Texas Parks and Wildlife Commission
Finance Committee

May 29, 2002

Commission Hearing Room
Texas Parks & Wildlife Department Headquarters Complex
4200 Smith School Road
Austin, TX 78744


             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:


            15    APPEARANCES:
                  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, 
            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
                           Robert L. Cook, Executive Director, and 
            25    other personnel of the Parks and Wildlife 


             1                       MAY 29, 2002

             2                         *-*-*-*-*

             3                 FINANCE COMMITTEE MEETING

             4                         *-*-*-*-*


             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 


             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 


             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 


             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 


             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.


             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 


             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 


             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 


             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 


             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 


             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 


             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 


             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 


             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 


             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 


             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.


             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 


             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 


             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 


             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 


             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 --


             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 


             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 


             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.


             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 


             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 


             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 


             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 


             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 


             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 


             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 


             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.)


            24                  COMMISSIONER ANGELO:  We will 

            25    reconvene the Finance Committee and move on to 


             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 


             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 


             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 


             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 


             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 


             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 


             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.  


             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 


             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 


             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, 


             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 


             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? 


             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 


             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 


             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 


             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. 


             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 


             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 


             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? 


             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 


             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.


             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 


             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 


             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.)


             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. 

                           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

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