Texas Parks and Wildlife Commission
January 16, 2002Commission Hearing Room
Texas Parks & Wildlife Department Headquarters Complex
4200 Smith School Road
Austin, TX 78744
1 5 BE IT REMEMBERED that heretofore on the 16th day 6 of January, 2002, there came on to be heard matters 7 under the regulatory authority of the Parks and 8 Wildlife Commission of Texas, in the Commission 9 Hearing Room of the Texas Parks and Wildlife 10 Headquarters Complex, Austin, Texas, beginning at 11 9:00 a.m. to wit: 12 13 APPEARANCES: 14 THE PARKS AND WILDLIFE COMMISSION: FINANCE COMMITTEE: 15 CHAIR: Katharine Armstrong Idsal, San Antonio, Texas 16 Donato D. Ramos, Laredo, Texas Philip Montgomery, III, Dallas, Texas 17 Ernest Angelo, Jr., Midland, Texas John Avila, Jr., Fort Worth, Texas (Absent) 18 Alvin L. Henry, Houston, Texas (Absent) Mark Watson, Jr., San Antonio, Texas (Absent) 19 Joseph Fitzsimons, San Antonio, Texas 20 THE PARKS AND WILDLIFE DEPARTMENT: Robert L. Cook, Interim Executive Director, and other 21 personnel of the Parks and Wildlife Department 22 23 24 25 ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 2 1 JANUARY 16, 2002 2 CHAIRMAN IDSAL: Good morning. Happy 3 New Year. This meeting is called to order; but before 4 proceeding with any busy I believe Mr. Cook has a 5 statement to make. 6 MR. COOK: Madam Chairman, thank you 7 very much. A public notice of this meeting containing 8 all items on the proposed agenda has been filed in the 9 Office of the Secretary of State as required by 10 Chapter 551, Government Code referred to as the 11 Opening Meetings Law. I would like for this action to 12 be noted in the official record of this meeting. 13 CHAIRMAN IDSAL: Thank you, Mr. Cook. 14 Our first order of business today is the 15 meeting of the Finance Committee. Chairman Angelo, 16 would you please take the gavel. 17 VICE-CHAIRMAN ANGELO: Thank you, 18 Madam Chairman. The first item of business is the 19 approval of the committee minutes from the previous 20 meeting. Are there any corrections, additions, or a 21 motion that they be approved? 22 COMMISSIONER RAMOS: I move that they be 23 approved. 24 VICE-CHAIRMAN ANGELO: Second? 25 COMMISSIONER MONTGOMERY: Second. ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 3 1 VICE-CHAIRMAN ANGELO: All in favor say 2 Aye. 3 ALL COMMISSIONERS: Aye. 4 VICE-CHAIRMAN ANGELO: Opposed. 5 (No Response.) 6 VICE-CHAIRMAN ANGELO: The minutes are 7 approved as presented. 8 ITEM 1. CHAIRMAN'S CHARGES. 9 VICE-CHAIRMAN ANGELO: Chairman's 10 Charges are the first item on the agenda; and I'll ask 11 Bob Cook to lead the discussion on that and present 12 the comments. 13 MR. COOK: Thank you, Mr. Chairman. We 14 have three charges that we are addressing at this time 15 that I want to tell you about to -- 16 Charge No. 1: To implement provisions 17 of the Sunset Bill, Senate Bill 305, that being to 18 develop guidelines for employee fundraising above 19 $500, develop best practices and accountability 20 measures for non-profit partners, and determine and 21 define content that is appropriate for reviewing by 22 youth. Our staff has been working on this; they have 23 developed and published the proposal in the Texas 24 Register for public comment. 25 Requirements for solicitation and ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 4 1 acceptance of gifts equal to or greater than $500 by 2 TPWD employees; best practices criteria for non-profit 3 partners as recommend by the Sunset Advisory 4 Commission and developed a definition of youth 5 appropriate advertising based on recommendations by 6 the Sunset Advisory Committee. This appears as Item 7 No. 7 on your agenda today that we'll move forward to 8 the full commission tomorrow. 9 Our next charge: To review all fees to 10 increase revenues and insure a fair fee structure. We 11 will be presenting -- making a presentation on that on 12 the status of our findings and some recommendations to 13 you shortly. 14 Finally, to review and implement 15 appropriate State Auditor audit recommendations. Our 16 staff continues to work on these recommendations, and 17 we are currently heavily involved with the Elton Bomer 18 Management Review team on several of audit issues. 19 Thank you, sir. 20 VICE-CHAIRMAN ANGELO: Thank you, 21 Mr. Cook. At this point we're going to go out of 22 order on the published agenda for the Finance 23 Committee and take up Items 4, 5, and 6, which have to 24 do with fees, and we'll ask Bob Cook to lead the 25 discussion on these items. ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 5 1 ITEMS 4, 5 and 6. LICENSE and PERMIT FEES, BOAT FEES, 2 and PARK FEES. 3 MR. COOK: Thank you, Chairman. 4 Chairman and Commissioners, I am Robert 5 L. Cook, TPWD's Interim Executive Director. Thank you 6 for the opportunity to discuss a very important 7 subject with you: The subject of fees, revenues, and 8 budgets. These issues are important to everyone in 9 Texas who loves, uses, and appreciates our State's 10 unique natural and cultural resources. License fees 11 for hunting and fishing, state park entry fees and use 12 fees, commercial fees, boater registration fees, 13 etcetera, are all very important to our constituents 14 and to our employees. 15 To better understand the issues before 16 us today, it is necessary that I briefly review some 17 recent history and related work on this subject. 18 What we do at TPWD and how we do it: 19 Our legislatively dictated duties, our resource and 20 conservation management efforts, research programs, 21 various outreach and education programs, and the 22 management of our facilities across the state are 23 subject to regular -- some of us feel almost 24 constant -- review, update, and revision. 25 For example, we routinely receive -- ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 6 1 solicit and receive constituent and user review and 2 suggestions. Some of which comes through our issue or 3 area specific advisory committees. 4 We do -- Routinely through the years we 5 do long-range planning strategies in which we involve 6 all levels of employees within the agency, our 7 constituents, and the citizens of Texas who are 8 interested in what we do and how we do it. 9 We are subject, of course, to review by 10 oversight agencies such as the State Auditor's Office, 11 and the Sunset Commission, and by our State's elected 12 officials, and finally the review, input, and 13 direction given by you, our Commissioners. 14 In short, our programs, our goals and 15 objectives, what we do and how we do it have been 16 reviewed and fine tuned to a high degree. We are 17 doing what is needed in an efficient and effective 18 manner. We have responded to the best of our ability 19 to the needs of the resources for which we are 20 responsible, and to the wishes of all of those 21 involved and interested. Survey results have clearly 22 documented that our users, our constituents, and the 23 citizens of Texas approve of and are very satisfied 24 with the results of our efforts. 25 With those thoughts in mind, staff ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 7 1 initiated the budget planning process for the FY02 2 fiscal year, in which we currently operate, in the 3 late spring of 2001 during the legislative session. 4 As always, initial planning was based on our approved 5 and ongoing programs, duties and land management 6 responsibilities using long-range revenue forecasts 7 for the year ahead. 8 At the end of the legislative session in 9 late May 2001 and with the successful passage of our 10 Sunset Bill we knew what was expected and we 11 incorporated those needs into our budget planning for 12 the fiscal year in which we currently operate. By 13 midsummer 2001 we settled on our revenue forecasts for 14 the upcoming fiscal year and finalized our current 15 FY02 budget with your approval at our August 16 Commission Meeting. 17 Revenue forecasts indicated 18 approximately the same total available cash as was 19 available in FY01; therefore, we absorbed the much 20 needed and welcomed state employee pay raise and other 21 related added expenses by reducing our operating funds 22 by approximately four percent. 23 Later in the summer of 2000 -- Late in 24 the summer of 2001 we began to discuss and consider 25 the need for a long-range funding strategy to raise ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 8 1 user fees to recover the lost operating funds and to 2 create funding of approximately $5 million annually 3 for needed capital projects. We had not raised most 4 of these fees in five or six years and we didn't want 5 to have to raise them again for another five or six 6 years. This funding level would have created -- would 7 have required approximately a twenty percent increase 8 in fees across the board. 9 Our leadership and our supportive users 10 urged caution and requested that we carefully review 11 all programs in search for cost-cutting opportunities 12 and higher operating efficiencies. Staff redoubled 13 their efforts in this review and began to explore 14 every possibility in detail. 15 Into the fall of 2001, we continued to 16 ask ourselves, "Is this absolutely necessary? Do we 17 have to do this at this level? Do we have to increase 18 this fee?" Everything changed for America and for all 19 of us on September the 11th, 2001. We are all still 20 struggling with that tragedy -- trying to cope with 21 its impact on us in many different ways: We still do 22 not know all of its impact, but we do know that it 23 united us together as never before. We will not give 24 up our freedom. We will continue to try to live 25 normal lives and raise our families to the best of our ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 9 1 ability. However, we continued to wonder how this 2 terrible event will affect TPWD, our sites, our 3 programs, and conservation in Texas in general. 4 Throughout the fall -- the summer and fall of 2001 the 5 economy in Texas and in our nation continued to 6 decline, unemployment continued to rise. We again, 7 redoubled our financial review efforts looking for 8 ways to save, expenses to reduce, while still 9 providing all needed services. We wanted to be part 10 of the solution not part of the problem. 11 November the 6th, 2001, Proposition 8 12 passed with almost 65 percent voter approval. This 13 was not an opinion pole; this was the people of Texas 14 saying with their vote, "I will support TPWD. I 15 believe in TPWD and what they are doing. I am willing 16 to commit my dollars to pay for needed repairs, 17 maintenance, and specific development projects at 18 TPWD." Obviously, this will be a major positive 19 impact on our funding needs over the next six to seven 20 years and is much appreciated; it became a major 21 factor in this -- in this review consideration. 22 We also incorporated into our financial 23 review and thought process that any significant fee 24 increase would result in the loss of users. We know 25 it happens; we've seen it happen every time we do it. ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 10 1 Fewer park visitors, fewer license buyers, fewer 2 participants in the outdoors of Texas, fewer 3 customers, fewer supporters, and fewer children 4 enjoying the very assets that we all love so dearly 5 and the resources that need their involvement so 6 much. 7 In summary, we have thoroughly reviewed 8 our revenues, and our expenditures, and our programs. 9 We have scrubbed all accounts and passed budget for 10 any left over, unused funds. Based on this review and 11 after giving full consideration to the issues and 12 concerns mentioned above, we believe that we can fund 13 TPWD's FY03 and FY04 operations and programs at or 14 very near our current funding and staff levels without 15 fee increases. 16 In the short term, we do not have to 17 have additional funding for new capital projects. 18 Therefore, we recommend to this Committee that other 19 than a few commercial fishing fee increases mandated 20 by statute and included as a rider in our 21 appropriations bill that no additional or new fees be 22 implemented at this time. 23 As opposed to our original long-term 24 funding strategy, it is important to note that this 25 short-term strategy is realistic only for the next one ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 11 1 to two years. This action does not address our 2 long-term funding needs. Additional funding is 3 needed. Our duties, responsibilities, and programs 4 are important; our capital needs are very real. 5 However, common sense and good judgment tells us to 6 not implement fee increases when the overall economy 7 is down, unless it is absolutely necessary. We do not 8 want to implement fee increases knowing that it is 9 likely we are going to lose a substantial and possibly 10 significant number of our users, our constituents, our 11 friends. We should not implement new or additional 12 fees at this time that might discourage the citizens 13 of Texas and of our nation from visiting and enjoying 14 the beautiful and unique outdoors of Texas and our 15 cherished state parks, fish hatcheries, and wildlife 16 management areas. We will monitor the key economic 17 indicators closely during the coming months when 18 considering future needs and fee increases. These 19 budgets are lean; there is no fat, but we can and will 20 do the job. 21 It is important to mention that the 22 budgets for FY03 and '04 resulting from this 23 recommendation of no fee increases do not contemplate, 24 do not include any planned reduction in force. 25 Although, some additional positions may have to be ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 12 1 held vacant to meet anticipated funding needs. For 2 example, in state parks right now, today, we have 91 3 vacant positions. And that's true in all of the 4 divisions across the -- across the agency. 5 Finally, as you know, we are in the 6 process of searching for and selecting our new 7 executive director. We believe that, along with our 8 new leader, this would be an appropriate time to 9 conduct a thorough strategic review of agency's 10 revenues, mission, goals, and programs. 11 In closing, we have shared our financial 12 review information and the many factors involved in 13 this recommendation with our Management Assessment 14 team, which includes Mr. Elton Bomer, Mr. T.C. 15 Mallett, and Ms. Sidney Hacker. They have studied and 16 reviewed our information thoroughly. They have 17 discussed the various aspects of this recommendation 18 with us in detail. They have made many positive and 19 constructive suggestions throughout this process. 20 They support this recommendation 100 percent. 21 It is important to the staff at TPWD; 22 this is a very important issue. It is important to us 23 that you and our constituents understand that it is 24 important to us. This is not just a job for us. This 25 is a serious commitment by everyone at TPWD to the ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 13 1 natural and cultural resources of Texas and to the 2 citizens and leaders of Texas for whom we work. We 3 will tighten our belts. With your help and guidance 4 we will focus our efforts and achieve our goals. We 5 will do our share. 6 In closing, Mr. Chairman, Commissioners, 7 I know these people at Texas Parks and Wildlife 8 Department; I know their commitment and their 9 dedication. You can count on them from one end of the 10 state to the other; they will do this job; they will 11 do it right; they will do it on time; and they will do 12 it in budget. I'll be glad to take any questions. 13 VICE-CHAIRMAN ANGELO: First, Bob, let 14 me say that I -- I think you and the staff, all the 15 department heads, and all the folks that worked on 16 this deserve everyone's commendation for the effort 17 that's been put in because this is not easy, I know. 18 MR. COOK: Thank you. 19 VICE-CHAIRMAN ANGELO: And to take -- 20 take into consideration the -- the timing and the 21 circumstances and to have come up with what you've 22 done is a remarkable effort, I think. And it's 23 greatly appreciated by me. 24 MR. COOK: They've done -- they've done 25 a great job. ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 14 1 VICE-CHAIRMAN ANGELO: Do we have any 2 questions? 3 COMMISSIONER FITZSIMONS: Bob, I want to 4 also commend you on making the hard call and putting 5 first things first. Let me ask you, what bearing or 6 consideration was given to the passage of Prop 8 and 7 how that fits into the recommendation? 8 MR. COOK: Well, it was a -- 9 Commissioner Fitzsimons, it was an absolute major 10 decision. Part of our -- part of our concern on this 11 capital budget involved many of these facilities that 12 we will be able to maintain, repair, keep those 13 facilities in operation. We won't be able to really 14 change the facility, completely rebuild the facility, 15 and I'll -- and I'll give you a really good example, I 16 believe, is our fish hatchery at Jasper. And Phil 17 would have to correct me, and I don't recall our exact 18 numbers, but the fish hatchery at Jasper is 70 -- 75 19 years old. It's current production level is about 60, 20 70 percent -- Phil, am I in the ballpark? -- of its 21 once -- of its once capacity, what we were once 22 producing there. It is the site, the place, where we 23 produce many of the fish that our lakes are dependent 24 upon. That production level is continuing to decline, 25 the facility just, you know, it's wearing out; we can ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 15 1 keep it operating, we can make some substantial 2 improvements to it. 3 The better choice, the wiser choice, 4 from a -- from a financial and a long-range standpoint 5 would be to rebuild that hatchery somewhere else. And 6 Mr. Durocher is working very closely with a number of 7 entities and, in fact, he's -- he's got some people 8 who are willing to help us do that. But we will have 9 to have some capital money to do that. That's -- 10 that's a big one that comes to mind immediately. 11 Obviously, some of our projects that we've got on tap 12 that we're looking at: The Sheldon Project, Rural 13 Birding Center, the River Center, all of those kind of 14 projects -- very seldom do we end up saving money on 15 those projects. It usually ends up taking a little 16 extra capital money to finish some of those projects, 17 so we were looking for a way to fund some of this new 18 development. What Prop 8 will do is keep us in 19 operation, let us make some major improvements to some 20 of the old facilities, but not rebuild them where that 21 is -- that is the real best solution. 22 Wonderful -- I mean, we were -- we were 23 so appreciative of Prop 8 and it is so -- I think 24 it -- I think it's so meaningful the message that it 25 sent. Even in the times that we were in, on November ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 16 1 the 6th, people went to the ballot box and said, "I 2 support TPWD and I'll pay my money to support it." I 3 think that was a -- that was a big point for us. 4 VICE-CHAIRMAN ANGELO: Bob, you 5 mentioned the 91 park vacancies and -- yet to put that 6 a little bit in perspective, what -- what would be the 7 normal vacancies due to attrition and whatever? 8 MR. COOK: That's a very good question 9 and -- and right on target. Having -- Having worked 10 in that area some and continuing to be closely 11 involved -- and Mr. Dabney, of course, can -- can 12 again correct me if I'm off track here -- but I 13 believe it would be safe to say that at almost any 14 given time in an organization of that size, of over 15 1200 FTEs, you can anticipate having 50, 55, 60 16 vacancies almost at any time. Just to go through the 17 advertising, interviewing, selection and hiring 18 process and getting somebody in that job you're going 19 to have 50 to 60 vacancies in that division. 20 We are -- knowingly have strung that out 21 some, are holding some of the positions, and will 22 rotate some of them as some of them -- you know, as -- 23 as the key time comes along on state parks we'll -- 24 we'll hire those positions. We'll get them in place, 25 but we'll have to hold, maybe, some others vacant. ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 17 1 VICE-CHAIRMAN ANGELO: So this approach 2 is in effect adding some 30, 35 or so -- 3 MR. COOK: I'd say at state parks in the 4 vicinity of 35 to 40 additional vacancies that we are 5 holding a little bit longer than we normally would to 6 generate some funding to cover that difference. 7 That's true -- that's true in all divisions. 8 VICE-CHAIRMAN ANGELO: You have 9 something, Mr. Ramos? 10 COMMISSIONER RAMOS: Yeah. I want to 11 echo the same comments that you both made and commend 12 you, Bob, and -- and staff. But what I am really 13 impressed is that we have prioritized and we are very 14 sensitive to our users. It doesn't make any sense 15 that we have parks if we price ourselves out of the 16 market, and it's obvious from your work that you've 17 prioritized it and it's very important. 18 MR. COOK: It's very important. 19 COMMISSIONER RAMOS: A second issue that 20 I think you need to be commended for, that's the -- 21 you -- you effectively are saying that you're making 22 this department and TPWD more efficient. And there's 23 always ways of improving efficiency and be more cost 24 effective, and I commend you and -- and staff, all of 25 you that worked on it. Thank you. ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 18 1 VICE-CHAIRMAN ANGELO: Phil? 2 MR. MONTGOMERY: Again, without 3 repeating everybody, thank you. I know these are 4 tough exercises for everybody, but it's appropriate, 5 and it's appropriate to recognize we're living in 6 unusual times and we've got to react to them. 7 What -- Bob, since August when we 8 signaled our intent to look at the possibility of fee 9 increases, what's changed in the way we're looking at 10 the budget, the forward budget? Question one and two, 11 how do you see us going with the forward planning 12 that -- that you're signaling? 13 MR. COOK: Well, the one of -- one of 14 the interesting factors that's happening to us right 15 now, and, you know, we're not sure why, it -- it looks 16 like, for example, that -- that our state park 17 visitation is up; it's up significantly. We've got a 18 lot of people coming to state parks right now. There 19 is some evidence, for example, that -- that across the 20 nation that is true. People are staying closer to 21 home. People are, you know, kind of wanting to get in 22 touch, you might say. So the -- the actual revenues, 23 as we perceived along here, the actual revenues coming 24 in to us over the next several months during this 25 fiscal year are going to be very important to us of ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 19 1 how we proceed into FY03 and '04. 2 I think it -- through this process one 3 of the things we did, for example, was talk about 4 and -- and have a long list of ideas, and -- and I 5 would be remiss in -- in not saying thanks to -- 6 likewise to everyone, especially a gentleman by the 7 name of Paul Hammerschmidt in our Coastal Fisheries 8 Division. Paul does a tremendous job of kind of 9 keeping all of these cats herded together up here 10 and -- and putting this information package together. 11 But we looked for ways to create packages, whether 12 that be in licenses or park entry fees combined with 13 the opportunity to fish in the park that day, and -- 14 and we're heavily in -- I mean, we're into that. We 15 are looking for those kind of opportunities to -- to 16 increase what we offer for the money that we're 17 offering right now, thereby attracting additional 18 people to our sites. 19 There are opportunities in all of these 20 areas. One of the -- one of the areas of concern that 21 we have and that we -- that we initially addressed 22 here was that some of our park sites, some of our RV 23 sites, some of our hotel sites, cabins and those kind 24 of things, are under priced. We -- we haven't changed 25 those fees in a long time. There's some indication ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 20 1 that some of the -- the funding -- the funds that we 2 receive -- the fee that we charge for RV hookups may 3 not pay for the electricity when that $175,000, 4 $200,000 RV backs up in there and -- you know, that 5 cord's about that big around and you suck it in there 6 and the lights in the entire community dim, you know, 7 but -- you know, we charge $15 for the site. So we do 8 need to look at some of that. We are -- we are behind 9 on some of those things, and there's some real 10 opportunity there. 11 On the other hand, to generate 12 significant numbers of dollars in state parks, that -- 13 that doesn't get you there. And the only other 14 opportunity that we see on our sites is that gate 15 entry fee, which is the most -- the most dangerous one 16 to be increasing from the standpoint of our users. So 17 those are all considerations, Commissioner, as we -- 18 as we go on into this process that we're going to 19 continue to work on, we're going to continue to 20 develop and we'll be coming back to you with some 21 thoughts on those, some ideas, some suggestions. 22 VICE-CHAIRMAN ANGELO: And somewhat in 23 line with what your question was, Phil, when we get to 24 the financial review, I think I want to say that 25 the -- the numbers that looked a little bit scary on ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 21 1 the low side at our last meeting have improved across 2 the board, and that's -- that was helpful also. 3 Any other comments? Questions? Madam 4 Chairman? 5 CHAIRMAN IDSAL: Does anybody have any 6 questions? As I recall -- 7 COMMISSIONER FITZSIMONS: Well, I have 8 one question for Bob. If -- if I understand you 9 right, Bob, what you're saying is, the recommendation 10 is not to go with -- with across-the-board fee 11 increases where -- you need to study where 12 strategically with a more pinpoint accuracy fees may 13 need to be increased in certain areas and not in other 14 areas and the whole -- the wholesale? 15 MR. COOK: Yes. Where that opportunity 16 exists. 17 COMMISSIONER FITZSIMONS: Right. 18 MR. COOK: Absolutely. And part of 19 this, remember too, is that we -- we -- as I mentioned 20 in my comments, we are coming to you with 21 recommendations -- why we've got Suzy and Hal sitting 22 here -- on the commercial fishing fees. And that's 23 part of this packet, and -- and -- and if there are no 24 other questions, I would suggest that we -- that we 25 allow -- ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 22 1 VICE-CHAIRMAN ANGELO: I believe the 2 Chairman's got a comment first. 3 CHAIRMAN IDSAL: I have no more 4 questions, but I -- I want to make a comment here. I 5 want to say how proud I am of this staff of the Texas 6 Parks and Wildlife Department. They have worked like 7 Trojans; they have tightened up their belts; they have 8 rolled up their sleeves; they have scrubbed numbers; 9 they've looked at things in different ways and from 10 different angles, and I just couldn't be more proud of 11 the employees of this agency. And I -- I just want to 12 say that -- thank you all very much. 13 VICE-CHAIRMAN ANGELO: Okay. Now, Bob, 14 if you would, go ahead and elaborate on the 15 commercial. 16 MR. COOK: As -- as -- as part of this, 17 like I say, part of our fee, the -- the -- really, the 18 only part of the fee recommendation in these items 19 that we're bringing forward to you is to address some 20 increases in specific commercial fishing fees. And we 21 have Suzy and Hal here to -- to brief you on that and 22 move that forward. 23 VICE-CHAIRMAN ANGELO: Suzy, if -- you 24 might explain also why it is we're at this point, 25 particularly with the commercial -- why we're doing it ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 23 1 right now and what's the impetus behind that. 2 MS. WHITTENTON: Okay. Yeah. I've got 3 that as part of the presentation, which I can go ahead 4 and move right into. For the record, I'm Suzy 5 Whittenton, Chief Financial Officer, and with me is 6 Hal Osburn, the Division Director of Coastal 7 Fisheries. 8 A study by the State Auditor's Office 9 that was published in December of 2000 determined that 10 Parks and Wildlife did not receive enough revenue from 11 license fees in the commercial fishery programs to 12 recoup the costs of managing those programs. 13 Subsequently, this report became the basis for a 14 legislative appropriations rider in the current 15 appropriations bill, which is -- which addresses cost 16 recovery from those programs. 17 This is the rider that's actually listed 18 in the bill. It's Rider No. 22 and it reads, "That it 19 is the intent of the Legislature that Parks and 20 Wildlife shall adjust rates charged for licenses in 21 each commerical fishery program accordingly as to 22 provide funds necessary to recoup costs associated 23 with the management of the program. In making the fee 24 determination, the -- the Department should consider 25 the commercial value of the license and the amount ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 24 1 needed to recoup Department costs." That's the exact 2 wording in the bill. 3 In order to reach complete cost recovery 4 we would need to increase all commercial license fees 5 by over 100 percent, and that would be in addition to 6 the license fee increase that was adopted by the 7 Commission last year, which was, in some cases, up to 8 a 50 percent increase, and that was expected to -- 9 that is expected to generate about six hundred 10 thousand. We're now proposing to do approximately a 11 20 percent increase. 12 The -- in re -- in restructuring 13 commercial fees, the staff's concerned about 14 socioeconomic disruptions to coastal communities from 15 large fee increases: Restoring the commercial 16 fisheries to a profitable status through license buy 17 back and other conversation measures may be necessary 18 before substantial fee increases become practical. 19 And -- and as a first step toward balancing the 20 interests of the State and the industries a 20 percent 21 fee increase appears to be appropriate for commercial 22 fishery licenses. If this -- If we should go forward 23 with this, it would bring in approximately $600,000 of 24 additional revenue per year. 25 This slide shows examples of what a ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 25 1 20 percent increase in commercial fees would translate 2 to by license type: Wholesale fish dealers would pay 3 $750 a year as opposed to the current fee of $625; 4 resident commercial Gulf shrimp boats would pay $450 5 as opposed to the current $375; resident commercial 6 bay or bait shrimp boats would by $348 opposed to 7 $290; commercial crab fisherman fee would go from $500 8 to $600; and the commercial fin fish fisherman license 9 would go from $300 to $360. That's what the 20 -- 10 those are some of the bigger licenses -- some of the 11 ones we sell the most of. 12 The staff proposals to publish these 13 increased fees in the Texas Register and to take 14 public comment. We'll post the information on our web 15 site and hold at least one public hearing, then we'll 16 bring this issue back to the Commission in April with 17 input from the industry for your final consideration. 18 VICE-CHAIRMAN ANGELO: Suzy, this is the 19 second round of these commercial license increases, 20 correct? 21 MS. WHITTENTON: That's right. 22 VICE-CHAIRMAN ANGELO: And it's your 23 analysis, though, that this does not yet get us to the 24 actual replacement of the costs, is that -- 25 MS. WHITTENTON: That's correct. It -- ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 26 1 our calculation of what we think we'd need to recoup 2 to do complete cost recovery would be to bring in 3 about $3 million in additional fees. You know, this 4 gets us part -- part of the way there. But, as I 5 said, to get to complete cost recovery, we'd be 6 looking at over a hundred percent or approximately a 7 hundred percent license fee increase. And so what 8 we're proposing is to do that more gradually, take 9 us -- take a first step -- or actually a second step 10 towards getting to cost recovery in this proposal. 11 VICE-CHAIRMAN ANGELO: Hal, what do 12 you -- what impact do you think this is going to have 13 on the industry, if any? 14 MR. OSBURN: Well, I -- I think that a 15 20 percent fee increase is -- is absorbable. The 16 industry is never happy about additional fees, but -- 17 but the cost of doing business does vary on the 18 coast. I think the cost of the price of fuel or the 19 price of -- of the product or the -- that you're 20 getting at the market based on the imports probably 21 has more -- much more effect on the profitability of 22 the industry than would these -- these relatively 23 small fee increases. 24 VICE-CHAIRMAN ANGELO: Are there any 25 other questions of comments? Phil? ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 27 1 COMMISSIONER MONTGOMERY: Something I 2 notes -- noticed about the structure of the leases. I 3 don't know if this is the time to talk about them or 4 not, but at some point I'd like to bring that up. Is 5 this the right time to do it? 6 VICE-CHAIRMAN ANGELO: Which leases? 7 COMMISSIONER MONTGOMERY: On the oyster 8 bays. 9 VICE-CHAIRMAN ANGELO: That's a 10 different -- that's going to come up under 11 Regulations. 12 COMMISSIONER MONTGOMERY: Right. Okay. 13 We'll take that up later. That's fine. 14 VICE-CHAIRMAN ANGELO: Yeah. Any other 15 comments or questions? 16 There being none, as the chairman of the 17 Finance Committee I authorize the staff to publish 18 this item in the Texas Register for the required 19 public comment period. 20 MS. WHITTENTON: Thank you. 21 VICE-CHAIRMAN ANGELO: And before we 22 move on from this discussion, we have the pleasure of 23 having Mr. Bomer and his associates here in the 24 audience this morning, and I'd ask, Elton, do you have 25 any comments you'd like to make with respect to the -- ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 28 1 the fee situation? 2 MR. BOMER: I don't have any comments 3 with the exception of being in total agreement with 4 what Mr. Cook and the staff have come up with. 5 VICE-CHAIRMAN ANGELO: Well, we -- 6 MR. BOMER: We have looked at it very 7 closely, and we're -- we're pleased with the -- with 8 the result. 9 VICE-CHAIRMAN ANGELO: We appreciate 10 y'all being here this morning. 11 MR. BOMER: It's our pleasure. 12 VICE-CHAIRMAN ANGELO: Thank you for 13 your efforts. 14 If that -- we'll move on then and get 15 back in the order of the agenda, the -- pick up Item 16 No. 2, which is a financial review and update to be 17 presented Suzy Whittenton. Suzy? 18 ITEM 2. FINANCIAL REVIEW and UPDATE. 19 MS. WHITTENTON: Thank you, 20 Mr. Chairman. The focus of the financial review today 21 will be on current-year revenue status and on this 22 year's operating budget status. First, I'll cover 23 account nine's primary revenue sources, which are 24 license fees and boat registration and titling fees. 25 As of December 31st, we had sold 2.2 ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 29 1 million licenses, stamps, and permits. Now, this is 2 up about two-and-a-half percent over where we were at 3 this time last year. Super combo sales are up 4 6.6 percent, and we continue to see a shift from the 5 regular combo licenses to the super combo. 6 This slide breaks out the hunting 7 licenses out by themselves with the combination 8 licenses included. And the number of hunting licenses 9 sold is -- is almost level over last year, but it -- 10 it's up less than 1 percent -- .8 percent, so it is a 11 little bit higher. We've sold just over a million 12 hunting licenses this year. 13 Fishing license sales are doing well; 14 they're up by over 6 percent so far this license year, 15 and we've sold over one million fishing licenses as 16 well. You'll notice resident fishing licenses are up 17 by 9.6 percent. So as expected license revenue is up 18 also by about three-and-a-half percent or $1.8 million 19 when compared to last year's revenue. This is mostly 20 due to the super combo sales and to the resident 21 fishing sales. 22 Now, the original revenue estimate for 23 this year, for the FY02 year, did project that revenue 24 would be higher this year than last year, so we were 25 counting on it being up. The revenue estimate was ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 30 1 not -- about $900,000 higher than last year, so at 2 this time we're ahead of even our revenue projection. 3 And the -- the Comptroller's revenue estimate is the 4 same for these license fees for this year; it's $64.8 5 million. And as of December 31st we had collected 80 6 percent of that revenue estimate, and at this time, it 7 looks like we'll meet or exceed the revenue estimate 8 in this category. As you know, we usually do sell 9 most of our licenses in the first few months of the -- 10 of the license year. 11 Turning to boat revenue, Registration 12 and Titling fees: As of December 31st revenue's up 13 four-and-a-half percent over last year, which is only 14 $93,000, because we don't collect that much of our 15 boat revenue in the first -- you know, in these winter 16 months; we collect most of it after April or after 17 March. Now, again, the Comptroller's revenue estimate 18 for boat registration and titling fees is $900,000 19 higher than last year's actual revenue, so we hope 20 that this trend continues through the spring and 21 summer. And if you'll remember, revenue from boats 22 was down in September and October, and we looked at 23 those trends and I'm not -- I can't really pinpoint 24 what happened, but it came back up in November and 25 December so that we recovered that lost revenue. It ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 31 1 shift -- I guess the -- the people were -- shifted 2 from the months that they -- they bought their -- or 3 they -- that they renewed their registration. As of 4 the end of December, we collected 16 percent of our 5 revenue estimate. The revenue estimate this year is 6 $14.8 million from the source. And as I said, most 7 boat revenue is received between March and June or 8 July, so it's really too early to tell on boat revenue 9 whether we'll meet or exceed or be below on the 10 revenue estimate, but at this time, it looks -- it 11 looks all right. 12 Turning now to our other primary 13 account, the State Park account, Account 64, a look at 14 the park revenue collected to date. The fall months 15 have been very good for park income, as Bob mentioned 16 earlier, revenue is up sixteen-and-a-half percent over 17 last year, which is about $882,000; however, the 18 current year revenue estimate from the Comptroller's 19 office and -- and that we've adopted is $900,000 than 20 last year's actual, so, you know, we're getting there 21 to reach -- reaching the revenue estimate and we're 22 counting on these increased park revenues in order to 23 meet the projections. 24 Park revenue is estimated at 25 $27.5 million. We've collected 23 percent of that so ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 32 1 far. Historically, we collect most of our park 2 revenue between March and August, so we won't know 3 until the summer whether we'll meet or exceed this 4 revenue estimate also. But at this time, park revenue 5 looks really good. 6 I wanted to briefly show you where we 7 are in terms of spending on our current year operating 8 budget. As of the end of December, which is one-third 9 of the way through our fiscal year, we've spent 10 31 percent of budgeted funds. So this -- and this 11 includes payables and encumbrances and -- so we're 12 about where we would expect to be in terms of cash 13 flow and spending for the year. And that was all I 14 had for a financial update, and I would be happy to 15 take any questions if you have any. 16 VICE-CHAIRMAN ANGELO: Do we have any 17 questions or comments? There being none, Suzy, we 18 thank you for that one. And we'll take up Item No. 3, 19 which is a license system update, and we'll be -- 20 we'll be briefed on this item by Jayna Burgdorf and 21 Terry Lewis. 22 ITEM 3. LICENSE SYSTEM UPDATE. 23 MS. BURGDORF: Chairman and Members of 24 the Commission, for the record, I am Jayna Burgdorf 25 and I am joined by Terry Lewis, she's our license ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 33 1 system contract manager, and in spite of the past few 2 months she is actually still new. 3 We are here to give you a brief 4 presentation on the license systems status. The good 5 news is, we are not going to be giving you any dates 6 as to when we're going to turn the system on. The 7 system is operational. The hypercom units in the 8 stores, that's in the vast number of retailers that we 9 have out there, those are operational; the PC system 10 for the law enforcement offices that sell both 11 recreational and commercial sales is operational; the 12 call center which is actually now here at Parks and 13 Wildlife -- this is our park reservation call 14 center -- are taking our 1-800 customer calls, that's 15 operational; and internet sales are expected to come 16 on in the spring of 2002. 17 Of course, during this time now, this 18 transition, Transactive is shutting down. They are 19 removing terminals from agent locations that will last 20 at least through the end of January. In this month we 21 are scheduled to begin audits on both WorldCom system 22 and the Transactive system. 23 We have a signed contract amendment with 24 WorldCom, as you all are aware, that reimburses us for 25 the cost of the contingency with Transactive through ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 34 1 the fall. In addition, there is some funding in that 2 reimbursement for Parks and Wildlife's delayed 3 implementation costs. 4 So in spite of the fact that we are -- 5 largely have the implementation behind us, there are 6 some remaining issues. And the highest priority issue 7 for us right now is that one-third of the agents have 8 not sold a license on the new system, and it -- and if 9 you can, I'd like to share with you some numbers. 10 In the Transactive system this fall, we 11 had 2,365 agents that were selling licenses and, as 12 Suzy mentioned, that's our big license sells time of 13 the year. 2,220 of those folks sent in agreements 14 with us, signed agreements, saying, yes, we want to 15 continue in the WorldCom system. Almost 2,000 of 16 those folks have connected their equipment so they 17 could be selling licenses; theoretically, they've gone 18 through the implementation process and, if you walked 19 in there, you should be able to buy a license, but 20 actually, only 1,550 or so have sold a license on the 21 new system. So what we've done is we've been calling 22 them; we've called over a hundred of them to try and 23 determine, you know, why have you not sold licenses. 24 Over half of them have indicated that they haven't 25 either had the time to set up the equipment and/or ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 35 1 they don't have a demand for selling licenses at this 2 time right now. It is a slow period for us; it is a 3 slow license sales period. 4 We have been adding about ten to twenty 5 agents a day for the past two weeks, and so we're 6 going to continue to keep working on that. I'd like 7 to show you this map that will also kind of give you 8 an idea of the coverage that we have across the State, 9 because, of course, that's our -- that's our biggest 10 concern: Can customers get their licenses when they 11 need them? 12 The blue areas are Zip codes where we 13 had agents in Transactive and we now have agents in 14 WorldCom that are selling licenses. The red areas are 15 areas -- Zip codes where we had agents in Transactive 16 but we -- they are not selling now on the WorldCom 17 system, haven't made a sale yet. And the white areas 18 are where we have not had an agent selling a license 19 at all this fall, we haven't had anybody sign up with 20 the system in that area. 21 So again, we're working with WorldCom. 22 We're going to keep calling these folks, keep 23 encouraging them to transition over; we're going to 24 focus on these areas where we feel like we need 25 coverage; and -- and deal with issues we -- escalate ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 36 1 issues as they come to our attention. 2 So we do have some key dates coming up. 3 We've got the License Deputy Advisory Committee 4 meeting on February 11th; and that will be a really 5 good session for us, this will be the first time we've 6 gotten together with these folks in a while. We'll 7 focus on both the implementation and also on what we 8 can do -- their suggestions for improving the 9 process. Again, hope to have internet sales 10 capability by March. And then this Phase Two 11 functionality, what that really means is more -- you 12 know, all the deliverables with WorldCom, none of them 13 should be due any later than April. There are some 14 support applications, some reports that we're still 15 not getting right now that we've contracted for, those 16 are all coming between now and the end of April. And 17 then, I think, later today you're going to hear about 18 a concept on changing the back of the license paper 19 for a log; and if that is approved then you'll start 20 seeing that kind of paper out in the fields in June, 21 so that by the new license year we will have all paper 22 in the new format. 23 And we'd be happy to answer any 24 questions for you. 25 VICE-CHAIRMAN ANGELO: Would it be ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 37 1 correct to say that you're not concerned by the fact 2 that this several hundred agents have not performed 3 with the new system and attributing that mostly to the 4 fact that this is a slow time, or do you think there 5 is some reason to be worried about that? 6 MS. BURGDORF: Oh no. I mean, we're 7 concerned. I guess we just -- we're just in the worry 8 mode for the past year, so we're just going to keep 9 worrying. But I think it made me feel a lot better 10 when we called them and we said, you know, what -- 11 what's going on here? You know, on -- on the down 12 side of it, while 50 percent of them said, you know, 13 we just haven't -- no one really wants to buy one 14 right now, about a quarter of them we got no answer, 15 which could mean -- you know, when you're a retail 16 location you'd expect someone to be there answering 17 the phone during the day. Some -- but you have to 18 remember some of the people who sell licenses for us 19 really just are seasonal, so that could be part of 20 it. The other quarter did say that they were having 21 some problems, and so what we did then is escalate 22 those to the WorldCom help desk for those to -- for 23 them to call those people directly and try and work 24 through those problems. 25 VICE-CHAIRMAN ANGELO: Have you in the ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 38 1 past experienced a loss of some -- some significant 2 number of agents from year to year? 3 MS. BURGDORF: I think with -- just like 4 any small business we do have a number of these folks 5 who go out of business every year. And I think there 6 are many license agents -- you know, the last time 7 they had a fee increase was the same time we did our 8 last fee increase, and we were -- what we did is they 9 were averaging about a 4 percent commission and we 10 raised it to 5 percent, and I think they feel like 11 they do a lot for that 5 percent. They also were very 12 used to, in the Transactive system, having a customer 13 service representative come out there and set up their 14 machine and fix their problem for them. You know, 15 they may have complained about it; they may not have 16 gotten it done as quickly as they wanted it, but at 17 least they had another person come and look at that 18 terminal. With this new system and -- and frankly 19 there are really only two major players in this 20 industry; it's WorldCom and another company alled 21 ALS -- they just do service by mail, service by phone 22 and so they're not going to see a customer service 23 representative come into their store to help them out, 24 and so I think for some of them that's an issue. 25 CHAIRMAN IDSAL: Do we have new ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 39 1 businesses that would like to adopt our system or take 2 on our system? 3 MS. BURGDORF: Yeah. And they're -- 4 they're coming on. We actually -- you know, this new 5 system is costing us more money. Again, you know, 6 Transactive is not going out of business because they 7 did really well in this industry; so this system is 8 costing us more money. And what we are doing with new 9 agents is we are asking them to pay the monthly lease 10 fee on the equipment. We are not doing that -- in 11 order to encourage getting coverage in some of these 12 areas where we don't have agents right now, we are not 13 charging them the lease fee if they are in a location 14 where we don't have an agent within a ten mile 15 radius. So that's what we are trying to do to 16 encourage more folks. But I -- I think we've probably 17 added about 30 or so folks since we've started the new 18 system. 19 CHAIRMAN IDSAL: Just following up on 20 that, can you give me sort of a bottom line feel for 21 how these two systems compare and your ex -- how 22 they -- the new one is living up or not living up to 23 your expectations and to the agent's expectations? It 24 sounds very positive. 25 MS. BURGDORF: In general, I would say ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 40 1 it is very positive. I think that the -- the biggest 2 issue we have right now is just change. People in 3 general just don't like change and it is a new 4 system. We've heard some comments that they think 5 it's a little slower; and part of that might be 6 getting used to it; part of that might be the fact 7 that they have to put in a little bit more 8 information, like, of course, we're -- at the same 9 time we're requiring a Social Security number as a 10 follow-up to one of the State Auditor's 11 recommendations. So are they combining that with the 12 WorldCom system and perceiving it as the same? The 13 other issue is, the Transactive system had one long 14 dial up: The machine called the host and stayed on 15 line until it connected and got all the information. 16 The new system has two separate calls, and I think 17 some agents are perceiving that as being a little 18 slower. In general, from -- just from a data accuracy 19 standpoint, from the standpoint of being able to have 20 a new license, from customer friendly, the little 21 screens that you can see on the terminal are much more 22 user friendly. So if you're one of the agents that 23 has high clerk turnover, such as a Wal-Mart or an 24 Academy, this is going to be a much easier system for 25 you to learn. The -- the sweep process -- when we ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 41 1 started with Transactive it took probably six months 2 before we had the sweep process down. WorldCom 3 balanced on day one at our front counter, and has 4 continued to do so. So we are really -- from a 5 financial management standpoint and a control 6 standpoint we're extremely pleased with the system. 7 We think we are getting a very high quality system. 8 COMMISSIONER FITZSIMONS: I have a 9 couple of questions, Jayna. You mentioned Academy and 10 Wal-Mart. The last time I looked at these numbers 11 they accounted for, help me, 65 percent total license 12 sales; is that right? 13 MS. BURGDORF: They're -- they're at 14 least over 50 percent; I know that. And that's -- 15 that's really only about -- 250 stores are over 16 50 percent of our license sales. 17 COMMISSIONER FITZSIMONS: All right. So 18 focusing on that fact, what has their response been to 19 the new system, since that's relatively a small number 20 of the thousands of agents who are selling the 21 majority of the licenses? 22 MS. BURGDORF: In general, I think 23 they've been very happy. As a matter of fact, Academy 24 is extremely proactive. They sent us -- they've got 25 this guy who e-mailed his stores, you know, they have ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 42 1 lots of really good communication, asked every store 2 to give him feedback, positive or negative, and copied 3 us on all of the responses, and then if there were any 4 issues in there we could escalate them to the help 5 desk. But there were probably more positive 6 responses -- we like this system; it's working for 7 us -- than there were concerns. And if there were 8 concerns, they were, in general, very small ones. We 9 had an issue when we first started out about having 10 trouble getting duplicate licenses out of the system, 11 and we've resolved most of that by finishing up all 12 the Transactive data loads. 13 COMMISSIONER FITZSIMONS: You gave some 14 numbers as to one-third of the total agents were not 15 using the new system. That's based on -- you -- 16 you're counting Academy and -- and Wal-Mart each store 17 as an agent? 18 MS. BURGDORF: Yeah. I'm -- Right. 19 Right. And I'm not basing it on -- on dollar sales or 20 anything; I'm just basing it on the pure number that 21 were in the system. 22 COMMISSIONER FITZSIMONS: Right. And 23 I'm focusing where -- on the -- on where the real 24 numbers are sold are in these -- how many? -- 250 25 stores. ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 43 1 MS. BURGDORF: Probably. 2 MS. LEWIS: Only eight Wal-Marts right 3 now are not selling. And one is a new store that has 4 yet to open and the other seven have some -- some 5 equipment problems that are being resolved by WorldCom 6 at present. 7 COMMISSIONER FITZSIMONS: Out of those 8 250, just those small handful you mentioned, less 9 than -- 10 MS. LEWIS: Right. Those are the only 11 ones that are not out of Wal-Mart and Academy. 12 COMMISSIONER FITZSIMONS: All right. 13 Okay. What is the -- what -- what is the fee, the 14 monthly lease fee, for the new WorldCom system, if you 15 do just to start out? 16 MS. BURGDORF: $40 a month. 17 COMMISSIONER FITZSIMONS: That's not -- 18 that's not significant. For the high volume or the 19 low volume -- and I've -- I've described that as a -- 20 a small sporting goods store that may sell several 21 thousand a year compared to an Academy, do they have 22 the exact same system as the high-volume sellers in 23 the low volume? 24 MS. LEWIS: Yes, sir. 25 COMMISSIONER FITZSIMONS: All right. ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 44 1 And when the low volume mom and pop, I'll call -- I'll 2 call them, when they -- when they're ask -- calling in 3 for help, and I've had a few comments, from -- from 4 some of these store owners, how -- walk me through 5 the -- the help -- the help desk. They go straight to 6 WorldCom or they come through Parks and Wildlife or -- 7 MS. LEWIS: We -- we request that they 8 actually call the WorldCom help desk first. There may 9 be an issue in which they just need some assistance in 10 setting up or getting ini -- initialized or they may 11 have some equipment problems; you know, these things 12 were, of course, shipped out and could have been 13 dropped or broken. So first we request that they call 14 the WorldCom help desk. If it is an issue that 15 requires an open remedy ticket, i.e., someone needs to 16 get back to them -- little bit more research -- they 17 will give them a -- a ticket number and WorldCom 18 will -- will contact them back. If they do not get 19 satisfaction from WorldCom, they can call us, and then 20 we handle it here through our license help desk and we 21 call those agents back -- see if we can assist, maybe, 22 you know, escalate the issue with the WorldCom help 23 desk, or it may be they just need some assistance in 24 understanding how the system functions. 25 Sometimes what we've found is that they ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 45 1 just needed some reference back to the training 2 materials, the users manual, and the -- the video to 3 help them in some of their questions as to where we -- 4 where -- where will I find this license, how do I set 5 up a clerk, how do I make a sale? And then that's the 6 type of assistance that we provide; we either escalate 7 with the help desk or try and answer questions their 8 through the phone. 9 MS. BURGDORF: I will say this. And -- 10 and Bob Parker from WorldCom is here with us and he 11 can correct me if I'm wrong, but I think that actually 12 a large percentage of the calls that the help desk is 13 not getting are now program related as opposed to 14 equipment related. Now, the -- like Terri was saying, 15 you know, where do I find this license? Maybe -- you 16 know, we have, what, over 215 types of licenses, so 17 finding the right one is sometimes an issue. 18 COMMISSIONER FITZSIMONS: All right. 19 Just so I'm -- I'm clear when you've mentioned that 20 one-third of the -- of the agents are not using the 21 new WorldCom system, less than, what would that be, 4 22 or 5 percent -- in other words, you have more than 23 90 percent compliance, if that's the right term, in 24 the two retailers that are the majority of sales. 25 MS. BURGDORF: Oh yes. ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 46 1 MS. LEWIS: Yes. 2 VICE-CHAIRMAN ANGELO: It's not 3 one-third, is it, that are not using it? 4 MS. BURGDORF: One -- one-third have not 5 sold -- 6 VICE-CHAIRMAN ANGELO: Had a sale. 7 MS. BURGDORF: -- a license yet. 8 MS. LEWIS: A real license, a production 9 license. 10 MS. BURGDORF: It's -- you know, really 11 it's a much higher proportion, you know, like -- more 12 like almost 85 percent that have connected their 13 equipment, so we know that they're -- they intend to 14 be on board with the system. 15 VICE-CHAIRMAN ANGELO: They're 16 functioning, but they just haven't sold any yet? 17 MS. LEWIS: Right. 18 MS. BURGDORF: Right. 19 COMMISSIONER RAMOS: You had a slide 20 that -- red, blue and white counties, and I thought 21 there were a lot of white counties with non-coverage. 22 MS. BURGDORF: Right. 23 COMMISSIONER RAMOS: Are we proactively 24 going after those or is there a reason for that why we 25 have so many? ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 47 1 MS. BURGDORF: Well, a lot of those are 2 low populated areas, and historically we haven't had 3 agents there. You know, we'd like agents there and, 4 like I said, we're -- as calls come in we are -- if -- 5 if they are agents in those areas we're not going to 6 charge them a lease fee, we're encouraging them to get 7 on. We're -- we're trying to kind of work through the 8 issue here of making sure that all the folks who used 9 to to sell with us continue to sell with us. But one 10 of the things that I think we're going to focus on as 11 soon as we get over that hump is, can we almost seek 12 out a retailer in that area that can -- in those white 13 areas that can give us statewide coverage there. 14 COMMISSIONER RAMOS: Yeah. So in those 15 white areas we're really -- we're not actively going 16 after them at this point? 17 MS. BURGDORF: Not at this time, but 18 that is our intent. 19 COMMISSIONER RAMOS: Okay. Thank you. 20 COMMISSIONER MONTGOMERY: Jayna, can you 21 tell yet how this new system is handling the lost 22 transaction and audit problems that the State Auditor 23 was so upset about? Can you -- can we tell yet? 24 MS. BURGDORF: Well, I guess there's two 25 aspects to that. One, it goes back to just kind of ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 48 1 the financial controls that are put in this new system 2 are so much -- so much better than what we had with 3 Transactive. But also one -- the primary reason that 4 we had issues with the Transactive system was the 5 off-line capability. We haven't instituted off-line 6 capability in the WorldCom system yet. We -- we will 7 be. Probably, within the week we'll be putting the 8 software out there so that agents can sell off line. 9 When that happens, what WorldCom will 10 have that -- that Transactive didn't really have is -- 11 is more of a clean handshake and -- and I can best 12 explain it, being a really technical person, in that, 13 you know, the host says, you know, "this is what I 14 have for sales for you terminal," and the terminal 15 says, "no, host, that's not right. I have a few more 16 sales; you need to upload these." And so they do, 17 what's called, a two-phase commit to make sure that 18 they are in sync when the system -- when the terminal 19 does come back on line. 20 The other thing that we have built in 21 here is, we have an incentive for WorldCom to not go 22 off line. I think the merchants got to a point where 23 Transactive would go down, they didn't want to or -- 24 and -- and let me -- sometimes it was even that the 25 system went down, it was just that the volume was so ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 49 1 high they couldn't get through, so they'd just unplug 2 their machine instead of waiting for the terminal to 3 try and connect and they'd take it off line. We have 4 an incentive with WorldCom that -- that the system not 5 go down, which means the -- the agents won't have any 6 need to use the off-line functionality. They get half 7 price for every transaction that's off line. 8 COMMISSIONER MONTGOMERY: This may be an 9 abundance of caution. Before we go off line and 10 create that potential gap, can we be sure we've got 11 our audit procedures clear so that we don't create 12 that problem over again? 13 MS. BURGDORF: Yeah. We have -- we have 14 tested that off-line capability to make sure that that 15 works and that all transactions are uploaded, and -- 16 and that is working, and we've got the internal 17 auditors involved in this whole process. And as a 18 matter of fact, they're starting -- they've been 19 looking at pieces along the way, but they are also 20 going to start an audit on the WorldCom system right 21 away. 22 COMMISSIONER MONTGOMERY: I just want to 23 be sure that our -- in going off line that the 24 retailers are given a procedure to follow that -- that 25 is approved by our auditors. ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 50 1 MS. BURGDORF: Right. Okay. 2 COMMISSIONER MONTGOMERY: So that 3 there's -- there's no -- the technical side I 4 understand, it's got its own procedures, but to me 5 we've got to button that audit piece down right up 6 front so it never gets away from us. 7 MS. BURGDORF: Uh-huh. 8 COMMISSIONER MONTGOMERY: Or to the 9 extent it does, we can measure how much it is getting 10 a -- it -- it's there, so we don't get back into that 11 same problem we had before. 12 MS. BURGDORF: Right. 13 COMMISSIONER MONTGOMERY: The other 14 question I had, will the PC -- will the internet 15 capability -- explain how that's going to work to me. 16 Because if that drops the cost and it opens the 17 access, does that solve the access problem? But then 18 how do we allocate who gets to use internet and who 19 gets to use the other system? Is one more expensive 20 than the other or one of them -- costs. 21 MS. BURGDORF: Well, I think you're 22 talking about the PC system, and that's actually for 23 our law enforcement offices and low-volume retailers. 24 And that -- and when I say "low volume," I mean they 25 sell less than a hundred licenses a year. ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 51 1 Internet actually means that you could 2 go on line, just like you could call the 1-800 number, 3 you as a customer, and directly get your own 4 authorization number through the internet to do 5 hunting and fishing activities that don't require a 6 tag. And so that's the piece that we -- we never had 7 before; and it's going to be a new offering, basically 8 a customer convenience. So it'll really just 9 substitute for someone going to an agent; they will 10 use their PC. 11 COMMISSIONER MONTGOMERY: So I can go on 12 line and buy my own license? 13 MS. BURGDORF: Yes. Uh-huh. 14 COMMISSIONER MONTGOMERY: And WorldCom 15 does not have an exclusive to control it, so in thoery 16 anybody in the state that can get on the internet will 17 be able to buy their own license. 18 MS. BURGDORF: Yes. And the only thing 19 they can't permission for at that time and they have 20 to wait for the license to be fulfilled is for any -- 21 hunting any tag species. 22 VICE-CHAIRMAN ANGELO: And those could 23 be -- those will be handled and they'll receive it by 24 mail; is that the process. 25 MS. LEWIS: Yes. ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 52 1 MS. BURGDORF: And they'll pay a $5 2 convenience fee for doing that. 3 COMMISSIONER MONTGOMERY: Is there a 4 reason why that shouldn't be available on the internet 5 also? 6 MS. BURGDORF: Why -- 7 COMMISSIONER MONTGOMERY: Those special 8 tags shouldn't be available if the license is 9 available to. 10 MS. BURGDORF: You know, we talked to 11 our customers about that; at this point it's been 12 probably close to two years ago. And there really is 13 just no good way for them to be able to print out a 14 license that has tags that can't be duplicated. And 15 there was a huge concern in areas of the state, you 16 know, that -- that have large deer populations, that 17 that would lead to abuse. So at that -- at this point 18 we haven't crossed that hurdle and we're simply going 19 with the authorization number. 20 VICE-CHAIRMAN ANGELO: Madam Chairman, I 21 believe you have a comment you'd like to make. 22 CHAIRMAN IDSAL: Well, I'm told by Bob 23 that Mr. Parker is here, Jayna mentioned him, Bob with 24 WorldCom. And I know he's been working with us for 25 sometime now on a day-by-day, hourly-by-hourly basis. ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 53 1 Thank you very much. 2 MR. PARKER: Thank you very much. 3 VICE-CHAIRMAN ANGELO: Are there any 4 other questions or comments? Jayna, Terry, thank you 5 you all. 6 ITEM 7. NONPROFIT PARTNERS, EMPLOYEE FUNDRAISING & 7 YOUTH APPROPRIATE ADVERTISING. 8 VICE-CHAIRMAN ANGELO: Next item is 9 No. 7 on our agenda, and it's the item that was 10 mentioned by Bob Cook in the charge, that's the 11 non-profit partners, employee fundraising, and youth 12 appropriate advertising. And we'll here a 13 presentation from Gene McCarty on this. 14 MR. McCARTY: Mr. Chairman. 15 Commissioners. Good morning, my name is Gene McCarty; 16 I'm chief of staff for the agency. 17 TPWD's Sunset Bill, Senate Bill 305, 18 requires the Commission to adopt best practices for 19 official non-profit partners and other non-profit 20 partners. The bill also requires that the Commission 21 adopt guidelines for the solicitation of sponsorships 22 by the official non-profit partner and policies for 23 TPWD employee fundraising and rules for youth 24 appropriate advertising. Let me see here. I would 25 like to go over the proposed rules as they were ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 54 1 published in the December 14th issue of the Texas 2 Register. 3 Best practices for the non -- for the 4 official non-profit partner were developed based on 5 recommendations made in the Sunset staff report. 6 These best practices include adopting a conflict of 7 interest policy, publishing an annual report, and 8 making the current IRS return audit and exempt status 9 available. 10 Partners must comply with the standards 11 and safeguards for accounting: These include adopting 12 financial procedures for the acceptance of funds and 13 prohibiting TPWD employees from spending or obligating 14 partner funds. Partners must also comply with state 15 and federal requirements governing TPWD spending for 16 expenditure of state funds. TPWD employees may not 17 hold paid positions or receive direct benefits from 18 partners. However, the partners may reimburse 19 employees for documented expenses, as well as award 20 scholarships to employees. Lastly, employee 21 fundraising on behalf of the partners must comply with 22 the employee fundraising activities elsewhere in this 23 title. 24 Sunset Bill -- the Sunset Bill allows 25 the Commission to name one non-profit partner as the ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 55 1 official non-profit partner of the agency. This 2 official non-profit partner must adopt the best 3 practices previously mentioned, as well as the 4 following best practices based on the recommendations 5 of the Sunset staff report. They must provide that 6 the Chairman of the Commission appoint a majority of 7 the official non-profit board. They must prohibit 8 TPWD employees from serving as voting members of the 9 official non-profit board, and prohibit the official 10 non-profit from using state funds to infen -- to 11 influence legislative action. 12 An independent accounting firm shall 13 audit the official non-profit partner annually and a 14 copy of the audit shall be sent to the Department. 15 State funds received by the official non-profit 16 partner shall be subject to audit by the State 17 Auditor's office. And no later than three years 18 following the selection of the official non-profit 19 partner, the Commission must assess whether the 20 official non-profit partner is still needed. 21 In addition to best practices for the 22 official non-profit partner, Senate Bill 305 requires 23 the Commission to develop sponsorship guidelines. 24 These allow the official non-profit partner to solicit 25 and accept corp -- corporate sponsorships when they ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 56 1 are consistent with the mission of TPWD and comply with 2 following sponsorship requirements: The official 3 non-profit partner may not accept sponsorships from 4 entities that conflict with the Department's mission 5 or legislative mandates, are regulated by or in 6 litigation with the department at the time of 7 consideration and would result in the role of TPW 8 being less prominent than that of the sponsor. 9 The official non-profit partner may 10 recognize sponsors solely in the context of the TPWD 11 program, event or material that the sponsor has 12 supported, and only when the contribution is greater 13 than the cost associated with providing that 14 recognition, and may not include signage of any kind 15 on any state-owned vehicle or trailer. 16 Sponsorship recognitions by the official 17 non-profit partner shall be based on the contribution 18 amount, scope and duration. The Department will, 19 however, have final approval of levels and terms of 20 recognition on a case-by-case basis. A report must be 21 prepared and submitted to the Department by the 22 official non-profit partner annually. And finally, 23 payment of sponsorship financial contributions shall 24 be made directly to the official non-profit partner. 25 Sunset required the Commission also to ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 57 1 adopt Department/employee fundraising guidelines for 2 all gifts equal to or greater than $500. These would 3 include allowing employees to solicit and accept 4 donations as part of their official duties; requiring 5 the employee to report their fundraising activities 6 quarterly; prohibiting employees whose jobs -- job 7 duties include regulatory oversight of an entity from 8 soliciting or accepting donations from that entity and 9 prohibiting employees from soliciting or accepting 10 donations as a consequence of administering or 11 enforcing State law or Department regulations. 12 And lastly, Sunset required that the 13 Commission adopt rules related to youth appropriate 14 advertising. This would limit advertising that is 15 appropriate for youth viewing to advertising that did 16 not include alcohol or tobacco products. 17 We published this in December. Received 18 six comments as of today. The bulk of these comments 19 requested that we amend the requirement for the 20 independent audit as it applies to all non-profit 21 partners, and only apply that independent audit to the 22 official non-profit partner. 23 We would agree with that. I think 24 that -- that many of these very, very small non-profit 25 partners, fringe groups and so forth, can't really ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 58 1 afford that independent annual audit, and in -- in 2 looking back over the legislation and the attempt -- 3 the intent for that annual audit was to apply 4 specifically to the official non-profit partner and 5 not the -- not all non-profit partners. So the staff 6 would concur with those -- with those comments from 7 the public, and would -- would amend the proposal 8 accordingly to -- to not require an annual audit of 9 all non-profit partners, only the official non-profit 10 partner. 11 VICE-CHAIRMAN ANGELO: The official 12 non-profit partner is -- is -- is more than likely or, 13 I guess, certainly going to be the foundation; is that 14 correct? 15 MR. McCARTY: Well, that will be up to 16 the Commission. What we have to do is adopt the 17 guidelines first. 18 VICE-CHAIRMAN ANGELO: First, I know. 19 But that's -- that's the perception that that's what 20 it'll be? 21 MR. McCARTY: Right. Yes, sir. 22 VICE-CHAIRMAN ANGELO: All right. And 23 how much is this going to affect the other -- like the 24 fringe groups and whatever, do you think? I mean is 25 this -- ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 59 1 MR. McCARTY: Well, I think it is -- it 2 is going to be a little more onerous than -- than -- 3 than what we have. But I think it's important that 4 we -- there have been issues concerning non-profit 5 partners: What they're doing, how -- what their 6 relationship is to the agency. And, you know, this -- 7 this will go a long way towards allowing us to all get 8 together on the same page. I don't think there's 9 anything that's in there that's a -- that's -- that's 10 a real killer. And it -- and what we've proposed here 11 pretty well follow -- follows right down the line of 12 what was -- what was brought forth through Sunset. 13 And you know, we've -- we've been working with all 14 the -- all the other non-profit partners discussing 15 these issues and I -- I think, for the most part, 16 they're -- they're okay with it except for this -- 17 this one issue. 18 VICE-CHAIRMAN ANGELO: The youth -- the 19 youth advertising, do you have any comments further 20 on -- on exactly what the impact of that's going to 21 be? 22 MR. McCARTY: Well, the intent was the 23 contract and/or the -- the an -- the outdoor annual 24 and the fact that we produce a certain number of 25 outdoor annuals that are youth -- that have youth ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 60 1 appropriate advertising. And the question came about, 2 what is youth appropriate advertising, you know, in -- 3 in that regard. And the -- and Sunset wanted us to -- 4 or at least -- or the -- the legislation wanted us to 5 define that. 6 VICE-CHAIRMAN ANGELO: Well, now, is 7 that going to apply to the ones that didn't have youth 8 appropriate advertising or do -- in other words -- 9 MR. McCARTY: No. 10 VICE-CHAIRMAN ANGELO: -- across the 11 board there will still be -- there will still be 12 annuals produced as they were before? 13 MR. McCARTY: No. The -- the way the 14 bill says -- the legislation says that a certain 15 number will be -- that our contract with -- for the 16 production of this must require a certain number to 17 have youth appropriate advertising, and then requires 18 us to define that. 19 VICE-CHAIRMAN ANGELO: Do you have a 20 question, Phil? 21 COMMISSIONER MONTGOMERY: Yeah. Just a 22 request really. When we adopt our policy and 23 procedure with respect to fundraising, can we also 24 have a very clear statement of how donations are to be 25 handled, whether they're a cash, check with us -- so ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 61 1 when we get back to the audit that we have a very 2 clear signal and a policy of what our handling 3 procedures are so we don't get -- 4 MR. McCARTY: Yes. 5 COMMISSIONER MONTGOMERY: -- back into 6 the same problem we had before? 7 MR. McCARTY: Right. 8 VICE-CHAIRMAN ANGELO: Those have 9 already been implemented. 10 MR. McCARTY: Yeah. Those have already 11 been implemented. We've already implemented changes 12 in mail room policy that -- that do not allow anyone 13 except the cashier to take those monies. 14 COMMISSIONER MONTGOMERY: Why don't we 15 just take that -- whatever that statement is and put 16 it in there too so it's repeated and very clear that 17 anybody that reads it knows where it is? I know it's 18 a little redundant, but -- 19 VICE-CHAIRMAN ANGELO: Okay. Do have an 20 appropriate spot to put that? I mean you -- 21 COMMISSIONER MONTGOMERY: Maybe, it's 22 overkill, Gene. I just wanted to be sure we were 23 attending to that one. 24 MR. McCARTY: Yeah. I think it's -- 25 it's a difference between agency policy and what we're ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 62 1 doing here which is rule -- required rule making of 2 Texas Administrative Code. 3 COMMISSIONER MONTGOMERY: Okay. That's 4 fine. 5 VICE-CHAIRMAN ANGELO: Any other 6 comments or questions? If not, as Chairman of the 7 Finance Committee we'll place this item on the 8 Thursday Commission meeting agenda for public comment 9 and action. Thank you, Gene. 10 ITEM 8. GRANTS. 11 VICE-CHAIRMAN ANGELO: Move on to Item 12 No. 8, Grants for local park funding and indoor 13 recreation grants to be presented by Tim Hogsett. 14 Tim? 15 MR. HOGSETT: Good morning, 16 Mr. Chairman. Members of the Commission. I'm Tim 17 Hogsett from the Recreation and Grants Branch and the 18 State Parks Division. This item is preparation for 19 your consideration tomorrow of funding from the Texas 20 Recreation and Parks account for our outdoor and 21 indoor recreation grant programs. 22 First, for outdoor recreation grants we 23 received 39 applications for the July 31st, 2001 24 deadline requesting a total of $16.2 million in 25 matching funds. We have ranked all of those projects, ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 63 1 prioritized them by ranking, and that is the Exhibit A 2 which you can find just behind Page 162 in your -- in 3 your agenda book. And we are proposing tomorrow to 4 recommend to you that we approve the top 13 5 applications for $5,750,962 in matching funds, which 6 is the current amount that's available for granting. 7 And I'll be glad to answer any questions. 8 COMMISSIONER MONTGOMERY: I had a 9 question looking through your grants. What's our 10 philosophy behind the amount? It seemed like we -- on 11 both that we had a cut-off of either half a million or 12 three-quarters of a million, and we -- rather than do 13 20 grants at hundred thousand we did five at half a 14 million. What -- what's the -- 15 MR. HOGSETT: The -- you mean $500,000 16 figure itself as a -- that is something that has been 17 subject to public comment. It was adopted the last 18 time the Commission adopted rules. It is a Commission 19 policy, and you're -- you're free to consider changing 20 that if you like. But basically it is working with 21 the people that we work with -- local park directors, 22 Texas Recreation Parks Society, etcetera -- they seem 23 to feel that that's probably an appropriate amount 24 given the level of competition that we have for the 25 limited amounts of money. You raise the cap; you make ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 64 1 the competition even more keen than it already is. 2 COMMISSIONER MONTGOMERY: I guess to 3 me -- have we considered or should we consider a 4 measure which looks at the -- the leverage we're 5 getting for our dollars? In other words, if -- if 6 people will contribute ten to one other dollars to our 7 dollar -- in other words, can we treat ours as 8 challenge grants rather than just as allocation? 9 MR. HOGSETT: That would require a 10 change in -- in the State law. Chapter 24 of the Code 11 mandates Texas Recreation and Parks account says 12 50 percent grants are to be awarded. 13 COMMISSIONER MONTGOMERY: So we're 14 limited by law to figures -- 15 MR. HOGSETT: Yes. At this point we 16 are. 17 COMMISSIONER MONTGOMERY: Well, in order 18 to be more effective with the use of that money than 19 maybe should we pursue a legisla -- would -- should 20 the Commission request a legislative change so that we 21 could treat these as challenge grants and try to get 22 more leverage for State dollars? 23 MR. HOGSETT: Certainly worth 24 considering and -- 25 COMMISSIONER MONTGOMERY: Would it be ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 65 1 more effective? 2 MR. HOGSETT: -- and getting with our 3 constituents and see how they feel about it. 4 COMMISSIONER MONTGOMERY: How to -- how 5 use the dollars most effectively. 6 COMMISSIONER FITZSIMONS: I agree with 7 Mr. Montgomery's comments. I'm unclear though as to 8 the statutory requirements. That's a cap of 9 50 percent. It doesn't you from leveling -- 10 MR. HOGSETT: It says, if I recall 11 correctly, Chapter 24 of the Code says that these 12 shall be 50 percent matching grants. The only 13 exception to that is the Community Outdoor Outreach 14 Grant Program. 15 COMMISSIONER MONTGOMERY: When you look 16 at the list -- 17 COMMISSIONER FITZSIMONS: That certainly 18 seems to limit the creativity that -- that Phil's 19 referring to. 20 MR. HOGSETT: Right. 21 MR. COOK: Tim, I think it might be 22 worthwhile to -- and -- and the -- many of these total 23 projects -- for instance, the project may be a two or 24 three or so million dollar project. We -- our cap for 25 any individual project is $500,000 or whatever that ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 66 1 limit might be. Tim, would you speak to that a little 2 bit? I think this is the same issue. 3 MR. HOGSETT: Most -- particularly, in 4 the indoor recreation grants, nearly all of those 5 involve a much larger local investment than just 6 50 percent. A typical recreation center, you know, 7 five, six million dollar facility. And in that 8 program, the indoor program, we have a cap of 9 $750,000. 10 Another option that we might have in 11 terms of addressing that would be through the scoring 12 system. We could potentially change the scoring 13 system to give some additional priority to projects 14 that do have higher levels of outside contributions 15 that don't -- over and above the match. So that would 16 be another way to -- 17 COMMISSIONER FITZSIMONS: I'm not clear, 18 Bob. The statute says shall be 50 or is capped at 50 19 percent. 20 VICE-CHAIRMAN ANGELO: I'd have to ask 21 Tim. 22 MR. HOGSETT: I'd have to -- I'd have to 23 look at the actual law, but if I'm not mistaken it 24 says "shall". 25 COMMISSIONER FITZSIMONS: If you don't ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 67 1 need to change -- it's capped at 50, you can make your 2 point it be 10 or 25 total. 3 COMMISSIONER MONTGOMERY: Yeah. It 4 just -- I'm new to this area and I don't know it all 5 and I'm not -- in no way pretending to, but it just -- 6 it raised the question to me of are we using the 7 granting capability to its most effective means to 8 cause the things we want to happen to happen with the 9 fewest dollars. 10 MR. HOGSETT: I understand. And we -- 11 COMMISSIONER MONTGOMERY: And the other 12 question I had is, how do indoor recrea -- how do 13 funding indoor recreation centers fit our mission and 14 why are we doing that? 15 MR. HOGSETT: I can't specifically say 16 that it does fit our mission, but it is a legislative 17 mandate. 18 COMMISSIONER MONTGOMERY: That the 19 indoor -- well is it -- 20 MR. HOGSETT: Yes. There is -- in -- In 21 Chapter 24 of the Code, it says that when the amount 22 of the Texas Recreation and Parks account exceeds, I 23 believe, it's 15 and a half million that three -- at 24 least 3.3 million a year must go to indoor recreation 25 grants. ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 68 1 MR. MONTGOMERY: Okay. But my question 2 is this, can we -- can we limit those and still comply 3 with the law to indoor recreation that fits the 4 mission of Parks and Wildlife? Because the things 5 we're funding to me, just looking at the list, look 6 like things that cities ought to fund, city rec 7 centers, you know, racquetball courts and things that 8 really have nothing to do with our mission. 9 MR. HOGSETT: Well, that's -- this is 10 based on legislation -- legislative intent that we do 11 just what you've just said that we do. I would think 12 that it would be an unpopular decision to make that 13 sort of a change, but we have that within our -- 14 within our power -- within your power as make -- 15 rule-making authority for the program. 16 COMMISSIONER MONTGOMERY: We're in the 17 kitchen. I don't know if we can stand the heat on 18 that one or not. We ought to look at it, I guess. 19 COMMISSIONER FITZSIMONS: I'll take some 20 of that heat. Let me take a little bit of that heat. 21 Let me ask again, it's mandate when Texas Parks and 22 Recreation -- Recreation and Parks account exceeds 23 what amount? 24 MR. HOGSETT: I believe that it's 15 and 25 a half million, but -- I wish I had brought the Code ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 69 1 book with me this morning. 2 COMMISSIONER FITZSIMONS: All right. I 3 think you have -- that a certain amount go to the 4 indoor recreation. But I think 5 Commissioner Montgomery's point is that doesn't mean 6 it can't be still consistent with our mission -- 7 COMMISSIONER MONTGOMERY: Right. 8 COMMISSIONER FITZSIMONS: -- and be 9 indoor. It just doesn't say any indoor that applies 10 shall be -- 11 VICE-CHAIRMAN ANGELO: What -- what 12 function of our mission would you suggest that we 13 would require for an indoor facility? 14 COMMISSIONER MONTGOMERY: I don't know. 15 But, you know, environmental education centers, 16 natural history museums, educational centers of some 17 kind, training centers, I -- maybe there's other 18 things. I really don't know the answer to my 19 question. But I also don't feel -- 20 MR. HOGSETT: We have done -- 21 COMMISSIONER FITZSIMONS: He's just sure 22 that racquetball is not on line with -- 23 COMMISSIONER MONTGOMERY: Well, I -- I 24 guess I'd like to have us look at that and review it 25 more carefully if -- if -- is there a -- city of ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 70 1 Athens you know, wants to put an education add on to 2 the fishery center in Athens, does that count -- 3 VICE-CHAIRMAN ANGELO: The Chairman -- 4 the Chairman's got a comment with -- in respect to 5 what you -- 6 COMMISSIONER MONTGOMERY: She'll 7 probably tell me to quit asking questions. 8 CHAIRMAN IDSAL: No, Phil. I'll put it 9 another way. Tim, I think we have some new 10 Commissioners here and aren't -- they are not 11 completely familiar -- and I can always stand a review 12 of what you do and some of the regs and rules and the 13 missions and the whatnot, it might be helpful to 14 provide a briefing for all of us on -- to go over 15 that. 16 MR. HOGSETT: Yeah. Absolutely. 17 CHAIRMAN IDSAL: And there have been 18 some changes made recently that you can incorporate in 19 that so that we can all get up to speed again with 20 this very important work that you do. 21 MR. HOGSETT: Yes. Absolutely. We'll 22 be happy to do that. 23 COMMISSIONER MONTGOMERY: Could we 24 include -- I'm sorry, Donato. Go ahead. 25 COMMISSIONER RAMOS: No. My only ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 71 1 comment, it seems to me that we ought to be trying to 2 help as many people as we can or cities or 3 municipalities, and we don't necessarily have to give 4 everyone a half a million dollars. In other words, if 5 you were to take what you've done here and give $250- 6 to each you could -- you could double the number of 7 people that you're helping. And it -- and my question 8 to you is, are we mandated by statute to give a 9 maximum or do we have the discretion? 10 MR. HOGSETT: No. We are not mandated 11 by statute. That is a Commission policy. 12 COMMISSIONER RAMOS: That's -- we could 13 give them a hundred thousand. 14 MR. HOGSETT: Yes. 15 COMMISSIONER RAMOS: My only concern 16 under this system, we're not helping as many people. 17 Out of 39 applicants we're only helping 13. 18 VICE-CHAIRMAN ANGELO: I believe, the -- 19 the theory, though, was -- that as long as you've got 20 the even 50/50 matching the theory was that if you -- 21 you set too low a number it's really not significant. 22 I mean, a hundred thousand dollars is a lot of money, 23 but it's not that significant in a -- in a million 24 dollar project for instance. Whereas, if you can go 25 to the larger amount you'd make -- it makes the ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 72 1 competition keener and -- but it also is more -- more 2 significant to the particular entity that's requesting 3 the money. 4 COMMISSIONER RAMOS: There's some 5 projects here like Crawford City Park, you know, 6 $153,000, you know, if you have matching funds you 7 could cover that project very easily. All I'm saying 8 is I don't think that the trend should be to where 9 we're helping the bigger projects. I think the 10 smaller projects are being compromised, it appears to 11 me, but anyway that's -- that's my only comment. 12 VICE-CHAIRMAN ANGELO: In the process 13 of -- of following up on the Chairman's comment you 14 could, maybe, go through the rationale for these 15 things, and if the Commission wants to change them 16 they can. 17 MR. HOGSETT: Absolutely. 18 VICE-CHAIRMAN ANGELO: Okay. We have 19 this divided into two items for the agenda for 20 tomorrow. Is there any further comments on the local 21 park funding grants? 22 COMMISSIONER MONTGOMERY: Just in that 23 review could we request the staff to lay out options 24 they see by which we might have a higher impact with 25 our dollars than our current policy, and ways in which ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 73 1 we can make sure that the dollars as much as possible 2 go to things that fit our mission? Just options. 3 VICE-CHAIRMAN ANGELO: Tim, did you -- 4 I'm sure all of that will get recorded but did you 5 hear that? 6 MR. HOGSETT: No. I didn't hear. I'm 7 sorry. 8 COMMISSIONER MONTGOMERY: In the review, 9 I guess, what I would like to see us do is make sure 10 that we -- you come back with options to consider 11 which would cause us to maximize the impact of the use 12 of these dollars, whether or not they require 13 legislative changes, and options we have for insuring 14 that the grants are as close to fitting our mission as 15 possible. 16 MR. HOGSETT: There are a number of 17 highly-weighted criteria in both the indoor and 18 outdoor scoring systems already for 19 conservation-related types of projects. 20 We -- we typically about every four or 21 five years will go through the rule-making process on 22 the entire program. It's getting close to the time to 23 do that again anyway, so I think this is a -- you 24 know, a welcome opportunity. I would think that the 25 Chairman's mandate that we form a local park advisory ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 74 1 board can also be helpful in that regard. 2 And I also will -- will remind you about 3 the small communities program that we're going to ask 4 you to adopt some permanent rules for later today. 5 That is a -- a new initiative setting aside some 6 additional money just for smaller communities in a 7 small amount. We welcome the comments. And this 8 slide indicates what we're proposing to recommend 9 tomorrow. 10 VICE-CHAIRMAN ANGELO: Excuse me, Tim. 11 Do we not have to separate those two for the -- 12 MR. HOGSETT: Do you? 13 VICE-CHAIRMAN ANGELO: -- agenda? I 14 mean, they are separate. 15 MR. HOGSETT: They are separate items on 16 the public hearing agenda tomorrow, yes. 17 VICE-CHAIRMAN ANGELO: Okay. Well -- so 18 I'll -- I'll go ahead and -- with -- if there's no 19 objection that we'll place the item for local park 20 funding on the agenda for tomorrow's meeting for 21 public comment and action, and then we'll move on to 22 the indoor grants. 23 MR. HOGSETT: The -- the Indoor 24 Recreation Grant program we take applications once a 25 year for it with the deadline being July 31st of each ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 75 1 year. This year we received 22 applications 2 requesting about 13 and a half million dollars. We 3 have approximately $3.3 million available, and but -- 4 I have the answer to your question 5 related to the Code. It says, when revenues from the 6 Texas Recreation and Parks account exceed $14 million 7 per year an amount not less than 15 percent shall be 8 made available to local governments for up to 9 50 percent of the cost of acquisition or development 10 of indoor recreation facilities. That may provide 11 some clarity. 12 And we will recommend to you tomorrow 13 funding of the projects that have been rank ordered 14 prioritized behind the agenda item at Page 204, and we 15 are recommending approval of the top six applications 16 for that available amount of $3,325,000. 17 VICE-CHAIRMAN ANGELO: Any other 18 comments on the indoor grants other than those we've 19 already had? If not, we'll place this item on the 20 agenda for tomorrow's meeting for public comment and 21 action. 22 And then we'll take up Item No. 9 on our 23 agenda, which is the small community grant projects 24 and regional grants, and again, we'll ask Tim to 25 present this item ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 76 1 ITEM 9. SMALL COMMUNITY GRANT PROJECTS and REGIONAL 2 GRANTS. 3 MR. HOGSETT: Thank you, Mr. Chairman. 4 Once again, I'm Tim Hogsett from the Recreation Grants 5 Program and the State Parks Division. This item is a 6 request that you consider adopting as permanent two 7 programs that we have had in pilot form. The one -- 8 for one pilot review, the small communities pro -- 9 program, and the other we've had two pilot awards that 10 you have -- have made for regional park grants. 11 And I'll address first the authority 12 that you have under the Texas Parks and Wildlife 13 Code. Says that you have the authority to adopt 14 programs and rules and changes to the -- how the 15 program is administered under Chapter 24 of the Texas 16 Parks and Wildlife Code. 17 As I said, we have conducted pilot 18 programs for both of these; they have been both very 19 successful in our opinion, very well received. And 20 today -- actually tomorrow we're going to propose the 21 adoption of rules to make these permanent pieces of 22 our arsenal, if you will, to assist local governments 23 in providing recreation opportunities. 24 To effect this proposal, we had six 25 public hearings around the state. We would conduct ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 77 1 one public hearing in the morning for the small 2 communities program and another program in the 3 afternoon for the regional parks. 4 Total attendance over all of those 12 5 hearings, if you will, was about 200 people. The 6 majority of the participants came to the small 7 communities program; the regional parks were not as 8 well attended. 9 This was well advertised. Statewide 10 mailing to all local governments that were potentially 11 eligible, publication through the Texas Recreation and 12 Parks Society magazine, Counsel of Governments 13 assisted us in getting the word out. 14 First, the small communities program. 15 This is a -- a outgrowth of the last time we did rule 16 making. One of the things that we heard consistently, 17 and continued to hear, is that small communities which 18 only need one or two facilities and only may need a 19 small amount of money typically cannot be competitive 20 in the larger outdoor recreation grant program. I 21 would agree with that based on the analysis of -- of 22 what -- of what we have seen historically and 23 especially in the last few reviews where the score 24 seems to continue to go up for outdoor recreation 25 grants. ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 78 1 So we asked and the Commission agreed to 2 set aside the equivalent of one of those grants, or 3 $500,000, for a statewide competition among, at that 4 point, governments of 50,000 population or less to 5 make $50,000 maximum 50 percent matching grants to 6 those local governments. Hopefully, we had a simple 7 application process, and it was a pilot, and we said 8 at the time that we would evaluate the results of that 9 pilot and come back to you with a recommendation about 10 the future of that program. 11 The results of the pilot were that in a 12 very short period of time, in about two months, after 13 again getting the word out statewide to all potential 14 eligible sponsors at 50,000 or less, we got 64 15 applications requesting $2.2 million for the available 16 approximately $500,000. We developed a -- a scoring 17 system that was reasonably similar to our indoor and 18 outdoor scoring system but were more tailored to the 19 goals of the program being small communities and one 20 or two facilities being the need. And evaluated those 21 and then brought to you last August recommendations 22 which you approved for the funding of the top 12 23 applications out of those 64. 24 When we did our public hearing we tried 25 to make them as facilitated as possible. In other ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 79 1 words, bring out the issues that we thought were out 2 there and then listen to other issues which might be 3 on the minds of potential applicants. One of the 4 obvious issues is the size of the cap on the 5 population. It was frankly rather arbitrary at the 6 time we set it for the pilot at 50,000. Some data on 7 what we actually received in the pilot: Out of the 64 8 pilot applications, 57 of those were communities of 9 20,000 or less. And the average population of those 10 64 was about 9,000. 11 The next issue that we heard -- and this 12 was not something that we put on the table, but was 13 brought to our attention by sponsors -- in the pilot 14 we did not -- because of the small amount of money 15 available, $50,000, we did not allow for acquisition 16 of property. We heard fairly consistently in our 17 public hearings that we ought to consider doing that, 18 particularly when it involved donation of real 19 property and that donation being allowed to be used as 20 part of the match for the project. 21 Administrative issues: The application 22 cap of $50,000 was discussed. And it so happens that 23 in the pilot almost all of applicants asked for that 24 maximum amount of $50,000. We asked if the guidelines 25 were easy to understand, and whether the numbers of ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 80 1 review cycles were appropriate, and whether web site 2 accessibility was -- was sufficient. And we got an 3 affirmative answer in all three of those cases. 4 So the proposal that we're going to ask 5 you to consider tomorrow will do several things. It 6 will, first of all, decrease the population 7 eligibility from 50,000 to 20,000. That was 8 consistently what we heard throughout our public 9 hearings and in the public comments that were 10 received. As I said, these were posted in the 11 Texas -- or I may not have said -- these rules -- 12 proposed rules were posted in the Texas Register, and 13 up until yesterday we had received no comments related 14 to that Texas Register posting. Yesterday we did 15 receive two letters, one from the City of San Benito, 16 which is in the Valley, approximately 23,000 17 population, and then second -- secondly, a letter from 18 their state representative, Ms. -- Representative 19 Solis, both of which are requesting that you consider 20 leaving the population cap at 50,000 as opposed to 21 reducing it to 20,000. 22 VICE-CHAIRMAN ANGELO: Your second 23 bullet wouldn't -- wouldn't apply to those 24 communities? 25 MR. HOGSETT: It would not, no. Because ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 81 1 they are in -- I believe they are in Cameron County 2 and they are an incorporated community. 3 What that second bullet is about that in 4 particularly rural parts of the state there may be 5 unincorporated areas who are not really served by any 6 government other than the county government but that 7 county government's pop -- that -- the entire 8 population of that county may be well over 20,000. 9 Example, might be a colonia in the El Paso County 10 area. A small unincorporated community, needs some 11 assistance, but obviously El Paso County is much 12 larger than -- than the 20,000 or 50,000 dollars -- 13 the population. I'm sorry. 14 VICE-CHAIRMAN ANGELO: Other than the 15 fact that -- other than the fact that you got mostly 16 requests from communities that were less than 50,000 17 or less than 20,000, what -- what is the other 18 rationale for lowering the number? 19 MR. HOGSETT: That -- we think that that 20 is closer to what the need is out there. That really 21 truly small communities, particularly more rural 22 communities, that have little or no facilities and 23 have very small needs that those -- those are the 24 kinds of folks that we think really need this kind of 25 a program. You get into the 50,000 population, for ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 82 1 example, you include a lot of the municipal utility 2 districts in the urban areas. You include the cities 3 that have greater resources potentially, or sponsors 4 that have greater resources, at their command that 5 possibly can be more competitive in the larger 6 programs. It's just a guess, frankly. 7 VICE-CHAIRMAN ANGELO: So 20,000 is an 8 arbitrary number also? 9 MR. HOGSETT: Yes. Yes, it is. 10 VICE-CHAIRMAN ANGELO: And we could just 11 as easily say 25- and -- 12 COMMISSIONER MONTGOMERY: My question on 13 that, though, is, why -- why have a floor if we're 14 tying to help the small communities? Because I -- we 15 can all think of counties with less than 20,000 that 16 fit the description you just gave. Why -- 17 VICE-CHAIRMAN ANGELO: If you make it 18 50,000 you're getting communities that have got 19 greater capabilities and they're going to out 20 commit -- out compete the -- 21 COMMISSIONER FITZSIMONS: They'll have 22 other options. 23 VICE-CHAIRMAN ANGELO: Isn't that the 24 reason? 25 MR. HOGSETT: That's my feeling, yes. ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 83 1 COMMISSIONER FITZSIMONS: The idea is 2 that they have other options, the bigger ones. 3 VICE-CHAIRMAN ANGELO: The bigger ones 4 can go for the $500,000. 5 COMMISSIONER MONTGOMERY: Well, no, 6 that's the ceiling. I'm talking about the floor. 7 COMMISSIONER FITZSIMONS: This is the 8 ceiling. 9 VICE-CHAIRMAN ANGELO: This is the 10 ceiling. 11 COMMISSIONER FITZSIMONS: There's no 12 floor. It's not the floor. 13 VICE-CHAIRMAN ANGELO: You've got to be 14 less than 20,000. 15 COMMISSIONER MONTGOMERY: Okay. All 16 right. Excuse me. I missed the point then. Okay. 17 COMMISSIONER FITZSIMONS: So for those 18 that are left in the -- if I may -- 19 VICE-CHAIRMAN ANGELO: Sure. 20 COMMISSIONER FITZSIMONS: -- those that 21 are left in the gap, so to speak, like San Benito -- 22 and you have to understand, I'm from a part of the 23 world where 20,000 is a lot -- town of 5,500 so it -- 24 yeah -- 20- is a pretty big number, it sounds like to 25 me. But in those -- in that gap like San Benito, they ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 84 1 are -- would traditionally or presumably be in the 2 bigger program, correct? 3 MR. HOGSETT: Well, we have had a number 4 of successful applications from small communities in 5 the larger program. The thing is, though, that they 6 typically are asking for the five -- they have the 7 ability to match a $500,000 grant. 8 COMMISSIONER FITZSIMONS: My point is 9 that an area of 50,000 is normally going for more than 10 a $50,000 grant and would -- and would presumably be 11 more appropriate to be in our larger program, is 12 that -- 13 MR. HOGSETT: Well, that seems to be 14 carried out in the -- in the example of the pilot 15 where nearly all of the communities that did apply 16 were -- were 20,000 or less. 17 COMMISSIONER FITZSIMONS: So the market 18 has told you that. 19 VICE-CHAIRMAN ANGELO: I mean, I think 20 that's a logical conclusion. Any other comments or 21 questions? 22 COMMISSIONER MONTGOMERY: It's sort of 23 based on the -- 20,000 is based on the data of what 24 we're seeing. 25 MR. HOGSETT: The other things that we ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 85 1 are proposing is, as I said, the allowing of use of 2 donated property to be used as part of the sponsor's 3 match and to give additional priority points to 4 communities of population of 2,000 or less to really 5 try to even up the playing field a bit. 6 VICE-CHAIRMAN ANGELO: Any other 7 comments or questions? 8 COMMISSIONER FITZSIMONS: I have one 9 question on the last -- on the third bullet point 10 about the matching. You said earlier that in the 11 previous program you could not use the -- the funds 12 for acquisition, and this would allow them to use the 13 funds for acquisition only in the event that there's a 14 match of donation? 15 MR. HOGSETT: Correct. 16 COMMISSIONER FITZSIMONS: Okay. I 17 understand that. 18 MR. HOGSETT: Correct. 19 VICE-CHAIRMAN ANGELO: Any other 20 comments or questions? If not, we'll put this item on 21 the agenda tomorrow for further comment and action. 22 And, Tim, again, I want to thank you for all the great 23 work you do on this area. 24 MR. HOGSETT: Thank you. 25 VICE-CHAIRMAN ANGELO: This is, as the ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 86 1 Chairman mentioned earlier, an extremely significant 2 part of what we do, and I think it's highly 3 commendable the manner in which you and your staff 4 handle it and make it a fair and competitive 5 competition that gives everybody a chance. Thank 6 you. 7 Madam Chairman and Members of the 8 Committee Committee, I believe that concludes our 9 action and Committee work for this morning. 10 MR. HOGSETT: So we -- we need to 11 discuss the regional park program? 12 VICE-CHAIRMAN ANGELO: Oh, did I skip 13 one? 14 MR. HOGSETT: I'm sorry. 15 VICE-CHAIRMAN ANGELO: I'm sorry. I 16 thought we were finished. I commend you again, Tim. 17 MR. HOGSETT: Okay. I'll run through 18 this real quickly. 19 CHAIRMAN IDSAL: He re-commends you. 20 MR. HOGSETT: Regional parks were also a 21 pilot program. You've made a couple of awards under 22 that program. This was an outgrowth of a -- of a 23 review and a study that was done for the Department by 24 Texas A&M University a couple of years ago. That 25 study revealed that there was apparent need for large ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 87 1 regional kinds of grants for either very 2 conservation-oriented projects in the urban areas of 3 the state and/or intensive recreation types of 4 projects in the urban area of the state. And that 5 that could also apply to indoor recreation 6 facilities. 7 We've made two -- You have made two 8 pilot grant awards, both approximately $3 million for 9 projects that are very similar in character, in that, 10 with the only exception being McAllen, all of them are 11 very conservation oriented, Greenbelt types of 12 preservation and development projects. And in the 13 case of McAllen, that is a renovation of a building 14 for one of the sites -- satellite sites of the world 15 birding center. 16 Again, we -- in our hearings -- went 17 through issues such as application caps. We have not 18 had one under the regional park grant program. The 19 consensus was that that be the case continue, that 20 those be open-ended applications and that we then as 21 staff come to you with some recommendations on what we 22 think would be appropriate award. The amount of the 23 grant awards, same thing. That -- that although we've 24 done -- been doing about million dollar grants, we -- 25 and this public has said, let's don't limit ourselves ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 88 1 to -- to that. The other issues are -- are similar to 2 the other program, the guidelines and number of review 3 cycles. 4 We propose to make changes from the 5 pilot, and when we adopt the permanent program, to 6 give priority in the evaluation criteria for projects 7 that use publicly-owned non-parkland as a portion of 8 their local match. That was a recommendation by a 9 couple of the large metropolitan areas who had some 10 surplus property that they thought would potentially 11 qualify for the development of a regional park, and to 12 give priority to projects that have a -- give 13 additional priority, actually, to projects that have a 14 significant natural resource conservation element; 15 hopefully, more in line with the mission of the 16 Department. 17 COMMISSIONER MONTGOMERY: Excuse me, 18 Tim. The first bullet, I don't -- 19 MR. HOGSETT: I'm sorry. Can I go back? 20 COMMISSIONER MONTGOMERY: You're first 21 priority for publicly-owned non-parkland as -- in 22 other words, the -- a public entity is converting land 23 to parkland; is that what we're trying to encourage 24 here? 25 MR. HOGSETT: A good example would ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 89 1 probably be the Houston project that we did. It was a 2 cooperative effort between the City of Houston and the 3 Houston -- Harris County Flood Control District. It 4 really accomplished two goals. It allowed the -- in 5 that case they were not allowed to use the value of 6 the land as match. But it was property that was being 7 developed for flood control purposes, but with an 8 environmentally friendly way of developing it. We had 9 not in the pilot allowed that kind of land to be used 10 as -- 11 COMMISSIONER MONTGOMERY: Now, the 12 intent is to converge -- is to encourage the 13 conversion of publicly-owned land to parkland. 14 MR. HOGSETT: Yes. 15 COMMISSIONER MONTGOMERY: My question 16 is, why limit it to publicly owned? 17 MR. HOGSETT: I'm sorry. Why is it -- 18 COMMISSIONER MONTGOMERY: Why limit it 19 to publicly owned? Why wouldn't we just encourage the 20 use of the conversion of any -- 21 MR. HOGSETT: There already are some 22 criteria in the scoring system that give a lot of 23 cri -- a lot of priority to donations of private 24 property. So I think what I guess I'm saying is, I 25 think it's already covered. ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 90 1 COMMISSIONER MONTGOMERY: This is 2 collapsing the two things to one criteria so the 3 donation of land from any -- 4 MR. HOGSETT: No, this would be a 5 separate -- a new criteria to give some additional 6 priority to those kind of projects. 7 COMMISSIONER MONTGOMERY: Does public 8 conversion to park land give a greater priority a 9 project than private conversion of land? 10 MR. HOGSETT: No. No. 11 COMMISSIONER MONTGOMERY: Are they 12 equal? Is the conversion of land from -- regardless 13 of ownership -- I'm just trying to filter out, to me 14 it doesn't matter who owns it. If it's converted to 15 our use we should be happy; it should be equally 16 treated. 17 MR. HOGSETT: I believe they are 18 equivalent in points. 19 COMMISSIONER MONTGOMERY: That's all I'm 20 asking. 21 MR. HOGSETT: I -- I will check to be 22 sure that that's the case. But I believe that that's 23 what we were recommending. 24 COMMISSIONER MONTGOMERY: Yeah. Okay. 25 That's all I was trying to get at. ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 91 1 VICE-CHAIRMAN ANGELO: Any other 2 comments? If not, we'll go through this exercise 3 again, and place the Item No. 9, the Grant Projects 4 and Regional Grants item on the agenda for public 5 comment and action tomorrow. And again, Tim, thank 6 you very much. 7 MR. HOGSETT: Thank you. 8 VICE-CHAIRMAN ANGELO: Now, is there any 9 other business to come before the Committee? 10 Madam Chairman, that completes the Finance Committee 11 activity for the morning. 12 CHAIRMAN IDSAL: Thank you, Mr. Angelo. 13 I would like to take a ten-minute break. And when we 14 resume Mr. -- Commissioner Fitzsimons, Chairman of the 15 Regulations Committee will take up that business. 16 (WHEREUPON, a short break was taken.) 17 18 19 20 21 22 23 24 25 ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 92 1 THE STATE OF TEXAS ) COUNTY OF BEXAR ) 2 3 I, DICIE LEE EYTCHESON, a Certified 4 Court Reporter in and for the State of Texas, do 5 hereby certify that the above and foregoing 91 pages 6 constitute a full, true, and correct transcript of the 7 minutes of the TEXAS PARKS AND WILDLIFE COMMISSION on 8 JANUARY 16, 2002, in the Commission Hearing Room of 9 the Texas Parks and Wildlife Headquarters Complex, 10 Austin, Travis County, Texas. 11 I FURTHER CERTIFY that a stenographic 12 record was made by me at the time of the public 13 meeting and said stenographic notes were thereafter 14 reduced to computerized transcription under my 15 supervision and control. 16 WITNESS MY HAND this the day of 17 , 2002. 18 19 20 DICIE LEE EYTCHESON, Texas CSR 5392 Expiration Date: 12/02 21 7800 IH-10 West, Suite 100 San Antonio, Texas 78230 22 (210) 377-3027 23 24 25 ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 . 93 1 ________________________ ERNEST ANGELO, JR., CHAIR 2 3 ________________________ DONATO D. RAMOS 4 5 ________________________ PHILLIP MONTGOMERY, III 6 7 ________________________ JOHN AVILA, JR. 8 9 ________________________ KATHARINE ARMSTRONG IDSAL 10 11 ________________________ JOSEPH FITZSIMONS 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ESQUIRE DEPOSITION SERVICES, INC. 7800 IH-10 WEST, SUITE 100, SAN ANTONIO, TX 78230 (210)377-3027 (800)969-3027 FAX (210)344-6016 .