Texas Parks and Wildlife Commission
Finance Committee Meeting

Nov. 8, 2000

Commission Hearing Room
Texas Parks & Wildlife Department Headquarters Complex
4200 Smith School Road
Austin, TX 78744
                   BE IT REMEMBERED, that heretofore on the 8th day
         7  of November, 2000, there came to be heard matters under
            the regulatory authority of the Parks and Wildlife
         8  Commission of Texas, in the Commission Hearing Room of
            the Texas Parks and Wildlife Headquarters Complex,
         9  Austin, Texas, beginning at 10:00 a.m., to wit:
            CHAIR:     Dick Heath, (Absent)
        13             Lee M. Bass
                       Carol E. Dinkins
        14             Nolan Ryan, (Absent)
                       Ernest Angelo, Jr.
        15             John Avila, Jr., (Absent)
                       Alvin L. Henry
        16             Katharine Armstrong Idsal
                       Mark E. Watson, Jr., (Absent)
            Andrew H. Sansom, Executive Director, and other
        19  personnel of the Parks and Wildlife Department
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         1                     FINANCE COMMITTEE
         2                 VICE-CHAIR DINKINS:  With that, we will
         3  move to the Finance Committee, and the vice-chair of
         4  that committee is Commissioner Angelo, and he's going
         5  to chair it for us this morning.
         6                 COMMISSIONER ANGELO:  Thank you, Madam
         7  Chairman.
         8                 In the absence of Commissioner Heath, we
         9  first ask the committee to -- the commission to
        10  approve the committee minutes from the previous
        11  meeting.
        12                 COMMISSIONER HENRY:  Moved.
        13                 VICE-CHAIR DINKINS:  I'll second.
        14                 COMMISSIONER ANGELO:  All in favor say
        15  aye.
        16               (Motion carries unanimously.)
        17                 COMMISSIONER ANGELO:  We have the --
        18  the minutes have been approved.
        20                 COMMISSIONER ANGELO:  Mr. Sansom.
        21                 MR. SANSOM:  A few comments, members, on
        22  the charges as they relate to the finance committee.
        23                 The first is that we have signed a
        24  contract with MCI to convert our license point-of-sale
        25  system, and the system design is under way and on
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         1  schedule.
         2                 Our license deputy advisory committee,
         3  which is the committee which represents the retailers
         4  who sell licenses throughout the state, met Monday and
         5  looked over the system and we received their input.
         6                 Jayna Burgdorf will report on, both, the
         7  status of the project and the results of that
         8  stakeholders meeting today.
         9                 The other thing that I would really like
        10  to call your attention to and point out is that our Big
        11  Time Texas Hunts program continues to be tremendously
        12  successful.  We've now received 82,147 applications,
        13  and the revenues are up over $800,000 in that program.
        14  So that's a very, very exciting development.  And that
        15  concludes my report.
        17                 COMMISSIONER ANGELO:  All right.  Then
        18  we'll move onto Item Number 2, which is the financial
        19  review update.
        20                 And Suzy Whittenton.
        21                 MS. WHITTENTON:  Thank you, Mr. Chairman
        22  and commissioners.
        23                 The finance presentation today will
        24  focus mostly on current revenue information, and then
        25  I'll touch briefly on some operating budget information
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         1  and give you a quick update on the appropriations
         2  request process.
         3                 We'll just go ahead and start out with a
         4  little bit of bad news.  State park fees are down for
         5  the period September and October by approximately 27
         6  percent, which is $1.2 million, when you compare it to
         7  the same period of time last year.
         8                 In talking to the park managers, a lot
         9  of them think it's weather related.  You know, our
        10  analysis is kind of inconclusive on it at this time.
        11  We were down 15 percent in September and then went down
        12  further in October.  So, you know, September was hot
        13  and dry;  October was very, very wet.  We did look into
        14  park cancellations.  The rate wasn't any higher this
        15  year than last year, but we did have fewer day visits,
        16  and some of the overnight stays were cut short.
        17                 So we'll continue to look at park
        18  revenue further and monitor it closely.  Even though
        19  the revenue is down, it's still early in the fiscal
        20  year for park revenue, and the original estimate was 23
        21  million, and that was calculated before we knew how
        22  good the fiscal year 2000 numbers were going to be.  So
        23  even though it sounds bad that our revenue is down,
        24  we're not concerned about it, as far as budget status
        25  goes, at this point because even with it being down,
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         1  we're still projecting $23.6 and we only budgeted 23.
         2  So we're not looking for any kind of a revenue
         3  adjustment at this time, but we will continue to
         4  monitor it and hope that the trend doesn't continue
         5  there.
         6                 Moving onto Account 9 where we deposit
         7  our boat registrations and titling fees and also all
         8  our license fees, both registrations are also down for
         9  this period, but, again, September and October are not
        10  months where we normally expect much activity in boat
        11  registrations.  We had a low year in fiscal year 2000,
        12  probably due to the drought, and, hopefully, by this
        13  spring, we'll see these numbers going back up.
        14                 Now for some good news.  License sales
        15  overall are up $1.9 million, or about 5 percent.  This
        16  means that compared to the same two-month period last
        17  year, we've collected $1.9 million more.
        18                 Super Combo sales are a big factor in
        19  the high revenue, with an 18-percent increase over last
        20  year.  We'll be looking at Super Combo statistics in a
        21  little bit more detail later in the presentation.
        22                 Combo sales are down, as we expected,
        23  and overall combination license sales are up six
        24  percent.
        25                 In looking at hunting license sales,
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         1  resident hunting licenses are up almost 5 percent, but
         2  nonresident sales are down 3.6, with an overall decline
         3  in hunting sales of 1 percent.  Of course, this is
         4  partly due to people moving to the Super Combo,
         5  probably.
         6                 Fishing license sales are down 10
         7  percent across the board at this time.  This also is
         8  probably due somewhat to a shift in the type of
         9  licenses people are buying, because the Super Combos
        10  are going up.  We're not sure at this time.  We do know
        11  that there were some weather issues, probably, have
        12  impacted fishing licenses so far.
        13                 It's worth noting that the saltwater
        14  stamp sales are down 10 percent, but the revenue is up
        15  28 percent due to the fee increase that we enacted.
        16                 In the Texas Outdoor Connection sales,
        17  which is sales from the point-of-sale system, they show
        18  that we've collected about 60 percent of the original
        19  estimate.  The current projections indicate that we
        20  very well may have more revenue than projected, but
        21  we're not ready to recommend any kind of an adjustment
        22  at this time.
        23                 Okay.  I mentioned that we'd be looking
        24  at Super Combo in more detail.  Here is a slide that
        25  will slow the last five years, how much sales have
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         1  increased.
         2                 The communications division has done a
         3  lot of marketing on this license type, and you can see
         4  the results of that.  Each year the sales have
         5  increased significantly.  They've -- We've mailed out
         6  the Hook and Bullet newsletter to 266,000 Super Combo
         7  holders and reminded them all to renew.  We also mailed
         8  personal letters to the Combo holders and encouraged
         9  them to upgrade to the Super Combo.
        10                 You can see that as of -- in the
        11  current fiscal year, as of the end of October, we
        12  already had sold more than we sold all of last fiscal
        13  year.
        14                 COMMISSIONER ANGELO:  Suzy, why don't we
        15  comment on the follow up -- I mean, the number of
        16  people that buy those licenses that subsequently buy
        17  them again.
        18                 MS. WHITTENTON:  Right.  When you look
        19  at the renewal rates, we've had 72 percent -- Let me
        20  go onto this side -- 72 percent of the Super Combo
        21  holders, the people who bought them last year bought
        22  again this year.  So that's a very high renewal rate,
        23  and that's slightly higher than the renewal rate that

        24  we had the year before.
        25                 Also, the response of the mailing to
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         1  Combo holders resulted in a conversion rate, from the
         2  Combo to the Super Combo, of 28 percent for the Combo
         3  license holders that had one stamp, and 13 percent for
         4  those with no stamps.
         5                 This slide shows the point in time, if
         6  you compare last year's as of October 31st, and this
         7  year at October 31st, and you can see an 18-percent
         8  increase.  So it looks very favorable.
         9                 Also, on the Big Time Texas Hunts, which
        10  Andy mentioned, this is another thing that the
        11  communications division has marketed.  Personal letters
        12  were sent, with a flyer and a postage paid return
        13  envelope, was mailed out in August, and then, in
        14  October, reminder letters were mailed out to those who
        15  hadn't renewed -- or who hadn't responded yet.
        16                 This slide shows that as of the end of
        17  October, we had sold 74,000, and, as Andy mentioned, as
        18  of yesterday, we had sold 82,000 applications or
        19  entries, which is a 15-percent increase over fiscal
        20  year 2000's numbers.  We'll be accepting entries that
        21  were postmarked as of the deadline, which was November
        22  the 4th.  We'll be accepting those through the end of
        23  the weak that have a postmark of November the 4th.  So
        24  we're pretty sure -- we feel pretty confident that
        25  we'll exceed our goal, which was 84,000 entries.
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         1                 This slide just shows the distribution
         2  of the type of drawings purchased, with the majority in
         3  the Grand Slam and the Whitetail Bonanza, but we're
         4  also selling quite a few in the Exotic Safari and the
         5  Big Time Bird Hunts.
         6                 In the operating budget, we're in the
         7  process now of closing out the last fiscal year's
         8  books, and at this time, it appears that we'll lapse
         9  approximately $4 million in regular operating budget,
        10  which is about 2 1/2 percent of the original budget.
        11   This doesn't include federal funds or fringe benefits
        12  and stamp funds, but each division is charged with
        13  monitoring their own budget, and they're not allowed to
        14  go over in their budgets, and so getting within 2 1/2,
        15  we feel like, is really pretty good.  Four million
        16  sounds like a high number, but it's pretty close.  And
        17  what that is, is that's appropriation authority mostly,
        18  and, in most cases, the cash will transfer forward, and
        19  we just lost the authority to spend that in that fiscal
        20  year.  So we're really working to try to keep that --
        21  keep from lapsing much.
        22                 COMMISSIONER ANGELO:  How does that
        23  number compare to the previous years?
        24                 MS. WHITTENTON:  I'm not --
        25                 COMMISSIONER ANGELO:  In percentage --
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         1                 MS. WHITTENTON:  I'm not sure --
         2                 COMMISSIONER ANGELO:  In percent.
         3                 MS. WHITTENTON:  It's probably quite a
         4  bit lower than usual.  I don't remember.  I know that,
         5  you know, when the -- we hear about our lapses in
         6  appropriations committees, they're usually giving us
         7  the big numbers that include fringe benefits, federal
         8  funds, stamp funds, things like that, that I'm not
         9  including here.  This is just regular operating
        10  budget.  So I know we've made a concerted effort to not
        11  lapse this time.  So I'll check into that and get back
        12  to you on that.
        13                 Also, in the fiscal year -- the current
        14  fiscal year 2001, we've still got 92 percent remaining
        15  so early in the year.  This was as of the end of
        16  September.  That's not real meaningful;  it just looks
        17  like we're about on track.
        18                 And then real quickly I wanted to update
        19  you on the legislative appropriations process and
        20  remind you that what we had done was we had submitted
        21  our request, which was limited to the level -- base
        22  level funding.  We also asked for some exceptions to
        23  that.  We asked to get additional funding for
        24  operations and maintenance of -- which includes eight
        25  million per year in scheduled facility repairs to
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         1  maintain the statewide infrastructure.  And we also
         2  asked for additional five million per year for -- to
         3  establish or restore services in existing parks.  That
         4  includes 81 1/2 employees, 9 of which are for the
         5  regional park interpretive program.
         6                 We also asked for authority to spend two
         7  million per year of the money that we're getting from
         8  the stamp -- the saltwater stamp increase for the
         9  commercial buyback and license buyback.  That's not new
        10  money.  The two million is not new money;  just
        11  authority to spend.  The other 13 million we're asking
        12  for is actually new money.
        13                 At our last meeting, we had just -- we
        14  had just submitted the request, and since that time, we
        15  had our first budget hearing on September the 5th with
        16  the legislative budget board and the governor's
        17  office.  We feel like the hearing went very well.  And
        18  since that time, the staff from the oversight agencies
        19  have been asking a lot of questions; they're doing
        20  their analysis, putting together their
        21  recommendations.  We've been told that those
        22  recommendations will be out in December, and then the
        23  session will start January the 9th, and we'll expect
        24  our budget hearings over at the Capitol to begin
        25  shortly thereafter.
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         1                 COMMISSIONER ANGELO:  Let me ask you a
         2  question.
         3                 MS. WHITTENTON:  Sure.
         4                 COMMISSIONER ANGELO:  During the earlier
         5  hearings, the meetings with Sunset Commission, there
         6  were some specific areas that were questioned in the
         7  budget, specific line items.  Did any of these come up
         8  during your initial budget hearings?  Was there any
         9  tracking there?
        10                 MS. WHITTENTON:  No, not really.  We
        11  didn't see much of the same kind of questions, no.  Our
        12  first budget hearing was mostly an opportunity for us
        13  to lay out what we were asking for, and they asked some
        14  questions about specific programs.  And since that
        15  time, they've been asking a lot of questions about the
        16  specific line items in the request.  You know, how we
        17  came up with numbers and how they compare to what we're
        18  doing currently and that sort of thing.
        19                 COMMISSIONER ANGELO:  Any other
        20  questions?
        21                 Thank you, Suzy.
        22                 MS. WHITTENTON:  Thank you.
        24                 COMMISSIONER ANGELO:  Item Number 3 on
        25  our agenda is an action item regarding the artwork.
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         1                 MS. STILES:  My name is Frances Stiles,
         2  and I'm with the administrative resources division and
         3  here with Mr. Bubba Wood to introduce the agenda item
         4  for artwork approval.
         5                 Under the terms of the contract with
         6  Collectors Covey for the artwork, design, and marketing
         7  of the departmental prints program, the commission
         8  approves artwork each year for the Waterfowl, Nongame,
         9  Turkey, and Saltwater prints.
        10                 The artwork for these stamps is combined
        11  into a collector's version consisting of eight stamps
        12  and is offered by Parks and Wildlife.
        13                 Additionally, Collectors Covey offers
        14  the print reproductions through their established
        15  marketing network, and TPWD receives a portion of the
        16  sale from each print.  This year we have four prints,
        17  four artwork.
        18                 The artwork for the Waterfowl stamp
        19  features a Snow goose and Blue goose, by John Dearman.
        20                 The Nongame stamp features the Long
        21  Billed Curlew, by Thomas Quinn.
        22                 The Turkey stamp features the Rio Grande
        23  Turkey, by Herb Booth.
        24                 And the Saltwater stamp features the
        25  Redfish, by Diane Rome.
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         1                 The artwork for these stamps is being
         2  displayed on these easels, as you see, and Mr. Wood is
         3  here to answer any questions that you might have about
         4  the artwork.
         5                 COMMISSIONER ANGELO:  Mr. Wood, do you
         6  have any comments you'd like to make?
         7                 MR. WOOD:  Yeah, but not about the
         8  artwork.  I could comment on how late we were up last
         9  night.
        10                 COMMISSIONER ANGELO:  You wouldn't be by
        11  yourself.
        12                 Does anyone have any questions?
        13                 They look like some great prints.
        14                 MR. WOOD:  Thanks.  You know, I guess,
        15  I -- given one, once a year, a chance to editorialize
        16  about our duck stamp program, Frances and I were just
        17  looking at the numbers.  We have paid the department,
        18  over the last 20 years, in excess of $6 million in
        19  stamp sales, from the sale of the prints.  Not
        20  department sales in stamps, but our sale of stamps and
        21  prints has amounted to more than $6 million for the
        22  Parks and Wildlife Department, which --
        23                 COMMISSIONER ANGELO:  Pretty nice deal.
        24                 MR. WOOD:  Yeah, it is. It's a good deal
        25  for us, too.
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         1                 COMMISSIONER ANGELO:  Well, I think
         2  everybody appreciates it.  Got a lot of followers.
         3                 Are there any other comments or
         4  questions?
         5                 CHAIRMAN BASS:  Do you see any
         6  correlation of interest in the stamps and the print
         7  collection to no longer having the requirement for the
         8  traditional stamp on the license?
         9                 MR. WOOD:  Oh, yeah, it -- I can't
        10  remember the -- we, in fact, I think, even talked
        11  about this two or three years ago when that first
        12  happened.  Maybe the second year, because the first
        13  year we knew it was going to hurt.  We didn't know
        14  what -- but the sales were off about 25 percent that
        15  first year, and then they really have leveled out.
        16  And, you know, there is a natural attrition to this
        17  program.  You know, when you get -- someone might want
        18  21, but all of a sudden, 22 of them is just "I give.
        19  You can print them longer and more of them than I can
        20  buy." And so you're going to have some attrition every
        21  year.  I mean, every program I've ever heard of has
        22  attrition.  But, frankly, it wasn't as bad as I thought
        23  it would be, you know?
        24                 COMMISSIONER ANGELO:  Last year we
        25  talked a little about the promotion of the sale of the
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         1  prints through the magazines.
         2                 MR. WOOD:  Right, and Andy gave us an
         3  ad, and I can't tell you that it -- you know, you just
         4  can't say -- it certainly didn't hurt, for sure.  And
         5  it -- most of the people that are collecting them now
         6  are people who continue to collect matching numbered
         7  sets of the whole print, you know, of the whole
         8  series.  They've got Number 330 of the duck stamp, and
         9  it's just amazing how many people, almost as soon as
        10  they get this year, will call up and start to want to
        11  place their order for the second one, but it's very
        12  difficult to generate "Hey,  this is our 22nd print.
        13  Would you like to have one?"
        14                 "Well, you know, if I had wanted one,
        15  I'd have bought, you know, sometime in the last 21
        16  years,"  you know?
        17                 COMMISSIONER ANGELO:  I've got a full
        18  set of the waterfowl ones myself.
        19                 MR. WOOD:  God bless you.
        20                 COMMISSIONER ANGELO:  You don't have any
        21  plans to come tomorrow and make another presentation at
        22  the regular meeting.
        23                 COMMISSIONER ANGELO:  That being the
        24  case, this consent agenda, and if we could have motion
        25  to that effect.
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         1                 COMMISSIONER HENRY:  Motion.
         2                 VICE-CHAIR DINKINS:  Second.
         3               (Motion carries unanimously.)
         4                 COMMISSIONER ANGELO:  Very good.  The
         5  motion is passed.
         6                 And, Mr. Wood, thank you again.
         7                 MR. WOOD:  Thank you-all.
         8                 COMMISSIONER ANGELO:  Ms. Stiles, thank
         9  you.
        10                 MR. WOOD:  We really appreciate you. I'm
        11  very impressed with this many people being here this
        12  early after last night.
        13                 COMMISSIONER ANGELO:  It wasn't easy.
        14                 MR. WOOD:  Yeah, I can imagine. It was
        15  even tougher to get up at 4:00 and drive from Dallas.
        16                 COMMISSIONER ANGELO:  I can guarantee
        17  you that's right.
        18                 CHAIRMAN BASS:  We appreciate all you're
        19  doing.
        20                 MR. WOOD:  Thank you.
        22                 COMMISSIONER ANGELO:  And now we'll hear
        23  a presentation from Jayna Burgdorf.
        24                 Jayna?
        25                 MS. BURGDORF:  Hi.
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         1                 COMMISSIONER ANGELO:  How are you this
         2  morning?
         3                 MS. BURGDORF:  Good.
         4                 This is the license sales system
         5  transition briefing.  And, actually, I'll point out
         6  that I'm no longer calling it the Texas Outdoor
         7  Connection.  That doesn't mean we've made a decision
         8  yet, but y'all could consider weighing in possible
         9  names for continuation of that name.
        10                 Our contract with Transactive does
        11  expire on August 31, 2001.  In the past two months,
        12  we've had some recent developments.  We signed a
        13  contract with WorldCom.  And I'd also like to introduce
        14  Bob Parker, who is our program manager with WorldCom,
        15  and he is located here in Austin.
        16                 Bob, if you'd --
        17                 He's been a great resource.
        18                 We completed the basic design sessions.
        19  We're in the process of finalizing all our user
        20  requirements.  And, as Andy mentioned, we did hold our
        21  second license deputy advisory committee meeting on
        22  Monday, and that went really very well.  When I say
        23  "second,"  we had this committee back in 1994, but
        24  we've reconstituted it, in light of the fact that we
        25  are moving to a new automated system.
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         1                 I'm sorry.  Every time I make a
         2  presentation and I'm pregnant, I have trouble
         3  breathing, so I have to apologize.
         4                 COMMISSIONER ANGELO:  We're having that
         5  problem today, too.
         6                 MS. BURGDORF:  There are some customer
         7  benefits with this new system.  We expect that we will
         8  reduce the wait time, and there's a number of reasons
         9  for this.
        10                 With the new system, what you will be
        11  able to do is not only use your driver's license in
        12  order to not key entry everything: The name, the
        13  address, but you will also be able to use bar codes
        14  from last year's license, and that would be, both, a
        15  customer identification and also your driver's license
        16  number that would be on the new license.
        17                 We will have updates from DPS and the
        18  National Change of Address file, which are -- in other
        19  words, what that does is if you change your address
        20  because you go get a new license or because you go to
        21  the post office and you move, then those updates will
        22  come to our database, and so when you come in -- let's
        23  say you moved in the past year, and you want to buy
        24  your fishing license again.  Your new address will come
        25  up.  And that will save on a lot of key entry, which is
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         1  time, and it will also increase the accuracy.
         2                 Additionally, WorldCom will receive only
         3  half the transaction fee for off-line sales, and that
         4  should be an incentive to them to keep the system on
         5  line and up and running, and that's where, again, you
         6  have more accuracy and reduced time in line.
         7                 We are going to have a hunter education
         8  number on the license, which is something that a lot of
         9  people have wanted.  As more people are required to
        10  have this hunter education number, and as they -- it's
        11  been a long time, perhaps, since they've been through
        12  the program; they've lost their cards, and it's a
        13  hassle for them, and they forget to get their cards,
        14  and so by automatically printing it on the license,
        15  that complies with the law.  And so they won't
        16  necessarily have to have their card when it prints out
        17  on the license.
        18                 We will offer the same kind of
        19  authorization number and license fulfillment through a
        20  call center service.  We'll also offer it through the
        21  Internet.  We may be passing on the mail fulfilment
        22  cost, which we don't do right now.
        23                 And this is kind of the more interesting
        24  part of the presentation:  We hope to have what we
        25  think is a more user-friendly license, which is tags
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         1  around the body of the license.  And I have two formats
         2  I'd like to pass out.
         3                 One is a 12-tag format, which is how
         4  many tags we have now.  The other is a 14-tag format.
         5  And please look at the front and back.  And I will also
         6  pass around, just for reference, the -- this is the
         7  pre-automated license, and oftentimes you hear
         8  people -- people get sentimental about this system at
         9  all; they get sentimental about the old license and how
        10  it looked and how the tags didn't come off if you took
        11  one out of the middle.
        12                 I also have a sample of the license
        13  stock, which is similar to the same -- to the stock
        14  that we're going to use right now -- or that we use
        15  right now, which is Valeron.  And you will notice the
        16  bar codes on those licenses.  Those all fold up -- and
        17  I've got a demonstration there of how they fold up --
        18  into a credit card size.  So they should be fairly easy
        19  to carry in someone's wallet.
        20                 If you purchase a fishing license under
        21  one of these two formats, there would probably be
        22  verbiage that would say, you know, "Call Operation Game
        23  Thief if you notice a violation"  or "Consider
        24  purchasing Texas Parks and Wildlife Magazine," or
        25  perhaps some coupon opportunities that we might work
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         1  out with a vendor.  But it would also have instructions
         2  that you could tear off those tags' faces.
         3                 What we're trying to do with these two
         4  formats is preserve the body of the license in the
         5  middle with creases, and then the tags around it with
         6  perfs.  So if we were to perforate the whole thing,
         7  there is some concern -- which was actually voiced by
         8  the license deputy advisory committee as well -- that
         9  people would accidentally tear their license in the
        10  middle, and we don't want that to happen. So whatever
        11  comments y'all have on that.
        12                 The concern about going with the 12-tag
        13  format, even though that's all we have right now, is
        14  that what that does is, for the next five years, it
        15  somewhat boxes you into staying with 12 tags.  Now, I'm
        16  sure that -- there's a price for everything, and I'm
        17  sure WorldCom would tell us "Well, if you'd like to add
        18  another tag, we can redo this license, and it will
        19  be,"  this amount of money and this much time.  But we
        20  probably need to consider both of those factors as we
        21  go forward.
        22                 CHAIRMAN BASS:  Jayna, what would be an
        23  incremental cost up front if we were to go to the
        24  14-tag option?
        25                 MS. BURGDORF:  I don't think there is an
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         1  additional cost.
         2                 CHAIRMAN BASS:  So it gives each
         3  regulatory options with no cost that otherwise might
         4  have a physical impact?
         5                 MS. BURGDORF:  Right.  Right.
         6                 CHAIRMAN BASS:  Sounds like an easy
         7  choice to make.
         8                 MS. BURGDORF:  The only issue is it's a
         9  little bit bigger, of course, so -- but if that isn't
        10  an issue for everybody -- the license deputies
        11  didn't -- you know, I think there was a small
        12  preference towards the smaller license, but they
        13  clearly understood the downsides of boxing ourselves
        14  into that kind of a corner.
        15                 COMMISSIONER ANGELO:  The two extra tags
        16  would have what on them?
        17                 MS. BURGDORF:  Well, for --
        18                 CHAIRMAN BASS:  Advertising.
        19                 MS. BURGDORF:  Yeah.  The sample just
        20  shows an operation gamefee, I think, and a --
        21                 COMMISSIONER ANGELO:  That would be one
        22  possibility for what --
        23                 MS. BURGDORF:  Right.
        24                 COMMISSIONER ANGELO: -- To put on it?
        25                 MS. BURGDORF:  Right.
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         1                 COMMISSIONER ANGELO:  Something that
         2  would make it clearer than it was on another tag.
         3                 MS. BURGDORF:  Exactly.  Exactly.
         4                 COMMISSIONER IDSAL:  Could we advertise
         5  on the blanks?
         6                 MS. BURGDORF:  Yes.  There's -- I don't
         7  believe there's anything prohibiting us from doing
         8  that.
         9                 CHAIRMAN BASS:  Make it a discount
        10  coupon on Winchester shotgun shells or something.
        11                 MS. BURGDORF:  And that's one -- been
        12  one of the suggestions tossed around, to do something
        13  similar to that.
        14                 COMMISSIONER ANGELO:  I guess, by going
        15  to 14, we might be signaling that we're getting further
        16  away from no tags;  is that right?
        17                 I didn't really mean -- I didn't really
        18  mean to bring up another subject.
        19                 CHAIRMAN BASS:  Since there was public
        20  resistance to no tags --
        21                 COMMISSIONER ANGELO:  Yeah, I noticed
        22  that.
        23                 MS. BURGDORF:  Yeah.
        24                 CHAIRMAN BASS:  Thanks for everything.
        25                 COMMISSIONER ANGELO:  Sore subject.
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         1                 MS. BURGDORF:  There are additional
         2  benefits for the license deputies from this system as
         3  well.  We believe we have a committed vendor with
         4  significant resources.  MCI -- or WorldCom, actually,
         5  is their official new name -- has five states under
         6  contract for hunting and fishing license systems, and
         7  we think that's significant from the standpoint that
         8  they're clearly slowing a commitment to this type of
         9  business.  They have a whole government services
        10  division; they have a large staff and a lot of
        11  financial resources.
        12                 The new terminal, and I -- actually, we
        13  had one down here at another meeting, and I can bring
        14  it down again, but it has a larger touch screen that a
        15  clerk can use to enter the license, and we believe that
        16  that will reduce errors, and it will also save the
        17  merchants on training time.
        18                 And the printer will now know
        19  automatically where the top of the license is, and they
        20  won't have to spend their time adjusting to make those
        21  licenses line up, which is what they do right now.  And
        22  for those -- for our retailers, time is money.
        23                 There are some policy changes that are
        24  going to be affecting them, and we went over this with
        25  them at the meeting on Monday, and they all seem to
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         1  understand that we are grandfathering all current
         2  license deputies, which means if you are -- if you can
         3  sell right now, you will sell in the new system if you
         4  choose to.
         5                 We are requiring a performance guarantee
         6  of $250 to $500 dollars depending on your equipment
         7  setup, and that is not something we've had in this
         8  current system.  Previously, we had the requirement for
         9  a bond, which none of the license deputies liked
        10  because they had to pay for the bond, and not only was
        11  it money out of pocket, but it was a bit of a hassle,
        12  too, especially for your smaller ones.  They had work,
        13  whether it was with their insurance agent or their
        14  bank.
        15                 We are planning for those license
        16  deputies that sell under 100 transactions per year --
        17  and you'll be interested to know we're talking about
        18  over 700 of our license deputies have a very small
        19  transaction rate per year -- we are planning to
        20  provide them with a printer, the same printer that a
        21  regular merchant would get, and attach that to their
        22  own PC.  And, really, what that does there is it allows
        23  them to print out the hard copy of the license, but
        24  it -- they don't have the same waiting in line issues
        25  that some of our other deputies do, and they don't need
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         1  that same connection speed.  A lot of the ones that
         2  we're talking about are ranches where they have
         3  customers coming in either from in-state or
         4  out-of-state, and so those people need that paper
         5  Valeron license so they can have those tags, but they
         6  don't -- they're not usually standing in line and
         7  having an issue there.
         8                 Right now, we have somewhat of a
         9  situation with the large stores that will let them get
        10  however many terminals from Transactive that they want,
        11  and, of course, at times, Transactive has claimed that
        12  they've run out of terminals.  What we are doing this
        13  time is a maximum of six terminals provided by Parks
        14  and Wildlife, at no charge, and, of course, that would
        15  be at your very high volume locations.  But some
        16  stores, just for their convenience and the convenience
        17  of their customers, like to have a terminal at every
        18  lane, and they understand now that that will change
        19  under this new system.
        20                 CHAIRMAN BASS:  So, under that, it would
        21  be a maximum of six per Wal-Mart outlet or six --
        22                 MS. BURGDORF:  Right.
        23                 CHAIRMAN BASS: -- As opposed to six per
        24  Wal-Mart?
        25                 MS. BURGDORF:  Right.  Yeah. No.  No.
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         1  Although, it was interesting that we had a large
         2  representation from Wal-Mart at the meeting on Monday,
         3  and they were telling me that, in some states, there is
         4  a maximum number of terminals, and they have to wait
         5  when they open a new store for someone else to go out
         6  of business or to decide not to be -- not to sell
         7  licenses for them to get a terminal for their Wal-Mart
         8  store, which is kind of amazing.
         9                 CHAIRMAN BASS:  We don't want to do
        10  that.
        11                 MS. BURGDORF:  Yeah, we're not doing
        12  that.
        13                 Future license deputies.  We will have
        14  an application process, and that would include things
        15  like a credit check, where is your business located?
        16  In other words, is there a current license deputy right
        17  across the street from you?  What are your expected
        18  sales?  What we found with other states is that our
        19  ratio of license deputies to license sales is really
        20  out of line. We have a disproportionate number of
        21  license deputies comparatively, even when you look at
        22  our large volume of sales.
        23                 We will require that they pay the
        24  performance guarantee -- by the way, which is
        25  refundable -- and we will require that they pay a
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         1  monthly lease fee for equipment.
         2                 COMMISSIONER ANGELO:  Jayna, what kind
         3  of response from the providers do you get -- from
         4  the --
         5                 MS. BURGDORF:  It was --
         6                 COMMISSIONER ANGELO:  -- deputies?
         7                 MS. BURGDORF:  From the deputies?  We
         8  brought this up at our, kind of, first again new
         9  meeting of this fiscal year, in July.  We brought that
        10  up and didn't get a lot of backlash, and, of course, we
        11  have lots of information on what other states do.  You
        12  have Ohio that charges -- I think it's 416 per year,
        13  nonrefundable deposit.
        14                 So when you look at some of those, how
        15  other states do it, in comparison to what we're
        16  proposing, we're pretty much right in the middle.
        17  We're very reasonable.  Louisiana, for example, on the
        18  low side, is 150 per year -- or 150, period,
        19  refundable deposit.  That's it.
        20                 So I think when they saw in it context,
        21  they understood.  I think they understood that the
        22  state does have an interest in protecting its funds
        23  that  are outstanding.  What we did after that meeting
        24  is we sent out minutes of that meeting to all license
        25  deputies, whether they at -- you know, whether they're
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         1  on the committee or not, and -- wondering if we would
         2  hear some response or some backlash for this proposal,
         3  and we really did not have -- maybe one or two
         4  deputies called and said they didn't like that idea,
         5  and that was it.
         6                 At Monday's meeting, again, very little
         7  response, very little concern.  There was one comment
         8  about "Well, is it really going to be per equipment
         9  setup, or could it just be overall?"  There's also --
        10  what we have planned to do is ask them if they need
        11  financial -- well, not -- I shouldn't say financial
        12  assistance, but if they need some kind of effort on our
        13  behalf to stagger, through a payment process, their
        14  performance guarantee;  they're willing to do that.
        15                 We are also going to have some benefits
        16  aside from what we're pointing out with just the
        17  customers and the license deputies.  We'll have more
        18  accurate customer information for surveys and marketing
        19  purposes.  We'll have a straightforward transition from
        20  one license year to the next.  Right now, when we --
        21  when we download for the new year, it's a lengthy
        22  programming process, and, in addition, we have to call
        23  up -- Transactive, I guess I should say, has to call
        24  every license deputy and set aside an hour or two to
        25  get the new information into the system.  Most of this
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         1  will happen from an administrative screen going forward
         2  with MCI, so there won't be that process.
         3                 Again, we'll have this performance
         4  guarantee to ensure the collection of our funds and the
         5  maintenance of equipment, and we will have the ability
         6  to manage the cost of our contract, which brings me to
         7  my next slide.
         8                 We are looking at a slightly higher cost
         9  on this contract than we have with Transactive right
        10  now.  And I guess, to me, I'm hoping that falls into
        11  the "you get what you pay for"  category.  I'm hoping
        12  we're getting a more reliable system.  But we're
        13  looking at 3.6 million.  Fiscal -- This past fiscal
        14  year, we paid 3.3 million to Transactive.  We also
        15  broke our costs into different categories.  Instead of
        16  just a transaction fee, it's now a transaction fee,
        17  equipment lease costs, mail fulfilment costs, some of
        18  which will be passed onto the customer.
        19                 And our next steps, continue with system
        20  design and development.  We did have a call center
        21  study that recommended that, along with looking at
        22  external parties to run our call center, that we also
        23  examine our internal park reservation system as an
        24  option.  We do plan to issue requests for offers for
        25  the call center and Internet in the December to
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         1  February time frame.  We will have our next license
         2  deputy advisory committee meeting in January, our pilot
         3  February and March, and statewide rollout April through
         4  June.
         5                 And I'd be happy to answer any
         6  questions.
         7                 COMMISSIONER ANGELO:  Are there any
         8  questions?  I don't believe so.
         9                 CHAIRMAN BASS:  Not now.  I think,
        10  Jayne, if you'll be available when we do the
        11  regulations items.
        12                 MS. BURGDORF:  Okay.  Sure.
        13                 CHAIRMAN BASS:  I think there might be
        14  some discussion there from a new vendor and what name
        15  may not be feasible under the technology.  Some
        16  questions might arise at that time.
        17                 MS. BURGDORF:  Okay.  No problem.
        18                 COMMISSIONER ANGELO:  Thank you.
        19                 Do you have a question?
        20                 MR. SANSOM:  No, sir, I have a comment
        21  that goes under the category of other business.  We
        22  have no problem.
        23                 COMMISSIONER ANGELO:  Okay.  Thank you.
        25                 COMMISSIONER ANGELO:  And under other
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         1  business, what do we have?
         2                 MR. SANSOM:  I would like to inform the
         3  committee of several audits under way in the department
         4  at the present time.
         5                 The state auditor is finishing up an
         6  audit of the commercial fishing industry in Texas.  The
         7  principal objective is the cost which Oyster Moon and
         8  other commercial fishers pay for their practice. That
         9  study is principally of the industry, and it will be
        10  due out, in draft, sometime next week.
        11                 The state auditor has also begun an
        12  audit of the Chief Financial Officer's area, the
        13  principal objective of which is to examine our revenue
        14  estimating and financial processes to identify, if
        15  possible, any non-value added services and potential
        16  cost savings.
        17                 There's a routine federal compliance
        18  audit under way.  The state auditor routinely audits
        19  state agencies, not only Parks and Wildlife, but
        20  Department of Human Services and others which receive
        21  substantial amounts of federal funds.  The purpose of
        22  this audit is to make sure that we're in compliance
        23  with the federal rules and regulations.
        24                 Those two audits should be complete and
        25  available for you by January.
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         1                 Finally, we're coming to the end of an
         2  audit which is being completed by the controller's
         3  office on our sales tax collections.  The department,
         4  because we sell goods in state parks -- we have a
         5  relationship with a contractor on a catalog, we have
         6  the Park and Wildlife Press, which is our book sales
         7  operations.  We do collect sales taxes, and it looks
         8  like we owe about $35,000 or so in state sales taxes,
         9  and that's been a tremendous amount of work by
        10  DennisO'Neil, our internal auditor, to bring that
        11  number into a manageable figure.
        12                 So those -- I just wanted to make sure
        13  that you-all were aware that those studies are under
        14  way.
        15                 At the present time, I have no
        16  particular issues or concerns on behalf of the auditors
        17  to report to you, but I'm sure you'll be speaking to
        18  them.
        19                 COMMISSIONER ANGELO:  Any questions or
        21                 If not, Mr. Chairman, I think that
        22  concludes the meeting of the finance committee.  We
        23  stand adjourned.
        24                 CHAIRMAN BASS:  Thank you.
        25                 Why don't we maybe take a 5-minute break
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         1  and let everyone get on their feet a little bit because
         2  we're all dragging a little bit now.  I think that
         3  might be in all of our communal best interests.
         4                       (Break taken.)
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         1  THE STATE OF TEXAS   )
            COUNTY OF BEXAR      )
         3                 I, STACI D. SLAYDEN, a Certified Court
         4  Reporter in and for the State of Texas, do hereby
         5  certify that the above and foregoing pages constitute a
         6  full, true, and correct transcript of the minutes of
         7  the Texas Parks and Wildlife Commission on November 8,
         8  2000, in the Commission hearing room of the Texas Parks
         9  and Wildlife Headquarters Complex, Austin, Travis
        10  County, Texas. I FURTHER CERTIFY that a stenographic
        11  record was made by me at the time of the public meeting
        12  and said stenographic notes were thereafter reduced to
        13  computerized transcription under my supervision and
        14  control.  WITNESS MY HAND this ____ day of
        15  ________________________, 2001.
        17                       ________________________________
        18                       STACI D. SLAYDEN, Texas CSR 7290
        19                       Expiration Date:  12/2001
        20                       7800 IH-10 West, Suite 100
        21                       San Antonio, Texas 78230
        22                       (210) 377-3017
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         2  _______________________________________
         4  _______________________________________
            CAROL E. DINKINS
         6  _______________________________________
            LEE M. BASS
         8  _______________________________________
            NOLAN RYAN
        10  _______________________________________
            ERNEST ANGELO, JR.
        12  _______________________________________
            JOHN AVILA, JR.
        14  _______________________________________
            ALVIN L. HENRY
        16  _______________________________________
        18  _______________________________________
            MARK E. WATSON, JR.
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