Texas Parks and Wildlife Commission
Finance Committee
Jan. 22, 2003
Commission Hearing RoomTexas Parks & Wildlife Department Headquarters Complex
4200 Smith School Road
Austin, TX 78744
BE IT REMEMBERED, that heretofore on the 22nd day of January, 2003, there came on to be heard matters under the regulatory authority of the Parks and Wildlife Commission of Texas, in the Commission Executive Board Room of the Texas Parks and Wildlife Headquarters Complex, beginning at 10:40 a.m. to wit: APPEARANCES: THE PARKS AND WILDLIFE COMMISSION: FINANCE COMMITTEE: Katharine Armstrong, Austin, Texas, Commission Chair Joseph B.C. Fitzsimons, San Antonio, Texas Ernest Angelo, Jr., Midland, Texas, Committee Chair John Avila, Jr., Fort Worth, Texas Alvin L. Henry, Houston, Texas Philip Montgomery, Dallas, Texas Donato D. Ramos, Laredo, Texas Kelly W. Rising, M.D., Beaumont, Texas Mark W. Watson, Jr., San Antonio, Texas THE TEXAS PARKS AND WILDLIFE DEPARTMENT: Robert L. Cook, Executive Director, and other personnel of the Parks and Wildlife Department CHAIRMAN ARMSTRONG: We will reconvene this meeting. We will reconvene with the Finance Committee. Commissioner Angelo? COMMISSIONER ANGELO: Thank you, Madame Chairman. The first item of business would be to approve the minutes from the previous meeting. Are there any corrections or additions? If not, a motion will be approved. COMMISSIONER FITZSIMONS: So moved. COMMISSIONER HENRY: Second. COMMISSIONER ANGELO: All in favor say, Aye. (A chorus of ayes.) COMMISSIONER ANGELO: Opposed? (No response.) COMMISSIONER ANGELO: The minutes are approved. Mr. Cook, if you could give us the chairman's charges. MR. COOK: Thank you, sir. Commissioner, just a few notes in this particular area, in our Finance Committee, on chairman's charges. I thought it would be appropriate to touch on kind of where we are in our legislative process a little bit. And Ms. Whittenton is going to expand on that some. You will recall, we submitted our legislative appropriations request back in August. It seems like a long time ago now. But -- and things have certainly -- the picture of where we're headed in this session is getting clearer and clearer every day. So we've got a lot of work to do. Just to give you an idea -- since the prefiling of legislation started in November, there have been slightly over 700 different pieces of legislation filed so far. We are -- the Department and our legislative liaisons -- within each division and legislative reps, Joey Park and Harold Stone, are tracking 84 of those bills right now. They, in some form or fashion, have some mention of, or some impact on Texas Parks and Wildlife Department and/or our resources. To give you an idea, there's three or four of them that have some obvious impacts that I want to be sure you know about. One bill has been filed relating to the transfer of the Odessa meteor crater to Texas Parks and Wildlife Department. Obviously, that potentially could have a fiscal impact that we would all be interested in. Also, a bill relating to the protection of public freshwater areas that, in a nutshell, closes state- owned riverbeds to vehicular traffic. And, as you know, we have worked with different folks, and different agencies, and Dr. McKinney chaired a group to help develop the recommendations and guidelines there. And we have worked to do there. We have a bill proposed, submitted, that exempts folks over 70 years of age and older from the requirement of having a hunting or fishing license. Again, that would have a fiscal impact. And we are developing, or already have developed, impact statements on each of those bills. Finally, just another example, we have a bill that would exempt landowners from the requirement of obtaining a hunting license to hunt feral hogs on the landowners' property. So, there is a bill that, sometimes, you might think -- and it does make some sense. And, obviously, it has some proponents. However, when a person is out with a rifle over their shoulder, and walking through the woods, it becomes difficult for one of our enforcement officers to determine if they're deer hunting, or hog hunting, or quail hunting, or whatever it is they're doing. And currently, if you're out in the woods with a rifle, and if you're out there hunting, then you have to have a hunting license. As of last week, the Senate committees were named. And I think we provided that information to you. If you haven't gotten it, we'll be glad to provide you that. We anticipate that the House committees will probably be named, at least, prior to the first of this next month, probably the end of this month or the first of next month, somewhere thereabouts. We are -- as Suzy will, again, give you a little more detail on -- we are preparing to assist our legislators in every way possible to get through what we all believe is going to be a difficult session. And we're going to make this thing work. We've got a good outfit. And we can find ways to help them. And we're going to. So, with that, if you have any questions, I'll be glad to take a shot at them now. Or we can address that when Suzy completes hers. COMMISSIONER ANGELO: Are there any questions? (No response.) COMMISSIONER ANGELO: There being none, Suzy, we'll move on to your item number two, which is the financial review and update. MS. WHITTENTON: Okay. Thank you, Mr. Chairman, Commissioners. For the record, I'm Suzy Whittenton, Chief Financial Officer. Last week, we sent out some financial reports to you, in a notebook to give you a little more comprehensive detailed information. COMMISSIONER ANGELO: Let me interrupt for just a second and tell you how much I appreciate that. I think that was a super collection of information. And I congratulate you and your staff on putting that together. And I hope the Commissioners take full advantage of it. I went through that. I won't say that I studied it to the extent I should have. But I think having that information is extremely valuable. And I would that there might be sometime that the commission could be, in a more detailed manner, briefed on this type of information, at least once a year. I think it would be very beneficial to everybody to be able to go through it and ask questions. But it's great information. MS. WHITTENTON: Thank you. COMMISSIONER ANGELO: I didn't mean to interrupt you. MS. WHITTENTON: Not at all. MR. COOK: Anytime. MS. WHITTENTON: We also plan to add to that some other information, like we'll try to include information on performance measures, and FTEs, and budget- wise strategy. And, as we go along, add to it -- and it's kind of a work in progress at this point. Anyway, today's presentation will cover summarized revenue and expenditure information, as well as an update on where we're going with this improvement plan, and, Mr. Cook mentioned, the legislative appropriations request status. Let's start with park revenue. As of the end of November, park revenue was down 12 percent, or about $659,000. Part of that is due to the fact that this year Thanksgiving weekend fell into the December reporting period, because of the weekend that it was in, the way they cut off the weeks to report revenue. Other reasons are the stormy weather. And there's some parks that just have not done as well, in certain parts of the state, as they had in previous years. However, from what we're seeing, it looks like December was a good month. I just don't have good December numbers just yet. So we think that we'll, possibly, be back up to closer to the levels we were at last year by the end of January. We'll just keep watching. It's early in the season for park revenues, as we collect most of that in the last two quarters of the fiscal year. In boat revenue, we're also down, as of the end of December. It looks like it's due to registrations being off. Titling revenue is actually up over last year. And sales tax started to rebound in December. So it's a little odd to see registrations this far off. We had a similar situation -- remember last year, we started off the year with boat registrations looking real strange, or revenue looking a little different. But we collect the bulk of our boat registrations between March and June. Actually, February is a pretty big month as well. So we'll be watching it real closely. We're not worried about it right now. We're only off less than half a million dollars. And I think we'll probably catch up. In license sales, this is the number of licenses, stamps, and permits that we've sold since the license year began in mid-August. And it's down just slightly over last year, but that doesn't necessarily translate into a revenue correlation. It just means that the total number that we sold is down. But super combo sales are up again. They've been up every since we introduced that license type. So what tends to happen is people who used to buy a license and two stamps will move to buying a super combo. So you a reduction in the total number of the sale. But, again, it doesn't necessarily mean that revenue is off. In fact, revenue is not down. Hunting license sales -- we've sold over a million hunting licenses so far this year. It's up just a little over 1 percent, as compared to this time a year ago. It's interesting to note that nonresident hunting licenses are at 6.5 percent roughly. And that ends up having a significant fiscal impact because those licenses are more expensive. And in fishing licenses, we've sold just over a million fishing licenses so far this year, which is down just slightly, about 2 percent, over last year. Again, nonresident sales are up slightly while sales to residents are down 5 percent. Also, saltwater stamp sales are down 4.4. percent. We'll probably still sell another 300,000 fishing licenses the remainder of this year. We've sold almost all of the hunting licenses we'll sell. But there's still significant numbers of fishing licenses that we think we'll sell. And in looking at total revenue, as I mentioned, revenue is up just a little bit, less than 1 percent, over last year, as of the end of December, which was about $183,000 higher. Early January reports show that revenues are continuing to outpace last year's. And as of last week, we were up $380,000 approximately. So license revenue seems to be doing fine. And we've collected 64 percent of what we think we'll collect all year. What we usually focus on in these meetings are the top three revenue types. But there are so many other revenue sources. And they're in your notebooks, if you want to study them. We track all of our revenue against the annual estimates, the cash we expect to receive in a fiscal year. The Comptroller's office does their revenue estimate as well. And that's what we base our budgets on. And so, I just picked out five of the primary funds to show you what it looks like. In Fund 9, the Game Fish and Water Safety account, we've already collected almost half of what we'll collect all year. And that's, of course, because license sales is the primary revenue source in there. And we collect most of those in the fall. State Park funds -- we collected 30 percent. We're about a third of the way through the year. And, again, the two biggest quarters for the state park revenue are the last two, the third and fourth quarters. So that looks like, cash-wise, we're doing all right. The artificial refund, the last one there, looks a little odd. The estimate was based on prior year donations that are received for artificial reaps and interest income. And we've already collected 170 percent of what we thought we'd collect all year. So, there are some unusual things that happen throughout the year. And I included information on all of our funds in your notebook. And on the expenditure side, this is just a summary by category, agencywide. We're a third of the way through the fiscal year. We've spent 31.5 percent of our budget. And you can see that some of the categories track pretty constantly throughout the year. Like, the personal services is salaries and wages. And fringe benefits, we're spending at about the pace we expected. You can see we've already spent 41 percent of our capital equipment budget. And I've only encumbered 14 percent of our grant budget. And that's just the way we spend funds throughout the year. Each division is managing their own budget and monitoring that they're not going to go over budget when make their expenditures. We're expecting to get some correspondence from the Governor's office sometime this week, possibly today, telling us -- directing us to save some funds for this year, to make up for the $2 billion shortfall that they've got. We don't know yet what format that's going to be in, whether it's going to be just a hiring freeze, or a freeze on certain types of expenditures, or whether it's going to be a targeted amount that they want us to save. And so we'll have to look at adjusting what's left of the year unspent. In the business improvement plan, I sent you a copy in your notebook of the detail of those items. There were 94 items in the plan. That's been in effect since March. We've now completed 46 of those items -- which is approximately 50 percent of all the items are 100 percent completed. A lot of them are pretty far along. There are another 14 items scheduled to be finished by the end of next month. That will put us at about two-thirds of the way finished with all of the 94 items. The plan actually goes out until November '04, before we'll have everything finished. Because there are some items in there that require programming, and some systems rewrites of some of our revenue systems, and some feasibility studies that we're going to be doing that take a little longer. COMMISSIONER ANGELO: Suzy, my comment that I saw Mr. Bomer [phonetic] during the past week and had a chance to visit with him. And I don't think he'd mind me saying that his comment was that -- I won't get this exactly right, but the essence of it was that Parks and Wildlife response to his recommendations was the best of any of the similar type of audit process that he had gone through with any other agency. MS. WHITTENTON: That's great. COMMISSIONER ANGELO: He was very complimentary for what you all have done. MS. WHITTENTON: Thank you. And, Bob mentioned the legislative appropriations request. We sent that out last September. And have, since then, spent a lot of time with the staff of Legislative Budget Board and the Governor's office, answering a lot of questions. They've been combing through our request and our prior spending. And last week, the Governor's office recommended a zero base budget. They're expecting each agency to start with zero funding and then justify every dollar that would be budgeted. They've also recommended a slightly more detailed funding pattern that would better identify the primary functions that are funded within each strategy. And then, they are associating indirect cost to each strategy. So it will be, probably, a little easier to read in the format that they've proposed. They have not addressed any of the rider requests in their budget. In prior sessions, what normally happens is the Legislative Budget Board's request is taken as a base and it goes from there. This go round, we're not sure if they're going to use a zero base strategy or use the LBB recommendation. That came out a couple of weeks ago. And it is a current services level budget, which, of course, there doesn't seem to be revenue to support. But it's important to look at what's in the recommendation I think. The recommendation excluded any Proposition 8 funding. And that wasn't just for Parks and Wildlife, but all the agencies that were covered by those Proposition 8 funds. They just left them out. We don't really know why. If they were thinking, postponing that as something that could be pushed out a couple of years. But none of the agencies had any Proposition 8 funding. It also eliminated our entrepreneurial rider, which would be a concern to us. We feel like that's real important. So that if we earned revenue over and above the revenue estimate, then we'd be able to spend it if needed. It also -- we had asked that land acquisitions, with federal funds or grant funds, be exempted from the restrictions that their capital budget rider places on those kinds of purchases. And instead, they came back with a rider that would increase the restrictions on land acquisitions. And, in fact, they cut out the $1.5 million of federal funds, land and water funds, that we had asked for, for land acquisitions. And they had recommended a decrease there. They also added the amounts for the floating cabins that we had asked for. The floating cabin money that -- if you will recall, we had earned revenue from floating cabin permits and then it was required to be deposited into the general revenue fund. And we weren't able to access it. And so it was lapsed at the end of last year. And we asked that that be given back to the agency. And LBB did recommend that we get that back. It's not a significant dollar amount. It's, I think, a couple hundred thousand. And also, a week or two ago, the Comptroller's revenue estimate was released. It is within 1 percent of the revenue estimate that we had submitted back in September. And so we were pleased that they agreed that our numbers were in line. So at this point, we're waiting on legislative leadership to provide some guidance on what the budget approach will be. And we'll be working real closely with their offices, and, of course, with the Senate Finance and House Appropriations committee to proceed from here. And that completes my presentation. I'm happy to take any questions. CHAIRMAN ARMSTRONG: Mr. Chairman. Suzy, it's my understanding that the entrepreneurial rider -- this is something we've had to deal with just about every legislative session since it's been in existence. So the fact that it's been eliminated at this point is not an unusual situation. MS. WHITTENTON: That's correct. Thank you. I guess we had that rider for some time in the '90s and then lost it a couple of sessions ago. And last session, that was one of our exceptional items requests, was to get that rider back. And we did get it back. We haven't had to use it yet because our revenue has not exceeded estimates yet. But we sure like to have it in place. COMMISSIONER HENRY: Mr. Chairman. Would you expand a bit on your comments -- I may have missed something -- regarding property funding and land acquisition? MS. WHITTENTON: Okay. On the Proposition 8 was the bond, you know, that passed, it was 100 -- COMMISSIONER HENRY: 101. MS. WHITTENTON: -- $101 million for eight agencies or so. MR. BORUFF: It was 850 -- MS. WHITTENTON: I'm sorry. MR. BORUFF: -- for a total optional -- MS. WHITTENTON: Thank you. We had been scheduled to get about $30 million, $34 million, over the next biennium, according to the schedule that was originally prepared. They didn't recommend that we get that, those bond funds, next biennium, nor did they recommend them for any of the other agencies. However, we have collected the first $36 million that was included in this biennium. They've given us all of -- the Texas Public Finance Authority went ahead and funded all of those bonds. So we have them in our bank account right now. So that will actually get us through if we have to go without the next biennium. I think we'd be all right there. COMMISSIONER HENRY: I understand. MS. WHITTENTON: Okay. Good. MR. BORUFF: The legislature issued $850 million -- oh, I'm Scott Boruff, Deputy Executive Director in Operations. The legislature issued $850 million in bonds for ten or eleven agencies, of which we would receive 101 million. That 101 million was to be issued roughly in equal installments, if you will, over the next three bienniums, of 35 million, more or less. We took an aggressive stance and had already had the first 34 million, or 35 million, issued. It is in the bank. We feel like we're pretty safe there. The current legislature, though, has to recertify the next installment, if you will, of 35 million or so. And that is the one that we're worried about more, it being at risk. If they don't recertify, we may not be able to get that 35 million the next biennium. COMMISSIONER ANGELO: Suppose the legislature's concern there, or reason for that, might be the interest payments on it. Would that be right? MR. BORUFF: Yes, sir. the debt services -- MR. COOK: That's a big debt service. COMMISSIONER ANGELO: Because the capital part of it is already covered. The debt service would be the problem. MR. BORUFF: The debt service is about $80 million on that total issue. So it's a big piece of it. MR. COOK: Let me point out, in particular, you know, like the Battleship was to be in this next -- there's several of those big projects that are specifically identified in the original bill, that, you know, this is really going to impact those. COMMISSIONER ANGELO: So we might be looking at a two-year delay? MR. COOK: Yes, sir. MS. WHITTENTON: That's a possibility. COMMISSIONER RAMOS: Are other agencies that are supposed to get profit monies in a similar situation? Or is it only us? MS. WHITTENTON: It's all of us. MR. BORUFF: It's all agencies. In fact, we're one of three that I'm aware of that were ahead of the curve, and went ahead and had the bonds issued early, in anticipation of this. The others would be at risk even for this first, since it's not been issued yet. And I don't know. I mean, obviously, that's not my call. But -- so, yes, all agencies were treated equally. MS. WHITTENTON: And as to your question on land acquisitions, we had asked that if we got any additional funds, federal funds, or grant funds, or gifts like we had with the Callison [phonetic] purchase, could that be exempted from any restrictions that are in the normal, in the regular appropriations bill? And, instead, they came back with a recommendation to increase the restrictions. In fact, the rider that they recommended says that before we could purchase any land over and above what's included in the base bill, we would have to go through a prior approval process, with the Legislative Budget Board and the Governor's office, before we could make any of those additional purchases. That's what their recommended rider says. And, you know, we don't know whether that will be proposed in a bill or not. COMMISSIONER ANGELO: Even though that would actually be of no cost to the state's budget? Is that correct or not? MS. WHITTENTON: That's correct. There would be no cost, zero cost, yes. I think we could -- we would have an opportunity to be heard on that. COMMISSIONER ANGELO: They probably don't want us taking on any new land purchases that are going to add to our operating costs. MS. WHITTENTON: I suspect that was the thinking. COMMISSIONER ANGELO: Right. Any other questions from the commissioners? COMMISSIONER AVILA: How long is that directive in effect for? MS. WHITTENTON: Well, if it were to pass, it would be part of the next two-year budget. So it would be for a two-year period. COMMISSIONER AVILA: Well, what happens if we sell a piece of property and get some money in order to acquire land? MS. WHITTENTON: We currently have a rider that says that if we sell land, that the proceeds from the land sale can be reappropriated for a similar purchase. The LBB has recommended that that rider be deleted. So I think the message we're getting there is, we're concerned about land acquisitions. COMMISSIONER ANGELO: That could have a bearing on your concern. COMMISSIONER AVILA: My concern is -- COMMISSIONER ANGELO: We'll discuss that, I'm sure, later. COMMISSIONER AVILA: Okay. COMMISSIONER HENRY: I think we need to let the record show that it also has a significant bearing on the report concerning the purchase of those five major parks that we talked about, within the ten-year period. COMMISSIONER FITZSIMONS: You mean the Land Conservation Act? COMMISSIONER HENRY: Yes, the Land Conservation Act. That just brings it to a halt. COMMISSIONER ANGELO: Those are probably a little -- CHAIRMAN ARMSTRONG: I think, for the next biennium, somewhere in the future. COMMISSIONER MONTGOMERY: But the Land and Water Conservation didn't address funding. And it is conceivable there have been acquisitions by the Department before, where the funds came not from the state and the operations were endowed separately from the state. And that's been one of the possibilities in that mix, from the beginning, that I really think was, probably, always the case -- is that we're going to have to get the money separately to do that. So, I'm not -- I don't think you should stop this work and all. COMMISSIONER AVILA: With the restrictions prohibitive from the next biennium then? This is what you're saying? COMMISSIONER MONTGOMERY: No, I don't think -- MS. WHITTENTON: I don't think it would prohibit it. We just wouldn't be -- COMMISSIONER MONTGOMERY: -- there would be state money for it. MS. WHITTENTON: We have to get prior approval to make any purchases. And then if we sold any land, we wouldn't necessarily get to use that money to make additional land purchase. COMMISSIONER ANGELO: The prior approval process would not absolutely exclude the possibility that it might happen. You might be able to get that approval. MS. WHITTENTON: It just makes it slow it down a little, yes. COMMISSIONER ANGELO: And depending on what you get there. COMMISSIONER MONTGOMERY: You have to look at the funding for operations and for acquisition is the short answer. I've always thought that was the case. COMMISSIONER ANGELO: Any other questions, comment? CHAIRMAN ARMSTRONG: Along those lines, I do have one comment -- that we all understand that these are very tough budget times for everybody; and that when the Land and Water Conservation Plan was formulated, we understood that there would be these sort of things. This is a ten to fifteen-year plan. And we are going to take realities as they come. These tough budget times have also brought some focus on the priorities of our holdings. And we have gotten some indications from the Comptroller's office and others that we need to be sure that our assets that we have right now are fully utilized. And that's sort of the other side of the coin here. And I just wanted to make mention of that. MR. COOK: I'd also like to make sure that, on this approval business, we have a decision -- I don't recall exactly -- we've made two or three requests under the present requirement to get clearance. And we've done so, not necessarily because it was required, because we wanted those -- we've been working with those folks closely, and we wanted them to know what we've been doing. We wanted them to understand. And the requirement that was put on us in this last couple of sessions, you know, we have -- for instance, and I'll use a classic example, was at Government Canyon -- you know, where you've got an adjoining piece of property. You've got half of the funding being provided by the City of San Antonio, the rest of the funding being provided, basically, through a grant program -- not one single dollar of the acquisition -- and in effect, what that one did -- and we've got another we're looking at right now down there that actually kind of squares up our property, where we have less fence, less property line to maintain. If I'm -- as a landowner, everybody looks for those kinds of things. But what the group is saying is, regardless of the funding source, they want to be involved. And that's the basic pattern of questioning. Is this going to cost you additional operating dollars? Is it going to help you? Are you going to have to add utilities? Are you going to have to add staff -- those kind of things. And we've been able to satisfy them every time. But it does take some time and effort. But still, in these kind of budget times, it's probably a good, responsible approach. And we can live with it. COMMISSIONER FITZSIMONS: You made a good point there. You don't want to squelch the opportunities, the sort of creative solutions you have at Government Canyon, where not just the City of San Antonio, but SOG [phonetic] and EAA -- CHAIRMAN ARMSTRONG: Private philanthropists. COMMISSIONER FITZSIMONS: It's unbelievable. MR. COOK: And as you know, we have -- our acquisitions in recent years, basically have been limited to access, you know, issues and/or end holdings, or maybe corners that square us up. Those are the kind of things we have been looking for. Now, our land and water plan will certainly be impacted -- could potentially be impacted by this. But we're going to continue to work on it. COMMISSIONER ANGELO: Any more questions? COMMISSIONER AVILA: Yes. Let's say we did sell property, wherever it may be, and we just got some money. And the intent of that is to purchase land elsewhere, in accordance with our plan, our Land and Water Conservation plan, are we in danger of being told to use that money differently? CHAIRMAN ARMSTRONG: I'd like to address that. Because I was intimately involved the Land and Water Conservation Plan, as were several of the commissioners here. And I see this argument developing, or discussion developing, that I think is not an accurate reflection. Simply because we are looking at divestiture, which might or might not raise funds, those funds are not earmarked for acquisition. And I think that's important to understand. It's just an option, not an absolute, you know, requirement. Don't think that just because we are finding ways to work with localities to divest ourselves of a park that, perhaps, is no longer fit to criteria that we've laid out for ourselves as to what a state park should be -- that does not necessarily mean that if funds are raised in that process, that they will immediately go to another acquisition. COMMISSIONER FITZSIMONS: Unless it's appropriate, meets the criteria. CHAIRMAN ARMSTRONG: It would be wrong to assume that that's a fait accompli. COMMISSIONER AVILA: I think it's good to get that out. COMMISSIONER FITZSIMONS: Point is well taken. COMMISSIONER ANGELO: Any other questions, comments? (No response.) COMMISSIONER ANGELO: Thank you, Suzy. That will complete that item and we'll move to item number three, which, again, will be presented by Suzy Whittenton and John Herron. This is the wildlife grant budget adjustment. I believe it requires some explanation. MS. WHITTENTON: Thank you, Mr. Chairman. This item's really a housekeeping item. It's an item to ensure that the wildlife budget for the Conservation Action grants complies with Section 11.043(c) that governs the use of the conservation and capital account, where license plate revenue is deposited. Last August, when we approved the operating budget, funds for this program were included in the budget. However, I mistakenly classified them as operating funds. They should have been grant funds. What the statute says is that license plate proceeds may only be spent for acquisition, development, maintenance, or operation of parks, fisheries, or wildlife projects that have been individually approved by the Commission. So in order to just ensure that we were in compliance, we felt we should bring this item into an open meeting. The funds set aside for this grant program are -- in the budget, there's $700,000 set aside. The funds come from a combination of state wildlife grant funds, federal funds, and these revenues from license plate proceeds. Those license plate proceeds are the ones that can only be used for certain projects -- so the wildlife projects that have been individually approved by the Commission. So this program is to benefit rare species and species in need of conservation. They're grants that require a one-to-one match from the grantee. And so we're just recommending that we specifically approve this as a separate budget item. It won't change anything in the budget. It just clarifies that the Commission was aware that these funds were set aside for this purpose. And there are -- if you have any questions about the specific program, I'll have to call on wildlife staff to help me. COMMISSIONER ANGELO: Essentially, this is a housekeeping item, to correct something that was not exactly correct the first time? MS. WHITTENTON: That's correct. COMMISSIONER ANGELO: Anyone have any questions on that? (No response.) COMMISSIONER ANGELO: If there's no further questions or discussion, without objection, we'll place this item on the agenda for the Thursday commission meeting for public comment and action. Hearing none, it will be done. Item number four -- thank you, Suzy -- this is several grant situations, local park grants first, I guess. Tim Hogsett will present this. Tim? MR. HOGSETT: Good morning, Mr. Chairman, members of the Commission, I'm Tim Hogsett, Director of the Recreation Grants Program and the State Parks Division. I'm coming before you today to acquaint you with the recommendations we will be making tomorrow for funding from three grant programs, two of which are from the Texas Recreation Parks accounts sporting goods tax and the other is a pass-through federal program. Our largest program is our outdoor recreation grant program. The $500,000 maximum grants are 50 percent grants to local governments for acquisition and development of public parks and recreation facilities. We bring these to you twice a year. As of our July 31, 2002, deadline, we had received 43 applications requesting a bit over $18 million in matching funds. We've scored and rank ordered the applications using the scoring system which you've previously adopted. We've conducted site visits. And tomorrow, we will be recommending funding for the top 14 applications, for $16,550,817 in matching funds. And that's all I have on that. COMMISSIONER ANGELO: Any discussion or questions on that particular item? (No response.) COMMISSIONER ANGELO: If not, Tim, the next one is Indoor Recreation Grants. MR. HOGSETT: Indoor Recreation Grants, also from the Texas Recreation Parks accounts sporting goods tax, sales tax revenue, we receive applications once a year for this program, the July 31 deadline. And we're bringing forward to you recommendations for the projects that we received prior to our July 31 deadline. We saw a pretty dramatic increase in the number of applications for this program this time, 25. It's typically been ten or twelve. So I think the news is getting out there. The interest is mounting for the program. We received 25 applications, requesting $15.8 million in matching funds. And, again, we prioritized those by the scoring system that you've adopted. And tomorrow, we'll be recommending funding for the top six applications for $3,411,868 in matching funds. And I'll be glad to answer any questions. COMMISSIONER ANGELO: Any questions on this item? COMMISSIONER AVILA: Tim, when is the next go around on this particular fund? MR. HOGSETT: It will be -- we've sent permanent deadlines now for the indoor program of July 31. And we'll come back every January with those grants. The outdoor program, we take applications twice a year, July 31 and January 31 deadlines, and bring those applications to you in August and January. For our other programs in the Texas Recreation and Parks account, we take applications for our small communities program that we just started January 31 for an August review, and the same for the regional park grants. COMMISSIONER ANGELO: Mr. Cook, do you have something? MR. COOK: Mr. Chairman, excuse me. COMMISSIONER ANGELO: Go ahead. Are you finished? MR. HOGSETT: I'm done. COMMISSIONER ANGELO: Are you sure? MR. HOGSETT: Yes. COMMISSIONER ANGELO: Mr. Cook? MR. COOK: Mr. Chairman, Commissioners, one thing that I wanted to remind you of, and make you aware of, not only in addition to the number of applicants that we have seen increase in both of these programs, we've added some requirements in these programs, at Commission direction, to emphasize conservation messages and, you know, deliver conservation on the ground in some of these sites. Tim, any comments, any thoughts, on that? Is that -- these guys came in and briefed me. And it sounds to me like we really have got people's ears, that they really are getting into those kinds of proposals. Because they get extra points for that kind of thing -- Tim, thoughts, comments? MR. HOGSETT: Yes, that's, I believe, to be absolutely the case. For example, in the outdoor program, one of the things that we're seeing is that it virtually is required that you be acquiring new park land to be able to be competitive. You'll notice in the description, in both the indoor and the outdoor programs, of the top three or four projects that all of them have some fairly significant conservation element in them, whether it be preservation of a wetland, or a nature interpretation facility, or whatever. I agree with Mr. Cook. I believe that it is. And we don't hear, really, very many complaints about it. I think that the local governments are pleased with the direction that the program's taking. COMMISSIONER AVILA: So if they are naming it recreation center, and indoor/outdoor recreation centers, these cities are clear when they come in with an natatorium, they're not going to score high? MR. HOGSETT: If that's all their asking for, probably not, no. In fact, we had -- the lowest scoring project of the bunch was a little community up in the Panhandle. All they want to do is put a roof over an existing swimming pool. COMMISSIONER ANGELO: That would be a stretch, wouldn't it? MR. HOGSETT: Yes. COMMISSIONER ANGELO: Any other questions? (No response.) COMMISSIONER ANGELO: All right. Does that -- you've got another one then? MR. HOGSETT: Yes. COMMISSIONER ANGELO: The final one is the Target Range Grants. MR. HOGSETT: Target Range Grants are 75 percent federal pass-through grants authorized by the Wildlife Restoration Act. They are just what you would expect them to be, grants for infrastructure related to hunter education facilities, target ranges, that sort of thing. We received two applications, requesting a total of $90,000, from two different gun clubs. And we'll be recommending approval for both of those to you tomorrow. COMMISSIONER ANGELO: Any questions on that item? (No response.) COMMISSIONER ANGELO: If not, and there are no further questions or discussion, without objection, we'll place this item on the Thursday commission meeting agenda for public comment and action. Hearing none, that's what will happen. We don't need to make a motion. MR. HOGSETT: Thank you. COMMISSIONER ANGELO: The next item on our agenda is the Kerrville-Schreiner State Park transfer. Mr. Dabney? MR. DABNEY: Mr. Chairman, Commissioners, good morning. I'm Walt Dabney, State Park Director. I'm here to talk to you today of the possible transfer of Kerrville-Schreiner State Park in Kerrville, Texas. We received this park, this 517-acre park, in 1934 from the city, soon after it was built by the CCC. And we paid them $10 for it. And it's a great park. It's virtually surrounded by the City of Kerrville now, right on the river. It has a lot of nice facilities -- campsites, restaurants, shelters, and so forth. Under House Bill 2108, wherein previously approved a transfer of five other sites, the City of Kerrville has come to us with a request that we consider transferring this park back to them for operation. We have $2 million per year authorized by the legislature, out of the grants program, not out of park operating dollars, to effect these kinds of transfers. The grant has to be predicated on a proposal from the city, or county, subdivision of the state, to take this ownership back. Kerrville has put a list of things together, and has requested a grant of $1.8 million to transfer the park back, including the facilities and equipment that is there, to operate it. They also want to contract with us -- which we've done with Lower Colorado River Authority -- to use our central reservations office to continue to make reservations for their campground, which we would be prepared to do. The staff, which is always an issue in these things, and has been -- and we have not, per your directions -- and certainly that is our feeling, too -- no employees have lost their jobs because of this. Some of the employees at Kerrville would choose to become city employees and others that are there would be moved to other state park sites. The transfer terms, as has been the case in the other five, guarantees that the park has to continue to be used as it is now, as a park. They must continue to take care of historical, cultural, and natural resources at the site. It would no longer be called a state park. And there is a transfer clause back, that if they decided subdivide it and sell if off, or whatever, it would come back to us instead. You can't do that with any of these sites. That's not the spirit of the law. The transfer grant would be in '03, '04 if you approve this. And it would let us provide some transition money so that they can get staffed up and start operating the site. It also would let us fix the water and sewer systems, put a new restroom in. And the idea behind all these things is we want to give them a first-class park. They've got a good recreation and parks department. We give them a first-class park to operate. And the people of Texas benefit all the way around on that. Our recommendation will be, tomorrow, will be that you give us the authorization to negotiate a final agreement up to that $1.8 million figure. And if we reach that agreement, we transfer the site. COMMISSIONER ANGELO: Walt, will you briefly give your opinion as to how this does benefit Parks and Wildlife and the state? MR. DABNEY: I think, first of all, there is certainly no net loss to the people of Texas, of park land, which is consistent with the philosophy behind this law. And the City of Kerrville, compared to 1934, is a real city now, and not a small town. They have a very good parks department. This park is quickly becoming a city park, as it is surrounded by development in the City of Kerrville. We certainly -- it's almost a wash as far as revenue versus operating cost, except for the capital piece of that, which over time, certainly, is an issue. We need those people. We haven't filled positions there for a while, knowing that the city was serious about this. The ones that are remaining, we need in other parks right now. And we would use them. So I look at this as a very positive overall situation financially. And, otherwise, I think all of you know, we're down 90 positions anyway and have difficulty in dealing with some of these things. So this is consistent. I don't really have any others on the pond right now. I think if you approve this one, this will be six that were pretty logical transfers. And I don't see many more coming forward that are likely to transfer -- with the exception, as Commissioner Ramos knows, that we might be able to transfer the swimming pool at Lake Casa Blanca to the City of Laredo, if we were to fix it up and give it to them so that they could operate it as a city pool. I'd love to do that, and a couple of more, if we had the chance. But I don't really see those opportunities coming. COMMISSIONER ANGELO: Commissioner Avila? COMMISSIONER AVILA: Walt, are we saying that we're going to transfer this to the City of Kerrville and give them 1.8 million? MR. DABNEY: Yes, sir. We don't give them -- it's a reimbursable thing. They have to go in and do these renovations, and so forth. And then they bill us back. They give us the receipts. There are some that it's transitional money, which is operational. But most of this is actually facility development, rehabilitation, and that kind of thing. COMMISSIONER AVILA: In that particular park, where is the -- what's the time period for the 1.8 million -- MR. DABNEY: Two years. COMMISSIONER AVILA: -- in our costs in operating that park? Now, we don't spend 1.8 million on that park, a year. MR. DABNEY: We spend, right now -- not counting capital -- 335,000, 336,000 a year. COMMISSIONER AVILA: Okay. CHAIRMAN ARMSTRONG: If you include capital, what would you spend? MR. DABNEY: Most of these things that we have to do -- and here, we're going to have to do them -- (Various voices in the background.) CHAIRMAN ARMSTRONG: We're going to have to do them anyway. COMMISSIONER ANGELO: This funding -- the funding that you're going to be able to utilize to do this is funding we couldn't otherwise use to fix it -- MR. DABNEY: We could not. COMMISSIONER ANGELO: -- unless we did it in that manner. Correct? MR. DABNEY: Right. COMMISSIONER AVILA: All I want to know is if there's a transfer. MR. DABNEY: That's correct. COMMISSIONER AVILA: Because it comes from a grant? COMMISSIONER ANGELO: Right. That's correct. MR. DABNEY: And so it doesn't hurt our capital projects, or our bond projects, or our operating dollars at all to fix this? And for us to try to do it otherwise and keep it, we would have to pull this out of Prop 8 money to fix it up. COMMISSIONER AVILA: Okay. MR. DABNEY: So that's another good deal, I think. COMMISSIONER AVILA: And that makes it a good deal for us, obviously. MR. DABNEY: Yes, sir. COMMISSIONER AVILA: Let me ask you this. What is the current site improvements there, versus -- or was that it? Is there anything new? MR. DABNEY: There -- COMMISSIONER AVILA: In that 1.8 million, are we going to do something new? MR. DABNEY: This is what is there now, sir. It's primarily -- CHAIRMAN ARMSTRONG: I have been there. And it's a fully developed park, intensely developed park. MR. DABNEY: And what we would do new -- new things -- there's going to be one new restroom. And we're going to upgrade the existing screen shelters to cabinettes. And these are not fancy. These are just -- what that allows you to do is, for example, put an air conditioner or heater in there, so that you can use them all year, as opposed to just in the better periods of time. And that will help them be successful from a revenue standpoint. The last thing we want to do is try to cut this short, make it difficult for them to be successful, and get something like this back. COMMISSIONER AVILA: Okay. I got it. COMMISSIONER ANGELO: You say you don't see any others on the horizon. Are we actively looking, yet, to see if there might be some? This one came in on its own. Or did you all get this? MR. DABNEY: No, sir. I think we've done that. As you recall, when House Bill 2108 was passed, this body instructed us to send a letter to every subdivision in the state that would be affected by it, that has a park nearby. And this is in response to that notice that 2108 is there, and if you had an interest. We've met and talked with a lot of different people that walked away and said, No, we appreciate what you're doing there. And we're glad that you're going to keep doing it. These are the only ones that I see -- I don't see any more coming as a result of that. And our recommendation -- I think the boss's recommendation is employee morale, and otherwise, we call it good and stop this business. Except that as the law stays in place, if someone does in fact come in, in the future, and says, Hey, things have changed. We want to do it. We certainly will talk to them. COMMISSIONER AVILA: Well, the only thing I'm worried about, is this funding to continue? Or what is the process? MR. DABNEY: Until the legislature changes it, it stays in place. And, again, it's just an authorization to use part of that grant money for this purpose. If this wasn't here, we might could be using that grant money to give additional grants. COMMISSIONER MONTGOMERY: Are we not proactively working on this from the Land and Water Plan? CHAIRMAN ARMSTRONG: Yes. I mean, we prioritized some of our holdings in terms of -- MR. COOK: We have, in effect, done that. COMMISSIONER MONTGOMERY: Yes? MR. COOK: And we'll continue to do so. COMMISSIONER MONTGOMERY: Before the plan had gone out? MR. COOK: Well, even before the plan. CHAIRMAN ARMSTRONG: The plan and what you are talking about, the directive, were not necessarily directly connected. But they are consistent with each other. MR. DABNEY: Yes, ma'am, they are. And that list that's in the plan -- whether there's a list or not, we still have the authority to divest on any given site. The purpose of the list in the plan was, if we had an opportunity, those would be our highest priority to transfer. COMMISSIONER MONTGOMERY: With regard to that list, I think we already explored the possibility of entities other than those local governments taking those over, and maintaining use and preservation requirements. Let's don't stop if the cities don't want them. It wasn't the intention, I think, in writing that plan, that we limit ourselves to local governments. MR. COOK: We have not limited ourselves to local governments. CHAIRMAN ARMSTRONG: We have not. MR. DABNEY: The only problem is money. CHAIRMAN ARMSTRONG: The funding. COMMISSIONER MONTGOMERY: The only problem is -- COMMISSIONER ANGELO: Walt, is there a ceiling on the amount -- MR. DABNEY: It's $2 million. COMMISSIONER ANGELO: -- accepted for transfer? MR. DABNEY: $2 million a year is what we're authorized -- the only problem with what the Commissioner is saying is that the money can only be transferred to a subdivision of the state. If it's a private, nonprofit situation and they're willing to take it, we cannot fix it up for them using for state money. COMMISSIONER AVILA: When do you apply for this money, Walt? MR. DABNEY: I'm sorry. COMMISSIONER AVILA: What's the cutoff date applying for this money? MR. DABNEY: There is none. COMMISSIONER AVILA: There is none. Okay. MR. DABNEY: Not until the legislature -- now, if they took it, then they could come to Tim for a local park grant, possibly, if the city or county would support that, and get a grant, once they owned the site that they took. CHAIRMAN ARMSTRONG: Now, I think everybody recognizes that these are sensitive issues. People care deeply about their park and all that. And we certainly understand that. But I also think that it's important that you all are doing your job looking at these situations, and trying to work things out with the local folks to do something that works for them, that works for us. And that people understand that -- I think I can speak for the Commission in saying that we do not view, necessarily, quantity as the way to fulfill our mission. It may be in some cases. It may be not in others. But that we need to look at each of these situations individually and make sure that what we're trying to accomplish here fits within the larger vision that we have for what you all are charged with doing. And I think the Kerrville-Schreiner situation here is a perfect example of where it's working out. COMMISSIONER AVILA: Yes, ma'am. MR. COOK: I just -- I say thanks to Walt and his staff for working so closely with the city and the folks in the community. There is a lot of personal -- as the Chairman just said, there's a lot of personal attachment to many of these parks. Some of the families were involved in putting these parks together. And this has been done very out in the open -- meetings with the local folks, time and time again -- to be sure that this is something that they support, and that they will continue to provide those services. MR. DABNEY: I think the city will be here tomorrow to talk to you as well. COMMISSIONER ANGELO: Well, I would concur that we've made some real good progress in this area. I know that the purpose of my asking the question about what we were doing proactively was to see if this area, if you felt like there's need for follow-up. And I think you've answered that -- that you're satisfied that the likely candidates have been taken care of, and anything now would have to come as an initiative from the local entity. MR. DABNEY: Yes. COMMISSIONER ANGELO: Is that correct? Is that right? MR. DABNEY: I think that's true. And the common questions back to us are, Are you going to shut it down? And when the answer is no, then the response is, Why would we take it over? COMMISSIONER ANGELO: Why would we want it? Very good. Well, thank you, very good -- good job. This item is a good item. Is there any further discussion on it today? (No response.) COMMISSIONER ANGELO: There being no questions or discussion further, without objection, please say, aye, to go before the commission meeting for public comment and action. Was there any other business to come before the committee, Madame Chairman? CHAIRMAN ARMSTRONG: I think there is. Is this the appropriate time to ask Scott Boruff to step up here and make an announcement? MR. BORUFF: Madame Chairman, Commissioners, my name is Scott Boruff, Deputy Executive Director of Operations. And it is with great pleasure, I would like to announce that we've selected our new Director of the Infrastructure Division. And it's Mr. Steve Whiston. (Applause.) MR. BORUFF: He will actually take over sooner than immediately, since he's been in this role for the last six months. CHAIRMAN ARMSTRONG: Steve, I'm still waiting for those stain colors. Congratulations! MR. WHISTON: Thank you. I'm looking forward to it. COMMISSIONER ANGELO: Is there any other business before the Finance Committee? (No response.) COMMISSIONER ANGELO: If not, Madame Chairman, the committee is adjourned. (Whereupon, this Finance Committee meeting was concluded.) C E R T I F I C A T E MEETING OF: Texas Parks and Wildlife Department Finance Committee LOCATION: Austin, Texas DATE: January 22, 2003 I do hereby certify that the foregoing pages, numbers 1 through , inclusive, are the true, accurate, and complete transcript prepared from the verbal recording made by electronic recording by Penny Bynum before the Texas Parks and Wildlife Department. 02/12/03 (Transcriber) (Date) On the Record Reporting, Inc. 3307 Northland, Suite 315 Austin, Texas 78731