Texas Parks and Wildlife Commission
Finance Committee
Aug. 29, 2001
Commission Hearing RoomTexas Parks & Wildlife Department Headquarters Complex
4200 Smith School Road
Austin, TX 78744
1 5 BE IT REMEMBERED, that heretofore on the 29th day 6 of August, 2001, there came to be heard matters under the 7 regulatory authority of the Parks and Wildlife Commission of 8 Texas, in the Commission Hearing Room of the Texas Parks and 9 Wildlife Headquarters Complex, Austin, Texas, beginning at 10 9:00 a.m., to wit: 11 12 APPEARANCES: THE PARKS AND WILDLIFE COMMISSION: 13 FINANCE COMMITTEE: 14 CHAIR: Ernest Angelo, Jr., Midland, Texas Donato D. Ramos, Laredo, Texas 15 Carol E. Dinkins, Houston, Texas Philip Montgomery, Dallas, Texas 16 John Avila, Jr., Fort Worth, Texas, Absent Alvin L. Henry, Houston, Texas 17 Katharine Armstrong Idsal, San Antonio, Texas Mark E. Watson, Jr., San Antonio, Texas 18 Joseph Fitzsimons, San Antonio, Texas 19 20 THE TEXAS PARKS AND WILDLIFE COMMISSION: Andrew H. Sansom, Executive Director, and other personnel of 21 the Parks and Wildlife Department 22 23 24 25 ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 2 1 CHAIR IDSAL: Our next meeting will be the 2 Finance Committee and I think I had made this announcement 3 during the budget workshop, but Ernie Angelo is the new 4 chairman of the Finance Committee and Phil Montgomery is vice 5 chairman of the Finance Committee. 6 Ernie. 7 CHAIRMAN ANGELO: Thank you, Madame Chairman. 8 First we have the minutes of the previous meeting. Do we have 9 a motion that they be approved or are there any corrections? 10 COMIMSSIONER WATSON: So moved. 11 COMMISSIONER RAMOS: Second. 12 CHAIRMAN ANGELO: All in favor say aye. 13 ("Aye"). 14 CHAIRMAN ANGELO: All opposed? The minutes are 15 approved. Mr. Sansom, would you go over the Chairman's Charge 16 with us, please. 17 Item 1: Chairman's Charges 18 MR. SANSOM: Yes, sir. The mission of this 19 committee is to assure the financial stability of the 20 department and seek self-sufficiency by maximizing revenues, 21 promoting entrepreneurial behavior, optimizing operational 22 efficiency, and complying with the Appropriations Act. 23 The Sunset Bill did have several specifics 24 provisions which will be overseen by this committee. First to 25 limit contracts for publication and then of specific note ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 3 1 there we will need to terminate any contracts the department 2 has for the advertisement of tobacco. We'll need to develop 3 guidelines for employee fundraising above $500, create a 4 business plan for statewide commercial projects, update 5 department policy and analysis to reflect current State and 6 Federal economic opportunity laws, equal opportunity laws. 7 Identify and assist nonprofit organizations that partner with 8 the department, and of specific interest there we will need to 9 establish an official nonprofit partner. Participate, as 10 appropriate, in the effort to obtain voter approval for a bond 11 issue in the November election. That bond issue is 12 Proposition 8 and -- on the ballot, and it would provide the 13 department with some $103 million for deferred maintenance, 14 for annual maintenance over the next several years, and for a 15 number of specific projects. We will develop a program to 16 identify and classify participants in the vessel and outboard 17 motor industries in the State. 18 In addition, the 77th Legislature will require 19 us to evaluate the potential for issuance a revenue bond for 20 the Admiral Nimitz Museum and to adjust rates for licenses in 21 each the commercial fishery programs. 22 In addition we will review and implement the 23 State Auditor recommendations and review all fees to increase 24 revenue and ensure a fair fee structure for our customers. 25 Thank you, Mr. Chairman. ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 4 1 CHAIRMAN ANGELO: Are there any questions or 2 suggestions about the Chairman's Charges? If not, we'll 3 proceed to the other items on the agenda. 4 Item 2: FY02 Operating and Capital Budget and Texas Parks 5 and Wildlife Investment Policy 6 CHAIRMAN ANGELO: Our second item is the review 7 of the Fiscal '02 operating and capital budget and our 8 investment policy. And these will be briefed by Suzy 9 Whittenton. Suzy. 10 MS. WHITTENTON: Good morning. Thanks. We're 11 having some technical difficulties. I'm going to start today 12 with a brief year-end revenue update on our three major 13 revenue sources and then look at the funds available for the 14 coming fiscal year including revenue estimates for those major 15 funds, and then I'll lay out a recommended budget with 16 information on -- that will include full-time equivalents, 17 allocation of supercombo revenues to stamp funds, and then 18 give you some information on the budget and investment 19 policies. 20 In license sales for the year ending this 21 August we sold about $3.2 million of licenses, permits, and 22 stamps which was about 2 percent less than we had sold in the 23 previous year, but it resulted in the $2.9 million in 24 additional revenue. The increase in revenue was due primarily 25 to the continued shift from -- from regular licenses into the ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 5 1 supercombo and also to the increase to the saltwater stamp 2 fee. 3 Hunting sales were up 3.5 percent in total 4 sales. If you look, that includes combinations but all 5 hunting-type licenses were up and revenue was up 6.6 percent 6 there. Fishing revenue was also up 3.7 percent. And in the 7 current year, the year that started -- the new license year 8 which begins selling licenses on August 15 and for that year, 9 for the FY02 license year revenue is already up a half million 10 dollars over '01 which is about 12 percent. And I think 11 that's due primarily or partly at least to the promotion that 12 we did where we gave away the couple of shotguns and a rod and 13 reel, so. 14 In boat fees, boat fees are up about $385,000 15 over last year and -- but they're also at about the level 16 where we estimated them for our original revenue estimate 17 which was $13.5 million is what we estimated and we're going 18 to come in, we think, at about 13.6 million as of -- by the 19 end of August. 20 In -- in park fees we started the year being 21 significantly down as you'll probably remember from the 22 previous year due to the weather that we had in the fall and 23 the winter months. But as of the end of July revenue was down 24 just 4 percent. And at the May meeting I reported that 25 revenue was down 10 1/2 percent, so we've made up quite a bit ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 6 1 of difference there. And we project that total park revenue 2 will be about $23.8 million at the end of the year, at the end 3 of August, at the end of our fiscal year. Our original 4 estimate was for $23 million, so we still exceeded our 5 original estimate by a little bit even with the poor start 6 that we got. 7 Expected ending cash balances at 8/31 are as 8 follows: In the State Parks Account we'll have about 9 $1.87 million left over. In the Account 9, about 10 $3.8 million. And then in the Local Parks Account 11 approximately $8 million. These funds can be used toward the 12 FY02 budget. I thought I would show you what the revenue 13 estimates are made up of in the three primary funds, general 14 revenue, Fund 9 and Fund 64. 15 In general revenue we'll get approximately 16 $37.7 million. This comes from the unclaimed refunds of motor 17 boat fuels tax. Boat and motor boat sales and use tax. And 18 then you'll remember we got additional money from the 19 Legislature the last session of $4.2 million for specific 20 State parks for the World Birding Center. We've got various 21 other general revenue that we could use. We can use general 22 revenue for any -- any use pretty much. It can be used for 23 parks or any of the Fund 9-type activities which would be, you 24 know, wildlife and fisheries and law enforcement. 25 In the State Parks Account we're expecting ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 7 1 about $52 million. The Park Revenue Account includes entrance 2 fees, concessions, Texas conservation passport, and some 3 public hunt money. They also get federal funds that go into 4 the State Park Account for the National Recreational Trails 5 and we get some land and water money that goes in there. We 6 also get $15.5 million of sporting good sales tax. 7 In Fund 9 we're estimating license revenue at 8 $61.6 million. Boat fees at $13.5. We have federal funds 9 from various sources at $47.6 million. We're also 10 anticipating that the commercial shrimp fee increase that just 11 went into effect will bring in about $600,000 the saltwater 12 stamp increase will bring in an additional $1.4 million. 13 The other categories includes public hunt, 14 fines, the boat tax, some interest in the revenue generating 15 thing kinds of activities for a total of $140 million. 16 And when you roll it all together from all 17 sources we've got about $263 million to work with. However, 18 some of these funds are set aside for specific uses. They 19 can't be used for just anything, but the total pot is about 20 $263 million. 21 Just as a reminder the Legislature passed some 22 much needed employee benefit increases and pay raises that 23 impacted our funds. They also approved House Bill 2071 which 24 requires that State agencies pay reimbursement for statewide 25 services through a cost allocation plan. And the estimate ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 8 1 during the Legislative session that it would cost Fund 9 about 2 $600,000. So these were all kind of unexpected increases that 3 we'll have to pay out of our current funds. Other impacts 4 just to kind of general operating expense impacts that we've 5 been experiencing for a year or so now is the increases in 6 electric costs and natural gas costs and then gasoline. And 7 the Legislature also increased the travel rates reimbursement 8 rates for employees when they stay overnight, and so we'll be 9 absorbing all of these costs as well in our base budget. 10 The meeting last month at the budget meeting 11 workshop we looked at the gap between the requested needs and 12 the funds available. That gap is about $12 million, however, 13 most of our funds can only be used for specific activities. 14 So when you look at it by fund you can see that between Funds 15 9 and 64 we've got a difference of about $19 million of 16 unfunded needs. So in order to make all these numbers work 17 we're recommending a budget that starts at 97 percent of the 18 FY01 base budget and includes some provisions for each 19 division to give up an additional 2 percent in salary lapse, 20 that's salary savings that will be achieved through delayed 21 hiring tactics and leaving some positions vacant. 22 We are recommending that $3 million be set 23 aside for small maintenance and repairs. And there are no 24 major capital projects included in this recommendation and 25 there are no new bond funds available. You remember we drew ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 9 1 down our last installment on our revenue bonds last February 2 and those funds are still -- they were all allocated to 3 projects. Some of that money will be spent during the year, 4 but it's not going to be budgeted. It's already budgeted in 5 previous years. And then we've got, of course, Proposition 8 6 on the ballot for November but even if that proposition 7 passes, we won't have the authority to spend any of that money 8 until fiscal year '03. So there are no bond funds in this 9 proposal. The recommended total operating budget is 10 $197.8 million. And it includes some supplemental funds, some 11 dedicated funding and some revenue generated projects. The 12 supplemental numbers include pay raises and the employee 13 benefit costs. That's why that may look a little high. Other 14 supplementals that are included in this budget which take the 15 place of other base items are increased cost to the hardware 16 and software maintenance. These are costs that we have to pay 17 no matter what of a little under $200,000. 18 Parks and Wildlife magazine has experienced 19 costs in postage and paper that's pretty significant and they 20 need an additional $150,000. 21 The game wardens had as one of their priorities 22 wanted to get computer equipment to some of their field game 23 wardens and they've managed to set aside $300,000 to get some 24 computers out there. They're going to have to stagger this 25 across several years to be able to get them all out there. ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 10 1 Then in the Sunset Bill we're required to do an 2 inventory of State lands so we've set aside some money to 3 outsource that activity. 4 In order to make the cuts needed we're doing a 5 lot of delayed hiring, some delayed vehicle and boating 6 equipment purchases, we've cut some of the unfilled positions 7 and we're delaying expansion of our Wide Area Network. We've 8 cut some general costs such as travel and supplies and those 9 sorts of things from the operating budget and most 10 significantly we've delayed some capital projects. 11 You see in the capital budget we had requests 12 of $19 million come in from all the divisions and we're only 13 able to recommend $5.2 million. Most of the that is in small 14 maintenance and repairs. We've got some acquisition money set 15 aside, $1.6 million that's land and water money that wouldn't 16 be able to be used really for anything else, also includes 17 funds for the Bastrop Hinckley purchase. And then the major 18 repair item there is for the railroad. 19 The recommended grant budget, these are 20 pass-through funds primarily -- is $41.8 million. This is 21 higher than we had last year, but these funds would not be 22 able to be used for other operating budget uses so we're going 23 to go ahead and recommend that that all be set aside for 24 grants. When you add up the three budget types it's a total 25 of $244.8 million. This number is not significantly lower ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 11 1 than last year's in total, but the funds are being used 2 differently. There are more grant funds and less operating 3 and capital funds. 4 This slide compares available cash to 5 recommended budget by fund and that -- so that last column 6 shows amounts of cash left unbudgeted. Some of those funds 7 are dedicated funds. But you can see that the cash balances 8 that we once had are no longer really there. We don't have 9 significant cash balances available anymore. 10 As you know, our appropriations bill includes a 11 cap on the number of full-time equivalent employees that we 12 can have and we can't exceed those caps. In Fiscal Year 01 13 that cap was 2,954. We overbudget full-time equivalents 14 because of the lag in hiring and we overbudgeted in the 15 current year by about 2 percent and at the end of August we 16 expert our total FTEs to come in at under 2,900 so we'll be 17 significantly under the cap, the legislative cap. So we're 18 recommending for the Fiscal Year 02 that we again overbudget 19 FTEs and with delayed hiring and leaving positions vacant, I 20 don't feel like there any cause for concern that we could 21 possibly exceed our cap. The reason the cap increased from 22 '01 to '02 was for the exceptional item for parks. There were 23 81 positions that the Legislature gave us that were for 24 specific park openings and for the World Birding Center. 25 Those positions are allocated just to those places. ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 12 1 And as you'll recall, the State Auditor noted 2 that -- that we didn't have a documented methodology for 3 allocating supercombo sales to the stamp funds and so at this 4 time I'm going to ask Gary Graham to assist in presenting this 5 recommendation on this year's allocation. 6 MR. GRAHAM: I'm Gary Graham, Director of the 7 Wildlife Division. The State Auditor's report directed us to 8 do an analysis of the allocation of funds into the various 9 stamp funds and to develop a methodology to reliably track the 10 allocation of those funds. 11 With respect to the analysis we found that the 12 funds had been held constant since the inception of the 13 supercombo license in 1996 except last year those funds were 14 increased by 8.6 percent. We have found that the actual stamp 15 sales are well documented but if we look at the true picture, 16 the complete picture, the potential for stamp sales by those 17 supercombo buyers is -- is not very well documented, and that 18 the methodologies used to estimate those potential sales are 19 inconsistent across the stamp funds. And even within a 20 particular stamp fund they're not particularly rigorous. 21 Consequently, there is in fact a real need to establish a 22 uniform and reliable methodology for estimating the potential 23 stamp sales. Consequently, we have recommended and staff have 24 worked on -- on developing a methodology whereby we would 25 conduct surveys of the supercombo license holders for two ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 13 1 years to reliably estimate a number of probable stamp users. 2 Then we would take that number and -- and -- and add it to the 3 actual buyers of the stamps and multiply that by the 4 discounted stamp value to come up the amount that would 5 actually be placed into the various stamp funds. In order to 6 do that it's going to take a couple years before we can have 7 confidence in those numbers of the potential stamp buyer and 8 during that time over the next two years we will hold the 9 stamp funds that are being allocated, the funds that are being 10 allocated to the stamp funds at the same level as they are in 11 FY01. 12 CHAIRMAN ANGELO: There's a possibility that if 13 that's done that some of funds will actually get less than 14 they're getting now? 15 MR. GRAHAM: Yes. These just show you the 16 range of discounted values as we -- as we look at them today. 17 We took the value of the supercombo and divided that by the 18 value of all the stamps and the licenses combined, and then 19 came up with these discounted values. And so that's what the 20 numbers of potential and actual users if we -- if we have that 21 number would multiply it by these values to determine the 22 amount that would actually go into each of the funds. And 23 this just shows you the distribution of -- of those funds 24 allocations over the past six years including the increase 25 FY01 that shows where they would be held constant over the ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 14 1 next two years. 2 COMMISSIONER MONTGOMERY: So the proposal is 3 simply to hold steady for two years while they survey? 4 MR. GRAHAM: Yes. 5 COMMISSIONER MONTGOMERY: Can we make some 6 explicit statement rejecting the proportional allocation of 7 the supercombo in our methodology? 8 MR. GRAHAM: Say that again. 9 COMMISSIONER MONTGOMERY: The auditor's 10 criticism or question is if we allocate proportionally, you 11 know, we're underallocating to some of these funds. I would 12 like to have the Commission recognize and acknowledge and deal 13 with that issue. If we're going to -- I think we need to 14 acknowledge that methodology as one way of doing it and decide 15 if we intend to do it that way or not so we're on record. 16 CHAIRMAN ANGELO: Are you suggesting we go on 17 record as opposing. 18 COMMISSIONER MONTGOMERY: If we're not going to 19 do it, I think we ought to not -- clearly say we're not doing 20 and the reasons we're not doing it. 21 CHAIRMAN ANGELO: As opposed just by doing it 22 by osmosis or whatever. 23 VICE-CHAIR MONTGOMERY: We don't have to but I 24 think -- I think there's flaws in that methodology. I think 25 we ought to say what the flaws are. ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 15 1 CHAIRMAN ANGELO: I totally agree with you 2 that -- 3 COMMISSIONER MONTGOMERY: We deliberate and 4 make a decision. 5 CHAIRMAN ANGELO: The proportional methodology 6 would not be proper, would not be correct. 7 VICE-CHAIR MONTGOMERY: I'm satisfied it's not 8 either, it's just -- 9 CHAIRMAN ANGELO: Well, does anyone -- is there 10 any objection to that that to stating that we reject the idea 11 of proportional distribution of the funds based on the sales 12 of supercombo license as one methodology? 13 VICE-CHAIR MONTGOMERY: And what the reason is. 14 CHAIRMAN ANGELO: Yeah. 15 COMMISSIONER RAMOS: I would rather not just 16 say that but rather they say that we are now implementing 17 something that perhaps will be more accurate because I'm not, 18 I mean that was the best perhaps that we had at that point and 19 I'm not convinced that it's necessarily, well, we know it's 20 not accurate but that's the best that we had. 21 CHAIRMAN ANGELO: But what we've actually done 22 is -- is give hold harmless on it so that they were getting 23 the same amount that they were getting before, but the auditor 24 is suggesting that we should have done is as the sales of 25 supercombo licenses went up, that we should have ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 16 1 proportionally given additional money to each of the stamp 2 funds in relation to the rate at which the sales of supercombo 3 license went up. And the Commission has felt that that was 4 totally inaccurate because or false because the people who are 5 buying the supercombo licenses and thereby getting the stamps 6 are not intentionally buying the stamps and would not have 7 been buying the stamps had the supercombo license not existed. 8 VICE-CHAIR MONTGOMERY: And that's the point, 9 it's the sale of -- 10 CHAIRMAN ANGELO: What Commissioner Montgomery 11 is suggesting is that we state as opposed to just having done 12 that that we state that our opinion is that a proportional 13 adjustment based on the increased sales of supercombo licenses 14 would not have been a correct way to do it and that we don't 15 think that it should be done at this time either. And because 16 of that we're conducting this two-year study to see if there 17 is some better way to allocate rather than the hold harmless 18 that we've been doing in the past which I think had a 19 substantial basis in the rationality as to why it should be 20 done that way. But I don't think there's any -- no one 21 objects to going ahead and stating it further to see if there 22 isn't a better way which as I point out may very well result 23 in some of the stamps actually getting less money than they're 24 getting down the hold harmless. Does that sate what you 25 were -- ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 17 1 VICE-CHAIR MONTGOMERY: Yeah. People buying 2 the supercombo would not necessarily be buying, you know, 3 archery, saltwater, muzzle loader licenses or any of the 4 others, therefore proportional allocation is not -- would not 5 be good judgment on our part. And we are explicitly 6 acknowledging that here, that that's not a valid methodology 7 in your opinion, in our judgment. 8 CHAIRMAN ANGELO: Does anyone object to that to 9 be part of the record that that's our position? While we're 10 discussing this -- this allocation or whatever, this may not 11 be the appropriate time to do it, but I would certainly like 12 to see that we evaluate the white wing stamp for the purpose 13 of possibly going to the Legislature and asking that that 14 statutory authority or the obligation to have that stamp, if 15 that's the current status, that that be -- that we consider 16 having that removed because it appears to me that the white 17 wings are no longer in need of that kind of support and might 18 replace with it a quail stamp. I'm being facetious there 19 probably. 20 MR. GRAHAM: We appreciate that guidance. In 21 fact, we have talked about the need for an upland game bird 22 stamp where you would -- you would not have it just restricted 23 to white wing dove but we would be able to use it for turkey, 24 doves, mourning doves, and quail. And, you know, we have 25 enough time to really work with you and the public to see if ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 18 1 that's a feasible idea between now and the session. 2 COMMISSIONER RAMOS: I like that idea. 3 MR. GRAHAM: Thank you. 4 MS. WHITTENTON: Okay. Just quickly in your -- 5 with your recommended budget we've got a budget policy. The 6 policy is the same as we've had for several years but includes 7 a change in wording. The current policy states that budgeted 8 adjustments that exceed $100,000 require the notification of 9 the -- to the chairman of the Commission and chairman of the 10 Finance Committee and then adjustments that exceed $150,000 11 actually require signatures of each of the two chairs. The 12 only difference in this year's budget policy is that we're 13 asking for an exclusion for new or additional Federal funds 14 and that would allow the staff to budget those funds without 15 bringing adjustments to each of the two chairman. 16 CHAIRMAN ANGELO: Those grants go with specific 17 authority and directions as to how they be spent anyway. 18 MS. WHITTENTON: They're very limiting in what 19 you can do with them. Also have an investment policy. The 20 investment policy is required by statute for all agents -- for 21 agencies that have -- they have to be reviewed annually and 22 this applies to all Parks and Wildlife funds not the 23 foundation funds or the operation game fee funds. 24 The policy provides for all the funds to be 25 deposit in the treasury. We have some existing stock that ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 19 1 could possibly be sold. We have been just retaining that. 2 We've had some stock it's only about $27,000 worth that we've 3 had since the '50s. We currently aren't making much money on 4 that stock and think that it perhaps would be better off in 5 just convert it to cash and deposited to the treasury. So 6 that's one of the changes. That's the only change to this 7 investment policy is that that stock may possibly be sold if 8 can we can find an opportunity to sell that. We periodically 9 will report to you-all on the status of our funds. 10 CHAIRMAN ANGELO: That completes your report. 11 MS. WHITTENTON: That concludes. 12 CHAIRMAN ANGELO: Before asking the Commission 13 to offer questions or suggestions or whatever, I wanted to say 14 that the staff from top to bottom has -- has done an 15 extraordinary job I think in reviewing the spending policies 16 and the spending needs of the department and have really done 17 a highly commendable job in my opinion of reaching the 18 recommendations that have been presented to you today. And I 19 also want to point out that the Commission has -- members have 20 had a lot of involvement this year in the budgeting process 21 and I want to particularly think the vice chairman of the 22 Finance Committee, Phil Montgomery, for the extensive amount 23 of time that he has put in working with staff particularly 24 with Suzy and getting us to this point. I think it's an 25 extraordinary accomplishment that they need to be commended ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 20 1 for and I certainly appreciate the effort that Suzy and her 2 staff, but all of the department personnel have put into this 3 effort. Do we have any questions or further comments on the 4 budget? 5 VICE-CHAIR MONTGOMERY: If I could I do want to 6 add my thanks to Suzy and the department heads. I know 7 you-all put a lot of time in on it and we asked for a lot of 8 material. But thank you very much. It was helpful to me 9 being new to the game to get up to speed and, Andy, you too. 10 Thanks. 11 CHAIRMAN ANGELO: I think there's been 12 exceptional involvement on everybody's part. It's much 13 appreciated. Are there any other comments or questions? If 14 not and there's no objection, this item will be placed on the 15 Commission's agenda for public comment and action tomorrow. 16 We'll move on to Item No. 3 which is the discussion of fees, 17 fee system and so on. And Suzy again will review that. 18 Item 3: Fee Review 19 MS. WHITTENTON: Okay. Thank you. As we just 20 saw, the reality of the budget situation is that we've got -- 21 we're only looking at about a million dollars less in total 22 than we had in 2001. However, the differences are that we're 23 spending a lot more on -- we have a lot more grant money this 24 budget, quite a bit fewer capital dollars, and fewer operating 25 dollars. We did get new money for the State Parks ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 21 1 $4.2 million and then we had to absorb those legislative 2 increases on employee pay raises and benefits. 3 Here's just some of the issues that have led up 4 to this discussion on possible fee reviews. There were the 5 legislatively mandated pay raises. This is for the current 6 year or the FY02 was a 4 percent pay raise. There's also a 7 potential 3 percent pay raise included in the coming -- in the 8 following year, in FY03 that is contingent upon the 9 Comptroller certifying funds. I've been told by the 10 Comptroller staff that it is likely that she will certify 11 funds. So I think we have to kind of plan ahead for that. 12 That will cost us an additional $3 million on top of the 13 $4 million that this coming year has already cost. 14 CHAIRMAN ANGELO: The certification of those 15 funds would not require that she certify we have the funds 16 available, we'll have to find the funds. 17 MS. WHITTENTON: That's correct. 18 CHAIRMAN ANGELO: I want to point that out. 19 MS. WHITTENTON: We did have increased health 20 insurance cost of about $2.5 million that will compound, you 21 know, as we get into the following year. As you saw, we have 22 a lack of cash balances that we once had. We were directed by 23 the Legislature a few years back to spend down those balances, 24 which we've done. There's not much left there. I'm going to 25 show you in a few slides here that most of our fees have not ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 22 1 kept up the pace of inflation, but it's something to consider. 2 The last fee increases were done in 1996 for the most part and 3 that was kind of an across the board Commission increased 4 license fees, boat fees, and park fees in 1996. The only fee 5 increases that have happened since then have been in the park 6 fees where park fees are set by range and they vary from park 7 to park. And the staff has the authority to raise fees within 8 those set ranges and so the park -- the parks division does 9 yearly adjustments to those fees within ranges and they always 10 do market studies before they do those. 11 When we look at the cost of these identified 12 funding needs when you add in the 4 percent pay raise with 3 13 percent pay raise, increased health insurance, and other 14 employee benefits. So if you take into account that we didn't 15 fund capital items at the level that we normally fund them, 16 we're looking at a difference of about $24 million in 17 long-term needs. 18 MR. SANSOM: Now, Suzy, may I stop you here and 19 ask if the bond issue, Proposition 8, passes then that could 20 potentially remove the item on the list that you see as 21 unfunded capital items. 22 MS. WHITTENTON: That's true. It would help 23 significantly there. 24 VICE-CHAIR MONTGOMERY: Let me add one thing 25 too. This doesn't include the accumulation of any reserve ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 23 1 during the year for emergencies. 2 MR. SANSOM: No. 3 MS. WHITTENTON: Right. I did add the last 4 line item there, the minimum supplemental needs as sort of to 5 deal with some of the new things that need to be done that we 6 aren't able to do. It's just kind of a minimal level there. 7 And in looking at consumer price index and how it compares to 8 the fees, I looked at fees from 1996. This one is resident 9 hunting licenses. In 19 -- I'm sorry, from 1965. From 1965 10 the hunting license was $5.15. If that had kept the pace 11 of -- with inflation that would cost more like $30 today. 12 Right now it's $19. So there's quite a gap there. 13 However, fishing licenses are a little 14 different story. In 1965 a fishing license only cost $2.15 15 and I guess somewhere along the line in early '90s that was 16 adjusted to be equal to the same price as a hunting license. 17 So this one did surpass the consumer price index. Most other 18 fees do not. In boat registrations, boat registration fees 19 are set by the size of the boat and they're paid every other 20 year. So I pulled the most two common boat sizes which are 21 the two smallest ones, up to -- up to 16 feet and then the 22 next range is from 16 to 20 feet boats, and you can see the 23 pink line is the consumer price index. The actual fees have 24 not quite kept up although they're on a similar line. We do 25 transfer of ownership fees with boats also. It's a $5 fee. ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 24 1 If this fee had kept up with the same pace of consumer price 2 index it would be about $6 today. 3 In looking at specific fees as compared to just 4 the 1996 level when we created the supercombo license it was 5 set at $49 in 1996. If that had received incremental 6 inflationary increases it would cost $55 today, a little over 7 $55 today and that's in '01. I can't get '02 numbers yet. A 8 boat registration of $40 would cost $45 and park entrance of 9 $5 would be about $5.67. And that's just since '96. 10 I've been asked what -- what would a fee 11 increase possibly produce in terms of dollars, so I just -- 12 I'm not advocating any kind of across the board percentage 13 increase, but this is just kind of some ballpark numbers on 14 what if we did anywhere between, you know, a 10 to 25 percent 15 increase what that might produce. It would probably bring in 16 somewhere between $6 to $7, $21 million just depending on -- 17 on how those fees -- depending on the elasticity factor what 18 the market could bear. And what would that mean for specific 19 existing fees, supercombo a 10 percent increase to the 20 supercombo would be $54; 20 percent would be $59 and 21 25 percent increase would be $61. You can see those other 22 examples there of what those ranges of increases would 23 translate into in terms of a specific fee. When we study the 24 fee increases we'll look at elasticity. I looked at just what 25 happened after the 1996 increases and licensed sales dropped ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 25 1 4.8 percent after that fee increase but they were up again by 2 the following year after that back up to about level. I don't 3 know if that was directly related to the fee increase 1996 was 4 a drought year, it could be that, you know, fishing and 5 hunting opportunities weren't as good that year. I don't 6 know, we need a little bit more time to study this. We didn't 7 see much impact to the boat registration and titling the 8 numbers after that increase in '96 and we haven't seen much 9 impact to park entrance rates people coming to the park after 10 the increases. 11 CHAIRMAN ANGELO: Suzy, would you elaborate a 12 little bit on what the process is on the park fee increase 13 which is different from the others. 14 MS. WHITTENTON: Because the park fees are set 15 by range every year, the parks department reviews those fees 16 on a park by park basis and they actually look at the market 17 conditions around each park and they look to see what, you 18 know, the other camp sites are charging and they try to set 19 their fees at a competitive rate. And they've been doing that 20 yearly so we don't see much impact. Do you want to add 21 anything, Walt, to that? 22 MR. DABNEY: Those fees vary depending on where 23 you are. They may be for similar size it might be different 24 in different locations in the state. 25 CHAIRMAN ANGELO: I think the key point is ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 26 1 though that you're updating them every year in effect or 2 frequently. 3 MR. DABNEY: We have and we've got some ideas 4 of some things we could do pretty quickly now that can make a 5 difference. 6 MS. WHITTENTON: The range is set by the 7 Commission but then within the range the staff makes minor 8 adjustments or has the authority to make minor adjustments. 9 Our strategy for looking at these fees is to -- 10 to start by meeting with some of the constituent groups. We 11 have had one very brief meeting with the boating trades 12 association people. We want to study the fee structures, look 13 into elasticity factors and then eventually hold some public 14 hearings. The time table is just kind of a proposal is that 15 we would start scoping now on all of our fees. Also, remember 16 that the Legislature directed us to increase commercial 17 fishing fees -- yeah, commercial fishing fees. I'm sorry. We 18 would maybe lay out some options, could lay o ut some options 19 on boat fees or state park fees and then between November and 20 January we'd look at license fees both recreational and 21 commercial lay those out later in the year maybe in the 22 spring. We can't really make those effective until August if 23 we -- if you-all should decide to make any changes to those 24 fees. That's just kind of a proposed time line. And that was 25 all I had on the subject. ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 27 1 CHAIRMAN ANGELO: Are there any questions or 2 comments with respect to this fee review? Any advice or 3 instructions. 4 CHAIR IDSAL: I want to mention that I will be 5 creating a State Parks Advisory group in the near future and I 6 hope that that will provide a venue for feedback and scoping 7 and getting a good feel for elasticity in -- in park fees and 8 whatnot. I just wanted to mention that now. 9 MR. SANSOM: Members, we will start a process 10 of scoping almost immediately to bring our customers in here. 11 We will go over the fixed costs that have been increasing so 12 they hopefully understand what the issues that we're facing 13 are and get their input across the board long before we 14 formulate any proposals that we might bring back before you. 15 VICE-CHAIR MONTGOMERY: I was just going to 16 pass on a couple of observations having gone through the 17 budget exercise. Again if you go back to this funding 18 needs -- identified funding needs shortfall going forward it 19 is very clear to me that our option -- let me put it in the 20 negative. If we don't increase fees we've got to squeeze down 21 something and it's not real pretty. You know, the staff did a 22 great job of going through several iterations of juggling 23 priorities, the management team, two or three rounds of 24 juggling priorities figuring out how to live with various 25 options now living with largely the same service package and ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 28 1 not deferring capital maintenance of significant number that 2 we said let's leave in there. And living with the same 3 dollars by deferring capital, you know, stretching out 4 employment and juggling for this year while we wait for the 5 bond money which we hope will pass in November and to deal 6 with this fee increase issue. But so that nobody misses the 7 point here without that we will not be able to sort of catch 8 our breath next year and move forward 'cause we've got -- 9 there's some continuing inflation in salaries and other costs 10 that are going to have to meet that. And that's the only way 11 we can deal with a lot of the supplementals that are purely 12 being deferred right now that when we got back to the policy 13 discussion we had last time there was a lot of comments about 14 not cutting services and continue to charge fair prices for 15 what we do. I think that is really where the rubber is going 16 to meet the road next year that we're going to need to 17 increase fees at some level in order to do the job we're 18 supposed to do. 19 So, you know, very clearly to me a fee increase 20 is going to be called for here. And while we're not 21 specifying it and shouldn't specify it until we've got a lot a 22 public comment, there is no question in my mind that it's 23 coming up and we need to be ready for it. And in these public 24 hearings make sure that we describe the trade-offs probably 25 more than they're described here to people what you get at one ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 29 1 fee and what you don't get. So that it's not just by the way 2 we're going to raise prices on you, but you're really getting 3 something for it and the department's worked hard to make sure 4 it's operating as efficiently as it can. Probably more on 5 that we all need to do going forward in the fall prior to 6 January 'cause it's an ongoing exercise, but I think that -- 7 for what it's worth. 8 CHAIRMAN ANGELO: Those are all very good 9 points and I think one other one is that the shortfall is not 10 a onetime thing it's -- it tends to be cumulative. So that 11 the longer you wait to address it the -- the more substantial 12 it becomes and you reach a point after a while where you can't 13 actually address it which is the situation that the department 14 found itself in with respect to capital improvements and 15 maintenance which we finally caught it up with that and it 16 would be a shame to fall back into that same problem. 17 VICE-CHAIR MONTGOMERY: We're seeing in this 18 budget we're not letting ourselves fall behind. We're not 19 going to get back in that trap. 20 CHAIRMAN ANGELO: That's right. 21 VICE-CHAIR MONTGOMERY: And appreciate 22 everybody's discipline in that department 'cause you know it's 23 a mess and I think the other thing the Commission ought to 24 understand is really no slack for drought or other seasonal 25 problems that can have a big impact on our budget in the ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 30 1 absence of fee increase when Suzy and Ernie and I looked at 2 it, the only way you really build in a reverse is to put these 3 fee increases in place in January. The department had 4 historically done a great job -- 5 CHAIRMAN ANGELO: The ones that we can. 6 VICE-CHAIR MONTGOMERY: Yeah. Running expenses 7 so that we had a cushion. That's been pushed out by the 8 Legislature and really don't have that ability in the 9 political arena to operate in, although, I personally think we 10 ought to go back to something like that going forward just to 11 send -- this my personal vote -- signal to everybody that we 12 need to do that. I would hole lot rather defend that in front 13 of the legislature and I volunteer before the committee than 14 defend why we're shutting down operations 'cause that's really 15 the choice if we have a problem. 16 CHAIRMAN ANGELO: There are factors that effect 17 that income that are totally beyond anybody's control or 18 anybody's ability to predict and that's a very important 19 point. 20 VICE-CHAIR MONTGOMERY: The only way we build 21 in that reserve is again through fee increases that will come 22 in the first half of the year why we run a lean budget to let 23 us kind of reload the reserve going forward. 24 COMMISSIONER FITZSIMONS: Your point is well 25 taken if you don't do it now then you go back into that ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 31 1 cumulative debt. 2 COMMISSIONER MONTGOMERY: It's a much uglier 3 problem a year from now than it is if we go ahead and deal 4 with it now and get on it. 5 CHAIRMAN ANGELO: Commissioner Watson? 6 COMIMSSIONER WATSON: Also, you know, I don't 7 think that we should be -- I don't think our situation should 8 change because of Proposition 8 because, you know, that is 9 debt. I mean we got to pay that money back. So I think that 10 we should have our fee structures, you know, positioned for 11 what our needs are going to be and if Proposition 8 happens, 12 it happens, but again whatever we get out of that we've got 13 to, you know, we got to pay that back. And I just -- I just 14 think that it's such and uncomfortable operating position to 15 always be, you know, under the knife that it looks like to me 16 that the -- even at 25 percent, you know, these don't seem to 17 be unreasonable amounts of money, you know, that we're asking 18 people to pay. I just don't see -- I don't see anything 19 objectionable about, you know, the supercombo license at $61. 20 I mean, that's -- I think if we had the right to focus 21 focussing groups, I mean, I think we can clearly demonstrate 22 that $61 for the supercombo license is still one heck of a 23 buy. So I don't think we ought to be timid about this at all. 24 CHAIRMAN ANGELO: Any other comments? If not, 25 we will move on to the next item on the agenda which is ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 32 1 grants. And, Suzy, thank you again for all your efforts. 2 COMMISSIONER DINKINS: Ernie, I do have a 3 question. What is the process that we would go through to 4 raise the fees and what would the timing need to be? 5 CHAIRMAN ANGELO: That chart we had up there 6 showed us. There's a couple of the areas of fees that could 7 only be done in -- for it to be effective in August of next 8 year. The balance of those could be done in the January 9 meeting and become effective. 10 MR. SANSOM: But in all cases -- 11 CHAIRMAN ANGELO: Would that be January or -- 12 MR. SANSOM: For parks and boats. In all cases 13 the process would be complete by April. 14 CHAIRMAN ANGELO: All right. 15 MR. SANSOM: So there would be no action beyond 16 April. 17 CHAIRMAN ANGELO: Right. It wouldn't become 18 effective until August for the two bottom categories but the 19 others could become effective earlier. 20 COMMISSIONER DINKINS: Well, I knew -- I knew 21 the two bottom came, I just got my license. 22 CHAIR IDSAL: You don't have to come up with 23 any more. 24 CHAIRMAN ANGELO: There won't be an extra 25 assessment. ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 33 1 COMMISSIONER DINKINS: I'd be glad to put in an 2 extra assessment if it would help on the budget. Really what 3 I was asking is backing up from this when would we be 4 considering fee increases to get the first opportunity? 5 CHAIRMAN ANGELO: In order for those boat fees 6 and park fees to become effective in January they would have 7 to be -- 8 MR. SANSOM: Back up before you in November at 9 the previous meeting. 10 COMMISSIONER DINKINS: Okay. Yeah. 11 CHAIRMAN ANGELO: So November would be the 12 earliest then. I think that would be the answer to your 13 question. November meeting would be the -- 14 COMMISSIONER DINKINS: Are these things that 15 would not be published in the Texas Register. 16 MS. WHITTENTON: It would have to be. 17 COMMISSIONER DINKINS: And so how would we get 18 to the place where we would approve them in the November 19 meeting? 20 MS. WHITTENTON: You couldn't. I don't think 21 we were suggesting that they be adopted in November but that 22 they be adopted in January then they could be effective, I 23 think, it's 20 days after the vote, the final adoption day. 24 They could actually be effective in February. 25 CHAIRMAN ANGELO: The action in November would ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 34 1 be to publish them if that is what the Commission -- 2 COMMISSIONER DINKINS: And I think that's where 3 I was getting lost was I was trying to back up into the public 4 notice and the approval out of public meeting and that sort of 5 thing. It was too many numbers for me. And then you add 6 those to the dates. 7 MR. SANSOM: Here's a way to think of it. 8 Notice for boats principally and any changes in Commission 9 action that might be required for parks and boats in November, 10 action in January. Notice for recreational hunting and 11 fishing fees any commercial fees in January for action in 12 April. 13 COMMISSIONER DINKINS: Thank you. 14 CHAIRMAN ANGELO: Any other questions? If not, 15 Jim, are you prepared on the grants presentation? 16 Item 4: Grants 17 MR. HOGSETT: Yes, sir. Thank you, 18 Mr. Chairman. Members of the Committee, I'm Tim Hogsett, 19 Director of the Recreation Grants Program in the State Parks 20 Division. I'm here today to talk to you about the grant 21 programs that you will consider for funding tomorrow. 22 The first of which is part of the Texas 23 Recreation and Parks Account our largest grant program of 24 outdoor recreation grants to local units of government. 25 You'll of course recall these are 50 percent matching grants ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 35 1 to local governments for parks and recreation lands and 2 facilities. And these applications are taken twice a year and 3 we bring funding recommendations to you twice a year. 4 The group that you will be considering tomorrow 5 includes 43 applications, all of which were received for our 6 January 31st, 2001 deadline, total request of $16.1 million in 7 matching funds. All of the applications have been scored by 8 the staff and we have rank ordered them, and you can find 9 those in Exhibit A of the agenda item for tomorrow. 10 And essentially we're recommending approval of 11 the top 14 applications in the amount of $5.58 million 12 tomorrow. And this is the entirety of the amount of money 13 that we have available at this time. 14 COMMISSIONER HENRY: Mr. Chairman, question. 15 Mr. Hogsett, very briefly would you describe for us the 16 process, internal process, that you use with staff in 17 determining whether or not a grant needs to be? 18 MR. HOGSETT: I'll be glad to. 19 COMMISSIONER HENRY: And even before that, 20 please. When you say local governments are the units that are 21 eligible for these grants, tell us the various entities that 22 constitute what you consider to be local governments. 23 MR. HOGSETT: Local governments typically are 24 cities, counties, river authorities. In some cases municipal 25 utility districts. Basically the law says that for a local ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 36 1 government to be eligible for our assistance they have to have 2 as part of their responsibility providing public outdoor 3 recreation. An exception to eligibility, for example, might 4 be a school district. They are not considered eligible as 5 local governments because that's not their primary 6 responsibility. In terms of the process that we go through, 7 we take applications, again, twice a year for the program with 8 a deadline being set. Those then applications are grouped 9 together and considered as a group. Typically we have will 10 have 45 to 50 applications every six months. And we have a 11 scoring system that the Commission has adopted based on public 12 input that's used to evaluate those projects. It's 13 essentially an issues based scoring system. 14 The -- some of the more important criteria or 15 ranking criteria include things such as whether or not the 16 local government has a locally adopted parks and recreation 17 master plan where they've gone through the process of 18 establishing priorities for what they think needs to be done 19 locally. If they then ask for high priority items out of that 20 master plan, that enhances the score for their application. 21 Additional priorities are given for projects that are related 22 to water, water type recreation. Additional priority is given 23 to projects that have a conservation element related to them, 24 things such as wetlands, natural areas, set asides of open 25 space in urban areas. Additional priority is given based on ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 37 1 demographic issues such as ethnic minority, low income, and 2 elderly. And there are, you know, a number of other criteria 3 but basically it's a way that we can with a large number of 4 applications received hopefully make some intelligent 5 recommendations to you based on the system that you've adopted 6 of which projects that should receive priority. Typically 7 we're only able to fund a third or less of the applications 8 received in any given review. 9 COMMISSIONER DINKINS: Mr. Chairman. 10 CHAIRMAN ANGELO: Yes, ma'am. 11 COMMISSIONER DINKINS: Excuse me. I noticed in 12 this group and let me say that I've always found your scoring 13 system to be very commendable and I've heard complements about 14 it being fair and objective to the extent you can be with 15 something this complicated. But in this -- in this group I 16 had several questions. One of them was that there are, I 17 think, three Travis County proposals in the top ranked group 18 and I wondered if you had within your evaluation and 19 recommendation system or process a way to sort to make sure 20 that we're not perhaps clustered within a particular part of 21 the State but that over time the money is spread around the 22 State because it is such a big state. 23 MR. HOGSETT: First I will say this is a little 24 unusual. I noted the same thing that we have Round Rock U 25 Brushy Creek, Fern Bluff and then here is one another in the ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 38 1 Austin -- 2 COMMISSIONER HENRY: Williamson County. 3 MR. HOGSETT: The only rule that the Commission 4 has adopted to now related to allocation is that any given 5 local government can only submit one application in each 6 review. Other than that, we really don't consider geography 7 in -- in this mix. It is, of course, something that you 8 could -- could propose that we do and take public input and -- 9 and do that. Generally I think that in most reviews there is 10 a pretty wide mix around the State of geography in terms of 11 funding but I had noted in the same thing. 12 COMMISSIONER DINKINS: Would it be difficult to 13 go back over several years and see whether this has 14 happened -- 15 MR. HOGSETT: Not at all. Not at all. 16 COMMISSIONER DINKINS: -- before? Because I 17 think that it would be well for the Commission to consider 18 whether we need to be attentive to geographic distribution 19 given how this one fell out in this particular group of them. 20 But let me say also that I thought that having -- being able 21 to support what -- was it in Williamson County looked like 22 several different pieces of the same type of project that we 23 had considered previously and that was so exciting with the 24 caves and other things. I really thought that was most 25 beneficial, you know, to concentrate this one cycle in a place ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 39 1 where you were going to have some real potential for return 2 on -- on public recreation and interpretative possibilities 3 for that one locale. But I just -- I just think it's 4 something that, you know, if there is that return it's one 5 that we should be aware of and recognize and support. But if 6 we on the other hand are just kind of stumbling a little bit 7 by the scoring system and to concentrating the money in Travis 8 County and the environs around Travis County and not getting 9 it out to West Texas or South Texas or East Texas that we 10 should be mindful of that and that shouldn't happen by just 11 circumstance. 12 MR. HOGSETT: Very well taken point and we can 13 analyze that and I would propose that we come back and talk to 14 you about that in January when we bring the next group. 15 CHAIRMAN ANGELO: Mr. Ramos. 16 COMMISSIONER RAMOS: Yes. In line of that is 17 your scoring system such that if, for example, if a particular 18 government applied for a grant and did not get it, does 19 that -- does that then become a higher priority or can you 20 theoretically stay at a low priority, do you automatically 21 move because you've been looked over or passed over two or 22 three times? 23 MR. HOGSETT: What we do is if an applicant 24 falls below the line, we offer them the opportunity to 25 resubmit their application in the next review. And we also ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 40 1 offer them the opportunity to come in and sit down with the 2 staff and go through the evaluation of how the project was 3 ranked and give them some suggestions of how they might want 4 to improve it. Many of these applications, in fact if you 5 look at the list on Exhibit 2 it's on Page 50 in the priority 6 in the full Commission meeting all the applications that have 7 an asterisk by them are resubmissions. And many of the 8 projects that do come back as resubmissions improve their 9 score and come back and receive funding at a later time. 10 COMMISSIONER RAMOS: Does staff share with the 11 applicant ideas as to how they could better improve their 12 chances? 13 MR. HOGSETT: Absolutely. That is the key of 14 what we do when we have those meetings. We, you know, make 15 suggestions of how they might want to restructure what they're 16 asking for or make sure that we were absolutely cognizant of 17 what they were trying to tell us in their application, what 18 they were trying to do. With this many to review, sometimes 19 it's a little difficult to understand without having that. 20 COMMISSIONER RAMOS: Does any part of your 21 scoring system include taking the historical data as you might 22 say of funding for particular counties and see, for example, 23 if over the last five years a particular area of the State has 24 gotten five times more money than another part of the State? 25 MR. HOGSETT: No, we don't and I think that's ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 41 1 what Ms. Dinkins was asking about as well. 2 COMMISSIONER RAMOS: I think that would be 3 helpful to ensure a balance. 4 CHAIRMAN ANGELO: One of the things that 5 probably comes into play to some extent that's beyond your 6 ability to change but by proximity the communities in the near 7 vicinity of Austin are much more -- have an advantage of being 8 able to come in and take the benefit of your people in helping 9 them, I would think. Is there some merit to that or -- 10 MR. HOGSETT: Yeah. I don't know. We see 11 these folks a lot more than we see the ones from -- 12 CHAIRMAN ANGELO: That's nothing we can do 13 anything about. 14 MR. HOGSETT: Sure. 15 COMMISSIONER FITZSIMONS: That -- at the 16 expense of piling on here on this issue, but my perspective 17 having lived in a rural county for many years and seeing that 18 this in these smaller and poorer counties is usually done by a 19 group of volunteers. And in the more urban counties you 20 essentially have professional or at least paid people who are 21 adept at the grant process. In addition, to the -- to the 22 geographic distribution you mentioned, Carol, I'm concerned 23 about I think, Donato, what you're getting it is some of these 24 underserved counties primarily rural counties that just are 25 not adept at the process. ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 42 1 CHAIRMAN ANGELO: Which is addressed to some 2 degree on the small grants. That was the intent of that of 3 course. 4 COMMISSIONER HENRY: Isn't the break at 50,000 5 population. 6 MR. HOGSETT: For the small grant program, yes, 7 50,000 is what we did under our pilot. And that's -- if we do 8 come back to you with a recommendation to continue that 9 program, that's one of the key things we need to consider 10 whether that is a good break point or not. 11 COMMISSIONER HENRY: But smaller communities 12 can apply for the local? 13 MR. HOGSETT: Yes. Yes, absolutely. 14 COMMISSIONER HENRY: Therefore we get the 15 Cranfills Gap. Pardon my ignorance, but tell me, where is 16 Cranfills Gap? 17 MR. HOGSETT: I'm not sure. 18 COMMISSIONER RAMOS: It's up by Meridian if you 19 know where Meridian is. Bosque County. Up in that area. 20 COMMISSIONER FITZSIMONS: Close to Walnut 21 Springs. 22 COMMISSIONER HENRY: I was wondering why they 23 weren't in the smaller -- the smaller communities can come 24 into the bigger picture. 25 MR. HOGSETT: Actually the small grants program ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 43 1 is not just small communities, it's also -- it is small 2 communities in that 50,000 or less, but it's also trying to 3 meet the need of communities that say we just need one thing. 4 All we need is a ball field or all we need is a pavilion. We 5 don't want to ask for a half million dollars for a huge park 6 development. That was the other thing that we were hoping to 7 address with that that smaller communities program. 8 CHAIRMAN ANGELO: Smaller in money. 9 MR. HOGSETT: And it's important that we keep 10 that simple so that applicants in those situations have a 11 simple process that they don't necessarily have to go out and 12 hire a consultant or -- or not have the -- because you're 13 right, they don't have the full-time resources that the larger 14 communities have. 15 COMMISSIONER HENRY: But doesn't that defeat 16 part of the process that you discussed earlier with regard to 17 scoring, you know, open spaces, water conservation and all 18 these items that cause your scoring to be higher? When you 19 talk about a community that just wants a ball field, I don't 20 see how they could ever score above. 21 MR. HOGSETT: That's exactly the point that we 22 got when we last went out and did public hearings. We said, 23 you know, how is the larger program working for you and the 24 smaller communities said, well, if we need to ask for a huge 25 park or for the -- or acquisition of a major piece of property ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 44 1 it works well for is. If we just need one thing it's not 2 working very well for us and that was the idea behind the 3 pilot program to reach some of these people that we knew that 4 we were not reaching that needed and deserved those 5 opportunities. 6 COMMISSIONER HENRY: I see. 7 COMMISSIONER DINKINS: Jim, it was really 8 exciting to read the small grant applications this time. 9 MR. HOGSETT: Uh-huh. 10 COMMISIONER DINKINS: You know, and to see what 11 had happened in response to that pilot program. 12 MR. HOGSETT: We got really what we were 13 looking for in that program. 14 COMMISSIONER HENRY: Let me say going in also 15 that this is something that we discussed not long after I came 16 on the Commission and I support, along with my colleagues, I 17 believe as I sit here completely the idea that this should be 18 a staff function rather than a Commission function, otherwise 19 we get into the realm -- 20 COMMISSIONER FITZSIMONS: We get too many phone 21 calls. 22 COMMISSIONER HENRY: Strictly politics in some 23 cases and I think that's to be avoided at all costs. 24 MR. SANSOM: We appreciate that. 25 MR. HOGSETT: We appreciate that very much. ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 45 1 MR. SANSOM: As do the communities at large. 2 MR. HOGSETT: Would you like me to go ahead and 3 continue with the next one. 4 CHAIRMAN ANGELO: Yes. Why don't you move 5 along. 6 MR. HOGSETT: The small communities program, as 7 I mentioned, it was a response to public input really that we 8 heard that the smaller communities and people that just wanted 9 to do one or two things were not being able to be competitive 10 in the larger program. And to address that we developed this 11 pilot and you endorsed the idea of doing it in January, of 12 setting aside approximately the equivalent of one of the large 13 grants of $500,000. And to make that make -- those grants 14 available to communities of 50,000 or less and for a maximum 15 of $50,000 in matching funds for each grant. Again, these are 16 50 percent match. We only in the pilot considered development 17 projects eligible. We thought that a combination of an 18 acquisition and development at $50,000 was probably unlikely. 19 However, we did hear from a few folks that were a little 20 unhappy about that, so that's one of the things we'll need to 21 consider when we do go out and do some public hearings and 22 staff how we're going to come back to you with a 23 recommendation for a possible continuation of that program. 24 And we do intend to do that this fall. We've begun the 25 process of scheduling around the State public hearings where ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 46 1 both this program and the regional park grant program that you 2 have approved projects under a pilot twice previously. 3 And we do understand the need to keep this 4 simple, to keep it a process that's successful and easy to 5 understand. It was very successful in the -- if in no other 6 way than sheer numbers. We got 64 applications. People had 7 from the time that you adopted the idea of doing this in 8 January until the 15th of May so it was a short time frame for 9 people to put together 64 applications for $2.2 million, 10 almost $2.3 million for only 500 -- approximately $500,000 11 available. We did have a scoring system that was used very 12 similar in most regards to the larger outdoor recreation grant 13 scoring system. We evaluated them using that system and are 14 proposing tomorrow to recommend that you a prove the top 12 15 applications out of those 64. 16 COMMISSIONER HENRY: Mr. Chairman, one of 17 the -- of the concerns that I have and that our -- led to my 18 questions concerning eligibility of applicants and that's the 19 concern of some concern over municipal utility districts 20 applying because the nature of them are quite different from, 21 for example, from most other governmental units, the cities, 22 the counties, et cetera. Do you guys have any concerns over 23 entities applying which may be wholly or partially privately 24 owned? 25 MR. HOGSETT: Well, municipal utility districts ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 47 1 are constitutionally authorized and they are government 2 entities. I recognize -- 3 COMMISSIONER DINKINS: They're governmental 4 subdivisions. 5 COMMISSIONER HENRY: I recognize that. 6 MR. HOGSETT: I recognize what you're saying 7 though, that in many cases early on in the development of a 8 subdivision they are the -- not under the complete control, 9 but under the umbrella control of the developer of that 10 subdivision. On the other hand that is the only conduit that 11 some of the citizens that live in those districts unless they 12 have a county that's willing to submit an application on their 13 behalf have to access the program. So it's something that if 14 we were to make a change like that it would require a change 15 in the law, in my opinion. There are different levels of a 16 affluence among municipal utility districts and I think that 17 if I had a concern I would say that would be my concern that 18 in some cases the municipal utility districts close to the 19 urban areas particularly in the Austin area are fairly 20 affluent to begin with. Those folks are paying taxes. 21 COMMISSIONER MONTGOMERY: Do think our match 22 funding requirements disproportionately exclude poor 23 communities at all? What do you see there? 24 MR. HOGSETT: I don't because we do have in 25 both programs significant numbers of applicants and typically ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 48 1 the smaller governments, as one of you mentioned, use 2 volunteers. Volunteer labor, donations of equipment and 3 materials as part or in some cases all of their match. We 4 have a small program within our operation for helping to do 5 planning for small units of government as well. We actually 6 will go out and do a master plan for a site for them and at 7 the same time can talk to them about the resources that they 8 have and recommend how -- how they look at match and whether 9 or not they have some opportunities for match that they may 10 not realize. 11 VICE-CHAIR MONTGOMERY: In that sense we have 12 not skewed this progressively, the progress versus regress 13 it's not progressively skewed because of that requirement. 14 MR. HOGSETT: I don't believe so at all. 15 COMMISSIONER FITZSIMONS: Can 100 percent of 16 the match be donated in kind labor volunteer, that sort of 17 thing? 18 MR. HOGSETT: Conceivably, yes, but you've got 19 to have a little bit of seed money to get started because as 20 it's a reimbursement program. If it's -- 21 MR. SANSOM: You've got to prime the pump. 22 MR. HOGSETT: Yeah, exactly. If it's a 23 development project, for example, we've got to see the plans 24 and specifications before you begin the work. Somebody has 25 got to pay for that. I've seen case where they will go borrow ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 49 1 a little bit of money and then come back and offset it with a 2 donation. But we get the projects to 100 percent of the match 3 is the value of donated property. 4 COMMISSIONER HENRY: I commend your work 5 because before I came on the Commission I was involved in one 6 of those where scraped it together with bake sales and 7 everything else and finally got it. 8 COMMISSIONER FITZSIMONS: But it's -- there 9 is -- it is tough for these small especially communities along 10 the border to pull together the expertise to get it done. I 11 commend your work. 12 MR. HOGSETT: The next program that we're going 13 to ask you to consider funding for tomorrow is the 14 Recreational Trails Fund. These are Federal pass-through 15 monies for the Department of Transportation. Monies are 16 appropriated annually by Congress. This year about 17 $2.4 million have been appropriated and there is some money 18 available from some savings and some other projects that 19 didn't get under -- actually get underway last year. That's 20 the difference between $2.4 and the recommended $2.6. We 21 received 66 applications requesting $6.2 million in 80 percent 22 matching funds this is an 80/20 matching program with 23 80 percent being the Federal share. This -- these projects by 24 law are reviewed and scored by a Trails Advisory Board. The 25 law requires for our eligibility to receive these Federal ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 50 1 funds that there be a Trail Advisory Board formed which has 2 been formed and evaluates the projects and that is it the 3 basis of the recommendations. 4 The scoring system is a bit different in that 5 rather than a point based scoring system it's a tiered 6 structured system of four different levels. In this case 7 we're recommending funding for the top two levels of projects. 8 VICE-CHAIR MONTGOMERY: What's the utilization 9 of the trails? Do you have any data on that? 10 MR. HOGSETT: Any? 11 VICE-CHAIR MONTGOMERY: Utilization, any data 12 on the utilization. 13 MR. HOGSETT: I don't know. Andy, have you got 14 any utilization, do we have data on utilization of trail? 15 VICE-CHAIR MONTGOMERY: Facilities, yeah. 16 MR. GOLDBLOOM: Facility once they're built? 17 Really, no. No. 18 VICE-CHAIR MONTGOMERY: Do we have a map 19 showing where they all are? 20 MR. GOLDBLOOM: Not a comprehensive map but 21 we've got like the State Parks System. We've got maps where 22 the system and prizes have been funded from this program are 23 only probably about 10 percent or 5 percent of what's actually 24 existing out on the ground. But there isn't really a good 25 comprehensive inventory. ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 51 1 VICE-CHAIR MONTGOMERY: Is there a way for the 2 users or the users who intend to use them for them to know 3 what's out there in a comprehensive way or you just have to 4 stumble into them? 5 MR. GOLDBLOOM: They really have to work with 6 their local governments and local areas with the State. 7 There's been a lot of State Park information, they would get 8 information there. For example, for motorized recreation 9 there's not a good inventory. There's a lot of private sites 10 but we just, frankly we haven't had the staff to update the 11 inventory. 12 MR. HOGSETT: More for the record this is Andy 13 Goldblum from Recreation Grants Program. He administers the 14 trail program. And finally this is a program that is not 15 under -- under the jurisdiction of recreation grants but for 16 time purposes I've been asked to present it today. This is 17 the national hunter education target range program. These 18 are, again, Federal grants. This is from the Robinson 19 Wildlife Restoration Act. These are 75 percent matching 20 grants can be either for local governments or private 21 enterprise. And the purpose is to enhance hunter education 22 opportunities through infrastructure related to hunting target 23 ranges and other infrastructure related to hunter education. 24 We are recommending funding for three projects for a total of 25 the annually available $150,000. I'll be glad to answer any ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 52 1 other questions that you have. 2 CHAIRMAN ANGELO: Any further questions or 3 comments on the grants program? 4 COMMISSIONER HENRY: They say it's 100? 5 VICE-CHAIR MONTGOMERY: Just to -- 6 MR. HOGSETT: A hundred and fifty. 7 VICE-CHAIR MONTGOMERY: I'm not sure exactly 8 what docket the trails program it seems one of the things we 9 can do at pretty low cost at least on our website is show 10 what's out there for the recreational user to have an 11 interest. 12 MR. HOGSETT: It seems to me that that would be 13 an issue for the Trails Advisory Committee to take look at it. 14 VICE-CHAIR MONTGOMERY: Just a thought. One 15 thing the agency ought to do. 16 CHAIRMAN ANGELO: I know of at least one trail 17 we've got that there's a lot of concern by the adjoining 18 landowners that we ought to not have it. At some point we 19 need to discuss that. 20 MR. HOGSETT: Trails tend to do that sometimes. 21 CHAIRMAN ANGELO: Any other discussion? If not 22 this item, if there's no objection this item will be placed on 23 the agenda for tomorrow's meeting for public comment and 24 action. 25 Is there any other business to come before the ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 53 1 Finance Committee? 2 Madame Chairman, I believe that concluded the 3 business of the Finance Committee. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139 . 54 1 THE STATE OF TEXAS ) 2 COUNTY OF TRAVIS ) 3 I, KIM SEIBERT, a Certified Court Reporter in and 4 for the State of Texas, do hereby certify that the above and 5 foregoing pages constitute a full, true, and correct 6 transcript of the minutes of the Texas Parks and Wildlife 7 Commission on August 29, 2001, in the Commission hearing room 8 of the Texas Parks and Wildlife Headquarters Complex, Austin, 9 Travis County, Texas. 10 I FURTHER CERTIFY that a stenographic record was made by 11 meat the time of the public meeting and said stenographic 12 notes were thereafter reduced to computerized transcription 13 under my supervision and control. 14 WITNESS MY HAND this ____ day of ____________________, 15 2001. 16 17 18 ___________________________ KIM SEIBERT, Texas CSR 4589 19 Expiration Date: 12/2002 3101 Bee Caves Road 20 Suite 220, Centre II Austin, Texas 78701 21 (512) 328-5557 22 23 24 25 ESQUIRE DEPOSITION SERVICES 3101 Bee Caves Road, Suite 220, Centre II Austin, Texas 78746 (512) 328-5557 FAX: (512) 328-8139