be able to engage and capture and get younger folks excited about it.  Certainly that is ongoing right now as we develop those programs but, undoubtedly, that’s going to have to be more of what we do.  Of course, what we want that to be is a step to grab their attention ‑‑

COMMISSIONER MARTIN:  To go outdoors.

MR. SMITH:   ‑‑ to get outdoors.

COMMISSIONER MARTIN:  Yes, exactly.

MR. SMITH:  Yeah, absolutely.  But we’re going to need it, to get their attention.  So, yes.  Commissioner Hughes.

COMMISSIONER HUGHES:  I’d like to make an observation.  In these tough times, we’re having to tighten belts, make cuts, it seems to me that there’s a couple of key areas that we provide that the private sector doesn’t provide and that’s law enforcement, which is protecting wildlife, Texas fish, and our state parks and I think after we go through and look at where we need to cut, we need to keep in mind that those are services that we provide that really aren’t available privately.  There are some services we provide that can also be privately be hired and I won’t go into each one of them but I think we need to look at what we provide and then what could also be acquired in the private sector and let’s make sure that we keep our priorities straight.

COMMISSIONER MARTIN:  You’re right.

MR. SMITH:  Yes, absolutely, Commissioner Hughes, I hear you and so, you know, what I hear you saying is, again, there are some services that this agency does that are not replicated anywhere else and not any NGOs or other private or public sector folks that are doing that and certainly state parks and law enforcement are two of those and I hear you saying that that’s really important, from a prioritization perspective for us to be thinking about.

COMMISSIONER HUGHES:  I surely think so.

MR. SMITH:  Okay.  And just also, you know, I’m certainly hearing from you the focus on the youth and the families and getting folks into the out-of-doors and all of our activities that we promote is really important to the Commission and we’re benchmarking what we’re doing against that.  That a safe statement?  Okay.

Let me go to the fourth goal here and this is the last one and some programs, a number of which we’ve talked about.  Again, as you know, this is basically our business goal.  One of the most efficient, sustainable and sound business practices and so we’ve talked a lot already about capital repairs, Fund 9 implications, which we are, obviously, very concerned about going forward but also very pleased about the bond funds which, again, very grateful for that.

I made the Commission aware of the regional office realignment in state parks.  Historically, we’ve had eight regional offices to support our state parks.  Through a very thorough analysis that our state parks team did and then supported by the executive office, we have downsized that now to six regional offices and so we have executed that plan.  Those offices will be there to support our state parks and we’ve made some necessary reductions in force associated with that, as I think all of you are aware.

The last two has been kind of recurring things that we’ve talked a lot about.  The criticality of IT support.  You know, what we do.  We’ve got to have a strong IT to support a very professional workforce that’s deployed throughout the state, very dispersed and make sure we have that and that’s phone and voice mail, computers, all of those issues that just require a lot of services.

And so if we’ve got biologists or game wardens that are out in the field and their phones don’t work and their computers don’t work, they can’t do their jobs and trying to outsource that to a bunch of small, little service providers throughout the state, we don’t think that’s cost effective and we think we’re going to see significantly diminished service so we’re putting a priority on trying to keep our IT support as strong as we can.

And then, of course, the last one, going back to your point, Commissioner Martin, is, we’re going to have to use the internet and social media and web-based tools to the maximum extent possible to help with our communication and our business functions so that is really kind of a summary of programs that we identified under those four goals that we feel like, you know, we’ve heard from the Commission consistently were important to you and wanted to provide some sense of what we think our recommended impacts may be.  You have given us some feedback about kind of key principles and things that you feel are important.  We’ll certainly take that and vet these recommendations against that.

As you’ll see here in just a minute, you know, we’re going to be coming back and talking to you at a budget workshop, which we hope to be in late June ‑‑ June 30th, if the Legislature approves a budget.  If not, it’ll be a little later on in the summer.

Gene, do you want to add anything to any of that discussion, anything that you want to build on?

MR. MCCARTY:  Not at this point.  I’ve got a few things to say at the end.

MR. SMITH:  Okay.  Is there any more feedback on any of those programs that you want to share with us or any other thoughts at any level?

COMMISSIONER MARTIN:  I wanted kind of to reiterate what Commissioner Hughes said earlier about our law enforcement, as well.  I mean, that isn’t anything that can be replicated away from this agency and kind of trying to keep a focus and trying to keep monies and our Academy going and new wardens on and I think it’s important because if we don’t have our law enforcement, it’s just ‑‑ it’s well supported and financially supported; then there’s a breakdown there, as well.

MR. SMITH:  Absolutely.  No doubt a key cornerstone.  The Fisheries and Wildlife conservation has got to be a strong law enforcement program and when you go to countries that don’t have that, let me assure you, it is quite a breakdown.  So, it’s essential.  As we understand the budget right now, really the proposed reductions to law enforcement, compared to other divisions, are certainly not nearly as significant and we also believe that we’re going to get the FTEs restored so that, you know, cadets in the Academy right now are not affected.  I mean, that was something we were very concerned about.  We’re trained cadets; they’re going through a seven-month training period, we commission them as officers and then, if we don’t have the FTEs to support them, well, we’ve just trained an officer that’ll go work for a city or a county or some other agency and so we’re very hopeful that that is going to continue at least as we think it will.

There will be some reductions.  You know, the 15 percent across the board impact to all of the divisions and like all of the field-based divisions ‑‑ from law enforcement to wildlife, state parks, inland fisheries, et cetera, the inflationary pressures associated with increasing gas and so forth will affect their operational flexibilities.

The high gas is affecting our patrols right now and so having to be, you know, very judicious about where folks are spending time but we certainly hear you on what you’re saying here, in terms of guidance and I think the budget is going to reflect that, Commissioner.  I think that’s the Legislature’s intent too.

COMMISSIONER MARTIN:  Right.  It appears to be.

COMMISSIONER DUGGINS:  On the revenue side.  We haven’t talked about ways we might increase revenues.  You mentioned House Bill 1301 ‑‑

MR. SMITH:  1301.

COMMISSIONER DUGGINS:  ‑‑ and it seems to me that really puts more criticality on that and maybe we ought to look at ‑‑ I hate to think about it ‑‑ but potential increases in fees.  I mean, have we ‑‑ are we looking at that too as a part of ways to address these or to reduce the impacts of these cuts?

MR. SMITH:  So, let me kind of address that.  So, remember when the Legislature appropriates dollars to us, they appropriate up to a certain level so anything we earn above that, you know, we’ll be able to capture with the Rider 27 provision, up to $2.5 million a year in Fund 9 and $3 million a year, state parks.

Any revenue generated above and beyond that would go into fund balances that would stay there for the agency to be able to be used in subsequent years and an important point to make is ‑‑ you know, at least as we understand the budget now ‑‑ there’s likely to be, you know, pretty significant hunting and fishing license revenues that we’re going to accumulate in fund balances going forward. So, we’ll see how that turns out.

Really, we’re not looking at hunting and fishing license fee increases.  You know, we went through, I think, a very thoughtful analysis with the Commission a couple of years ago.  The sportsmen were very involved in that and realized that, you know, they were willing to invest more again largely to help support compensation issues with our fisheries and wildlife biologists and technicians.

And so, we are not looking or proposing any kind of an increase in hunting and fishing license fees.  Now, on the state parks side again, you know, we go through a methodical annual process, in which every superintendent is asked to look at the suite of fees associated with their state park; entrance fees, camping fees, if they’ve got electricity, use of cabins, et cetera, and do a market-based analysis of comparable parks and decide, okay, are we in the ballpark, is it comparable, are our fees too high or are they too low and then state parks makes a recommendation to Scott and then to me as to whether or not we should adjust our fees.

And so, we do have some fee adjustments that we are making that we think are, again, based on a good market analysis and certainly our hope is that we’ll be able to generate some more revenue that will not impact visitor use but help us to generate that $3 million in Rider 27 dollars which we need.  So, that’s where, I guess, we’re looking at that.

COMMISSIONER DUGGINS:  But, for example, on the public hunts, if our constituents knew that a particular public hunt might not be available because of the lack of funds to lease the property, should we consider asking them or look into some way to increase those fees so that they knew the opportunity would be available, I mean somebody might say, I’ll pay an extra X dollars in order not to lose the ability to hunt ‑‑ take advantage of this public hunt.

MR. SMITH:  I think ‑‑ and there are definitely people out there that, no doubt, would be willing to support us in that way and make that investment.  Again though, remember, we have a cap.  We have a ceiling as to how much we can earn and so I guess my recommendation would be, I’m loathe to raise any fees any more, if we’re not going to be able to use the revenue.

So, I just ‑‑ I hate to ask our hunters and anglers to bear any more additional cost, no matter how willing they were to do that, to help support important work, if we weren’t able to use the revenue.

COMMISSIONER FRIEDKIN:  Due to the cap.

MR. SMITH:  Due to the caps.

COMMISSIONER DUGGINS:  Due to the caps on the Rider 27?

MR. SMITH:  Right.

COMMISSIONER HIXON:  Be better served to find somebody to underwrite the whole program and  ‑‑

COMMISSIONER FRIEDKIN:  Right.  And 1301’s a good example of an area where we can do that and really try to activate this through marketing and visibility-type of campaigns to draw additional revenue.

COMMISSIONER HIXON:  Would that give us the right also to do ‑‑ I mean, obviously there’s no real development department that could do and then they can grant proposals to other foundations and things like if it ‑‑ does that give us that ability as well?

MR. SMITH:  It does, really, through our communications team.  I mean, again, these are cause-related marketing partnerships.  I mean, these tend to be more on kind of the marketing side of things.  We’ve got the Parks and Wildlife Foundation.  Obviously ‑‑

COMMISSIONER HIXON:  Allotted to the Foundation.

MR. SMITH:  Right.  Right.  But you would be surprised ‑‑ maybe you wouldn’t ‑‑ I mean, just how resourceful our colleagues are out there, in terms of finding funding and grants to help support other priorities out in the field.  I mean, a great example of that is Inland Fisheries ‑‑ Tim Birdsong ‑‑ who has captured grant after grant after grant to do work on Guadalupe Bass work and just been masterful in terms of attracting other private and public dollars to help support things and so, our colleagues are pretty resourceful on that front and wherever possible, we try to give them appropriate latitude to pursue that.

Gene, do you want to add something to that?

MR. MCCARTY:  No, I think you made the point.  We ‑‑ this current appropriation authority in this bill is significantly less than our revenue so we have all the revenue necessary to support the authority that we have.  In fact, we have more revenue and we will be building fund balances through this next biennium and since Rider 27 is capped, you know, we really ‑‑ it’s hard for us to go out and generate even more revenue when we won’t be able to utilize it, through fees.  Now, we can generate other funds through grants and things that are outside the appropriations process and, really, that’s where we need to focus our attention is on areas that are outside the appropriation process that aren’t capped by the Legislative appropriations.

COMMISSIONER DUGGINS:  What would those areas be?

MR. MCCARTY:  Federal grants, private grants, donations, all of those areas, sponsorships.  All of those areas bring their own appropriation authority with them.  All of those fees ‑‑ all of those funds.

COMMISSIONER FALCON:  And Gene, also, I think it’s important to know that we can’t roll over ‑‑ for the Commission to know, we can’t roll over unexpended balances.  They’re ‑‑ they end with the biennium and ‑‑  is that correct?

MR. MCCARTY:  Yeah, between bienniums, you can’t roll over unexpended balances for the most part, except for capital construction and even that’s limited this time but, within the biennium, for the first time, we can actually move money from one year to the next, within the biennium.  That’s a piece of flexibility that we got through this process, which is fairly important to us, in terms of, you know, if we lose some money between years and it’s good to be able to take it from year to year.       COMMISSIONER HIXON:  Is that the same as ‑‑ you’re talking about now, you know, revenues that we will be accruing, that are going into these fund balances.  Does that apply to those as well or do those go on?

MR. MCCARTY:  The fund balances stay there and for   ‑‑ in perpetuity or until they are appropriated.

COMMISSIONER SCOTT:  Which is every two years.

MR. MCCARTY:  Yes, sir.

MR. SMITH:  Okay, Mr. Chairman, if I can continue, unless there’s any more questions on that front.

COMMISSIONER FRIEDKIN:  Can I make one comment?

MR. SMITH:  Sure, please.

COMMISSIONER FRIEDKIN:  Before we get away from the goals, I think you all have done a great job of identifying the key areas and the key areas of importance to each of us, you know, in terms of what we want to focus on for goal accomplishment, given these constraints.  I think it would be helpful when we come together for the budget workshop and I think you anticipated doing this, because we’ve had this discussion, Carter, but if we could take a look at, you know, some choices there, you know, in terms of fish stocking.  Understand, not at that detailed level but understand a little bit of ‑‑ okay, if we do this we’re going to have to forgo doing that and just get a sense of that sort of thing and also, if we could look at state parks ‑‑ sorry, outdoor hunting opportunity, in terms of efficiency.

So, if we’ve got 100,000 that’s not going to be available for additional lease, you know, understanding where we’re going to get maximum benefit with the monies that we do have to appropriate the leases and, obviously, that would a part of, you know, a detailed analysis that you all are doing and I’m not asking for minutiae but, you know, kind of high level understanding of those choices that the department’s making to accomplish the goals that we have and that we’ve agreed to do.

MR. SMITH:  Absolutely.  Yes, that’s kind of what we were hoping to do in June at the budget workshop after we got some more guidance and direction from you and understood kind of where you wanted us to focus and drill down on and also to make sure, Mr. Chairman, at least at a high level, that we hadn’t misread the priorities that you had given us through the Land and Water Plan and discussion in previous Commission meetings, in terms of key programs that we felt like you wanted us to continue at some level, recognizing there are going to be tradeoffs between those programs and with other programs that we’re not talking about.

COMMISSIONER FRIEDKIN:  And I think it’s also helpful for us, periodically, to look at our goals and review them ‑‑ discuss them.  That’s good.

MR. SMITH:  Thank you, Mr. Chairman.  Quick summary, Chairman Falcon, just on kind of the summary of the budget process.  I mean, the time lines are always helpful.  We’ll have a time line slide after this one.  You know we’ve already submitted our legislative appropriations request so long ago I can’t remember it, Gene.

We’ve got, you know, the Legislature going on and, again, hopefully, there’ll be a budget bill passed imminently.  The budget discussions have been ongoing with, you know, division directors and the senior leadership team.  They’ve been working with their senior management team doing exactly what you’ve asked about, looking at those hard choices and tradeoffs and, you know, where they recommend that we prioritize our limited funds and so that is ongoing.

Obviously, today marks the first kind of formal strategic budget discussion with you about things and we’re looking forward to the workshop in, hopefully, late June.  Next week we hope again, assuming that there is a budget passed, we hope to have a proposed base budget that then we give to the divisions to start thinking again more formally about and then come back and present that base budget, with some of the guidance you’ve given us today, to the Commission at the budget workshop.

Ultimately, we’re going to have to finalize that through approval by you in August, is when that comes and then we’re going to have to execute on that.  And so, some important timing things.

Let’s look at the next slide from a timing perspective that lays this out and you can see the time line.  This presumes sine die on May 30th so keep all appendages crossed. I know many do.  In June you will see again kind of the time line there for the base budget development.  The budget kickoff and then the Commission workshop again, we’ll be thinking will be June 30th, assuming that Chairman Holt can indeed make that day.

July 15th.  That’s an important day for us, just to be honest.  If we are going to be able to meet our goal of the 45 days of administrative leave that we are able to provide colleagues whose jobs are being eliminated, as part of this very difficult budget.  In order to do that by the end of the fiscal year and to have those costs absorbed this fiscal year and not rolled into the next biennium, we’re going to have to do that by July 15th.

So, these deadlines are important.  So, if a budget is not approved by the end of May and there’s a special session called, that will impact our planning and we’ll need to talk to you about how to proceed and what are all the assumptions that we’ve made and goals are still tenable.

So, ultimately, at the end of August, the Commission will have to sign off on a final budget and so you will have to approve that and then September 1st, Chairman Falcon obviously marks the start of the new fiscal year and the official execution of that, as we have said previously.

We’re going to make decisions.  We’re going to continue to make decisions.  I have no doubt we’ll make decisions for the best intentions and we probably won’t get all of them right.  And so, you know, we certainly ask for your support and flexibility as we try to adjust as need to, as we see consequences, intended or otherwise.  And so, this undoubtedly will be an adaptive and [inaudible] process.

But that give you kind of a key time line on the budget.  Any questions about that?  Gene, anything on that you want to add to it?

All right, I think that covers the budget per se and, Chairman Falcon, the next thing that we wanted to cover was just a very quick status update of key bills and legislation that the Commission is interested in and has been interested in where it stands.  So, let me just stop again and see ‑‑ is there anything else on the budget ‑‑ a question for Gene or me on?

COMMISSIONER FALCON:  Carter, the only thing I’d like to add is, I want to thank all of you that have been involved in this process now for many, many months because we’ve seen the difficulties coming for a long time.  I think the more engaged the Commission is in helping you make decisions and unburden the load for you ‑‑ let the Commission help take some of the load off of your shoulders and help make some of the tough decisions and I think the more informed we are ‑‑ especially now as we’re getting really close to making the final decisions on some of the budget ‑‑ the more informed we are with numbers and information, I think the better we can help you make those decisions.

And, personally, I would like to stay as involved as possible and to share some of the responsibility and some of the difficult decisions that will be made and also to put ‑‑ I think the more people that look at this, the more we can try to avoid unexpected consequences, especially of the long-term ones.  You know, sometimes we may look at something short-term.  There may be an impact later on.

But, again, more than anything else, I appreciate all the work that you all have put into this.  I know it’s been ‑‑ those are big numbers to deal with and it’s been tough, Gene.  Thanks a lot.  Gene and Carter.  Thank you.

MR. MCCARTY:  You know, I just wanted to say, Carter started off by being very kind in his opening comments and I appreciate that very much but this has really been a team effort.  This whole process, from beginning to end, Carter’s been intimately involved; he’s been a very, very valued confidant and advisor through the process.  You know, he’s been lead, he’s been point, he’s been taking the ‑‑ you know, I can stand behind him and whisper in his ear but he’s been taking the brunt of it, in terms of the response from the Legislature.  I appreciate that very much.

Every division director in the agency has been intimately involved in this.  They’ve been available, they’ve been responsive to our needs and, you know, having a team like we’ve got here at Parks and Wildlife is what makes this happen the way it does.

And there’s a couple of people that, you know, that are also available 24/7.  Julie Horsley in Administrative Resources and Lance Goodrum.  Both are, you know, masters at analyzing the information.  The reams and reams of information that comes back, they can analyze it in a matter of minutes and provide a summary document to us that we can work off of.

So, without people like that we can’t make it happen either.  So, it’s been a team effort and everybody’s been intimately involved and that’s what makes it worthwhile.

MR. SMITH:  Thank you, Gene.  Appreciate that.  I would provide just a very quick kind of update unless, Commissioner Falcon, you have any other question or observation on that?

COMMISSIONER FALCON:  No, sir.

MR. SMITH:  Okay.  And I ‑‑ let me just respond too, Commissioner.  We absolutely will keep you apprised, you know, again, of some of the details.  I think we’ve got a good sense of some of the information particularly you want to focus on going forward and also, obviously, appreciate your sensitivity to the difficulty of these decisions, Commissioner, because these are difficult decisions and many of these decisions are involving positions that have been filled by colleagues that have given a lot to this agency and have worked for pretty sunrises and pretty sunsets throughout their career so these are difficult ones for us, going forward and so we appreciate very much your sensitivity and willingness to help us as we have to prioritize through this difficult time.

I think your other observation is ‑‑ you’re right, this agency and one of the things that I love about it is, this agency doesn’t think in two-year budget cycles.  This agency thinks in terms of generations and the work that we do and how long it’s going to last and what it’s going to mean to the future of our fish and wildlife and our kids and their kids after that.

But the decisions that we’re going to make now are going to have very important implications as how we can accomplish those generational goals and so we absolutely have to be extraordinarily thoughtful and careful about what decisions we make so we don’t inadvertently affect those and I appreciate your being very sensitive to that.

There are a number of bills that we have been tracking during the legislative session.  Harold and Lacie and Gene and David Sinclair, Ann Bright and Clayton Wolf and a whole host of others who keep a spare cot up at the Capitol.  We thought we’d highlight a number of these that are being sent on to the governor for his review.

The first one, Oyster Shell Recovery one.  This is an important one for coastal fisheries.  You know how important the oyster shell is.  This would provide a fee for each sack that then would be used or could be available then for the department to acquire cultch to go in and restore reefs.  So, industry is enthusiastic about this.  We are, CCA, Nature Conservancy, a bunch of partners been involved in this one and so it’s a good one.

HB 1300 by Chairman Guillen, the for-profit partner authority again.  Those are those cost-related marketing  ones that we’ve talked about, give Lydia and her team the ability to negotiate a lot of things that we think will help the agency as a whole.

We’ve talked about HB 1301 and so you’re familiar with that.  Again, another one that’s going to require a lot of marketing to help drive folks to do this.

HB 1395, the mandatory boater ed.  Again, as a reminder, anybody born on or after September 1st, 1993 will be required to have boater education.  This is a landmark bill.  It is a landmark bill.  Very important from a water and boater safety one.

SB 1480, by Hegar, calls for the return to the aquatic black list.  Obviously, this Commission is very familiar with the issues associated with the white list and the black list.  This just reinforces the authority of the Commission to go back and use a black list to address aquatic, exotic vegetation.  So, we look forward to that getting signed.

HB 3722, the Boater Ed provider fee.  I mentioned that, you know, we’re going to have to continue to rely heavily on online boater education.  We have a contract right now with an internet provider.  By statute, that fee, Gene, I believe, is capped at $3 a person.  That contract is about to expire and so that is not a very lucrative opportunity for a provider to do that and so this bill would give the Commission the ability to set fees on what we could pay and the internet provider could charge so, we see that as a really important thing for us, going forward.

HB 716, the helicopter hog-hunting bill, frequently referred to as the porkchopper bill was passed and sent to the governor and so, obviously, a lot of discussion on that.  I think many of you are familiar with that.  I want to thank David Sinclair and Scott Vaca, in particular, and Ann Bright and others ‑‑ very involved in this because there’s a lot of state/federal nuances here and dynamics that made this an interesting one.  So, that’s going to the governor for what I assume will be his inevitable signature.

The next slide that I want to talk about, HB 550.  This is on the Senate intent calendar today by Representative Dutton.  This bill would stipulate that no fishing license is required for anyone over 75.  As you will recall now, seniors already get a significantly discounted rate, you know, around 50 percent of the normal cost that other anglers pay.  If this bill were to pass and be signed into law, basically what we would see is a fiscal impact to the department ‑‑ a negative fiscal impact to the department of around $350,000 a year, that would impact our Fund 9 revenue and then we’d see that increase in time because of the aging demographic of our license users.  So, the first year we’d see the department, you know, lose revenue or have reduced revenue of, we estimate, around $350,000.  The second year around $424,000 ‑‑ $425,000.  The third year, we’d see reduced revenues of upwards of a half million to $550,000 and by the next year, we’d see revenue reduced on an annual basis by as much as $700,000 a year.

So, this one has a significant, appreciable fiscal impact on the agency.  Yes.

COMMISSIONER HUGHES:  Carter, does this apply to in state and out-of-state anglers or just in state anglers?

MR. SMITH:  In state, isn’t it, Gene?

MR. MCCARTY:  It’s in state.

COMMISSIONER HUGHES:  So, out-of-state ‑‑ snow birds and all that come down, they’re still buying ‑‑

MR. MCCARTY:  Well, we’ve got reciprocal agreements in with other states that would count for them.  We’ve got reciprocal agreements with Oklahoma and Louisiana and I think maybe one other state but it would count with them so they fish free in their state then they fish free in our state.  But others, it doesn’t count.  It’s only for in state seniors.

MR. SMITH:  The next bill.  You know, this was a major priority for the Commission and the agency is getting the sunset date removed from the freshwater fish stamp ‑‑ the $5 stamp there that, you know, provides such critically important funding for buying fish but also,  obviously, for maintaining our fish hatcheries.  I mean, this is essential, from a capital perspective.  That’s on Senate local.

MR. MCCARTY:  And it passed.

MR. SMITH:  Yes, it’s passed?  Oh, that’s right.  It passed.  It’s right here.  It passed through the Senate so, Good news, there, if you hadn’t already gotten that news and also it’s slated to go through the House today so we may have this passed in multiple places, been a lot of effort put on this one to see it through.  A very important priority.

The last one, HB 78, again, we know is important for the Commission.  It would give us the ability to charge an emolument so that we could provide food to our cadets as they were going through the Game Warden Training Center and so this is really important and it’s set for ‑‑

MR. MCCARTY:  And that passed today too.

MR. SMITH:   ‑‑ that passed.  So, all right.  So these things are going through pretty quickly.  So, any questions about any of those?  Gene, anything else you want to add?

MR. MCCARTY:  This has been a fairly ‑‑ we had a lot of bills.  A lot of bills.  Probably more bills than we’ve ever managed before, both from an internal perspective and from an external perspective.  So, been a lot of people involved.  All the division directors, all ‑‑ a lot of different staff.  We’ve had a lot of different committee hearings and a lot of different resource witness testimony from lots of people in the agency so our legislative program this year was very ‑‑ we started out hoping to be simple.  It got very complex very quickly.  Not a lot of our own doing but a lot of ‑‑ there’s just a lot of bills that have been introduced associated with Parks and Wildlife and I think, you know, just from the standpoint of ‑‑ it ‑‑ you know, Parks and Wildlife has shown, throughout this process ‑‑ and we’ve had a lot of people ‑‑ a lot of very, very professional, expert testimony up there on a wide ranging area of topics and so I just want to say, you know, I thank everybody within Parks and Wildlife who’s been involved because it’s been hectic, chaotic through the process but we did survive.

VOICE:  Almost.

MR. MCCARTY:  Almost.

MR. SMITH:  Thanks, Gene.  Commissioner Falcon, I think, unless you or any of the other Commissioners have any questions, I think that completes our presentation.

COMMISSIONER FRIEDKIN:  Thank you, Gene.  Appreciate it.

COMMISSIONER FALCON:  Thank you, sir.  The Committee has completed its business.

(Whereupon, at 11:24 a.m., the Finance Committee was adjourned.)

C E R T I F I C A T E

MEETING OF: Texas Parks and Wildlife Commission

Finance Committee

LOCATION: Austin, Texas

DATE: May 25, 2011

I do hereby certify that the foregoing pages, numbers 1 through 86, 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.

6/09/11

(Transcriber) (Date)

On the Record Reporting, Inc.
3307 Northland, Suite 315
Austin, Texas 78731


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