Texas Parks and Wildlife Commission
Finance Committee
May 29, 2002
Commission Hearing RoomTexas Parks & Wildlife Department Headquarters Complex
4200 Smith School Road
Austin, TX 78744
1 7 BE IT REMEMBERED that heretofore on the 8 29TH day of MAY 2002, there came on to be heard 9 matters under the regulatory authority of the 10 Parks and Wildlife Commission of Texas, in the 11 commission hearing room of the Texas Parks and 12 Wildlife Headquarters complex, Austin, Travis 13 County, Texas, beginning at 11:15 a.m., to wit: 14 15 APPEARANCES: 16 THE PARKS AND WILDLIFE COMMISSION: Chair: Katharine Armstrong Idsal, San Antonio, 17 Texas, Chairman Ernest Angelo, Jr., Vice Chairman, 18 Midland, Texas John Avila, Jr., Fort Worth, Texas 19 Joseph B.C. Fitzsimons, San Antonio, Texas 20 Alvin L. Henry, Houston, Texas (Absent) Philip Montgomery, III, Dallas, Texas 21 Donato D. Ramos, Laredo, Texas Kelly W. Rising, M.D., Beaumont, Texas 22 Mark E. Watson, Jr., San Antonio, Texas 23 24 THE PARKS AND WILDLIFE DEPARTMENT: Robert L. Cook, Executive Director, and 25 other personnel of the Parks and Wildlife Department. . 2 1 MAY 29, 2002 2 *-*-*-*-* 3 FINANCE COMMITTEE MEETING 4 *-*-*-*-* 5 6 COMMISSIONER ANGELO: The agenda for 7 which begins with the approval of the committee 8 minutes from the previous meeting. 9 COMMISSIONER RAMOS: Move approval. 10 COMMISSIONER ANGELO: Have a motion 11 to be approved. Second? 12 COMMISSIONER MONTGOMERY: Second. 13 COMMISSIONER ANGELO: All in favor 14 say aye? 15 ("Aye.") 16 AGENDA ITEM NO. 1 - BRIEFING - CHAIRMAN'S 17 CHARGES. 18 COMMISSIONER ANGELO: The minutes 19 are approved. And item number 1 is the Chairman's 20 Charges. And Mr. Cook, if you might -- 21 MR. COOK: Thank you, sir. Just a 22 couple of items to report to you on our Chairman's 23 Charges in the Finance Committee. You will hear 24 later on in this presentation will be the item 25 number 5 that will be presented to you in this . 3 1 committee meeting. As required by Sunset, the 2 Commission must approve all nonprofit 3 organizations that partner with the Department. A 4 current list, as developed by a Natural Leaders 5 Team, will be presented to you for your approval. 6 AGENDA ITEM NO. 2 - BOMER REPORT UPDATE. 7 MR. COOK: And I would like to 8 report to you on the implementation of what we 9 finally referred to here as the Bomer Report. And 10 we gave it a new title. We are now calling 11 this -- referring to this entire effort as the 12 Business Practice Improvement Project. And I 13 would be remiss to not to -- to say to you that 14 we -- we actually, I believe, went into motion, 15 for sure, during the time that the Bomer team was 16 here doing their work. We were already working on 17 a number of these known issues that we have 18 included in this Business Practice Improvement 19 Plan. We were working on a number of those issues 20 several months prior to the arrival of the team. 21 And the team reinforced the need to make those 22 adjustments, make those corrections, and deal with 23 some of those issues. 24 Let me tell you a little bit about 25 what we have done since that time. I don't want . 4 1 to be repetitious here, but I would like to cover 2 this fairly thoroughly because it is the number 3 one focus that we have at the agency at this 4 present time. 5 The first thing I did, I hired one 6 of the team members who did the -- did the Bomer 7 report, Mr. T.C. Mallett. And Mr. Mallett, if you 8 have not met him, is with us today. And I gained 9 such a tremendous amount of respect and 10 appreciation for T.C.'s knowledge and his 11 understanding of how to make things work, how to 12 get answers, how to help and assist in the 13 development of solutions, that I pleaded with him 14 and got him to come back to us for at least a few 15 months, and hopefully we can stretch that out as 16 long as possibly needed and as long as he can 17 stand us. And I appreciate T.C. 18 The second thing that we did, I 19 appointed -- as you know, in the Bomer report, the 20 Bomer report recommends that we increase our 21 administrative numbers within the -- within Suzy's 22 division and it also recommends that we hire two 23 deputy executive directors, one in operations and 24 one in administration, in which this area would, 25 of course, fall. The report also recommended that . 5 1 we hire general counsel. One of the first things 2 I did on this one was, I requested -- I guess that 3 would be a nice way to say it, I requested 4 Mr. Scott Boruff's assistance in helping us 5 develop this plan and implement this plan in doing 6 everything we can, putting the resources that were 7 needed to help get this done. I appointed Scott 8 as the Interim Deputy Executive Director of our 9 administrative divisions. To go along with that, 10 we also advertised that position. I'm going to 11 wait a little while on the other one until we -- 12 in order to keep our focus on this effort, I'm 13 going to wait a little while on the other one. 14 Our operation guys are good people, very 15 experienced, very strong in their areas, and I 16 have a lot of confidence in them. And so I don't 17 want to detract from this effort. But that 18 position has been advertised. We have been 19 getting some very, very qualified applicants, 20 people calling and asking about it. 21 In addition, we have the general 22 counsel position advertised, which I think we all 23 agree is a very important addition to the agency. 24 And, again, in getting, I believe the last time I 25 counted, we had 30, 40 applicants, of which I can . 6 1 tell you that a number of them are very qualified, 2 very capable people. We'll be very fortunate to 3 be able to add to our team with that kind of 4 experience. 5 The project team that Suzy and Scott 6 have put together to get this thing rolling is 7 truly an interdivisional team. It includes 8 members from all divisions within the agency. The 9 project plan addresses all of the issues 10 identified in the Bomer report, the State 11 Auditor's reports through the past several years, 12 the Sunset Bill, and other internally identified 13 issues that some of us have. 14 Our primary focus, however, on this 15 effort is on our financial management organization 16 and process issues. We have hired -- Suzy has 17 found and hired six temporary staff to address the 18 backlog of revenue and expenditure reconciliation. 19 And the Comptroller's Office, upon our request, 20 has loaned us two very seasoned, very capable 21 professionally people to assist us at no charge. 22 We asked and the Comptroller produced. And we are 23 very fortunate to have these people. They are 24 very knowledgeable, very capable, and they're 25 doing us a great job. . 7 1 Our goal on these two efforts, this 2 revenue and expenditure reconciliation, which are 3 two clearly different issues but very connected 4 together. Our goal is to complete that 5 reconciliation by August 31. And I will tell you, 6 as we have gotten into that project, that's a 7 tough one. But that's our goal, that's what we're 8 shooting for. I believe, based on what Suzy and 9 Scott and staff are reporting to me, that we will 10 have the expenditure reconciliation completed by 11 that time. The revenue reconciliation is another 12 matter. It's a little more difficult, a little 13 more tedious and very labor intensive. And we 14 still have that as our goal, but we may or may not 15 make that particular date. But that's a date that 16 I set, and I'll keep a close eye on that. 17 We have a plan developed to support 18 the summary level corrections in order to meet the 19 deadlines -- the absolute deadlines that I feel 20 like we must meet. 21 We have hired a new financial 22 management director. That person will start in 23 mid June. We have a new director of budget and 24 planning job posted, with the hire for that 25 position anticipated in 60 days. And we have the . 8 1 license manager position posted and expect to hire 2 that position within the next 30 days. 3 Four other positions in the finance 4 division have been posted, two systems analysts 5 and two general ledger accountants. Three of 6 those positions are new positions. You will 7 recall in the Bomer report there were some -- 8 there was some comparisons given of agencies of 9 comparable size and comparable complexities where 10 we had two or three or so people in this 11 particular area, most agencies of our size had 12 maybe eight or ten people in that group. So we 13 are beefing up some of those areas, adding staff 14 and adding what we need to do to get that job 15 done. 16 The boat registration and titling 17 system that we were operating with, I think we all 18 agreed was fairly antiquated and resulted in a 19 high rate of what the State Auditor's Office 20 termed as nonvalue added processes. A specialist, 21 a gentleman by the name of Clovis Boatright, was 22 hired to redesign this system. And the only thing 23 I know to tell you is when you shake hands with 24 Clovis Boatright, he works on a farm -- I guess he 25 works at night because he stays up here from . 9 1 daylight until dark. But this guy knows his 2 business. He is a great value to us and he's 3 being very helpful to us in that particular area, 4 and we appreciate that. 5 The long-term fix requires extensive 6 programming and will be implemented as soon as the 7 system can be completed. An interim workflow has 8 been designed for use with the current automation 9 and will be implemented June the 3rd. It has been 10 tested and will eliminate much of the nonvalue 11 added processes identified by the State Auditor's 12 Office. 13 We've done some redesign in our mail 14 room and our cashier office processes. We will be 15 moving the incoming mail function closer to the 16 revenue section, as per the Bomer report 17 recommendation. Suzy will present the Revenue 18 Estimating Methodology to the Commission today in 19 order to make that process more open. 20 In an attempt to improve 21 communication with oversight agencies, staff are 22 currently making weekly contact with the 23 Legislative Budget Board and State Auditor's 24 Office and legislative briefings have been 25 scheduled with all oversight agencies beginning . 10 1 June 11th. 2 The detailed project plan is 3 complete. We receive progress reports on this 4 weekly and I suspect Suzy and Scott will tell you 5 almost daily. We're focusing our efforts on what 6 we have prioritized as the top 30 issues. When 7 you go up for lunch today and during your visit, 8 if you haven't already seen it, when you walk into 9 the Executive Office, you will see that I have 10 saved a wall for a basic reporting system on this 11 entire project. You'll seen line charts and bar 12 graphs and -- that all of us have to walk by every 13 day several times so that anytime someone comes to 14 my office with a problem, I can say, you know, 15 focus on this first. 16 And we -- for instance, in our -- we 17 have a regularly scheduled Monday morning division 18 director's meeting, which we take up the issues 19 from the previous week, long-range issues, what's 20 fixing to happen the next week, what our crisises 21 were over the weekend and that kind of thing. 22 First report at our Monday morning DD meeting is 23 on this project. 24 As you have seen, we are focused on 25 this effort, we are dealing with this effort right . 11 1 now in our FY03 budget planning process. Some of 2 these changes, some of these adjustments require 3 significant funding. And we are all dealing with 4 that. We all recognize the value and importance 5 of it. That money is -- we have failed to make 6 our press work here, and we're taking that money 7 from our existing resources. 8 We are making progress. It's slow 9 at times, and I know for staff who is doing this 10 from daylight until dark, it's frustrating at 11 times. But they are making progress. I'm glad to 12 report that to you. 13 We will report to you on this matter 14 regularly, for sure, at every commission meeting 15 and at every opportunity that you and I have to 16 talk, I will do my best to keep you posted. 17 It is my goal to be able to come to 18 you at the November commission meeting and be able 19 to report to you that the majority of this effort 20 has been completed; that whatever adjustments were 21 called for were needed, have been done, the 22 corrections have been made, that the additions, 23 the additional staff and additional equipment have 24 been acquired. That is my goal. And the various 25 parts of this that we will not have completed by . 12 1 that time, I want to be able to report to you that 2 the plan for dealing with them, for handling them, 3 the scheduled time-line and the deadlines are in 4 place of how we will deal with them as the months 5 go by. 6 That's my report to you on that very 7 important matter. And any questions or comments 8 I'll be glad to entertain. 9 COMMISSIONER ANGELO: All righty. 10 COMMISSIONER MONTGOMERY: I just 11 would say I know how hard y'all must be working on 12 it. But it's very, very important to all of us on 13 the Commission, I think it's fundamental in 14 gaining credibility of the Legislature so we can 15 go execute what's most important to us which is 16 our mission of business. But we've got to do this 17 first to be ready for it. So appreciate all the 18 hard work. 19 MR. COOK: I just want to say thanks 20 to Suzy and her folks and Scott and the people who 21 are working on this. I see them regularly and 22 it's head down and all business. And I appreciate 23 that. 24 COMMISSIONER ANGELO: Bob, that 25 really -- that takes care of item number 2 on the . 13 1 agenda as well as the Chairman's Charges. 2 Correct? 3 MR. COOK: That's correct. 4 AGENDA ITEM NO. 3 - FINANCIAL REVIEW AND 5 UPDATE. 6 COMMISSIONER ANGELO: Okay. We'll 7 then move on to item number 3, which is the 8 financial review and update from Suzy. 9 MS. WHITTENTON: Thank you, Mr. 10 Chairman, Commissioners. I'm here to give you a 11 financial update, which will include status of the 12 major revenue sources in our major operating 13 funds, operating budget and our pending request 14 for legislative appropriations for the coming 15 biennium. 16 First, I'll cover our largest fund, 17 our largest operating fund, account 9. And our 18 two major revenue sources in that fund are license 19 sales and boat registration and titling fees. The 20 total -- this slide shows numbers of licenses sold 21 in total. And this includes stamps, permits, and 22 licenses. The total number of licenses sold as of 23 the end of April show that we're selling roughly 24 the same number of licenses, stamps, and permits 25 as we did last year. It's down just slightly, .3 . 14 1 percent, which is pretty close to even. We are 2 selling more super combos and senior super combos 3 and as we've experienced less straight resident 4 and nonresident licenses. That's nothing new. 5 We've sold a total of 2.7 million 6 licenses, stamps, and permits since the license 7 year began on August the 15th. 8 Now, these next two slides break out 9 hunting and fishing licenses but don't include 10 permits or stamps. So when you look at just how 11 many hunters we've got out there -- really the 12 purpose of this slide, the total numbers of 13 licenses sold is up just a little bit, .9 percent. 14 So it's less than 1 percent. It's holding pretty 15 steady. It had -- these numbers have not changed 16 much since our last -- your last meeting here. 17 But we've sold over a million licenses to hunters 18 this year. And in fishing licenses, we've sold 19 1.3 million fishing licenses, which is up just 20 about 1 percent over last year, again, with 21 combination licenses up and resident and 22 nonresident down. Also it's not included in 23 these -- in the slide, but saltwater stamp sales 24 are down, as well. Let's see. They're down about 25 1-1/2 percent right now. And last year, you'll . 15 1 remember those sales were down about 8 percent. 2 So ever since we put that $3 increase on there, 3 they have -- the total number of saltwater stamps 4 has decreased, although, of course, the revenue is 5 way up from that source. 6 Okay. In revenue from hunting and 7 fishing licenses, at the beginning of the year, we 8 estimated almost $65 million from this source, 9 $64.8 million in commercial and recreational 10 license sales. That's what our budget is based 11 on. And as of the end of April, we collected 77 12 percent of that estimate. That's what's in the 13 bank, about $50 million at April 30th. And so at 14 this time, it looks like we'll be close to our 15 revenue estimate by year end. So there aren't any 16 real concerns about being over or under much in 17 this category. And boat registrations -- boat 18 registration and titling, we -- the majority of 19 our revenue comes from registrations of boats. 20 And I just wanted to show you how many boats we 21 have registered. These are in the thousands. 22 Over this last eight-year period, nine-year 23 period, we've ranged from about 600,000 boats to 24 630,000 boats. So there's not much of a swing 25 there in number registered. And as of April the . 16 1 30th, we had about 621,000 boats registered. And 2 I know May has been a real busy month. Our 3 biggest months for boat registrations are May 4 through August. And so they're coming in pretty 5 steady. 6 COMMISSIONER MONTGOMERY: Are they 7 up or down from last year? 8 MS. WHITTENTON: Well, right now 9 we're up about -- let's see. It was about 1 10 percent. Let me see. About 2 percent overall, 11 from the same period last year. Now, this slide 12 breaks out the revenue, shows that we estimated 13 $14.8 million, almost $15 million from this 14 source. And as of April the 30th, we collected 15 about half of that. And I checked this this 16 morning, and as of yesterday we collected about 62 17 percent of that. So because there's so much 18 activity in May, I thought I'd just look and see. 19 And that looks like it's coming in about what we 20 expected. 21 One thing to note here is that 22 registrations are up, but titling is down because 23 there are less sales of boats going on now than 24 there were this time last year, which I think 25 makes sense in the slow economy. In fact, we also . 17 1 get some revenue from the sales tax on boats. We 2 only get 5 percent of the total amount; and the 3 other 95 percent gets goes to the Comptroller's 4 office. And those numbers are down, about 14 5 percent. But, again, the majority of our boat 6 revenue comes from registrations. And since 7 that's -- doesn't seem to be impacted much by a 8 slow economy, we are -- we're not too worried 9 about revenue from that source. 10 Okay. Now, in park revenue, most of 11 our park revenue, this is our second largest fund 12 for operating fund. And our largest source of 13 revenue is from entrance and use fees from state 14 parks. We estimated 27 and a half million dollars 15 for this year. And as of the end of April we 16 collected over half of that, 56 percent, or about 17 $15 million. Park revenue has continued to be 18 strong this year. Even, it looks like May looks 19 like it's been a good month also. So if the 20 weather holds out, we should meet our revenue 21 estimate. We were up about 9 percent over last 22 year as of the end of April. So, of course, our 23 big months, again, in this revenue source are in 24 the late spring and summer. So we'll be watching 25 that. . 18 1 I just wanted to turn over to a 2 discussion on operating budgets. The current year 3 operating budget, we're spending at the expected 4 rate. With two-thirds of the fiscal year 5 complete, we've spent or encumbered 65 percent of 6 the budget. So this has been tracking 7 consistently through the year. The bottom line 8 here is that everything looks fine for the current 9 year's spending. As you know, we're in the 10 process of developing the '03 operating budget, 11 which we discussed briefly a couple of weeks ago. 12 Some items that we're taking into consideration 13 include, as Bob mentioned, the cost of 14 implementing some of the suggestions from the 15 Business Practices Improvement Plan, trying to 16 find a way to fund those. We hope to continue to 17 fund the minor repair program in parks. We're 18 also going to have to set aside some money for the 19 increase in the WorldCom contract cost. And we 20 also plan to include another game warden academy 21 in the '03 budget. Those cadet positions have 22 been posted -- or will be posted next week. So 23 we're hoping to set aside some money for that. 24 In the early stages of putting the 25 budget together, we've reviewed the appropriation . 19 1 authority and the estimated funds available. And 2 the bottom line is that we're pretty close to the 3 amount we had budgeted in the current year. But 4 we don't have -- we won't have any contingency 5 funds available, and we expect by the end of 6 fiscal year '03, to have pretty well depleted the 7 funds in the state park account. 8 This summer, we're also putting 9 together our appropriation request for the next 10 biennium. We just got the instructions recently 11 on how the Legislative Budget Board and the 12 Governor's Office wanted us to put that together, 13 how they want it submitted this time. A new 14 change this go around is that they want it 15 submitted in two parts. The first part is what 16 they call the base reconciliation. That's due 17 next month, June the 28th, which is just a 18 calculation of what our current biennium spending 19 is expected to be. That's what they consider our 20 base. And then anything over and above the base 21 that you want to request is called an exceptional 22 item. And that would be due in the August 23 submission of the entire document. 24 After we submit that, we'll begin 25 having budget hearings with the staff at the . 20 1 Legislative Budget Board and Governor's Office. 2 Expect that in September or October. And then the 3 LBB will recommend -- LBB and the Governor's 4 Office will make their recommendations to the 5 Legislature on what they would like to see our 6 funding -- our appropriations at for the '04-'05 7 biennium. 8 We've talked about some items that 9 we might consider requesting as exceptional items. 10 These are just some of the items that have been 11 discussed so far, and that is asking for general 12 revenue to cover the pay raise from fiscal year 13 '03. You remember we reduced our operating 14 budgets internally in order to make up for the pay 15 raise that didn't come with any extra funds. 16 Also, it looks like we're going to need more 17 general revenue for parks, since we will have 18 spent down those funds in the park account. We've 19 also talked about the possibility of asking for 20 more game wardens in the field. Those are just a 21 few things that have been mentioned so far. And, 22 of course, we haven't gotten feedback from you-all 23 about what you -- what all you'd like us to 24 include. That may be something we could discuss 25 at a budget workshop or at any time that you want . 21 1 to let us know your feelings on what kind of a 2 request you'd like us to submit. 3 And that's all I had for financial 4 update. And I'd be happy to take any questions. 5 COMMISSIONER ANGELO: Suzy, with 6 respect to the pay raise for this year, the status 7 of the second part of it is -- has been changed or 8 affected by the State's financial situation. 9 Could you tell us about that? 10 MS. WHITTENTON: Right. During the 11 last legislative session, the Legislature passed 12 two pay raises, one for fiscal year '02 and 13 another one for '03. Both were contingent upon 14 the Comptroller being able to certify the funds 15 were available. She did certify the funds were 16 available for the fiscal year '02 pay raise, which 17 we implemented. And then the '03 one was to be 18 another 3 percent or $65 a month, whichever was 19 higher -- or I guess it depended on what pay group 20 you were in. But the Comptroller was unable to 21 certify that funds were available, which is good 22 news/bad news for us because, again, we would not 23 have received extra cash to pay out that pay 24 raise. We would have gotten authority but we 25 would have had to juggle some of our operating . 22 1 budget funds again. So that's bad news for the 2 employees, but it -- in the tight financial 3 position that we're in, it's somewhat -- you know, 4 relieves the -- having to decide where that money 5 would come from, what programs we'd have to pull 6 the money from. 7 COMMISSIONER ANGELO: Any other 8 questions or comments for Suzy? 9 COMMISSIONER RISING: Suzy, the 10 budgets that you're planning will have an 11 exceptional amount prepared (inaudible). Right? 12 We're going to ask for more for -- but that's an 13 exceptional -- 14 MS. WHITTENTON: Yeah. That's one 15 of the things that's been offered as a suggestion. 16 I don't think any final decisions have been made. 17 But since we didn't get cash to fund those pay 18 raises, we -- that's one possibility, is to go ask 19 for that to be funded by general revenue. 20 COMMISSIONER RISING: And how does 21 that work? We're one pay raise behind also. 22 Right? 23 MS. WHITTENTON: Right. That's what 24 we're talking about, is funding the one behind 25 that we had to -- . 23 1 COMMISSIONER ANGELO: We managed to 2 fund it, but we're trying to get reimbursed, in 3 effect, for the -- because we had to take it from 4 other sources, other places. 5 MR. COOK: We took it out of 6 operating in order to fund that pay raise. 7 COMMISSIONER RISING: That's the 8 second one also, right? 9 MS. WHITTENTON: The second one, 10 since the Comptroller's Office -- the Comptroller 11 was not able to certify funds, the second one 12 won't happen. 13 MR. COOK: Like Suzy says, I think 14 it's important that as we go through probably the 15 next 30 to 45 days, we pretty well need to have 16 your direction as to our legislative agenda items 17 because they will directly certainly -- 18 potentially would impact our financial situation 19 and what we go to the Legislature and request and 20 our priority that we have those in, the amounts. 21 And we have some, you know, pretty solid 22 information on that for you. And recognizing that 23 it is a tight budget year for the entire State, I 24 think, it's important. It's our responsibility to 25 know that that's a fact and know that it will be a . 24 1 difficult decision to the Legislature. But report 2 to them what we believe our serious needs are. 3 COMMISSIONER ANGELO: With respect 4 to that, I think it would be appropriate to say at 5 this time that in consultation with the chairman 6 and executive director, we've set a workshop for 7 June the 20th at 9:00 a.m. here in Austin to work 8 on the budget and come up with these 9 recommendations, if that will fit everybody's 10 schedule. That's about the only time we could do 11 it. So there wasn't enough flexibility to offer 12 any other options. 13 AGENDA ITEM NO. 4 - REVENUE ESTIMATING 14 METHODOLOGY. 15 COMMISSIONER ANGELO: Okay. Suzy, 16 we'll keep you at the table and go to item number 17 4. As Mr. Cook mentioned earlier, this is 18 something that was recommended in the report from 19 Mr. Bomer and his staff. And that's the -- that 20 the revenue estimating methodology be made more a 21 public item and something that's discussed in open 22 meetings. And so we'll give you the opportunity, 23 Suzy, to do that. 24 MS. WHITTENTON: Okay. Thank you. 25 I want to just share the methodology that we plan . 25 1 to use in estimating future revenues for the 2 upcoming biennium. And since we are a fee-funded 3 agency, we have to include revenue estimates in 4 our appropriations requests, which we just 5 discussed. That will be due in August. 6 Here are the key components of the 7 methodology. First -- and this is a methodology 8 we've used before and have shared with the 9 Comptroller's Office, with their revenue 10 estimators. And what we do is, we collect 11 historical data for the past five years and 12 analyze that data by Comptroller object code, 13 which is by revenue type within each fund. Then 14 we conduct a trend analysis by calculating 15 historical average change in each revenue type and 16 pulling out unusual occurrences. And, of course, 17 fee changes are taken into consideration. 18 From this analysis, a first cut 19 revenue projection is arrived at. There's no -- 20 from the first cut, based on historical trends, 21 there's no allocation or allowance for any future 22 unusual occurrences. We don't take from that and 23 subtract off an amount in case we have a drought 24 or anything else that's unusual. So it's just a 25 straight trend. . 26 1 The process from there is that this 2 first cut revenue estimate will be shared with the 3 division directors for their input and to 4 determine if there are any anticipated future 5 events that would invalidate the use of the trend 6 analysis. If so, those events would be quantified 7 and revenue estimates would be adjusted. 8 We would then review and share our 9 estimate with the Comptroller's revenue estimators 10 and discuss our rationale. Final projections will 11 then be presented to division directors again, and 12 then ultimately the executive director would sign 13 off with his approval. 14 What happens next is that the final 15 revenue estimates are included with our 16 appropriations request, which is sent to the 17 Legislative Budget Board and the Governor's Office 18 as well as the Comptroller's Office. And those 19 numbers are used by the oversight agencies in 20 coming up with their recommended future 21 appropriations. 22 Then the Comptroller's Office 23 publishes a statewide revenue estimate called -- 24 we call it the BRE, the Biennial Revenue Estimate, 25 which usually comes out right before the . 27 1 legislative session. These are the official 2 revenue projections and they -- they're used to 3 certify the State's budget. And just -- we work 4 closely with the Comptroller's Office in coming up 5 with our estimate so they're not too far off from 6 what comes out in the BRE. Last biennium, we were 7 within 1 percent of their estimates. And we hope 8 to come close to that again this next time. 9 The accuracy of our revenue 10 estimates are important because, as I've 11 mentioned, the Legislature will grant budget 12 authority based on the Comptroller's revenue 13 estimates. And then our annual operating budgets 14 are driven by a combination of appropriation 15 authority and available cash balances and 16 revenues. So business decisions are largely 17 impacted by how much money we have to spend on our 18 programs. And lastly, credibility with oversight 19 agencies and the Legislature can be impacted if we 20 go over or underestimate those revenues. 21 Here is the time-line for this 22 exercise. We'll begin development of the numbers 23 in June and plan to obtain review and approval 24 internally in July. We'll share those estimates 25 with the oversight agencies in July and August and . 28 1 then submit our official appropriations request in 2 August. And then, of course, as I mentioned 3 before, the hearings will begin with the staff of 4 LBB and the Governor's Office and then the 5 Comptroller's Office will publish their BRE in 6 January, right before the session begins. And 7 then during the session, of course, these numbers 8 are discussed often and much analysis is done with 9 the numbers once they're turned over. 10 I have shared the revenue estimate 11 methodology with the Comptroller's Office and have 12 verbally obtained their approval. In fact, there 13 are -- contacted the Comptroller's Office, is the 14 person I worked with for well over ten years and 15 he agrees that keeping it simple is the best 16 methodology, not factoring in too many what-ifs 17 into it. 18 I do plan on sharing it also with 19 the Legislative Budget Board and Governor's Office 20 and hope to get their approval on the methodology, 21 as well. And I'll be happy to take any questions. 22 COMMISSIONER ANGELO: Are there any 23 significant changes in this methodology from what 24 you've used previously? 25 MS. WHITTENTON: In actually coming . 29 1 up with the numbers, there's no real change. The 2 only real change in the process is that we hadn't 3 shared the numbers much with the division 4 directors and obtained their input on any future 5 occurrences that they may anticipate. We've 6 formalized the procedure a little more by sharing 7 with the division directors and getting an actual 8 approval from the executive director that would be 9 more normal than what we had done before. But the 10 actual development of the numbers is pretty much 11 the same as what we did, the last go round, which 12 was the only one I was involved in. 13 COMMISSIONER ANGELO: Which Suzy and 14 I discussed this process yesterday, I noticed that 15 one of the things that she pointed out was that 16 she was eliminating any consideration for 17 extraordinary circumstances. And that seems a 18 little unusual to me. So I might ask you to 19 explain to the group as you explained it to me, 20 why that's the process that we're doing. 21 MS. WHITTENTON: I think, before I 22 came here, that the staff did try to make the 23 numbers fairly conservative and -- just in case 24 there were bad years. But the oversight agencies 25 really discourage that. And the thinking is that . 30 1 if for some reason your revenue estimates don't 2 come in and you do have an unusual occurrence that 3 impacts it, then you would either adjust your 4 budget at that time or you would go ask for 5 emergency appropriations. 6 We had been criticized for 7 underestimating revenues in the past. So we 8 really -- in this process, you don't gain much by 9 doing that. 10 COMMISSIONER ANGELO: I thought that 11 was an interesting explanation for that. 12 MS. WHITTENTON: It's much different 13 in the private sector. 14 COMMISSIONER MONTGOMERY: Reserve 15 our losses. 16 COMMISSIONER ANGELO: That's right. 17 So we just ignore that possibility and deal with 18 it when it happens. 19 MR. COOK: I think it's worthwhile 20 here to note I was in the Commission meeting when 21 Commissioner Dick Heath directed staff, in the 22 early '90s, to prepare their estimates based on 23 conservative numbers, you know, not ridiculously 24 so. But, you know, assume that you may not do as 25 well as we did this last year; prepare for an . 31 1 emergency, if we have a hurricane, to have -- you 2 know, and if we have a million dollar or two 3 million dollar hit in that manner, we'll have some 4 funds to go with. 5 But the fact of the matter is that 6 the oversight agencies, the folks who give us that 7 kind of direction, you know, I mean from their 8 perspective it's, you know, give us your best 9 estimate right on -- right on target. We 10 understand that things happen. But it certainly 11 makes most of us who operate on a budget at home 12 uncomfortable. 13 COMMISSIONER ANGELO: A little 14 nervous. 15 COMMISSIONER MONTGOMERY: Seasonal 16 business. That's the problem. 17 COMMISSIONER ANGELO: That's the way 18 to go and that's what we're going to do. Are 19 there any other questions or comments on that? 20 Suzy, thank you. 21 COMMISSIONER MONTGOMERY: Excuse me. 22 I have one question. I didn't hear the State 23 Auditor in your list of people you're going to run 24 this by, but that may have been me missing it. 25 Have you run this by them and they have agreed to . 32 1 it? At least they have had no further comments? 2 MS. WHITTENTON: I don't recall 3 actually if we showed them the exact document. 4 But they are in the loop on what our process is. 5 And last biennium, they were included in all of 6 our meetings and we would do that again this go 7 round when we meet with the oversight agencies to 8 talk about what our estimates are. We had several 9 meetings two years ago with the LBB office, 10 Governor's Office, Comptroller's Office, State 11 Auditor's Office and ourselves in a meeting going 12 over what the numbers were by revenue type. And 13 we would certainly include them again. 14 COMMISSIONER MONTGOMERY: I just 15 meant specifically the methodology because that 16 was one of the things they kept bringing up. 17 MS. WHITTENTON: And actually the 18 criticism that the State Auditor gave us was not 19 so much about our methodology as it wasn't 20 well-documented. 21 COMMISSIONER MONTGOMERY: Right. 22 MS. WHITTENTON: So we will have a 23 documented place where we will keep any updates, 24 any kind of changes to those estimates in the 25 Director of Finance's office and so everything . 33 1 will be in one place, easy to find and the 2 methodology is documented. 3 COMMISSIONER ANGELO: Good point. 4 COMMISSIONER MONTGOMERY: Just keep 5 them in the loop. 6 COMMISSIONER ANGELO: That was 7 something we talked about a lot last year, so -- 8 very good. Any other questions or comments? If 9 not, at this point we'll recess the Finance 10 Committee, reconvene the Conservation Committee 11 for the purpose of recessing it to an Executive 12 Session. And I'd like to announce at this time 13 that pursuant to the Rules of Chapter 51 of the 14 Government Code, referred to as the Open Meetings 15 Law, an executive session will be held at this 16 time for the purpose of consideration of Section 17 551.071 of the Texas Open Meetings Act regarding 18 pending litigation and legal advice in Sections 19 5.072 of the Texas Open Meetings Act regarding 20 real estate matters. So we'll stay in recess for 21 the executive session at this time. 22 (RECESS.) 23 AGENDA ITEM NO. 5 - NONPROFIT PARTNERS RESOLUTION. 24 COMMISSIONER ANGELO: We will 25 reconvene the Finance Committee and move on to . 34 1 item number 5, which is a Nonprofit Partners 2 Resolution. It will be presented by Susan Harris 3 and Page Campbell. We had a quorum. What 4 happened? Somebody left. 5 MR. COOK: Bob just walked away. 6 COMMISSIONER ANGELO: I hit the 7 gavel and they walked off. All right. We're 8 back. Let's go. 9 MS. HARRIS: Thank you, Mr. 10 Chairman, members of the Commission. For the 11 record, my name is Susan Harris with the 12 Administrative Resources Division here in Austin. 13 And joining me today is Page Campbell with the 14 Coastal Fisheries Division stationed in Rockport. 15 The item we're bringing before you 16 today is the Nonprofit Partners Resolution. A 17 quick overview of what we're going to be 18 presenting, we're going to be looking at Sunset 19 legislation and the mandates that impact the 20 Department as well as the Commission. And we're 21 going to look at how the project evolved into a 22 Natural Leader's assignment, and then finally, 23 we'll look at the categories that were identified 24 by the project team. 25 Senate Bill 305, also known as the . 35 1 Sunset Bill, authorizes the Department to select 2 and cooperate with nonprofit partners, but it also 3 requires that the Commission approve each 4 nonprofit organization selected to partner with 5 the Department. The Sunset staff report stated 6 that the Department does have beneficial 7 relationships with private, nonprofit foundations, 8 but that additional controls are needed. So they 9 recognize the significance and the importance of 10 the partnerships, but they just wanted to have a 11 few more controls put in place. 12 As part of the Sunset implementation 13 plan, this was selected as a Natural Leader's 14 project. And the project team includes myself and 15 Page, a project mentor, Russell Fishbeck with the 16 State Parks Division, and a project sponsor, Gene 17 McCarty with the Executive Office. Senate Bill 18 305 further defines a nonprofit partner as a 19 nonpolitical legal entity that is incorporated 20 under the laws of this State, has been granted a 21 501(c) tax exemption and works with the Department 22 to further its goals. 23 The project team established three 24 specific categories into which all current 25 nonprofit partners were grouped. And they are the . 36 1 official nonprofit partner, closely related 2 nonprofit partners, and other nonprofit partners. 3 The official nonprofit partner is the Parks and 4 Wildlife Foundation of Texas; and as such, it is 5 the single nonprofit organization designated by 6 the Commission to function as the principal 7 support entity for the Department. The second 8 category, closely related nonprofits. And these 9 are nonprofit by law and their sole purpose is to 10 support Parks and Wildlife, its facilities, the 11 research or activities within the facilities. 12 These are also known as our friends groups or 13 support groups. They are administered by the 14 board of directors and they are independent from 15 control of the Commission. 16 The team identified 69 closely 17 related nonprofit partners that have a signed 18 memorandum of agreement on file here at the 19 Department. And those can be found under 20 Exhibit B in your commission book. 21 The third category, the other 22 nonprofit partners, they're also nonprofit by law, 23 and their mission statement compliments the same 24 mission of Parks and Wildlife. And they provide 25 to us money, goods or services. And these . 37 1 relationships are ongoing. And what the project 2 team found is that the level of partnership can 3 vary from paying travel expenses for employees to 4 attend certain conferences all the way to full 5 conservations projects such as building marshes 6 with Ducks Unlimited or even acquiring property 7 with the help of a nature conservancy. So there's 8 a wide variance. We've currently identified 101 9 that meet the other criteria, and they can be 10 found under Exhibit C in your commission book. 11 And the most significant difference between the 12 closely related and the other is that the closely 13 related, they exist solely to benefit Texas Parks 14 and Wildlife. The other category, those are large 15 nonprofit foundations, organizations that support 16 Parks and Wildlife, as well as many other groups 17 and organizations. And I will be presenting this 18 information tomorrow for your consideration. At 19 this time, we'd be happy to take any questions 20 that you might have. 21 COMMISSIONER MONTGOMERY: You put 22 everything through the sieve of Sunset to see if 23 it qualified for the criteria laid out in Sunset? 24 MS. HARRIS: Correct. We were -- 25 COMMISSIONER MONTGOMERY: Would they . 38 1 not meet the criteria to fall out? 2 MS. HARRIS: There -- we started -- 3 COMMISSIONER MONTGOMERY: Did we 4 find any organizations we now can't do business 5 with? 6 MS. HARRIS: No. But when we 7 didn't -- when we said ongoing nature, the thing 8 that we didn't want to capture was like a one-time 9 donation or a one time -- because that list would 10 just be enormous. So we did -- you know, we 11 worked with Sunset staff and our legislative team 12 to develop criteria to kind of funnel those down. 13 But there's nothing that fell off that -- 14 MS. CAMPBELL: And we set up the 15 list -- a list. We started out with the interest 16 groups for our Sunset, but then we sent this list 17 through the division, all the divisions and the 18 division directors to have them add to it or take 19 out from it. And so this was a list -- 20 COMMISSIONER MONTGOMERY: So if they 21 felt they needed to strike it, they'd strike -- 22 MS. CAMPBELL: Right. 23 COMMISSIONER MONTGOMERY: -- it. 24 Was the intent just to catalog it or was it to 25 review it and be sure we had compliance with the . 39 1 law? What was the intent of Sunset to do it? 2 MS. CAMPBELL: To catalog. I think 3 it was just to catalog, to make a list for the 4 Commission. 5 MS. HARRIS: So that you're aware. 6 COMMISSIONER ANGELO: Okay. Will it 7 be an ongoing process to add to that list or not? 8 MS. HARRIS: Yes. 9 COMMISSIONER ANGELO: You set up -- 10 established the guidelines for doing that? 11 MS. HARRIS: What we will propose is 12 that it be similar to the donations acceptance 13 policy that's already in place at the commission 14 meetings. You-all receive a list of donations. 15 It's going to be similar to that policy on an 16 as-needed basis. If new nonprofits come on board 17 that we haven't already identified and you haven't 18 already approved, they will go through that 19 process. So it is ongoing, yes. 20 COMMISSIONER ANGELO: Any further 21 discussion or questions? If there's no objection, 22 this item will be placed on the agenda for action 23 at tomorrow's commission meeting and public 24 hearing and action -- public comment and action. 25 AGENDA ITEM NO. 6 - POINT-OF-SALE UPDATE AND . 40 1 LICENSE LEGIBILITY RULES. 2 COMMISSIONER ANGELO: Okay. We'll 3 move on then to the next item on the agenda, which 4 is item number 6, the point-of-sale update and 5 license legibility rules presented by Suzy 6 Whittenton. 7 MS. WHITTENTON: Thank you, Mr. 8 Chairman and Commissioners. With me today is John 9 Wilson who is the project manager on the licensed 10 point-of-sale project. He's been working with 11 this project for a couple of years, although he 12 wasn't planning on being on this project for that 13 long. 14 MR. COOK: John had real dark hair 15 when he started. 16 COMMISSIONER MONTGOMERY: Did you 17 know this was a permanent endowment when you took 18 it on? 19 MR. WILSON: I had no clue when I 20 started this. 21 MS. WHITTENTON: We have a few other 22 projects we would like to get him on, but if we 23 can get him past this implementation stage. It 24 looks like he's stuck. Also today, we have Bob 25 Parker with WorldCom here, back in the back. . 41 1 This is a briefing of the 2 implementation of the point-of-sale system. And 3 I'll cover the closeout of the old Transactive 4 system, findings of the PricewaterhouseCoopers' 5 review, status of planning for the new license 6 year, phase III enhancements that are still 7 outstanding, and finally a discussion on proposed 8 license legibility rules. 9 On the old system, the old 10 Transactive system we essentially completed that 11 closeout. The game wardens assisted us in picking 12 up some of the terminals that had not been turned 13 in yet so that we could check them all to see if 14 there were any off-line sales on any of those 15 terminals. That was one of the State Auditor's 16 concerns is that some of the offline sales hadn't 17 made it to the host. There were about less than a 18 hundred out there that we collected. And we had 19 hired some of the Transactive employees to help us 20 look for -- pull out those off-line sales. And we 21 ended up finding a total of $236 that was 22 uncollected that never made it to the host. And 23 so we have billed those agents -- there are 15 24 different agents that owed us that $236. So 25 anyway, that was good news. It gave us a level of . 42 1 comfort that we've collected off of all the 2 offline sales, virtually. 3 COMMISSIONER MONTGOMERY: Did you 4 include the State Auditor's Office? 5 MS. WHITTENTON: I don't think we 6 have officially told them that yet, but we will. 7 COMMISSIONER MONTGOMERY: Just 8 checking. 9 MS. WHITTENTON: As you'll recall, 10 we contracted with PricewaterhouseCoopers to 11 review the controls in the new WorldCom system 12 early on, to help us -- well, for a couple of 13 reasons, to check the controls and also to 14 establish an ongoing audit procedure so that we 15 can keep current on if the internal audit's in 16 place. 17 The final report was received last 18 week. And there were two major findings in it. 19 One is that they identified gaps in sequence 20 numbers on the licenses. And in looking at those 21 gaps, some of those gaps relate to failed 22 transactions that are recoverable. So in other 23 words, there's enough information available where 24 we can recover the transaction -- the information, 25 get it into the database. And we are able to bill . 43 1 the agents for that. 2 At this point, no transactions have 3 been identified that are not recoverable. So 4 we're working on correcting -- or WorldCom is 5 working on correcting that problem. The other 6 major finding was that some off-line limiters are 7 not functioning as designed. Those are checks in 8 the system that prevent -- for instance, you can't 9 sell more than $1,000 off-line -- you're not 10 supposed to be able to sell more than $1,000 11 off-line at any one time. And they found that 12 there were some cases where you could do that. So 13 we're working with WorldCom to ensure that these 14 issues are addressed quickly. 15 There were a total of 24 16 recommendations in the report. All of them were 17 minor other than these two, but we're following up 18 on all of them. The other recommendations are 19 things like the kinds of reports that we need to 20 get and establishing an audit plan, those sorts of 21 things. 22 We're getting ready for the new 23 license year, and in doing that we've got 1937 24 agents right now that have made at least one sale. 25 That number is about 12 higher than last time, . 44 1 when Jay was here reporting to you. We actually 2 have 2100 -- over 2100 that are enrolled, but only 3 1900 have made a sale. 4 We are working on system stability 5 issues. There are some operational problems 6 primarily with the little hypercom units. A new 7 release is going out to the agents this week. 8 It's been tested here. We're working with 9 WorldCom to ensure that the system is stable well 10 before the license year begins. And no major 11 changes in sales applications will happen before 12 the new year. 13 We also are going to conduct some 14 statewide training to the agents that scheduled in 15 July at eight different locations across the 16 state. We're also going to have law enforcement 17 staff training during the summer and we'll get 18 agent support information on our Website. We are 19 also doing some contingency planning in the 20 unlikely event that something should happen with 21 the system, that we have something to fall back 22 on. 23 Part of the WorldCom contract 24 requires that they escrow their software with a 25 third-party vendor. We're making sure that that . 45 1 software gets to the -- gets escrowed. And then 2 considering other options, if anything should 3 happen, that we can't get the escrowed software up 4 and running, if anything should happen. 5 Phase III of the project will be 6 going on this summer also. It will include 7 enhancements for ease and efficiency of use, 8 including a more streamlined sales process, use of 9 bar codes to read last year's license from. And 10 that would also include some of the other 11 PricewaterhouseCoopers' recommendations. 12 We have an improved format that's 13 been designed for the licenses. We have one copy 14 here to pass around. It will have the 15 white-tailed deer log on the back and some small 16 graphic images on the tags of the animals on that 17 one. There are actually going to be -- those 18 images will be in the lower right-hand corner of 19 each tag. But we'll be focusing on key bugs to be 20 addressed before August 1st. And the final 21 software releases are expected later this year, 22 including Internet sales, but that won't happen 23 until after the license year kicks off. 24 COMMISSIONER MONTGOMERY: What was 25 that about the Internet sales? . 46 1 MS. WHITTENTON: The final software 2 release that will come out later this year will 3 include Internet sales, but that won't happen 4 until after August 15th. 5 COMMISSIONER MONTGOMERY: I thought 6 that was -- I was going to ask about it, because I 7 thought that was scheduled to come out this 8 spring. 9 MR. JOHN WILSON: It was, 10 Commissioner. It had been planned for late 11 spring, early summer. Because of the issues of 12 stabilizing the system and making sure that we are 13 in good shape to sell in August, we had to move 14 that back. We put it on the back burner, if you 15 will, with WorldCom to give them time to fix the 16 ongoing production problems and get us ready for 17 all the critical things for the sales process to 18 start in early August. 19 MS. WHITTENTON: That was all I had 20 on the update of the system. But I also wanted to 21 mention that the Sunset Bill requires that we 22 specify legibility standards for the licenses, 23 including paper and print quality and a minimum 24 font size. We've proposed standards that specify 25 that, for example, the paper be durable, water . 47 1 resistant, waterproof, tear resistant, and printed 2 in an indelible print and that the font size be 3 reasonable and no less than six points, which is 4 what's on the license right now, and a color that 5 contrasts the background. What we would like to 6 do is propose -- publish some proposed changes in 7 the Texas Register and bring to you in August a 8 recommended rule for adoption. 9 COMMISSIONER ANGELO: John is able 10 to read it without his glasses, so it must beat 11 the test, huh? 12 COMMISSIONER RAMOS: I can read it. 13 Actually I'm looking at the little animals. 14 COMMISSIONER MONTGOMERY: We've got 15 questions. Are you through with -- 16 MS. WHITTENTON: That's all we have. 17 We're happy to take questions. 18 COMMISSIONER MONTGOMERY: Is the 19 software in escrow somewhere? 20 MS. WHITTENTON: Not yet. 21 COMMISSIONER MONTGOMERY: And why 22 not? 23 MR. JOHN WILSON: Because the system 24 is being built, the escrow agreement requires that 25 every time a new release comes out, that they . 48 1 would have to put it into the escrow company. 2 That has just not been done by WorldCom. We're 3 supposed to have a report tomorrow as to why -- 4 where they are in the process. And we just have 5 not gotten them to do that yet. The -- you 6 know -- 7 COMMISSIONER MONTGOMERY: Why don't 8 we insist? 9 MR. JOHN WILSON: We are. At this 10 point, we are. And because we now have a system 11 that we believe is viable for continuation -- 12 earlier the system was, you know, in pieces and it 13 wasn't put into a package, really, that we could 14 take and implement ourselves. And that's part of 15 the process that WorldCom is doing now, is to 16 packaging that up so that when it goes into 17 escrow, it will be a viable option for us. And we 18 are insisting. And that is a subject of 19 discussions on calls that Mr. Cook gets on weekly 20 with the WorldCom senior management, to take that 21 up. 22 COMMISSIONER ANGELO: John? 23 COMMISSIONER RAMOS: The 24 third-party -- escrowed with the third-party 25 vendor, give me an example of a third-party . 49 1 vendor. Somebody in the same business? 2 MR. JOHN WILSON: It's -- I'm sorry, 3 Suzy. 4 MS. WHITTENTON: Go ahead. 5 MR. JOHN WILSON: The name of the 6 company is Fort Knox Escrow Services, 7 Incorporated. They are in the business of 8 escrowing large software systems for many vendors. 9 And they are independent. There's a separate 10 agreement with them that gives us the right, under 11 our contract under certain conditions, of default, 12 you know, other conditions that we have access to 13 the software independent of WorldCom's 14 involvement. Obviously they could sue us to keep 15 it in place. But we -- you know, if they go 16 bankrupt or if they're in default of the contract, 17 we have access to the software. 18 COMMISSIONER MONTGOMERY: I've 19 always thought that Internet -- having the 20 Internet capability really helped us broaden out 21 market more broad. I hate to miss the whole 22 season, which it sounds like you're doing. If 23 there's any way to speed it up, I hope that we 24 could do that to get out there just because I 25 think it could open up a lot of avenues. . 50 1 MR. JOHN WILSON: We understand and 2 we're sensitive to that also. Our plan right now 3 is last week we finished with WorldCom just 4 identifying all the pieces that need to be fixed 5 for this August delivery. We're working on an 6 agreement with them and identifying what resources 7 it would take to do that. And our next step is to 8 look at the Internet. 9 We have a couple of things we have 10 to do with state government and the Department of 11 Information Resources and the Texas On-line 12 Authority. We've gotten approval to go ahead with 13 some of our activities for collecting money, but 14 we have not -- we've not gone through the process 15 with them of setting up the linkage between our 16 sales and the collection of revenues through the 17 Texas On-line Authority. They have, under 18 legislation that was passed last session, they 19 have sort of first right of refusal on doing that. 20 And we have to go through an exception process, 21 which we're well underway with, but it would be 22 another sort of step that we have to take to get 23 this done. 24 COMMISSIONER RAMOS: What kind of a 25 system do we have that will ensure that the . 51 1 vendors will be coming to us either on a daily or 2 a quarterly basis or a weekly basis to where if, 3 for example, if academy were to send a hundred 4 dollars worth of licenses today, would we have a 5 comparable record at that the end of the day that 6 would advise us of that so if the funds had not 7 come in there would be a cross-check or something? 8 MS. WHITTENTON: Yes. We get 9 information through the system of how much each 10 agent has sold. And then what we do is, we sweep 11 those funds from their bank accounts once a week. 12 And there's a reconciliation process that goes on 13 to make sure that we're capturing all the sales. 14 We're also going to be hiring an 15 auditor who will audit the WorldCom system. 16 COMMISSIONER RAMOS: Would we have 17 the ability at any given point, let's say, in a 18 day or every second day, to access the records of 19 academy and say, yesterday you sold a thousand 20 dollars or whatever? 21 MR. JOHN WILSON: Yes, sir. We 22 actually have a copy of the database and all sales 23 records here in-house. And it's updated every day 24 for the prior -- for that current day's business. 25 So this morning we got -- when we came in, we had . 52 1 all sales records for everything up to yesterday 2 at midnight. 3 So we have access to that. We have 4 reporting capabilities that we can get any agent 5 and all of their sales at any point in time within 6 our license revenue section. 7 So the only real information that we 8 don't have is, Suzy was talking a little bit about 9 off-line sales. In the instances where the 10 machine might go off-line -- and by the way, we're 11 up, you know, more than 99 percent of the time -- 12 there may be some sales that are in the point of 13 sale device that have not been transferred to the 14 back-end computer, the host database. And those 15 sales we wouldn't know about until they actually 16 came back on-line to load those up when the 17 machines -- when the servers came back up. So -- 18 and there's our limiters on that, so the thousand 19 dollar limit that Suzy talked about to help 20 minimize our risk in terms of having sales out 21 there that we don't know about instantaneously. 22 But if you make a sale right now, in two minutes 23 we can get access to that sale on the system. 24 COMMISSIONER RAMOS: We didn't used 25 to have that on the old system? . 53 1 MR. JOHN WILSON: We had it in a 2 much more limited way. Yes, sir. 3 COMMISSIONER ANGELO: Any other 4 questions? 5 MR. COOK: I want to expand a little 6 bit for the Commission because I'm concerned that 7 this is something you may hear about; and if so, 8 it will be in a rush fashion. Suzy mentioned 9 contingency planning. Obviously the most obvious 10 contingency plan is the software system being 11 escrowed at port docks. 12 Secondarily, I've asked staff to 13 look at several other options that we might go to 14 in case, you know, the system just goes down, 15 something goes wrong at WorldCom, whatever the 16 case may be. And with all due knowledge and 17 respect of Mr. Parker, who is here, we've talked 18 about these kinds of issues. We're looking at, 19 for instance, what I will just call an emergency 20 backup paper system. I think that is, you know, 21 something that probably, given that this is our 22 sixth or seventh year in an automatic licensing 23 system, that's probably something that we should 24 have had all along. We can stock pile a year's 25 supply of paper licenses, very simplified, with . 54 1 blanks in all the right spots that would have to 2 be filled out, where we could continue to 3 function, continue to sell licenses, continue to 4 permit people to do the various things that this 5 system does, by hand, manually, ink and paper. 6 And I'm looking at what that backup 7 system there cost us. We don't have that 8 information yet. If we had to go that way, it 9 would require some very, very quick action. We 10 would have to change some of our rules in order to 11 implement a system like that, and that would take 12 commission action. So I just wanted you to be 13 aware that that's the case. And obviously we have 14 some concerns. But in visiting with the people at 15 WorldCom that we work with -- when I can, I'm on 16 the phone with Mr. Edgerton and Nancy Collins and 17 people that head up this government group, and, 18 you know, they have assured us that they're here 19 for the duration, we're going to get our system 20 fully operational, running smooth and be with us 21 for the next four years. And that's exactly what 22 we all have as our goal and our mission. But 23 there's always that possibility that I think, as 24 conservative as I am, that we need to be prepared 25 for. . 55 1 So we're looking at those costs and 2 I'll be telling you more about that as the months 3 go by. 4 COMMISSIONER ANGELO: Any other 5 questions? If not, we've got one portion of this 6 item that needs further action. And if there's no 7 questions or discussions or without objection, I'd 8 authorize the staff to publish the item regarding 9 legibility in the Texas Register for the required 10 public comment period. Hearing none? So done. 11 AGENDA ITEM NO. 7 - TPWD FACILITY TRANSFER - 12 PORT LAVACA. 13 COMMISSIONER ANGELO: The last item 14 is number 7, Parks and Wildlife facility transfer, 15 Port Lavaca, Walt Dabney. 16 MR. DABNEY: Chairman, 17 Commissioners, I'm Walt Dabney, State Park 18 Director. I'm here to talk to you today about the 19 potential transfer of the Port Lavaca State 20 Fishing Pier. We -- it's a ten-acre site. 21 We've had it since 1963, after Hurricane Carla 22 blew down the causeway -- or wrecked the causeway 23 in 1961 for Highway 35. We converted the site to 24 a 3200-foot fishing pier. Actually if I back up 25 one, that's a pre -- the fishing pier is the . 56 1 facility to the right side of the main causeway 2 going over there, that's before 1999. It was 3 struck by lightning and 1200 feet of the end of it 4 burned off. We -- you authorized us -- 5 COMMISSIONER MONTGOMERY: Kind of 6 unlucky. 7 MR. DABNEY: Yeah. It made -- 8 couldn't get out to quite as deep a water. 9 You gave us the opportunity in -- a 10 year or so ago to look at using transfer money 11 from 2108, do an engineering assessment as to what 12 we ought to do on this with the notion of possibly 13 transferring it to the City of Port Lavaca if we 14 fixed it up. Port Lavaca had been operating this 15 site as a city fishing pier. 16 The engineering assessment we got 17 back told us it would cost us about $320,000 to 18 tear it down and as much as $6 million to fix it 19 up into a first-rate fishing pier, somewhere 20 between 3 and 6 million. That did not seem to be 21 in the interest of this Department. And so we 22 looked at the $320,000 proposal. 23 In talking to the City of Port 24 Lavaca, they are making a request of us that we 25 give them the money that we would have used to . 57 1 tear it down, the $320,000, and they will find 2 additional monies to fix the pier back up into a 3 serviceable fishing pier. We think that's a good 4 deal and we are recommending to the Commission 5 tomorrow that we do, in fact, effect a transfer of 6 this to the City of Port Lavaca. 7 COMMISSIONER ANGELO: Any questions, 8 comments, discussions? Hearing none, I'll place 9 this item on the Thursday commission meeting 10 agenda for public comment and action. 11 Before adjourning the committee, I 12 wanted to go back and mention on the item number 13 5, the presentation from Susan and Page, that they 14 mentioned briefly, but I think it's worthy of a 15 little further comment, they're part of the 16 Department's Natural Leaders program, which I 17 think is an excellent program. And I neglected to 18 thank them for a job well done and to emphasize 19 the fact that they are part of that program. 20 Thank you-all. 21 No further business to come before 22 the Committee, the Finance Committee is adjourned. 23 Madam Chairman, back to you. 24 *-*-*-*-* 25 (MEETING ADJOURNED.) . 58 1 REPORTER'S CERTIFICATE 2 STATE OF TEXAS ) 3 COUNTY OF TRAVIS ) 4 I, MELODY RENEE DeYOUNG, a Certified 5 Court Reporter in and for the State of Texas, do 6 hereby certify that the above and foregoing 57 7 pages constitute a full, true and correct 8 transcript of the minutes of the Texas Parks & 9 Wildlife Commission on MAY 29, 2002, in the 10 commission hearing room of the Texas Parks & 11 Wildlife Headquarters Complex, Austin, Travis 12 County, Texas. 13 I FURTHER CERTIFY that a stenographic 14 record was made by me a the time of the public 15 meeting and said stenographic notes were 16 thereafter reduced to computerized transcription 17 under my supervision and control. 18 WITNESS MY HAND this the 5th day of 19 August, 2002. 20 21 MELODY RENEE DeYOUNG, RPR, CSR NO. 3226 22 Expiration Date: 12-31-02 3101 Bee Caves Road 23 Centre II, Suite 220 Austin, Texas 78746 24 (512) 328-5557 25
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