Texas Parks and Wildlife Commission
Finance Committee Meeting
Nov. 17, 1999
Commission Hearing RoomTexas Parks & Wildlife Department Headquarters Complex
4200 Smith School Road
Austin, TX 78744
1
8 BE IT REMEMBERED that heretofore on
9 the 17th day of November 1999, there came on
10 to be heard matters under the regulatory
11 authority of the Parks and Wildlife Commission
12 of Texas, in the commission hearing room of
13 the Texas Parks and Wildlife Headquarters
14 complex, Austin, Travis County, Texas,
15 beginning at 10:25 a.m. to wit:
16
APPEARANCES:
17 THE PARKS AND WILDLIFE COMMISSION:
18 FINANCE COMMITTEE:
CHAIR: Ernest Angelo, Jr.
19 Lee M. Bass (absent)
Dick Heath (absent)
20 John Avila, Jr.
Carol E. Dinkins
21 Alvin L. Henry (absent)
Katharine Armstrong Idsal
22 Nolan Ryan
Mark E. Watson, Jr.
23
24
THE PARKS AND WILDLIFE DEPARTMENT:
25 Andrew H. Sansom, Executive Director
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2
1 NOVEMBER 17, 1999
2 MORNING SESSION: 10:25 a.m.
3 * * * * *
4 FINANCE COMMITTEE
5 * * * * *
6 COMMISSIONER ANGELO: The first
7 item will be to approve the committee minutes
8 from the previous meeting. Do we have a
9 motion to that effect?
10 COMMISSIONER DINKINS: So move.
11 COMMISSIONER AVILA: Second.
12 COMMISSIONER ANGELO: All in favor
13 please say aye.
14 (Motion passed unanimously.)
15 AGENDA ITEM NO. 1: BRIEFING - CHAIRMAN'S
16 CHARGES.
17 AGENDA ITEM NO. 2: BRIEFING - FINANCIAL
18 OVERVIEW.
19 COMMISSIONER ANGELO: We have an
20 official briefing overview by Jayna Burgdorf.
21 MS. BURGDORF: Good morning. This
22 is the financial review. We have three
23 sections of the presentation this morning for
24 you. One is the standard updated financial
25 information for major accounts primarily
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3
1 geared towards the revenue. We have a special
2 update on the Super Combo and Big Time Texas
3 Hunt sales. And actually, Lydia Saldaña is
4 going to join me and recap the marketing
5 efforts. And the operating budget status will
6 be a final slide that I will show you as it
7 relates to our expenditures.
8 Account 64, State Parks: September
9 through October, the revenue is up 22 percent
10 to 2.6 million, and that is a $664,000
11 increase. It is in large part due to the poor
12 year that we had during this same time frame
13 last year. If y'all will remember, some of
14 our parks were closed due to flooding, and
15 just overall, the weather has been much more
16 positive lately. Garner, for example, is up
17 $55,000 compared to prior year alone.
18 We, at this time, have only collected 16
19 percent of the revenue estimate. So we are
20 not recommending any changes at this time.
21 It's very early in the fiscal year to do that.
22 This is the income statement of sorts for
23 Parks and Wildlife as far as Account 64 goes.
24 We start with our cash balance as of September
25 1 at $12 million. We add in our expected
.
4
1 revenue of entrance and use fees, sporting
2 goods sales tax allocation, and other, which
3 is primarily our TCP sales, which is the Texas
4 Conservation Passport, annual pass of sorts,
5 and some of the magazine revenue associated
6 with the State Park Account.
7 We subtract out our expenditures which
8 include operations, which is the operating
9 budget associated with Account 64, and also
10 the employee benefits and the grants related
11 to Account 64. Under Capital and Other, that
12 primarily represents your bond payment at $4
13 million, $1 million for donations and other
14 dedications, and $2.5 million for capital.
15 Prior year obligations represent the
16 accounts payable and encumbrances from the
17 previous fiscal year through September 30th.
18 The last item there is the biennial
19 allocation. Basically that's an effort to
20 address the legislature's request that Parks
21 and Wildlife use all available cash resources.
22 And so our -- what used to be our estimated
23 revenue allocation in any one time revenue
24 increases are now being applied on a biennial
25 basis. And so this is really $2 million that
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5
1 we're holding to cover our appropriation for
2 next fiscal year.
3 That leaves us with an ending available
4 balance of a million. This is in large part
5 due to the change in policy, again to maximize
6 our available cash. This year we have a
7 policy that says all your obligations from the
8 previous fiscal year as it relates to your
9 budget, your operating budget. Again capital,
10 we have approval to spend capital over five
11 years, but the operating budget, our policy is
12 now that it must be paid or encumbered one
13 month after the fiscal year or it will affect
14 the current year's budget. And that allows us
15 to much more quickly capture what those
16 obligations are and what money is really freed
17 up that was not spent in the previous years.
18 COMMISSIONER ANGELO: Jayna, how is
19 that different from what you've done before?
20 MS. BURGDORF: Well, before your
21 prior year obligations -- right. We are
22 basically finding out much sooner what our
23 obligations are, and at the same time, having
24 some savings. In the past, we would carry the
25 remaining budget from the previous year under
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6
1 prior year obligations, and we would
2 potentially carry that all the way out through
3 January. So now we know at a much quicker
4 date what that lapse was.
5 Account 9, Game, Fish and Water Safety,
6 your two primary fee driven revenue sources
7 are boat registration and titling license
8 sales. Boat registration is up over prior
9 year. Again, a reminder that boat
10 registrations are valid for two years, and so
11 when we look at our projects we actually take
12 into account, yes, this year's increase over
13 prior year, but also the previous year's. We
14 have only collected 14 percent of our original
15 estimate. And so we are not recommending any
16 change at this time.
17 Okay. License sales, a very positive
18 report. It's up almost $2.3 million through
19 November 10th. The primary drivers are the
20 Super Combo and Big Time Texas Hunts. I put
21 some of the other statistics up there,
22 although they are not the primary drivers.
23 Non-resident hunting is up. And because
24 that's a $250 license, 8,000 -- an 8,000 item
25 increase can mean a significant amount of
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7
1 money. But the fishing license sales and the
2 saltwater stamps sales are also up
3 significantly, and those are real drivers.
4 They reflect the quality of the fishing for
5 the red drum and spotted sea trout and the
6 good weather that we've been having.
7 The other thing I will mention, the
8 numbers there on Big Time Texas Hunts are
9 slightly different than what Lydia is going to
10 show you. What those numbers are, and it's
11 only off by a thousand, but this is what we
12 collected this year for sales. There were
13 some customers last year who did not make the
14 deadline, and so their purchases are actually
15 automatically, they may not know it, but
16 they're rolled into this drawing. So her
17 numbers will reflect the total drawing.
18 License sales are up, but one of the
19 reasons we are not requesting a revenue
20 adjustment is because the increases in the
21 fishing license and the saltwater stamp may in
22 actuality just represent early sales. At this
23 point, we have -- we don't necessarily know
24 that those are people buying licenses that
25 wouldn't have otherwise. They may just be
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8
1 purchasing them early because of the good
2 weather.
3 And the financial statement: September
4 12 cash balance of $32 million. License sales
5 at 61 million. Boat fees at $14 million.
6 Your federal funds at $34 million, which
7 include the Sport Fish and Wildlife
8 Restoration grants, boating access and EPA
9 grants.
10 Other: At $13 million, which includes
11 interest earnings, fines, magazine revenue,
12 mineral leases, just lots of miscellaneous
13 revenues. Less the expenditures, again the
14 operations are both the operating budget, the
15 employee benefits and in any grants that flow
16 through Account 9.
17 Capital and Other represents a capital
18 budget of $9 million and dedications such as
19 stamps at $3.5 million.
20 Prior year obligations at $24 million.
21 And again, the biennial allocation at $5. The
22 ERA for Account 9 was significantly higher
23 than Account 64 because of the volume of
24 revenue, which leaves us with an ending
25 available balance of $4 million.
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9
1 And if -- are there any questions on that
2 section because I'll move into the Super
3 Combo?
4 COMMISSIONER DINKINS: I would like
5 to ask about the Texas Horned Lizard license
6 sales.
7 MS. BURGDORF: Well, we can -- I
8 think that will fit right in if you have that
9 information. Do you want to come up?
10 COMMISSIONER DINKINS: I saw an
11 article on the cover of the Houston Chronicle
12 within the last week or so, and I thought that
13 since they'd announced it, maybe you had
14 gotten enough orders to go ahead and --
15 MS. SALDAÑA: Not quite yet. We're
16 just under a thousand now. That hit at the
17 Houston Chronicle resulted in our phones
18 literally ringing off the hook. We got
19 hundreds of phone calls based on that.
20 COMMISSIONER DINKINS: I saw the
21 applications at the door, too.
22 MS. SALDAÑA: We can certainly do
23 that.
24 MS. BURGDORF: Real briefly let me
25 show you some historical numbers. The initial
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10
1 survey of combination holders back in 1996,
2 they told us that half of them would purchase
3 a license, and that was about 500,000
4 combination holders that year. They basically
5 said that half of them would purchase a Super
6 Combo with all the stamps for $49. And what
7 we've seen through marketing efforts, word of
8 mouth, education of retailers is that that
9 number has grown, and now as of this year we
10 have surpassed that expectation, that
11 $250,000 -- or excuse me -- 250,000 licenses,
12 and that's because of the targeted marketing.
13 And just to note as of this time last year, we
14 had sold 94 percent of Super Combos. So that
15 number may grow a little, but in general
16 that's what we expect will be our Super Combo
17 sales for this year.
18 And I'm going to go ahead and turn it
19 over to Lydia.
20 MS. SALDAÑA: I'm Lydia Saldaña,
21 Director of Communications. And I'm going to
22 go into some detail about the marketing
23 efforts for both the Super Combo program, as
24 well as the Big Time Texas Hunts program. It
25 has been or is the largest scale direct
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11
1 marketing effort that we've ever done, at
2 least since I've been here, and for the most
3 part have been successful.
4 The results that we have garnered and
5 what we did our marketing strategies for both
6 were based on the research that we did this
7 last year. And one of the things that we
8 found out is that doing a renewal reminder for
9 Super Combo definitely had a positive impact.
10 Now, what we did this year was we developed a
11 newsletter. We didn't actually test a
12 newsletter, but we ended up producing a
13 newsletter called the Hook and Bullet that we
14 direct mailed to all 244,000 Super Combo
15 customers. It was mailed with a personnel
16 letter, as well, and it reminded our Super
17 Combo customers to renew their license. It
18 was also a communication piece to our core
19 customers. And we got some very, very
20 positive feedback on that.
21 We also tested mailing a letter to our
22 Combo customers that have zero stamps and one
23 stamp to find out if it would be an effective
24 strategy next year to do a direct mail to
25 them, and we certainly found that it was. The
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12
1 letter encouraged them to upgrade. And we
2 mailed 50,000 of those letters out today as a
3 test -- or this year as a test.
4 Now, what we found was that those
5 customers that did get the letter did upgrade
6 at a higher rate than those who didn't.
7 Specifically those who had no stamps, they
8 converted at a 4.5 percent higher rate than
9 those who did not get the letter, and 7.2
10 percent less for those with one stamp. Based
11 on that -- and it doesn't seem like much.
12 Those percentages don't seem like much, but
13 with a product that costs $49, it certainly
14 adds up quick. What this suggests for us next
15 year is that we have the potential to generate
16 an additional $100,000 by doing a direct mail
17 effort to all of our current combination
18 customers that either have no stamp or one
19 stamp and convert them up. So that's
20 certainly what we're going to be recommending
21 that we do next year.
22 Another note about in this newsletter.
23 We did -- the research projects were separate.
24 I mean, we were testing, and what the research
25 that we did that resulted in our strategy for
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13
1 the Big Time Texas Hunts was actually for
2 Texas Grand Slam. That's what we were doing
3 research on. And then we also researched
4 separately the Super Combo customers. What we
5 found was that they were the same target. So
6 what we ended up doing instead of doing two
7 separate mailings, we combined the mailing, we
8 saved postage costs, and with that mailing
9 cost savings, we ended up producing the
10 newsletter. So I think it was a calculated
11 risk, but I think it has paid off.
12 Now, specifically with the Big Time --
13 oh, a little bit more information about the
14 Super Combo newsletter. We got very, very
15 positive feedback from our customers. Our
16 customers like to get information from us. We
17 did a little survey for them, and I was
18 surprised at the number of responses that we
19 got, so was our research staff who had to
20 input all the information. We got over 1,000
21 mailed back surveys, lots of e-mailed
22 responses, and we're still tabulating that
23 information. But again, an overwhelming,
24 positive response, about 95 percent had very,
25 very positive things to say about the
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14
1 communication effort. And overall, the kind
2 of comments we got was that our customers want
3 more information about, you know, what, when
4 and where information about hunting and
5 fishing. So we'll be looking at doing that
6 again next year.
7 COMMISSIONER RYAN: Lydia, what did
8 the newsletter cost us?
9 MS. SALDAÑA: Darcy Hamburg,
10 Marketing Director, is here with us. Do you
11 have --
12 MS. HAMBURG: $13,000 (inaudible).
13 MS. SALDAÑA: Darcy, why don't you
14 come up here. This is Darcy Hamburg,
15 Marketing Director.
16 MS. HAMBURG: The newsletter
17 itself, the newsletter was a $13,000 cost, and
18 then we included that in the mailing to the
19 customers.
20 COMMISSIONER RYAN: How many of
21 those did we produce?
22 MS. HAMBURG: We produced 250,000
23 newsletters.
24 COMMISSIONER ANGELO: So this was a
25 financially profitable even if those people
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15
1 didn't continue to be Super Combo buyers next
2 year.
3 MS. SALDAÑA: Oh, absolutely. Very
4 much.
5 COMMISSIONER ANGELO: Very solid
6 profit.
7 MS. HAMBURG: Very much so.
8 MS. SALDAÑA: I think you -- I
9 mean, if you look at that -- that $13,000
10 expense, I think that's certainly worth
11 communicating to --
12 COMMISSIONER ANGELO: You got to
13 add the postage to that.
14 MS. SALDAÑA: Right. Right. And
15 again, we have this piggybacking in the Big
16 Time Texas Hunt mailing to save that postage
17 cost.
18 MS. HAMBURG: So we didn't even
19 have postage cost.
20 MR. SANSOM: We also mailed the
21 newsletter to all of our lifetime license
22 holders, as well, with a personal letter as a
23 kind of a relationship issue.
24 MS. BURGDORF: Super Combo revenue
25 is up $1.3 million. And the combination is
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16
1 down half a million, if that gives you an
2 idea.
3 MS. SALDAÑA: Okay. Going through
4 the Big Time Texas Hunts results for this
5 year, what I'm going to do in this portion of
6 the presentation is go through what our
7 marketing strategy was, historical sales
8 comparisons, and we're comparing to Texas
9 Grand Slam sales, and also the direct mail
10 results.
11 Our initial strategy here was to develop
12 an umbrella brand for the sales that we were
13 offering this year. Certainly the Texas Grand
14 Slam, the previous products for the Grand Slam
15 and the Texas Exotic Safari, and we also
16 developed new products this year. And that
17 was the White-tail Bonanza, the Waterfowl
18 adventure and the Big Time Texas Bird Hunt.
19 So we were packaging all of these hunts under
20 one umbrella brand of the Big Time Texas
21 Hunts. Certainly the strategy in doing that
22 was obviously to broaden the appeal of the
23 program, make it more attractive to more
24 hunters, increase the number of winners,
25 maximize the cost effectiveness of the
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17
1 marketing effort, because again, what had been
2 happening were individual sale pieces, and we
3 developed one sales piece that encompassed all
4 the products. And certainly that improved
5 customer convenience in terms of ordering and
6 just finding out about the hunts.
7 We mailed to all of our 1999 Grand Slam
8 customers. That was 11,000 from the previous
9 year. We mailed to all 244,000 Super Combo
10 customers from last year. We also, this year,
11 tested direct mail to lifetime license holders
12 and non-residents to see if we could expand
13 our reach next year.
14 We mail a personal letter with a flyer
15 and a postage-paid return envelope. We tested
16 both postage-paid envelopes and those that
17 were not postage paid and found that we got a
18 better return obviously with postage-paid
19 envelopes, and that the increase of more
20 revenue more than offset the amount of money
21 that that cost. And we also, what we did here
22 was we mailed an initial letter in August
23 prior to the Super Combo sales going on sale.
24 And then we followed up with a reminder
25 letter. We literally were frantically
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18
1 entering all of the entrances that came in
2 after the deadline, and some of these results
3 we were tweaking this morning. So a lot of
4 stuff was coming in very, very rapidly toward
5 the end.
6 Here's the historical data. In 1996 we
7 sold 6,829 Texas Grand Slams. In 1997 that
8 figure went up 49 percent to 10,177. Last
9 year it jumped 117 percent, and 65 percent of
10 that increase was due to the direct mail test.
11 This year the results were 71,297. As Jayna
12 mentioned, that includes some of the last year
13 entrances -- entries that didn't make it. So
14 that's 223 percent increase.
15 In terms of the response rate, we found
16 certainly that our previous Grand Slam buyers
17 were our best customers. They had a 40.7
18 percent response rate.
19 Super Combo customers had a 5.3 percent
20 response rate. Our lifetime customer had a
21 2.5 percent response rate. We think that's
22 going to go up next year because we only did
23 one mailing to the lifetime license holders
24 and that was in October. We'll do the same
25 thing with the lifetime license holders next
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19
1 year of doing a double mailing. And we feel
2 very confident that that number will go up.
3 And the non-resident, I think that's the
4 most surprising number in here that that
5 return was so high. We did have an issue with
6 our mail house this year. And we had some
7 actual letters that did not go out. So we're
8 working through some of those issues. That
9 number will likely go up next year simply
10 because about 12,000 letters did not make it
11 out. And then late entries represent about
12 1100. So again, the direct mail total was
13 63,000.
14 And then all the others, those are folks
15 that bought either, you know, at the --
16 through point of sale or perhaps at Expo, that
17 totaled 7400.
18 So the grand total was 71,297.
19 Some interesting findings. What we did
20 find again was that the direct mail is 90
21 percent of the sales as compared to 65 percent
22 last year. So the vast majority of our sales
23 for this program came through direct mail.
24 COMMISSIONER ANGELO: Do you have a
25 feeling what the direct costs of that
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20
1 marketing effort would be compared to --
2 MS. SALDAÑA: Yeah. And that will
3 be the very last slide. We also found that
4 the addition of new hunts -- we were a little
5 concerned with adding hunts, that they might
6 somehow cannibalize sales, but that did not
7 happen. It didn't increase the response rate,
8 but it did increase the number of chances
9 purchased. Last year the average buyer bought
10 two chances. This year they bought four. So
11 clearly having a, you know, broader menu of
12 hunts to choose from resulted in additional
13 sales.
14 Texas Grand Slam was the most popular
15 package, counting for 34 percent of all
16 chances sold. The Texas White-tail Bonanza
17 came in a very strong second with 28 percent
18 of the sales. The Texas Exotic Safari had 17
19 percent. The Big Time Bird Hunt, 14 percent.
20 And the Waterfowl adventure had 7 percent of
21 the sales.
22 Here is, I guess, the money slide here.
23 The gross revenue, again, was 712,970. In
24 terms of out-of-pocket costs, the direct mail
25 cost 178,100. That included the production of
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21
1 the piece and the postage. The hunt cost
2 totaled about 70,500. All these costs have
3 not been actualized some of them are
4 estimates. So these will be tweaked a little
5 bit as we go through the process of doing the
6 purchases of the hunts -- or Wildlife does the
7 purchases of the hunts.
8 An additional 20,000 in other costs that
9 included, for example, hiring temporaries to
10 input all the information. It also included,
11 for example, the cost of producing a piece for
12 the public hunt guide.
13 But our total out-of-pocket expenses were
14 $268,600, for a net revenue total of $444,370.
15 Now Bob Cook always asks me, what about staff
16 costs. So we estimate marketing and wildlife
17 staff costs at about $25,000.
18 But overall, we certainly feel like this
19 has been a successful program. We have a lot
20 of analysis of the results to do. We're going
21 to be further refining these numbers. We'll
22 be analyzing the purchase behavior by customer
23 type to see who purchased what and at what
24 rate they purchased. And we will certainly be
25 determining the return on investment for each
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22
1 individual hunt package to make sure that each
2 hunt we're offering is profitable in and of
3 itself. We'll continue to tweak and improve.
4 And we're still verifying the names of the
5 hunters. We'll be making the announcement
6 tomorrow of who won what.
7 Any questions?
8 MR. SANSOM: Members, I think it's
9 important to look at this. I mean, it's
10 obviously very exciting that it is producing
11 revenue. It's also a major opportunity to
12 provide the opportunity in a state where
13 average citizens do not have these kinds of
14 opportunities. So if you imagine the
15 situation which occurs in most of the western
16 state where people draw for virtually all
17 hunting opportunity, what we've done here with
18 the blessed support of private landowners is
19 to allow us to provide hunting opportunities
20 to average citizens on places where they
21 otherwise would not be allowed to hunt. So
22 it's an opportunity issue as well as a revenue
23 issue.
24 COMMISSIONER WATSON: Now, do you
25 have to have a hunting license to buy a
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23
1 chance?
2 MS. SALDAÑA: Well, in order to --
3 you don't to have to buy a license -- in order
4 to take the hunt, but you don't have to buy a
5 license to purchase a chance. But again --
6 COMMISSIONER WATSON: Why not?
7 MS. HAMBURG: I think you have to
8 (inaudible).
9 COMMISSIONER ANGELO: Especially
10 those out of state.
11 COMMISSIONER WATSON: I don't think
12 you ought to be able to buy a chance unless
13 you have a hunting license.
14 MS. SALDAÑA: Well, remember, we
15 are mailing to our Super Combo customers. I
16 mean, that's our primary target are those
17 folks who are our license holders, but --
18 MS. HAMBURG: Is Herb here?
19 MS. BURGDORF: I don't think that
20 we logistically -- I think is the problem.
21 Because, as Lydia says, most of the Big Time
22 Texas hunt purchases respond by mail. Most
23 licenses are sold through the system. And so
24 what we'd end up doing is basically doing a
25 lot of rejection through the mail, sending
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24
1 their checks back, depositing their checks,
2 issuing them refunds. If we went in -- when
3 we go ahead and the temporary staff she was
4 talking about actually entered those chances
5 and determined that individual has not
6 purchased a license, I think we'd end up
7 really driving up our costs. I don't know
8 that the revenue that we'd gain from requiring
9 a license would necessarily offset those
10 costs.
11 MS. HAMBURG: We can look into how
12 many (inaudible) license if you'd like. We
13 could do a run and see. It may be that all of
14 them do. We could certainly look into that.
15 COMMISSIONER WATSON: You know, I
16 think it's something we ought to at least
17 monitor the percentage of people that don't
18 have licenses that buy the chances.
19 MS. BURGDORF: It would be
20 interesting to know how many don't.
21 COMMISSIONER IDSAL: If you win a
22 chance with or without a license ahead of
23 time, are you allowed to give that chance to a
24 relative or a child or a --
25 MS. SALDAÑA: Is Herb here? Herb
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25
1 might be better to answer the details, or Bob.
2 MR. KOTHMANN: You can gave it to
3 an immediate family member or you can give it
4 to a youth under 17.
5 COMMISSIONER IDSAL: Okay.
6 COMMISSIONER ANGELO: Any other
7 questions, comments? Thank you-all.
8 MS. BURGDORF: I have one more
9 slide. I'm sorry. We talk a lot about
10 revenue. This is a status slide --
11 MR. SANSOM: You could also give
12 it to the executive director.
13 MS. BURGDORF: The operating budget
14 status: As of the end of fiscal 99, $6.6
15 million or 4 percent of the operating budget
16 was lapsed. And where we stand this year with
17 regards to the operating budget, $163 million
18 remaining, or 84 percent, and 16 percent of
19 the fiscal year has elapsed. So we are really
20 right on target with where we would expect our
21 expenditures to be. Again, salaries are a
22 major driver in our operating budget, and so
23 it really does track on a monthly basis the
24 payroll. And that is the end of the
25 presentation.
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26
1 COMMISSIONER ANGELO: Any
2 questions? I should have commented in the
3 beginning that I'm presiding in the absence of
4 Finance Committee Chairman Dick Heath who is
5 unable to be here today but will be in for the
6 meeting tomorrow.
7 AGENDA ITEM NO. 3: ACTION - ARTWORK APPROVAL.
8 COMMISSIONER ANGELO: The next item
9 on our agenda is the approval of artwork.
10 Frances Stiles is going to make that
11 presentation, I believe.
12 MS. BURGDORF: Buba Wood is also
13 here from Collectors Covey.
14 COMMISSIONER ANGELO: I was going
15 to recognize him. Buba, why don't you come up
16 and sit with the ladies. Buba Wood is the
17 gentleman that's really the driving force and
18 I guess you'd say the father of this whole
19 program, and we appreciate very much your
20 efforts on behalf of (inaudible) programs. It
21 wouldn't be here without you.
22 MR. WOOD: That might be good for
23 all of us.
24 MS. STILES: Good morning. My name
25 is Francis Stiles. I'm with the
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27
1 Administrative Resources Division. And I'm
2 here to introduce the agenda item for the
3 artwork approval. Now, we have the artwork
4 being set up here for you to review.
5 Under the terms of the contract with
6 Collectors Covey for the artwork, design and
7 marketing of the departmental prints program,
8 the Commission approves the artwork each year
9 for the waterfowl, nongame, turkey and
10 saltwater stamps. The artwork for these
11 stamps is combined into a collector's edition
12 consisting of eight stamps and offered to the
13 general public by Parks and Wildlife.
14 Additionally, Collectors Covey offers the
15 print reproductions through their established
16 marketing network. And Parks and Wildlife
17 receives a portion from the sale of each
18 print.
19 This year for the waterfowl stamp, we
20 have the Hooded Mergansers, by Sherrie Russell
21 Meline. The nongame stamp features the
22 Scissor-tailed Flycatcher by Ken Carlson. The
23 turkey stamp features the Rio Grande Turkey by
24 Eddie LeRoy. And the saltwater stamp features
25 the Speckled Trout by Herb Booth.
.
28
1 MR. WOOD: What can I say? I'm
2 brought to tears by the beauty of it all.
3 COMMISSIONER WATSON: Where can we
4 find grass like that right now?
5 MR. WOOD: Not in Clay County, let
6 me assure you, or anyplace else that I --
7 anyplace south of San Antonio, I guess.
8 MR. WOOD: Sherrie Russell --
9 you-all might be interested, Sherrie Russell
10 Meline is a California artist, the first woman
11 we've ever used in the duck stamp program.
12 She's won, I think, the California contest
13 twice, which is frankly a nonevent, but it is
14 a contest that lots of prominent artist enter.
15 She was 6th this year in the federal duck
16 stamp contest, which might be interesting for
17 you-all to know that this year the mottled
18 duck, the Texas mottled duck was selected. I
19 think the only reason they used it, they have
20 this system where they're trying to get all
21 the species eventually on the federal duck
22 stamp. And obviously the scoters and the
23 Texas mottled ducks have been -- there haven't
24 been too many entries. And they've had no
25 chance when they're entered against mallards
.
29
1 and pintails and wood ducks and the more, you
2 know, colorful species. So they have this
3 system now that I don't totally understand,
4 but this year you could only enter a Texas
5 mottled duck or a scoter. Well, you know,
6 that's an ugly duckling contest to some
7 extent. But the guy that won it, it was a
8 22-year-old kid that no one had ever even
9 heard of, won with a mottled duck.
10 And Sherrie entered a mottled duck, too,
11 because if we could have -- once I found out
12 that she had reference and was capable of
13 painting a mottled duck, which most of the
14 national duck stamp artists don't even have a
15 clue what they look like, I didn't want to use
16 that because she had entered a federal, and at
17 the time she was painting ours, I would be
18 afraid, boy, it would be our luck, you know,
19 we have a mottled duck and, hell, she wins the
20 federal duck stamp contest with a mottled
21 duck, which she didn't.
22 Anyway, we're really excited to have her.
23 I think that's really a neat design of a --
24 really one of my favorite of the duck stamp
25 design we've ever had. Unfortunately, I don't
.
30
1 think it's going to impact sales much one way
2 or the other, but we know good art won't hurt
3 us and bad art can hurt us. So we're tickled
4 to death to have her.
5 Of course, Herb Booth, everyone in Texas
6 I'm sure knows Herb Booth and his art, did a
7 Texas duck stamp for us in 1986 and has done a
8 couple of saltwater stamps.
9 The problem art is always the nongame art
10 because, as you can see -- did you pass out to
11 them our little -- last year we sold 119
12 nongame stamps. Well, needless to say, the
13 artists are not jumping up when they get a
14 call to get to do the Texas nongame stamp. So
15 what the last several years I have done is
16 just when I see a neat looking piece of
17 nongame art -- actually if you lifted up that
18 painting, the matting on that painting,
19 there's another scissortail underneath that.
20 You know, it's actually two scissortails in
21 this painting, but in the duck stamp print
22 format, it wouldn't crop. It's a vertical
23 rather than a horizontal.
24 But it's usually pretty easy once the
25 artist has already painted the art, he doesn't
.
31
1 have to go out and paint a very unprofitable
2 painting. You know, they're more than happy
3 for us to use the artwork, and that's really
4 how, you know, to have an artists of Ken
5 Carlson's stature do the nongame stamp is --
6 you know, is actually a real coup, but that
7 also won't result in any more sales. But it's
8 a beautiful piece of art.
9 MR. SANSOM: May I ask perhaps a
10 question to be directed to Lydia as well,
11 whether or not the kind of direct mail efforts
12 you've seen on the previous presentation could
13 boost those sales.
14 MR. WOOD: You know, at the risk of
15 just being negative -- I mean, you know, I've
16 always felt like the department has a lot
17 bigger fish to fry than just the Texas duck
18 stamp program or the nongame or the saltwater.
19 You know, we're leaving a little exposure on
20 the table, but I really don't think that
21 people who like to hunt necessarily translate
22 into people who like to collect duck stamp
23 prints. I mean, surely there's some
24 crossover, but it's just not that simple. I
25 mean, it would be wonderful if we had those
.
32
1 images in some way in the mailing. And I
2 think the department really has over the years
3 left a lot of real neat exposure on the table.
4 I don't think it would result in any more
5 print sales. Most of these prints now are
6 bought by people on matching number basis
7 through our dealer network. And you know, if
8 you haven't bought the 1998 Texas duck stamp,
9 why in the world would you all of a sudden
10 were to buy the 1999 one, unless it happened
11 to be your favorite duck. And you know, we
12 probably have 50 sales a year that are
13 individual sales of just -- but now it's just
14 people keeping their collection in tact. They
15 look forward to getting the -- you know, a new
16 species of duck to put in their collection,
17 just look forward to getting it. You know,
18 we'd be tickled to death to try anything in
19 the world short of spending considerable
20 amount of money to get more sales, but I
21 really don't think it would be --
22 COMMISSIONER ANGELO: How do we
23 compare with other states?
24 MR. WOOD: Oh, there's just no
25 comparison. I mean, we -- the Texas Parks and
.
33
1 Wildlife Department, I wouldn't say they've
2 gotten more money than all the other states
3 combined, but there's really not even a second
4 place. I mean, we -- the department has
5 gotten so much more money and we sell so many
6 more prints. You know, we also happen to be
7 lucky enough to be Texans, and there are 18 or
8 20 million of us, and 80 percent of the ducks
9 in central flyway winter in Texas. I mean, it
10 isn't like we don't have lots -- you know, at
11 the time, the first Texas duck stamp was
12 published, it was the largest limited edition
13 print ever published of any kind, including
14 the federal duck stamp prints. I mean, you
15 know, it was just our timing was great, the
16 Commission, you know, stood behind our effort
17 to try to make it a national program rather
18 than a resident artist only program.
19 For y'all's information, there's only
20 been one Texas artist win a duck stamp contest
21 of any kind on a nationwide basis. So all
22 that tells is even as many great artists as
23 Texas has, a lot of them don't participate in
24 duck stamp contests. And now that the money
25 is not what it used to be, you know, on the
.
34
1 federal level, very little. There were only
2 269 entries in the federal duck stamp program
3 this year. In year's past there has been as
4 many as 2000, to show you the sales -- the
5 sales in the federal duck stamp print are
6 going down just like our sales are. But, you
7 know, still the bottom line in 1998, we paid
8 y'all royalty of $130,000, and that's -- beats
9 some other things we've done, I'll tell you
10 for sure.
11 And frankly, it's a big part of our
12 identity. I mean, we take probably a lot more
13 pride in the Texas duck stamp that we're
14 really entitled to, but it's really our
15 identity. And I think if you ever quit it or
16 I think then you'd find out how many people
17 really did like it or liked the idea of it.
18 And certainly going to automated licenses, you
19 know, also tied a pretty good knot in our
20 tail, but, you know, there were certainly
21 bigger fish to fry in that agenda, too, you
22 know, and we understand. Don't like it, but
23 we understand.
24 COMMISSIONER AVILA: We advertise
25 these in the magazine, don't we?
.
35
1 MR. WOOD: I wish you hadn't
2 brought that up. We used to, and --
3 COMMISSIONER AVILA: Why.
4 MR. WOOD: Why? Because it was a
5 great place to advertise. I mean, over a
6 period of a very brief period of time, the
7 magazine doubled their advertising rates just
8 boom, boom, boom, you know, from like $1800 a
9 page to over $5,000 a page. And at one point
10 in time, in one of my more eloquent moments I
11 convinced Andy that -- you know, which also
12 wasn't a bad decision. It just put us out of
13 the game that the department, because they get
14 $28 a print, which is considerably more than
15 we get, that there might be some logic to
16 giving us a page ad in the spring issue to
17 showcase the duck stamp prints. And we did
18 that for a couple of years.
19 But in fiscal hard times of the magazine,
20 we don't get that free ad anymore. And that's
21 all right, but you know, that's why we don't.
22 Because it's just now at this point, you know,
23 it's going -- it's $5,000 out of our revenue
24 that the department is getting a heck of a lot
25 more out of than we are. And I have no really
.
36
1 ax to grind with the department for not giving
2 us the ad. But Andy, is that not a pretty
3 fair -- David Baxter took my ad is what
4 happened.
5 COMMISSIONER AVILA: I think we're
6 going to negotiate this right here on the
7 spot.
8 MR. WOOD: Let me tell you, when I
9 leave here, I'm going to go see Susan Ebert,
10 is where I'm going from here.
11 COMMISSIONER AVILA: I think we
12 need -- and we don't need to seriously
13 negotiate, but do the math on that. If it
14 drives sales, then it's just like the mail out
15 we just did. Let's see what --
16 MR. WOOD: But --
17 MR. SANSOM: It would be an
18 accounting issue for us.
19 MR. WOOD: Well, sure. You know,
20 the deal -- I think the accounting issue was
21 and rightfully so, the department got the --
22 the department got the income and the magazine
23 had to fade the $5,000 loss of revenue. And
24 you know, all of us -- shame on David for not
25 liking that arrangement was my attitude.
.
37
1 COMMISSIONER AVILA: Well, then I
2 think you sell (inaudible), whoever would sell
3 more of the -- if you look on this handout you
4 passed around -- the nongame. I mean, these
5 birders, they'll collect those, surely, the
6 birding community.
7 MR. WOOD: I want to use this line
8 at least one more time.
9 COMMISSIONER AVILA: Okay. Careful
10 my sister-in-law is a birder.
11 MR. WOOD: I understand. But a
12 couple of years ago someone brought this up in
13 this same conversation we're having now, and I
14 made the statement that the nongame stamp and
15 print program gives new meaning to
16 nonconsumptive user. You know, the nongame
17 people just feel like because they don't hunt
18 them, because they -- I mean, who am I to say?
19 I'm from Wichita Falls. That they don't --
20 they don't have the responsibility that we
21 hunters and fishermen, you know, embrace to
22 help pay the resource and develop the habitat
23 and stuff, and the birders just don't feel
24 that responsibility.
25 COMMISSIONER AVILA: Just put a
.
38
1 little guy at the bottom of the picture with a
2 rifle like that.
3 MR. WOOD: I would be more than
4 happy -- and I say that with the Audoban
5 Society and DeDe Armentrout and the people
6 that were involved when we first did the
7 nongame program. They could not have been
8 more helpful. They tried their best, it just
9 didn't work.
10 MR. SANSOM: Would it -- one of the
11 things that I keyed on, though, in your
12 comments about the nongame is I would presume
13 that of the fairly small amount of -- I mean
14 not fairly -- substantially small amount of
15 prints that you sold that virtually all those
16 would be in that collecting category, people
17 that --
18 MR. WOOD: No. I would say without
19 knowing, 80 percent of those people are duck
20 stamp people that like those images, too.
21 MR. SANSOM: I see.
22 MR. WOOD: You know, when we first
23 did the nongame program, I went to the
24 National Audoban Society and tried to convince
25 them if they would promote this on a national
.
39
1 basis, knowing that we had the best duck stamp
2 program, the best dealership network program,
3 lots of factors that had nothing to do with
4 the National Audoban Society, that we had this
5 chance to make this a huge deal on a
6 nationwide basis, and then they could take the
7 Texas results and take it nationwide to every
8 other state and create the same nongame stamp
9 and print programs. They weren't remotely
10 interested in that concept. It was really
11 shocking to me that they, ah, who cares, you
12 know. Even though at the time, I think the
13 nongame budget was $48,000 in the state of
14 Texas. In the first year we paid $125,000.
15 No, I think that's what we lost on the damn
16 thing. We paid a lot of money into the
17 nongame program. Nongame program should be
18 the Martin F. Wood Nongame Program, because we
19 didn't do -- we were a lot more confident in
20 our bid than we should have been.
21 COMMISSIONER AVILA: There will be
22 no more questions.
23 COMMISSIONER ANGELO: A sore
24 subject.
25 MR. WOOD: Anyway, it certainly
.
40
1 gave me religion.
2 COMMISSIONER ANGELO: That was a
3 good question, John.
4 MR. WOOD: It was. It was a good
5 question. That's a great question. And if it
6 ends up getting us a continuing ad in the
7 Parks and Wildlife magazine, it's the best
8 question of all.
9 Anyway, it's a real pleasure working with
10 y'all, and the staff is really -- has always
11 been incredibly supportive of what we're
12 doing.
13 COMMISSIONER ANGELO: We thank you
14 for your efforts on it, too, for sure. Any
15 other questions or comments? Thank y'all.
16 MR. WOOD: Thanks.
17 MS. STILES: This is eligible for
18 the consent agenda.
19 COMMISSIONER ANGELO: We do need a
20 motion. Thank you for reminding me.
21 COMMISSIONER RYAN: I'll make a
22 motion.
23 COMMISSIONER ANGELO: We have a
24 motion. Do we have a second?
25 COMMISSIONER WATSON: Second.
.
41
1 COMMISSIONER ANGELO: For the
2 consent agenda.
3 COMMISSIONER RYAN: Right. For the
4 consent agenda.
5 COMMISSIONER ANGELO: All in favor
6 please say aye. Motion carried. Thank you.
7 (Motion passed unanimously.)
8 AGENDA ITEM NO. 4: ACTION - IMPLEMENTATION OF
9 HOUSE BILL 1581 - STATE PARK FEE POLICY.
10 COMMISSIONER ANGELO: Okay. We
11 have implementation of HB 1581 regarding state
12 park fee policies. Kevin.
13 MR. GOOD: Good morning. My name
14 is Ken Good, and I'm a program administrator
15 in the state parks division. I've got a brief
16 housecleaning type item for you today that was
17 required by an action of the 76th Legislature.
18 The item is the implementation of House
19 Bill 1581 which amends §11.028 of the Parks
20 and Wildlife Code. §11.028 in general
21 authorizes volunteer activity on behalf of the
22 department. Of particular note is Subsection
23 C which authorizes the executive director to
24 waive fees for volunteers.
25 Director Sansom has delegated this
.
42
1 authority down to the park manager level as
2 part of our existing fee policy. It's
3 important to note that managers are not
4 required to waive fees for volunteers, but can
5 waive the loss of revenue against potential
6 benefit gained by work performed. And I think
7 it's also notable to understand that last year
8 we did gain over 17,000 hours of youth service
9 from volunteer workers.
10 House Bill 1581, and I do have copies of
11 this available if you would like, adds a
12 Subsection E which directs the Commission to
13 authorize park managers to waive fees for
14 volunteer youth groups, and then goes on to
15 define exactly what groups they're talking
16 about. This addition will not really have any
17 real effect as it just restates our current
18 policy. This fact was communicated to the
19 Bill sponsor. We did, however, express our
20 concern to the sponsor that this could be
21 interpreted as requiring managers to waive
22 fees for youth groups, and he did agree that
23 our policy of performing a cost benefit
24 analysis was reasonable and should be
25 continued.
.
43
1 Nevertheless, the Bill did pass and does
2 require your approval on the motion you see.
3 And then I would further ask that this be put
4 on the consent agenda for tomorrow's meeting
5 assuming there's no comment or opposition to
6 this action.
7 COMMISSIONER ANGELO: To reiterate,
8 this is just putting into rules what's been
9 the long-standing policy of the Commission.
10 Is that right?
11 MR. GOOD: That is correct.
12 COMMISSIONER ANGELO: Do we have a
13 motion?
14 COMMISSIONER IDSAL: So moved.
15 COMMISSIONER DINKINS: Second.
16 COMMISSIONER ANGELO: Seconded.
17 All in favor say aye. Anyone opposed? Your
18 motion is adopted and it will be on the
19 consent agenda.
20 (Motion passed unanimously.)
21 MR. GOOD: Thank you.
22 COMMISSIONER ANGELO: Thank you.
23 AGENDA ITEM NO. 5: BRIEFING - TEXAS OUTDOOR
24 CONNECTION LICENSE POINT OF SALE SYSTEM.
25 COMMISSIONER ANGELO: Next item on
.
44
1 the committee agenda is a briefing on the
2 Texas Outdoor Connection, License Point of
3 Sale System by Jayna Burgdorf.
4 MS. BURGDORF: This briefing, as
5 Commissioner Angelo stated, presents the
6 current and future issues that we'll be
7 addressing for our automated licensing system,
8 which we refer to as the Texas Outdoor
9 Connection. It's currently a partnership
10 between Transactive and Texas Parks and
11 Wildlife, which is a subsidiary of --
12 Transactive is a subsidiary of GTECH. We
13 started the system with a pilot in December of
14 '95. With lots of work, we went on-line for
15 the entire '97 license year. We have over
16 3000 locations and almost 3800 terminals
17 across the state of Texas. The contract with
18 Transactive is for five years and does include
19 an option to renew.
20 Last year we had almost 3.2 million
21 transactions. And we do pay Transactive on a
22 transaction basis. So we also include such
23 things as settlement reports, those are called
24 transactions. Those only represent sales. So
25 from year to year, we pay 3.2 million to 3.4
.
45
1 million for the cost of this contract. This
2 year we've already sold 1.8 million items.
3 That's 58 percent. Because some of those
4 items are Super Combo, you notice that our
5 revenue was at 61 percent. So, a slight
6 difference there between the number of items
7 and the revenue in terms of total expectations
8 for the year.
9 Depending on what you purchase, whether
10 you answer HIP questions or how smoothly the
11 sale goes, it can take between three and ten
12 minutes on-line and five to 12 minutes
13 off-line. The contract with Transactive also
14 provides for a 1-800 number, and last year we
15 had over 15,000 calls.
16 You have seen this slide before, just
17 want to reiterate that license sales are
18 basically a quarter of the revenue for this
19 entire agency. And the spike in '97
20 represents the one-time increase in revenue
21 from the change in our collection myth as a
22 result of going on-line with this system.
23 Transactive operates a system within four
24 primary functional areas. They have the call
25 center, field service and supplies, which is
.
46
1 basically the people who go out and repair the
2 machines and deliver the supplies to our
3 retailers. We have reconciliation unit, and
4 they handle the electronic fund transfers and
5 any differences in the retailer's financial
6 reports versus what Transactive says that they
7 owe. And then there is the actual operation
8 of the system, including software changes
9 which occur on an annual basis as a result of
10 our rule changes.
11 Unfortunately, this license year we did
12 experience some problems, especially during
13 and preceding Labor Day weekend, which is our
14 peak weekend for the entire year. Reliability
15 and response times are obviously very critical
16 issues for our merchants. And so that's one
17 of our key issues that we'll be bringing up in
18 the study which I'm about to tell you about.
19 Right now our collections are at 79
20 percent, instead of the 91 percent we had
21 collected by this time last year. And in
22 other words, what has happened is when the
23 sales go off-line, it causes -- and those
24 sales are eventually then downloaded when the
25 system can get through, it often causes those
.
47
1 sales to be out of sync with what the main
2 database server says. This results in a
3 reconciliation issue, and until those are
4 worked, at this point on a manual basis, they
5 don't collect the money. They don't sweep it.
6 So that's -- the collections are an issue for
7 us, although the number continues to steadily
8 improve and there are efforts underway at
9 Transactive right now to increase this number.
10 As a matter of fact, by tomorrow, I may have
11 updated collections information that could be
12 even better than the 79 percent.
13 The maximum number of machines are in
14 use. We're at a total number of terminals
15 allowed under the contract. And so we have a
16 waiting list for our merchants. Now the
17 waiting list isn't large, it's 20, 30
18 merchants, but that is an issue for us.
19 Again, the contract was written five years
20 ago. And the current contract expires August
21 31, 2001, and Transactive has notified us that
22 they do not intend to renew the contract.
23 So the future of the Texas Outdoor
24 Connection is the issue at hand. We have
25 contracted with Spectrum Maximus -- they are a
.
48
1 consulting group, a national consulting group,
2 but Spectrum actually is located here in
3 Austin -- for an analysis of alternative
4 study.
5 The objectives of the study are to review
6 the current system, assess the feature options
7 based on these key factors and develop
8 alternatives and recommend short and long-term
9 strategies. I would like you to know that our
10 steering committee consists of Allan
11 McConnell. He's the director of store
12 operations for Academy. Academy is our second
13 largest retailer based on volume of sales.
14 And he is -- he agrees with the objectives of
15 the system and has met with our consultants
16 already.
17 The study process will include focus
18 group meetings with key stake holders,
19 basically customers, our licensed customers,
20 and then our customers who are our retailers.
21 We have both kind of direct and indirect
22 customers. It will include a review of other
23 state systems. There are 16 other states that
24 either have a system or are in the process of
25 implementing one. Once again, Academy is
.
49
1 going to be very helpful, I think, in that.
2 They have stores located in Louisiana and
3 Tennessee who are just bringing on systems
4 now. And so they have managers who have
5 direct experience with both Texas and these
6 new states so that they can really give us
7 some interesting feedback. Include, of
8 course, interviews with Parks and Wildlife and
9 Transactive staff, and surveys to both sets of
10 customers, again, our licensed buyers and our
11 retailers.
12 The consultants will identify
13 alternatives, including service delivery
14 options, and let me explain what I mean by
15 that. This could range from another turnkey
16 contract with a different vendor. EDS does
17 Michigan's system, for example. LIS is doing
18 the system in Louisiana. So there are other
19 players out there in the marketplace, to some
20 combination of outsourcing and in-house.
21 There are potentially some options of taking
22 pieces of the system in-house.
23 They will also provide cost estimates,
24 transition plans and time frames, high-level
25 project work plans and recommendations for
.
50
1 request for proposal. They won't write any
2 RFPs, but they will give us some key elements
3 that should be included in any kind of
4 request. With the two most viable
5 alternatives, Spectrum will provide a more
6 detailed cost benefit analysis and a risk
7 assessment.
8 They will also examine all the system
9 components. And obviously, it's a complicated
10 system, and so there's lots of pieces and lots
11 of places where things can be improved.
12 They will examine everything including
13 Internet sales. Again, the current contract,
14 which was written back in 1995, did not
15 envision the level of e-commerce that we
16 experience today and our customers have come
17 to expect. So that's something else we want
18 to make sure is addressed in any new system we
19 put in place.
20 There are some policy issues that we want
21 to explore. Again, just some examples:
22 Service options, right now the contract calls
23 for a four hour response time, and that's a
24 very expensive issue in that you have people
25 going out in Houston and perhaps driving for
.
51
1 hours to get to the retailer, wherever they
2 may be located, to service that machine.
3 Transactive has actually been helpful in
4 suggesting just some policy changes that might
5 save money, even though I think they realize
6 that that won't necessarily affect them at
7 this point. And one of those options is
8 having a vendor overnight a machine. In other
9 words, they would be down but they still have
10 the 1-800 option where an individual can call
11 from their phone, but to have them overnight
12 the machine and then send the other one back
13 for repairs at a central location. Another
14 example is every time licenses are voided,
15 Transactive actually matches up -- they have
16 the retailer send in the little yellow copy
17 and match that up against the database to make
18 sure that individual really purchased a
19 license. There are ways to automate that or
20 do some kind of sampling technique that would
21 eliminate or reducing the need for the size of
22 reconciliation staff that they have.
23 Another issue that we didn't anticipate,
24 one of the biggest complaints we had with our
25 previous system is that the retailers had to
.
52
1 post a bond in order to get the licenses
2 because these were all prenumbered and they
3 had a value. With this system and the
4 electronic funds transfer, we were able to
5 allow retailers to not have to post a bond
6 when they get the terminal. The terminals
7 don't always find their way back to
8 Transactive when the business either goes out
9 of business, decides they don't want to sell
10 licenses anymore, or is somehow damaged. And
11 so we have 200 machines out there that
12 Transactive is in the process of rounding up.
13 In other words, we have 200 machines that
14 didn't get the most current download, and so
15 there isn't an incentive in terms of a deposit
16 or anything like that to get that machine
17 back. So that's something we have to look at.
18 There's other business processes and rules,
19 but I wanted to give y'all a flavor of what
20 we're talking about here.
21 Possible implementation scenarios: This
22 kind of goes hand in hand with the service
23 delivery options. We could reassign the
24 existing contract and negotiate future system
25 enhancements in exchange for an extension of
.
53
1 that contract. That is a possibility. We
2 could partially outsource this, or again, we
3 could totally replace the system.
4 Key upcoming dates: The study should be
5 complete in January. In February, and
6 hopefully early March, we'll do analysis and
7 prepare some RFPs. I'm assuming that there
8 will be some written work that perhaps goes
9 back and forth between us so that y'all have a
10 more recent update than April, but we will be
11 prepared to make a presentation to you in
12 April, as well as to the status.
13 MR. SANSOM: Members, this is a big
14 deal, real big deal. I met with chairman of
15 GTECH recently and expressed to him my desire
16 that this be an orderly transition, that it
17 not sort of resemble the sale of a house in
18 which, you know, if you're going to sell your
19 house, you kind of put off painting a bedroom,
20 that we really need to keep that level of
21 service up. We've negotiated with them pretty
22 hard on the problems that have cropped up this
23 year, and in fact, I think we're still
24 withholding some funds.
25 But it would be our desire to try to
.
54
1 cause this transaction to happen more quickly
2 than their two-year contract so -- that and
3 they're amenable to that, so -- but this is a
4 big deal.
5 COMMISSIONER RYAN: How many years
6 do they have left on the contract.
7 MR. SANSOM: Two years.
8 MS. BURGDORF: Two years.
9 MR. SANSOM: Well, two years from
10 September 1.
11 MS. BURGDORF: From the start of
12 this license year.
13 COMMISSIONER RYAN: So a little
14 less than two years.
15 COMMISSIONER IDSAL: And you say
16 they're willing to shorten the contract.
17 MR. SANSOM: If we can -- that's
18 right. I mean, they're -- they just basically
19 have made a business decision that this is not
20 something they want to do, and so --
21 MS. BURGDORF: Transactive
22 basically runs our license point of sale
23 system and the electronic benefits transfer
24 systems for Illinois and Texas, and they are
25 winding out of those businesses as well.
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55
1 COMMISSIONER RYAN: Jayna, what's
2 the value of those machines they are missing?
3 MS. BURGDORF: I think the value is
4 probably around -- well, at this point, these
5 are five-year-old machines, too. So
6 depreciated, they're probably worth, you know,
7 $500, $250. Initially they're probably worth
8 a thousand or two.
9 COMMISSIONER RYAN: What are we
10 doing now for people that are coming on
11 wanting machines to start selling licenses?
12 MS. BURGDORF: Well, there's a
13 waiting list, and we're actively working with
14 Transactive on getting some of these other
15 machines back. If it's a -- some people are
16 just kind of putting their names on the list.
17 Like, two of those people are potentially
18 Internet providers, which the way the contract
19 is structured right now, I don't believe that
20 they would make any money. I think they would
21 seriously lose money because they'd be selling
22 over the Internet and still having to go
23 through the whole fulfillment process, and
24 their only revenue would be 5 percent from
25 Transactive, a 5 percent commission. I think
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56
1 if someone -- if an existing retailer has
2 another store that they are opening, they have
3 been given priority in that list.
4 COMMISSIONER RYAN: But what you're
5 saying is if somebody wants to start selling
6 licenses, right now we're not able to allow
7 them to do that?
8 MS. BURGDORF: That's correct. In
9 general, that's correct.
10 COMMISSIONER RYAN: How long has
11 that been going on?
12 MS. BURGDORF: I'd say that's a
13 fairly recent phenomena probably within the
14 last six months.
15 COMMISSIONER IDSAL: Are you also
16 saying that if we could get some of these
17 machines back that they could then be given to
18 the people that are --
19 MS. BURGDORF: Yes. Absolutely.
20 And Transactive is in the process of doing
21 that right now.
22 COMMISSIONER RYAN: What do you
23 think the solution to that is? They wouldn't
24 have to put up a deposit to receive a machine
25 now?
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57
1 MS. BURGDORF: Right. Even if it
2 was $50 or a hundred dollars, or if -- even if
3 we were talking about people perhaps who
4 hadn't done business with us, we could even
5 have some criteria that didn't necessarily
6 cover everyone because we have some retailers
7 obviously who have done business with us for
8 years, and we've never had an issue. And so
9 you don't want to all of a sudden put a
10 disadvantage or a burden on them. But an
11 option would be on some new retailers or those
12 who have multiple machines or we've had
13 problems with in the past, that we have some
14 kind of a deposit so they have an incentive to
15 take better care of the machine.
16 Transactive has told me before that --
17 and I don't know if it's in Illinois or where
18 it is, but -- or maybe it's the lottery, but
19 they own -- retailers are required to purchase
20 some of these machines. And they said the
21 difference in the care that is taken -- it's
22 not the same, but you understand VeriFone has
23 a large corner on the market of these types of
24 electronic terminals at stores. And the
25 difference in the quality machines and how
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58
1 long they last and how well they're taken care
2 of based on the ownership is an issue.
3 COMMISSIONER RYAN: So within two
4 years, we're going to have to come up with a
5 new vendor, and also, they're going to have to
6 design another machine.
7 MS. BURGDORF: There is a
8 possibility that we could continue with this.
9 And again, it would involve either another
10 vendor or Parks and Wildlife purchasing the
11 system from Transactive. We could continue
12 with this system. Obviously we'd want some
13 modifications because we don't think things
14 are going perfectly right now.
15 MR. SANSOM: There could be some
16 formulations that are different than the one
17 we have now. We could take part of the system
18 in-house and contract part of it out. We
19 could find another contractor, like GTECH
20 would take it all. But that's what this
21 process is designed to do. And I -- and we'll
22 be keeping you up to date at every single
23 meeting.
24 I would also like to compliment Jayna
25 here in that she has skillfully added the
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59
1 retailers into this whole process from day
2 one. She has got a major retailer, you know,
3 basically on the procurement committee to
4 select the contractor. We've got an advisory
5 committee made up of everybody from a bait
6 stand owner to Wal-Mart, you know, that will
7 be involved in this process. So they'll be
8 intimately involved in making these decisions
9 and recommendation to you-all.
10 MS. BURGDORF: And they are very
11 vocal.
12 MR. SANSOM: Kind of like Buba.
13 COMMISSIONER ANGELO: Any other
14 comments or questions? Is that all Jayna?
15 MS. BURGDORF: That's all.
16 COMMISSIONER ANGELO: Thank you.
17 AGENDA ITEM NO. 6: ACTION - PERSONNEL
18 MATTERS.
19 COMMISSIONER ANGELO: Okay. The
20 last item on our agenda is a personnel matter
21 and it revolves from the last session of the
22 legislature, House Bill 1. It's the General
23 Appropriations Act authorizing salaries for
24 executive directors of various departments in
25 the state, one of which is our executive
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60
1 director of the Texas Parks and Wildlife, any
2 increase in salary for the executive director
3 must be approved by the Commission in an open
4 meeting. And certainly based on the
5 performance and expertise and commitment of
6 our executive director, it's very much in
7 line, but ask for a motion to present this to
8 the full Commission tomorrow.
9 COMMISSIONER WATSON: I so move.
10 COMMISSIONER (inaudible): Second.
11 COMMISSIONER ANGELO: Any
12 discussion? All in favor please say aye.
13 Opposed?
14 (Motion passed unanimously.)
15 Any other business before this committee?
16 Madam Chairman, it's all yours.
17
18 * * * * *
19 FINANCE COMMITTEE ADJOURNED
20 * * * * *
21
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23
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25
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1 REPORTER'S CERTIFICATE
2
3 COUNTY OF TRAVIS X
4 THE STATE OF TEXAS X
5 I, Rachelle Latino, certified shorthand
6 reporter for the State of Texas, do hereby
7 certify that the above and foregoing 60 pages
8 constitutes a full, true and correct
9 transcript of the minutes of the Texas Parks
10 and Wildlife Commission on November 17, 1999,
11 in the commission hearing room of the Texas
12 Parks and Wildlife Headquarters Complex,
13 Travis County, Texas.
14 I further certify that a stenographic
15 record was made by me at the time of the
16 public meeting and said stenographic notes
17 were thereafter reduced to computerized
18 transcription under my direction and control.
19 Witness my hand this, the 10th day of
20 January 2000.
21
22
23 Rachelle Latino
Certified Shorthand Reporter
24 State of Texas
Certificate No. 6771
25 Expires: 12-31-01