Texas Parks and Wildlife Commission
Finance Committee Meeting

May 24, 2006

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

BE IT REMEMBERED, that heretofore on the 24th day of May, 2006, there came to be heard matters under the regulatory authority of the Texas Parks and Wildlife Commission in the Commission Hearing Room of the Texas Parks and Wildlife Department Headquarters Complex, to wit:





COMMISSIONER FITZSIMONS: Good morning. Meeting is called to order. Before proceeding with any business, Mr. Cook has a statement to make.

MR. COOK: Thank you, Mr. Chairman. A public notice of this meeting, containing all items on the proposed agenda, has been filed in the Office of Secretary of State as required by Chapter 551 Government Code, referred to as the Open Meetings Act.

I would like for this fact to be noted in the official record of this meeting.

COMMISSIONER FITZSIMONS: Thank you, Mr. Cook. We will begin today with the Finance Committee.

Mr. Holmes.

COMMISSIONER HOLMES: Thank you, Mr. Chairman. The first order of business is the approval of the previous committee meeting minutes, which have been distributed. Is there a motion?



COMMISSIONER HOLMES: Bivins and Ramos. Discussion?

(No response.)

COMMISSIONER HOLMES: Hearing none, I'll ask the question. All in favor say, aye.

(A chorus of ayes.)


(No response.)

COMMISSIONER HOLMES: Motion carries. Item number one, Land and Water Plan update.

Mr. Cook.

MR. COOK: Thank you, Mr. Chairman. This Friday we will, along with several other state agencies, go down and testify to the House Appropriations Subcommittee on General Government. This subcommittee is chaired by Representative Warren Chisum.

We have been asked to provide a brief presentation on our operating budget and plans to carry out legislative initiatives, along with other matters affecting the fiscal condition of the Department and the state. We'll do that in five minutes. It'll be brief and short and, I think, pretty much just saying, here's what we did this year getting the year started; here's where we are, and that's about how long it will take unfortunately at times, but that's what we're preparing for.

Administrative Resources and Information Technology staff continue to work with staff in the field on fine tuning our new boat registration and titling system. It was implemented in early January. That process is going very well. As with all new systems, there are issues that have to be worked out. Staff is committed to make the system and processes run as smoothly as possible. I think, from what I'm hearing from people across the state, our folks are doing a great job, working well with these people, and it is functioning well.

Each of you has, I believe, at your seat one of these booklets prepared by Mr. Friedkin and some of his folks. I want to tell you about a project that they've got going ‑‑ just very briefly. Then I'll let Mr. Friedkin and Mr. Ramos speak to it, if they wish.

Under the leadership of Commissioners Friedkin and Ramos a group of potential partners and sponsors have been working on plans to hold a professional bass tournament on Lake Fork in April 2007. The goal of the group lead by Gulf States Toyota is to create and execute an event which will raise significant funds to benefit the Agency's fisheries and youth programs. The Texas Bass Classic will be governed by the rules and regulations of TPWD, and will set new standards within competitive fishing industry.

Mr. Friedkin.

COMMISSIONER FRIEDKIN: I think that states it well. I just want to thank Phil and his staff and everyone at TPWD who's been involved in that. I think it's going to be a great event. We're looking forward to it.

MR. COOK: We are very enthused about it. It's shaping up to be a great event.

COMMISSIONER FITZSIMONS: We thank you for your work and Donato, if you have any questions ‑‑

COMMISSIONER RAMOS: And of course I can't say enough to thank Dan and his support staff. I've always felt that, just like our White-tail industry, the bass industry is a tremendous asset to the state. What I think is unique about the bass industry is that it offers an opportunity to more of the youth of the state to fish. It's not as expensive to buy those fishing rods and lures than it is to go buy a seven-millimeter or magnum rifle and access a hunting lease.

So we thought it was time to showcase, not only Lake Fork, but all the other great lakes in the state. And this is kind of what drove this project, and we think it'll accomplish at least three things: 1), it's going to hopefully bring some money to our fisheries to improve the quantity of our fish; 2), it will serve as an educational experience for the youth of the state to learn about fishing and how great it is to go spend an afternoon and catch a six, eight, or ten-pound bass, whatever. Lake Fork has a lot of those. And then lastly ‑‑ and I have to give Phil credit for this ‑‑ and that is setting a new standard at these fishing tournaments to where you can actually have a tournament within the standards, as they exist there. It's kind of a new face. Phil has to get full credit for this. Anyway, we're excited. We think it's going to be great park-wise, a good deal.

MR. COOK: My understanding is ‑‑ initially the plan is to, as the years go by, to move around the state to different locations?

COMMISSIONER FRIEDKIN: That's correct, serve the whole state over a period of time.

MR. COOK: Very good. All right. Thank you, sir.

COMMISSIONER HOLMES: $1 million purse.

COMMISSIONER FRIEDKIN: That's what makes them fall in.

COMMISSIONER RAMOS: The bass industry does great in this state and throughout the country. We thought it was time to start waving our flag. We're here. We have some great bass fishing in Texas.

COMMISSIONER HOLMES: Is that all, sir?

COMMISSIONER PARKER: I want to compliment Donato and remind everybody that this happened because a father took his son fishing on Lake Fork about 18 months ago and he came away from there with a spark in his head, that it was a father taking a child fishing. They had an experience, and this is what has come of it.

COMMISSIONER RAMOS: That actually confirms everything that I have heard about Lake Fork.


COMMISSIONER RAMOS: And the thing is there's a lot of other lakes like Lake Fork throughout the state, and that's a reflection of our staff and our dedication to our fisheries. The bass industry's huge. I mean we have to recognize that the bass industry is a huge industry in this state.

COMMISSIONER HOLMES: It's a wonderful program, and thanks to both of you. Anything further?

(No response.)

COMMISSIONER HOLMES: Item number two, state parks funding issues.

MR. COOK: In a way of introduction here, I want to give credit to Walt Dabney. He has been presenting this program across the state ‑‑ I wouldn't even hazard a guess how many times, but he's done a great job in many different locations, many different audiences and types of folks who are interested in our parks. I thought it was important that you hear exactly what those folks across the state have been hearing from Walt and have the opportunity to add to, as you would wish. Thank you.

MR. DABNEY: Mr. Chairman, Commissioners, I'm Walt Dabney. I'm going to stand up in a second to give the presentation, because I feel better on my feet than sitting down here. It cuts off my circulation. Anyway, as Bob said, we've given this all over the state. We put this program together in response to folks inviting me and us to come and talk to them about what had happened to their park. We, as you know after years of having difficulties, ran into a situation where we really affected the operations at nearly half of the state parks in the system this year. We've cut back in operations in about 50 of them and had to eliminate a number of positions. People literally called us and wanted to know, why are you doing this to my park. And one of the things that you know, I'm sure, and it was loud and clear to me that when I show up in Palestine, or I show up in Cooper, or I show up in Giddings, those parks ‑‑ whether it's Nails Creek over at Somerville, or whether it's Doctors Creek at Cooper Lake or the Railroad ‑‑ that is their local park. It may be a unit of the state park system, but when it goes down ‑‑ both because they like to use it and because it means something to them economically ‑‑ they are upset about this, and I think we're seeing that all over the state.

As Bob said, I've given this probably in two dozen or more places from River Oaks Country Club to a town meeting in El Paso, and I've probably got another dozen more scheduled. I don't know of any more with a tuxedo, Commissioner, but I've got it just in case. Anyway, I'm going to start that presentation and will be glad to answer any questions afterwards.

This idea of parks is really an American idea ‑‑ the notion probably coming from our ancestors who came, at least initially, from Europe where you didn't have the opportunity to have big special places that weren't reserved for royalty or the very wealthy.

It was manifested initially in this country in 1872 when this nation set aside Yellowstone National Park. One of the interesting things about that in the early days is folks said, I don't know why you're doing that. It's all the way out west. No one will ever get there. You probably hear that with Big Bend Ranch now. Someday people are going to be saying, thank God somebody was thinking not five years down the road, but 50 years down the road, and they set these places aside. This idea of parks in the United States has grown to where, not only are special places like the Grand Canyon and Yellowstone enshrined forever and protected forever, and indeed they not only are American treasures ‑‑ there's only Grand Canyon or Yellowstone ‑‑ so they're truly international treasures.

The national park system is a repository of some of our special historic sites, whether that be Independence Hall, or Manassas, or Gettysburg or whatever. This idea has grown to where every one of the 50 states now has a state park system. And indeed the world has grown to where this idea has been copied in probably 150 countries around the world, both to protect what they have that's unique and special, and also because they understand this is an important economic factor. The mission of state parks, everyone would understand, has a definite recreation destination, a place to go have a good, safe time with your family. It is also more than that. It's a repository where we keep some of our special historic resources or cultural resources and certainly examples of the diversity of the Texas landscape, and thirdly, a place where we teach people about that, whether it's school groups ‑‑ we deal with thousands of them every year ‑‑ or whether it's the visiting public in general.

There are 114 state park units, including 34 historic sites. Our visitation is now about 10.5 million visits a year to the system. Within this we have some of the great examples of Texas history, whether that be the Indian culture, the Native American prehistory, or whether that be the establishment of government presence. An example of that certainly are the frontier forts, where most of these weren't actually Indian battle sites or anything. They were a place to establish the presence and law and order on a frontier that was pretty wild at that time.

It also includes some very unique and challenging experiences or units, like the Texas State Railroad, which was a vital piece of East Texas history, and it is one that's got a lot of interest right now, because we've got to make some deliberate decisions about the Texas State Railroad. It's a very expensive operation to run, but it is a neat experience if you've never been there. Nothing is easy at the Railroad. You don't go to the auto parts store to get new parts for this thing. We have to make everything that we use there.

Another challenge that this state has got to deal with is the Battleship Texas. We've got some ideas to do this better than we've done it in the past, which is hauling it to dry dock and fixing it for a while and then hauling it back and doing it again. Makes no sense in the long term. We need to address the Battleship Texas. It's a very popular destination. It truly is a nationally significant artifact ‑‑ not so much Texas significant, but this is the last of these dreadnought battleships in the world and fought in World War I and World War II. It actually supported our landing at Normandy. So there's a lot of interest in what we're going to do with this. A place like Sauer-Beckman Farm is one of our historic sites. It's a place where you can bring school kids out there to experience what it was like 70 or 80 years ago, and it absolutely blows them away that 80 years ago folks were not in fact going to HEB to get what they needed. They had to grow it, and they had to put it up. They had to kill it, and render it, and get it ready for the winter, or they didn't eat in the winter. There was no HEB to go to. It's really an incredible experience for them.

San Jacinto, one of the sites that are as dear to Texas as all of you learned growing up, it's the place where we won our independence from Mexico. It is a bigger story than that. It is truly a nationally significant site. It is the place where in 18 minutes in April 1836 ‑‑ in an 18-minute fight all or parts of seven are what are now the United States were won. It's as big as the Louisiana Purchase or the Alaska Purchase and that kind of thing. So it is truly a major story. It is also not a story about whites and hispanics fighting, because the Texicans included all ethnic backgrounds. They were fighting a Mexican dictator who was not going to support freedom for them. So collectively they were fighting Santa Ana. It's a wonderful story to tell. The Casa Navarro House in San Antonio ‑‑ Jose Navarro was a signer of the Declaration of Independence and a true Texas hero. Also we have many sites in the system that represent the diversity of the Texas landscape. If you don't own your own place, this is what most Texans have to go enjoy, and within this system we've got great examples, from east to west and north to south, of what Texas was like, and these places will stay this way forever. It's a great place where, if you don't have your own place to go, you make those family memories that'll never go away, and they're terribly important to growing up. I guarantee you that if these kids look at this picture some day and they're telling the story about how we went fishing at this park with my dad, and the redfish we caught was at least as big as my little brother, he's got the picture to prove it. It's also a place where you can go to do almost any kind of activity you want to do ‑‑ great adventures in Texas state parks.

One of the places where we had to cut back operations was at Nails Creek at Lake Somerville, a major equestrian destination. You think of Texas as being this great equestrian state, where we've got all these cowboys. If you don't own a ranch there are very few places, if you own a horse, to go ride. The park system is one of them. These folks are a constituent group that are really coming to bat saying, we need more of these places. We don't need to be shutting down what we have.

Education. If we're not teaching these kids about their history, we're not teaching these kids about the important places and events that made Texas what it is and made us who we are. You may as well live anywhere because there's nothing that grabs you right here, that grounds you back into who we are as Texans, or in fact in the national system who we are as Americans. If you don't understand natural science, if you don't understand interrelationships with plants, and animals, and water, and air, we will continue ‑‑ as these young people grow up to be parents, and voters, and legislators, and decision-makers ‑‑ to make stupid decisions that maybe someday are irreversible in taking care of the living in an environment that we are constantly affecting.

Well, we've got a great system, but this system is indeed in some serious problems. Just a little background on the budget issues that got us here. If you look just at the last five years ‑‑ I've been here seven years now wrestling with this, with certainly the support of this Commission and our leadership here. Just in the last five years if you look at our budget, it's basically been flat ‑‑ actually down a little bit in 2006. The big problem is with $1.5 million or $2 million we're down in 2006, our expenses have gone up significantly in the last six years ‑‑ five years. Obviously fuel costs, utility costs, all those kinds of things, have escalated significantly. We've brought on the World Birding Center in Government Canyon and some other places that we didn't have the full operating costs available to get those started. In fact, Government Canyon is a great example. You can see downtown San Antonio from the hill on a mountain bike trail in Government Canyon. We're open four days a week. I mean, this is a park that ought to be open fully. It ought to be available to the millions of people that are in San Antonio, and we were only able to open the door four days a week. Personnel costs have increased. So we're down at the beginning of this year somewhere close to $8 million, just in where we were in '02, and we were already in trouble in '02.

What that caused in December, we eliminated 73 more positions, because the year before that we'd already dumped some positions. We cut back operations at about 50 parks, and that includes taking some of the historic sites down to two or three days a week being open. Some parks we converted from overnight use to day use only. We cut back hours of operation and closed some facilities, at least seasonally. The Legislature gave us the authority with Rider 27, that if we generated additional revenues, we can apply to use those revenues. That's the only thing that kept the wheel from completely flying off the system. I had another 87 positions ‑‑ that would have probably been 90 or more by the time we pulled the trigger on this ‑‑ that were going to have to go; that we couldn't pay. That would have shut down a whole bunch more parks. And when you shut down more operations, then you don't collect revenue, and when you don't collect revenue, that makes your problem worse. We would have been in a complete downward spiral, I think, without Rider 27. We would have had a crash of the whole system. So we're holding our own. This $4.88 million that the Comptroller certified available to us to operate didn't restore anything. Those 50 sites are still in reduced operation. We didn't bring back any of these 73 positions, but we didn't go to the next round of cuts. So Rider 27 actually brought us up some and kept us from having to go more drastically in the hole.

Texas Recreation Account. The one that you give grant approvals all over this state ‑‑ extremely popular. It provides these kind of outdoor recreation grants, indoor recreation facilities and so forth. That program in 2002 had, with appropriations and interest, about $20-plus million available to make grants. We still weren't able to award all the grants that we had applications for, but now we're down to just $5.5 million with interest. And we're able to fund less than one in four of the people that are actually applying. And there's fewer applying, because they know we don't have any money now. And this is to build new city and county parks with at least a dollar-for-dollar match. Most of the places that build a park put a whole lot more than a matching dollar into this program. We're doing everything we can to make this work better.

We're using lots of different volunteers. You might question whether the TDCJ crew is a volunteer group or not. "Life is Better Outside" is our motto. After each day's work we give them a bumper sticker to take back with them. I don't mean to make light of this. These guys do us a lot of work: 85,000 man-hours a year. I wish it were four times that much. They love coming out. It's great for the taxpayer. It's great for them. They'd rather be doing that than sitting in a cell. A lot of them have said, Man, when I get out, I want to come back and show my family what we helped build out here. Community service workers, people that screw up, and the judge says, you're going to have to go do something somewhere useful, and a lot of them come to us.

The real big story, however, is the true volunteer ‑‑ over 400,000 documented hours every year. If we didn't have available to us these programs, we literally could not operate the system. These people do things like building trails, but they also collect money, they give programs, they mow grass, they clean bathrooms for free.

MR. COOK: It's worth pausing there. Notice that total FTE, full-time employee equivalence. Basically you're talking 300 employees, the work of that we don't have to pay ‑‑ not one cent.

COMMISSIONER FITZSIMONS: How did you figure my Boy Scouts in there, like five Boy Scouts equal one person?

MR. DABNEY: At the most.

COMMISSIONER FITZSIMONS: When we did our project ‑‑

MR. DABNEY: If we can get a Girl Scout crew in there, that'd be smart.

COMMISSIONER FITZSIMONS: My Boy Scout troop is probably worth negative one FTE.

MR. DABNEY: We actually do get a lot of Eagle Scout projects coming into parks that people are looking for. This number is equivalent to about 25 percent of our paid classified staff. I mean, they're incredible, and they are wonderful. They have to work at least 25 hours a week. Most of the time they're working 40, to 50, or 60 hours a week. They just absolutely want to help.

We're doing as many innovative things as we can. At the Texas State Railroad we implemented, two years ago, a Kids Ride Free Program if we had vacant seats. It pays to have two paying parents bring two or three kids on the train. As long as it's full and we've got as many paying customers, it's increased our ridership and our revenue significantly in those two years.

The Free Fishing Celebration ‑‑ we call it "Fishing Free in State Parks" ‑‑ is a great deal. It isn't losing us any fishing license. Just think about it. If you have somebody coming from Michigan ‑‑ retired folks ‑‑ and they're going to make a decision, because of a $60 license, to come stay with us two or three months, because they can fish free ‑‑ that for Texas is a great economic deal. It also encourages people that want to try fishing, but don't want to buy a license, to maybe get into it and go fish elsewhere.

State Park Annual Pass. All of you I know have one, and I do as well. It's a great deal. We have sold just under 5,000 more of these this year than we did last year. People are loving this. It's really a passport to Texas state parks, and it is going extremely well right now. It's a great gift. People are giving these as presents to folks. For $60 for a year, you can go in every single unit of the state park system, as many times as you want, with whoever is in your vehicle. A lot of people talk about parks are not a good business deal. That actually is not true. I don't know of many government agencies that make any of their budget back. We certainly do, but most parks do not in fact turn a profit, if you look at just the budget and just the revenue coming in.

Texas Coalition for Conservation contracted with Texas A&M University to look at 80 parks, and they measured these four things: expenditures, impact on sales, personal income and jobs measured. And what they found out ‑‑ if you interview people that are coming in there, and you eliminate those that already live there, and you eliminate those that came because they were coming to visit Uncle Ned or whatever, and you just measure those people that came there because the attraction, because of the park ‑‑ it's a significant number. Looking at Bastrop for example ‑‑ Bastrop actually, I think, basically breaks even now ‑‑ but in '04 ‑‑ it's a good example to use ‑‑ we lost $77,000, but we didn't. If you look at the impact to Texas of Bastrop State Park and bringing people to Bastrop County that would not have come otherwise, $2.5 million in impact on sales, over $1 million in impact on personal income, and all a part of 84 jobs created in that area. That's a pretty good return on your money. In the State of Texas as a whole, A&M says that the impact on sales is just under $800 million, mostly in rural Texas; the impact on personal income, $456 million; and just under 12,000 jobs created by the park system being there. So, we collect $37 or $38 million a year; our budget, $56 million ‑‑ we're looking at $28 million in tax money, if you looked at it, that is keeping this system afloat and generating that kind of economic benefit to Texas. Why do people come? According to the Texas travel industry they want these kind of things, almost all of which are found in the state park system. According to A&M we are the accumulative, the primary destination for tourism in this state, where tourism is the second biggest component of the economy in Texas. And we are second in the United States behind California as a tourist destination. We've got some great attractions ‑‑ obviously Palo Duro, the new World Birding Center down in the Valley is really going to be an international destination. You're going to have a little briefing by Director Russell Fishbeck tomorrow on where we are with the World Birding Center, but truly people are coming from all over the globe to Texas, because we are such a great birding destination, especially down in the Rio Grande Valley.

What are the problems? If you have an attraction and it is not good ‑‑ I talked to some folks the other day ‑‑ we're not ready to market Texas the way Arkansas and some of them are doing right now. We're not there. The way we've kept going is we haven't bought the last few years. We haven't replaced equipment. All these mowers are shot. We use them to part them out to keep a couple others going ‑‑ you're talking about a $500 mower here ‑‑ huge waste of personnel time to keep this going.

I've got the biggest collection of packrats in the world. They won't get rid of anything, because they know they're going to need it someday to keep something else going. We talked about the Railroad. The only thing new in this picture are the railroad spikes. And the numbers to get the Railroad going include the fact that we've got to replace most of the crossties at least in about 18 or 19 miles of the track. You're talking about another ‑‑ with synthetic crossties or concrete crossties ‑‑ it's just under $600,000 a year to replace 700 of those a year. You're talking major.

Battleship. We've got to quit patching the hull of the Battleship, get it up out of the water in a permanent solution, and start putting our money on the inside of this, stabilizing it and restoring the rooms, so that it is truly a wonderful experience. It's a great experience now, but we've got too many of those rooms that are locked up to the public ‑‑ lots of behind-the-scenes stuff.

Obviously the San Jacinto Monument is now closed to visitation and hopefully will be open in the next couple of months. Behind the scenes, not only at San Jacinto, but at a lot of these places where you don't see ‑‑ these are old. Thirty-one of the parks were built by the CCC. Thirty-four of them are historic sites, but even many of these other parks are 40, 50, 60 years old. I was telling somebody that the restrooms, four of the restrooms, I was cleaning in Inks Lake in 1966 they're still cleaning or trying to clean today. They are worn out. Speaking of which, winter destination ‑‑ this is Mustang Island. If you're a winter Texan coming down from Michigan ‑‑ and we've got this big ad campaign, Come to Texas State Parks ‑‑ and you show up to Mustang Island to use the restroom, or if you ended up at Goose Island instead, this is what would welcome you. And that is not a good reflection on Texas, and it would blow up on us as they went back to try to market this to their folks about coming down here. Again, a lot of our facilities are great, but a whole lot of them are in trouble. It's difficult to maintain these kinds of things.

Our equipment, as I said, is tough. I was talking to somebody the other day. He said, do you know how old that tractor is? I said, no. He said, I'm 39, and it's four years older than I am. And this is typical of what we have. Our vehicle fleet is ten years old on the average. We're putting more money into some of these vehicles than they are worth, just to keep them running.

COMMISSIONER FITZSIMONS: You missed the duct tape.

MR. DABNEY: I forgot. Commissioner Holmes or Commissioner Fitzsimons could be giving this program as well. What the Chairman is talking about ‑‑ if you were very observant before I went past that, that is duct tape across the front of that thing holding the hood on this 43-year-old tractor. Our guys won't throw anything away. I mean, that truly is their part store. We rag on them all the time. Get them off the inventory. They look like you've got a real vehicle out there. Look at the door in the back. They will put that door on some other car. They just won't get rid of them.

Nature beats us up on a regular basis. Hurricanes ‑‑ especially Rita ‑‑ knocked us out in five parks. We're nearly back online in most of them to some extent. Our infrastructure's aging. Much of the bond money that we've spent so far has gone into water and wastewater. You don't see the improvements above ground, because we had such a backlog of those kinds of things, and obviously we needed to be fixing them. Callahan at Choke Canyon is a perfect example. That park is closed now because our water system failed. We're doing major repairs now to try to get it back online ‑‑ at least a temporary or emergency fix. So we're not doing very well taking care of what we have, 114 units of the park system.

Several studies in the past ‑‑ A&M, Governor Bush put a group together, including Chairman Fitzsimons, to look at taking care of Texas. Texas Tech did a follow-up study. All of these said Texas does not have enough lands for this population today, and they've got to get moving to meet the needs of a population that may well double in the next 15 years ‑‑ for the future. The Legislature, in our Sunset, told us to review these studies and to look at this ourselves. We put together what we call our strategic plan, the Land and Water Resources Plan. It calls for adding lands to existing parks. It calls for the establishment of four new state parks near the major metropolitan areas. We haven't done any of it, and there is no money to do any of these. There is no money to add any facilities to existing parks.

So with that, the last thing somebody asked me the other day ‑‑ is this taps or reveille. I like to think it is reveille, with all the help that we're getting now. The Chairman has appointed a State Park Advisory Board. And they're looking at this very clearly, but I will just tell you ‑‑ after 40 years in this business ‑‑ this system's in trouble. We are caretaking this system right now. I don't have the staff to invite new people in. We don't have the facilities or the equipment to take care of them. We literally are in a caretaker mode, and this has got to turn around pretty soon. We're at 49th per capita spent on parks, and it really shows that now.

With that, I'll be glad to answer any questions you might have.

COMMISSIONER FITZSIMONS: Walt, as you know, I've been with you doing this a couple of times, one memorable one in Houston. I thought it was really interesting where your presentation and John Compton's on that $28 million number. Think about that $28 million number ‑‑ really all the net dollars we're putting in, and we're collecting $104 million in sporting goods sales tax. I think everybody around this table knows what the hook and bullet communities would do if less than 30 percent of their money got to where it was needed. I think that's worth focusing on.

The other thing that we've learned ‑‑ this is a great presentation. The one thing I don't want ‑‑ and I've said this to the Advisory Group last week ‑‑ don't get too focused on fixing the bathrooms, because pretty soon you're going to hear, how much for the ties, how much to fix the bathrooms. If you do that you're going to lose focus on the big vision and the plan for us to be able to really fund the vision that's in that plan: new parks, taking care of parks. Otherwise you're just back to zero, and going back to zero is not going to get us to the goal that we've set out in our Land and Water Conservation Plan. So that's just my perspective on that.

One of our State Park Advisory Board members just walked in. Janice Elledge is in here. Well, we were going to have a presentation next on that, but they're doing great work. John Montford, in typical John Montford style, is bringing a laser to this issue.

There's one other thing I wanted to mention on Government Canyon State Natural Area. Not only is it only open four days a week ‑‑ I was out there the other day riding my bike. Eight years it took us to open four days a week. That's not really ‑‑ let me put it this way. At that rate that's not a ten-year plan that we have. It'd take us a lot longer than that.

COMMISSIONER HOLMES: That's a great presentation, Walt. Thank you. You've really highlighted the issues that we're confronting, and it's going to require the work of really everybody in this room and quite a lot more to help rectify this. And we're getting great help out of Chairman Hilderbran. I see Todd back there, and we appreciate all that.

MR. DABNEY: Thank you.

COMMISSIONER HOLMES: Any other questions for Walt?

COMMISSIONER RAMOS: I have one question. Walt, towards the end of your presentation, you mentioned that we rank 49th in the country in, I think you said, allocation of cost per capita for parks.

MR. DABNEY: Yes, sir.

COMMISSIONER HOLMES: Can you elaborate a little bit on that? I guess what they've done is they've said, the Legislature or Parks and Wildlife, whatever, has spent X number of dollars.

MR. DABNEY: They're looking at our total budget and the population and looking at a per capita figure there.

COMMISSIONER FITZSIMONS: With revenue at $28 million and that number?

MR. DABNEY: They're looking at the total number.

COMMISSIONER FITZSIMONS: With that number we're even lower.

MR. DABNEY: We're 54th.

MR. COOK: As somebody said the other day, thank God for Kansas.

MR. DABNEY: Yes. Kansas is the only one below us, and if you look at Louisiana ‑‑ I talked to the director there ‑‑ is over twice as much as we are, Louisiana is. New Mexico is three or four times more than we are. Oklahoma is two, or three, or four times more. Every state around us ‑‑ and I guarantee you, they are intercepting people coming to Texas.

COMMISSIONER FITZSIMONS: Our customers drive through every one of those states on the way here.

COMMISSIONER RAMOS: Can we take that data and ‑‑ for example in Texas, $30 are being allocated per citizen for parks as compared to other states that have $80 or $90. Do we have that data? I'd be interested in that.

MR. DABNEY: We do have that data. A&M is reworking it right now, because depending on how a state reports it ‑‑ they may report state parks in there, they may throw their museums in it and some other things. John Compton is going to try refine this so he's just talking parks, but I've got some of that initial data right now. I think the national average is $8 or $9, and we're at $2.30 or something like that.

MR. COOK: As I recall, almost any way you look at those kinds of information on state park funding ‑‑ and there's four or five different ways that they present it through the National Parks, State Parks Association ‑‑ we're 45th, 46th, 48th, 49th in every class.

MR. DABNEY: With one exception, and that is how much of our budget we actually recover in revenue. We're in the top, probably, 10 percent.

COMMISSIONER PARKER: Which speaks highly.

MR. DABNEY: Florida has 170 state parks. You were down there, Chairman, when they were talking about this. They have the same revenue with 170 state parks that we have with 108. You were there, too, Commissioner. We have milked this revenue about as much as we can without really turning people away.

COMMISSIONER FITZSIMONS: Which also shows the public support.

COMMISSIONER BROWN: Do other states have the sports tax?

MR. DABNEY: Three other states use some formula of the sporting goods tax. Most of them have some combination of revenue, dedicated real estate tax, a bunch of different things. I had a presentation to the Advisory Board the other day that has that information. I could give you a copy of that presentation, and it'll give you some ideas of what other states are doing.

COMMISSIONER FITZSIMONS: Arkansas did a percentage of sales ‑‑

MR. DABNEY: One-eighth of one cent sales tax.

COMMISSIONER FITZSIMONS: — which involves sales. Colorado is a dedication of the lottery. Florida is mainly real estate transfers.

MR. DABNEY: Five of them are still using cigarette tax.

COMMISSIONER PARKER: Missouri and Oklahoma do the same thing. In fact the sequence was, I believe, on the one-eighth of one cent sales tax ‑‑ Ohio, Pennsylvania, then Missouri, then Arkansas, then Oklahoma.

COMMISSIONER HOLMES: The sequence in terms of passage of that.

COMMISSIONER PARKER: Yes, the historic sequence.

COMMISSIONER HOLMES: We have a very identifiable stream of revenue from the sporting goods sales tax, which in its totality is adequate to carry these needs, and there's a great nexus between the people that provide the sales tax revenue on sporting goods and the people that use our parks system. And I know that you ‑‑ we've all worked on it ‑‑ had recent conversations that would help tie that closer together to actual appropriation.

COMMISSIONER FITZSIMONS: Ned's point is really important, because a lot of people will back away from that and say, now, wait a second. Softballs, tennis rackets, what does that have to do with it? That's that local parks grant program. Don't back away from the fact that, as Ned said, there's a logical nexus between spending the money, paying your sales tax and expecting that to go to a place to use it, the same way you expect your gasoline tax to fix a pothole.

COMMISSIONER RAMOS: And in line with that there's a direct nexus between deferring maintenance and then having to have a capital expenditure, and it's my concern that you can defer maintenance for some period of time. At that point the deferral becomes a capital expenditure. So the longer we wait the more costly it's going to be for us and the state to get the parts.

COMMISSIONER HOLMES: That's absolutely right.

MR. DABNEY: Another piece of that, sir, is if you bond it and then have nothing in bondage, you can't do a logical, planned approach to fixing this.


COMMISSIONER PARKER: And the critical thing that we need to remember is the great job that our parts people are doing. The 77th Legislature cut our parks budget revenues by 5 percent; 78th, 13 percent; 79th, 5 percent. And then you have inflation on top of that. We are at a ‑‑ they've got us by the jugular vein.

COMMISSIONER FITZSIMONS: There's an interesting point to that though, John, is that those cuts are disproportionally larger in the local parks system, where you go from $20 to $5 million. This means in simplest terms, if you were coming in from a local community for a match of $200, you're now at $50, which is the difference between building their parks or not.

Your comment, when you showed all those studies and having been involved in a few of those, and some of them hopefully not just doorstops ‑‑ you will hear over the next year and a half, gee, why all of a sudden is this a big issue? When I signed that letter on the Tributary of Texas study in October 2000, that was in the first paragraph of the executive summary. It says, if we don't do something on park funding, right now, they're going to be in serious trouble. So that's been on the record for some time.

COMMISSIONER HOLMES: It's not a new message.

COMMISSIONER FITZSIMONS: It is not a new message. If somebody ‑‑ do the math wrong and wake up one day and go, Oh, my God.

COMMISSIONER PARKER: But now the chickens have come home to roost.

COMMISSIONER HOLMES: It's now visible in the infrastructure with Walt's good work around this thing.


MR. DABNEY: One last point that I would make, that Dr. Compton made here to the Advisory Board, is that it's one thing to do a survey and people to tell you that they support additional funding for parks, but he put a slide up there that shows that virtually every time a bond issue goes before the Texas voters or the national voters, it wins overwhelmingly. There were eight, I think he said, last year. Every one of them won by over 60 percent to buy parks.

El Paso passed them three years ago, four years ago. It, I think, was the only one of the bond initiatives in El Paso that passed. People not only support them philosophically, they're willing to pay for them, and they're wondering, I think, what's going on.

COMMISSIONER HOLMES: Great presentation.

Any more questions for Walt? I really endorse your view that this is the single most critical issue that this Department faces.



MR. DABNEY: Thank you.

COMMISSIONER HOLMES: Item number three. State Parks Advisory Committee update.


MR. BORUFF: Mr. Chairman, Commissioners, my name is Scott Boruff, Deputy Executive Director of Operations, here today to give you a briefing on the State Park Advisory Board process and the meeting that happened last Friday. First of all, the Chairman appointed this committee about 75 days ago. The committee has been in kind of a hurry-up-and-get-something-done mode. They've met twice in the last two months. The last meeting occurred last Friday.

The first meeting had occurred about 30 days prior to that, and the staff was asked to present information, particularly financial information, about the state park system, what we currently have, what our current operating budget is, and what we think would be reasonable recommendations for additional funding to address the issues that Mr. Dabney just outlined. I will say that we also were given a pretty straight directive to make sure that what we came forward with was adequate but not excessive. So we really went through quite an extensive process. Mr. Dabney, Mr. Sholley, and all the regional directors met many, many times and kind of combed through what they would need to do this state park system well, but not excessively.

So, we came to the first meeting with some broad ranges of numbers. We hadn't had a lot of time to look at it. Mr. Montford, the chairman of the Advisory Board, instructed us to go back to the drawing board and come back and work closely with his Subcommittee on Finance with some more closely honed numbers that didn't give such broad parameters. I will say that in the interim we met probably five or six times with the Subcommittee on Finance. We provided them reams of data. We sat down with them many times and kind of looked at ‑‑ really on a park-by-park basis what the park leadership believed was necessary to run the parks appropriately. I will say that the ladies and gentlemen in the state parks leadership group have a combined 200-plus years in the state and federal park systems. So, I'm not sure you could find a better-qualified group to sit down and say, this is what we need in our state parks. The numbers that were rolled out last week ‑‑ I'm going to kind of go through those. I did not prepare a slide. These were not hard recommendations from the Subcommittee, these were just the latest numbers. We don't want to get a bunch of differing sets of numbers floating around, but we just want to give you some idea of the numbers that are out there right now.

We started out by kind of breaking down the numbers into some major categories that we thought were important. The first were our operating cost. We were going under the theory that it's always better to take care of what you've got before you look out and start getting something else, and that's been something that this Commission has directed us over the last five or six years. So, the first few items that were high priority were operating. How are we going to get enough staff? How are we going to get enough gasoline, and toilet tissue, and window panes, and screens to take care of the system ‑‑ minor repairs are a critical piece ‑‑ and as you saw up there, what kind of equipment would be necessary to take care of the state park system.

The numbers that the Subcommittee presented to the Advisory Committee last week go something like this: about $5.7 million in additional full-time, classified staff. That's about 159 full-time equivalents that would be spread across the system, many of them in positions we currently don't have ‑‑ for example, law enforcement. We really have problems in that regard. Take a big park like Garner State Park. It's a pretty dangerous scenario if you don't have law enforcement out there. So those were categories that ‑‑ there are new staff in there. There is some restoration of staff that was reduced over the last two or three years in the operating budget, but the short story is there is about $5.7 million in classified employees, full-time, spread across the system.

In addition to that, they reported a probable need of about $1.4 million in hourly or seasonal staff. As you probably are aware, about this time of year we start gearing up to go into the busy summer season. State Parks Division typically needs quite an influx of staff. So in addition to the $5.7 million in classified, about $1.4 million was identified in classified, part-time staff.

Other operating. That includes things like gasoline and paying utility bills. It's interesting to note that over the last three or four years, utility increases at the state parks have exceeded 30 percent a year in many cases. Steel, for example, has gone up 100 percent in the last six months. A lot of things that the parks use have gone through the roof. As Walt described, we were really looking at ‑‑ we did an analysis over the last four years. And in the last four years alone we were some $6 to $8 million in the whole, relative to our ability to purchase ongoing operational equipment. We also identified about $2 million in other staff that support state parks, for example, the Infrastructure and the Communications Divisions, and others, have over the last two or three years taken pretty significant hits in an effort to shield state parks from the continuing deterioration that they're experiencing. Of course this has affected our ability to support state parks. Infrastructure is the group that goes out and does the major capital repairs and oftentimes the smaller technical assistance. So, we are identifying about $2 million in the other divisions in staff costs.

The other main category in this operational group is equipment. You saw the condition of most of the vehicles in state parks. They do average about ten years old, many of them in excess of 120-, 130,000 miles, really not enough equipment to do just basic things like mowing the lawn. The number that came out from the Subcommittee last week was about $6.6 million in additional equipment per year. Now a reminder as we go forward, these are numbers in addition to the existing budget in state parks. So, if you take the $5.7 million, the $1.4 million for hourly, about $4 million in minor repairs ‑‑ and those are things like fixing the leak in the roof ‑‑ as Commissioner Ramos addressed earlier, that is a key problem for us. We have historically, over the last few years, not had much minor repair money. So small roof leaks in a couple of years turn into roof replacements, and ceiling replacements, and those kind of things. So we've identified an additional $4 million a year in minor repair needs. Those are ‑‑ for lack of a better term ‑‑ our first tier of needs that we believe the state park systems need in order to take care of what we have.

The second tier of really important financial needs are major repairs. And those are repairs which we've described as capital repairs, that typically under our rules, items that cost $25,000 or more, and those are things like replacing water and wastewater systems. We have 255 water and wastewater systems across the system. When we went back and looked at an average replacement cost ‑‑ about $1.5 million per system. So, it just gives you an idea of the scope of the problem that we're facing. We believe that a $25 million-a-year major repair budget is conservative, but reasonable. We have identified $4 to $500 million in critical, imminent repairs that are necessary, but we do believe that if we could come up with a consistent funding source that allowed us to gear up and stay geared up, we could be much more efficient. Just as a reminder, Proposition 8 which was approved three sessions ago ‑‑ the first session we got some $32 million, and the second session we got zero. This year we got $18 million. As businessmen and women, you can understand the difficulty in trying to gear up, and gear down, and gear up, and gear down, and try to keep going.

COMMISSIONER FITZSIMONS: The $25 million is in addition to what the bonded that the ‑‑ authority we have.

MR. BORUFF: Yes, sir. We currently have $42 million ‑‑ as clarification ‑‑ remaining in the Prop 8 of $40 million, that has not been appropriated to the Agency. We intend to go back this year and ask for most or all of that. It's yet to be seen, of course, whether or not we'll get any or some piece of that, but the $25 million is indeed in addition to whatever current funding we have.

COMMISSIONER FITZSIMONS: So that would ‑‑ I just wanted to make that clear.

COMMISSIONER FRIEDKIN: Did you say $42 million?

MR. BORUFF: $42-million-and-some change.

COMMISSIONER FITZSIMONS: Balance of the unappropriated. It's more like $46 million and some change.

COMMISSIONER PARKER: $46 million remaining, instead of $42 million.

MR. BORUFF: Yes. That's correct. To move on, we currently have an MOU with the Texas Department of Transportation, and vis-a-vis that MOU we get $5 million a year in road repairs under this contract. That money does not come to the Agency. We don't account for the money, and we don't bank it and spend it. That's under a direct MOU that TxDOT provides directly to us. That has been the case for the last ten years. We have currently about a $40 million-plus backlog of road repairs. It didn't really reflect there, but there are many of the parks that are folks are dodging some pretty significant chuckholes, and there are at least two parks I'm aware of where the park roads are falling off into the creek, or lake, or whatever.

COMMISSIONER PARKER: Are you saying that MOU of $5 million is in the $15 million or it would be in addition to the $15 million?

MR. BORUFF: We currently have $5 million a year that we've been getting for ten years. Under the proposal that was floated out last Friday we would ask TxDOT for an additional $15 million a year on top of the $5 million.

COMMISSIONER PARKER: So it would become $20 million?

MR. BORUFF: Yes, sir.

COMMISSIONER BROWN: That's going to be on an annual basis?

MR. BORUFF: Every year.

COMMISSIONER BROWN: And that's going to let us catch up?

MR. BORUFF: I think over time it would allow us to catch up.

COMMISSIONER BROWN: Do we need to ask for more?

MR. BORUFF: I think $15 million is adequate. We did what we were asked to do, Commissioner, which was to come up with numbers we believe would take care of the system, that wouldn't be outrageous numbers. So I think over time we could catch up if we had $20 million a year. Yes, sir.

The next category that we looked at was acquisition and development. As you gentlemen are aware, we have a Land and Water Plan, which envisions over ten years the acquisition of at least four 5,000-acre state parks within the so-called Golden Triangle between Houston, Dallas and San Antonio. It also articulates the need to acquire additional Wildlife Management Areas to represent some unique ecosystems that are currently unrepresented in the system. It also envisions us adding to existing parks in ways that make sense.

So, the Committee, through the Subcommittee, asked us to come up with some ideas about how we could fulfill that vision, and as a result of that, the number that was recommended last week was $15 million a year over the next ten years to try to fulfill the intent of the Land and Water Plan. I will say that the Committee did take the time to say this wasn't a bold vision in their opinion, that they wish they could acquire more and do more, but given the marching orders, which was to see what it would take to fulfill the Plan, this was the number they ultimately put on the table.

The last number that was discussed last week were the local park grants, which you heard about here earlier. At one point those park grants were getting $15.5 million of the sporting goods sales tax and also were earning some interest. And occasionally we had other funds, federal funds, we could match against them. So at one point several years ago, the local park grant system had almost $20 million a year to hand out to local entities. That number's been reduced to just over $5 million in this last budget cycle. So the Subcommittee proposed to the Committee, on top of the current $5 million, an additional $20 million a year for local park grants.

I believe the thinking was there, that kind of gets them back to even. Given all the inflation and spiraling cost increases, I think the Subcommittee felt that if you could get them back to $25 million, it would be kind of equivalent to where they were before at $20 million. So, the short story in all that, Commissioners, is that the Subcommittee recommended some additional $100 million-and-some-change if we want to put the park system back into reasonable condition and be able to maintain it at a level we could be proud of. Part of the presentation was to point out that currently we are capped at $32 million, under the sporting goods sales tax authorization. In the last budget cycle we were approved about $20 million of the $32 million.

Having said that, I think that represents the happenings last week at the Advisory Board meeting.

COMMISSIONER BROWN: We're capped at $32 million, but once [inaudible].

MR. BORUFF: The estimated amount is at this year, I believe, $104 million.

COMMISSIONER FITZSIMONS: $104 million. That's the $20 million out of the ‑‑ they only appropriated $28 million out of the $32 million.

MR. COOK: That's the Comptroller's estimate.

MR. BORUFF: It's the Comptroller's estimate. It's probably worth articulating for just a moment. You know, there is no hard number that says we sell that many sporting goods. That's an estimate that the Comptroller makes every year. And it has been increasing yearly. This year, I believe, it's just over $104 million.

COMMISSIONER FITZSIMONS: That does not include footwear. Right?

MR. BORUFF: I'm not sure of the answer to that.

MR. COOK: I'd like to make one point here. We've worked on this a long time. We started on this back last fall, and we've gone through a number of different gyrations. Walt and his crew have done a great job. Scott and Gene, all of us, have. I want to point out to you something. When it gets around to me and when I start looking at these kind of numbers and the things that I want you to touch on ‑‑ probably our most valuable asset in our State Parks Division is our people. The most valuable thing that we've got are the people that work out there in these parks. Go back up there, and you look at those numbers that Scott laid out a minute ago: 159 full-time employees at $5.7 million. It doesn't take long to do the math on what that is per employee ‑‑ full-time, year employee ‑‑ $35,000. We're not talking a bunch of fluff. If we were in a position to do so, we would try to completely reclass our park people. Most of our park people are paid below what they should be for the jobs they do, but we're not in position to do that right now. That's $35,000 per full-time employee. If you look at the seasonals, the part-times, that's 70 FTEs at $1.4 million. That's $20,000 if you think of it on an annual basis.

So when we say to the Committee, to the legislators, to the folks that we work with downtown, and to you: we tried to keep this budget reasonable; we tried to keep it within the framework; we don't believe there's fluff, I think that's about the best example that I can give you. There's no fluff in there. One hundred fifty-nine (159) people, 114 parks ‑‑ that's not piling a whole bunch of people in very many parks. So, those are the kind of things that ‑‑


MR. COOK: Yes, sir.

MR. BORUFF: We've reduced about 100 FTES over the last four years out of that Division. So, if you want to look at it that way, it's really only an addition of about 59 FTES over what we were even three years ago, and we were not in good shape then.

MR. COOK: A lot of times it's hard for people, who don't explore those kind of numbers a lot, to understand, well, you're just building a whole lot of people, a whole lot of high-paid folks. I hope that you follow that.

COMMISSIONER BIVINS: But you're saying we need $100 million annually in addition.

MR. COOK: In addition.

COMMISSIONER HOLMES: I didn't understand that that was in addition. I understood it to take it from the current funding level.

MR. BORUFF: That's in addition to current budget. That was the instruction we were asked by the Committee.

COMMISSIONER FITZSIMONS: Chairman, I was there, not for the first meeting, but for the second, but Chairman Montford ‑‑ if I'm paraphrasing his words correctly ‑‑ was that, give me the real number of what the cost of these years of deferment are going to cost us to get where we need to be. See, you're doing two jobs at once. You're bringing things back up to where they need to be, plus ‑‑ and I've reiterated this ‑‑ plus you have to meet the goals set out in the ten-year plan. So, that's why the number's staggered is because you're not starting from zero. You're starting from behind the line to get to that goal, and I think he's right, that that's probably not a realistic number in the beginning, but that's why you need a long-term plan to get out of the ditch and on the road to the goal.

COMMISSIONER HOLMES: When you have a system this size, and you have deferred maintenance for five, or six, or seven years, it's going to cost ‑‑ you said $4 to $500 million in deferred payments. Mr. Parker.

COMMISSIONER PARKER: I have two questions. First of all, will this proposal, $105.45 million ‑‑ let's say we got it. How does it reflect on the 5 percent reduction in the 77th, the 13 percent reduction in the 78th, and the 5 percent reduction in the 79th, which is 23 percent. Does that bring us up to where we were in the 76th? Do you understand what I mean?

MR. BORUFF: I do believe I understand what you mean, Commissioner. I don't have a clean answer for you.

COMMISSIONER PARKER: Could we get ‑‑ I think that's very important.

MR. COOK: It puts us in considerably better shape.

COMMISSIONER PARKER: I realize that, but I think it would give us additional comparative ‑‑

COMMISSIONER FITZSIMONS: We were still deferring maintenance at the time of the first cut.

COMMISSIONER PARKER: That's the reason why I want to know. It's a moving target.

MR. BORUFF: We can get some numbers for you there. I would say the same thing Mr. Cook said. We would be in much better shape than we were in whatever year you want to pick.

COMMISSIONER PARKER: And my second question, I had two. You answered the first. My second question is, does this $100.45 million include necessary funding for the Texas State Railroad?

MR. BORUFF: This funding includes funding for the Texas State Railroad as a static display beginning in February of next year.

COMMISSIONER PARKER: So it does not include ‑‑

MR. BORUFF: It does not envision the Railroad moving on the tracks next year.

COMMISSIONER PARKER: Okay. That's what I wanted to know.

COMMISSIONER HOLMES: And just for the record, Scott, if it did include the Railroad moving on both runs, how much would you add to that?

MR. BORUFF: We believe over the ten years ‑‑ by the way these numbers are all based on a ten-year vision ‑‑ it would add approximately $40 to $45 million to the price tag, and it might be slightly higher than that. But with the last look we took, which was about nine months ago, I believe the number was about $45 million.


MR. BORUFF: As I recall it was about $6 million in the first three or four years, then decrease to $5 million for three or four, then decrease to $4 million for three or four.

MR. COOK: I think that's correct. We can get that analysis.

COMMISSIONER HOLMES: You've got to dig out of that hole, too.

MR. BORUFF: That's correct. An additional hole. Most of that $4 to $5 million ‑‑ or a lot of that I will say ‑‑ a majority of the $4, $5 or $6 million a year is in capital improvements to the Railroad. There's only about $1.5 million or $2 million a year in additional operating costs. So, this $25 million number that we floated out here does not include that $3 or $4 million a year in capital improvements to the Railroad, nor does the budget that we rolled out.

COMMISSIONER PARKER: Okay. Now a sub-question. How much of this proposed budget would go into the Battleship Texas ‑‑ realizing from past meetings that we had numbers thrown out to us ‑‑ that we expect from the ISTEA, which is actually Texas gasoline tax dollars coming back to us ‑‑ but that Ice TEA item to be $16 million available for the Battleship Texas, and then $12 million from the Legislature, which is $28 million. The last repair figure that I heard on the Battleship Texas was $48 million. So that leaves us $10 million shy. Where does that $10 million come out of this budget, this $100 million?

MR. BORUFF: It does not. There's two components there, Commissioner. The component I believe you're talking about is the capital repair component. Indeed the Legislature ‑‑ by the way the program now is called SAFETEA, not ISTEA anymore; they changed the name for some reason ‑‑ out of the SAFETEA Program they directed $16.1 million, I believe, out of that SAFETEA Program. We also ‑‑ out of Proposition 8 we were directed to spend $12 million-and-some change.

COMMISSIONER PARKER: Which we don't have yet.

MR. BORUFF: Which we do not have, and we have to come up with a match, and so the answer to your question is we are still struggling with how we are going to come up with a match.

Now, the other part of your question was how much would it take to repair the Battleship. There are several proposals on the table. The least expensive one could probably be covered with the money we currently have, assuming we could find a match. That would be the least desirable solution, because it would require you to tow the Battleship, spend $20 or $30 million, tow it back, set it in the mud and let it rot again for ten years.

COMMISSIONER PARKER: In ten years we'd be back in the same boat.

MR. BORUFF: We, in the Agency, don't think that's a wise way to do it. We are proposing a $45 million fix, or $48 million. We don't have the hard number yet. We have not done the engineering. We are moving forward with some engineering studies that would give us some of the answers to allow us to come up with a hard number, but we do believe it would be in excess of $40 million, maybe closing in on $50 million ultimately, to do it right, which would require us to move the ship out, build in essence a dry berth, move the ship back in, get the water out from under it, so that over time you only have normal maintenance and not the maintenance that accrues with the saltwater berthing.

COMMISSIONER HOLMES: Just to clarify, I want to make sure I understood the answer to your question. Does the $100 million include repairs to the Battleship or the reberthing of the Battleship?


MR. DABNEY: Of the $115 million a year in major repairs, some of it could go to ‑‑

COMMISSIONER FITZSIMONS: But when you came up with the number, did you allocate a certain amount to the Battleship?

MR. BORUFF: No, we did not.

COMMISSIONER PARKER: Okay. We're still stuck with that.

COMMISSIONER HOLMES: Well, we still have that unfunded.

MR. BORUFF: Well, part of the issue, Commissioners, is obviously if we get $25 million, it'll be your decision by and large where you want us to focus some of that money, and many times the Legislature will tell us where they want to spend some of it, too. We tried to come up with a reasonable middle-of-the-road figure and would depend on yours and the Legislature's direction as to how we might spend some of that money.

COMMISSIONER FITZSIMONS: My own editorial comment on the Battleship ‑‑ as you've heard me say before ‑‑ it was not serving in the Texas Navy, and I believe there should be some effort made ‑‑

COMMISSIONER HOLMES: To give it back to the United States Navy.

COMMISSIONER FITZSIMONS: — for some federal funding seeing that it did serve in the United States Navy.

COMMISSIONER HOLMES: And Congressman Ted Poe has worked on that as you know. Somehow we inveigled the Navy to give it to us in 1948.

COMMISSIONER RAMOS: My only comment is I think we need to work on the Battleship, but I think we have a more pressing problem that will impact the entire state with the park system. So my emphasis would be there, not that we ignore the Battleship. That would be my idea.

COMMISSIONER HOLMES: Well, I think that's what this presentation to the Committee last week addressed. It really was the entire park system without identifying major capital allocations to either the Battleship or the Railroad.

MR. BORUFF: Well, for purposes of the exercise, gentlemen, I at least want you to understand we purposefully pulled out a lot of the capital ‑‑ we pulled out the capital pieces for the Railroad as I described. We did not specifically include more capital dollars for the Battleship. We really kind of looked at more the normal day-to-day operating and normal capital expenses, not these behemoth projects, because if you want $45 million for the Railroad and you want $45 million more for the Battleship, now you're doubling the number in one fell swoop.

We really believe over time, those are the kind of projects that would really benefit from a bonding program. We're talking about on a regular, normal, replace-the-roof, put in a new slab, and when a tornado knocks it down, fix-the-walls kind of capital. These kind of big projects are really kind of stand-aside in our opinion.

COMMISSIONER PARKER: That's a very good point.

COMMISSIONER FITZSIMONS: Just so you all are getting an idea of where we're going ‑‑ you used the right word. It's an exercise that Chairman Montford asked them to go through. I think he's exactly right. Oftentimes once we get in the legislative process, too many of these what-if questions are asked at the last minute. He's trying to go through this exercise now a year ahead, so that the final product is everybody's singing off the same sheet of music, of what dollars are necessary for what. I've got to tell you ‑‑ there were some legislative staff folks, whom I'd invited and encouraged to come to these meetings, that left this last one a little shocked at that number.

One of them caught me in the hall and said, how long is this going to go on. I said, well, you've got a need for parks, and I explained that you are getting out of a ditch first, but after you're out of the ditch, I said, it'll last as long as we decide to grow, and they looked at me ‑‑ what? I said, yes. You've got to look at the parks as an investment and a need that is commensurate with your economic growth, the same as any other infrastructure. I think we're still a ways before we get to that hurdle. Walt does an excellent job of pointing out the economic development component here, but it cannot be seen as a finish line. As long as you're growing you need a parks system that's able to grow with the state.

COMMISSIONER HOLMES: There's a park budget that is required regardless. If you've got to open parks and operate parks you have to have a budget to do that, and you've got to take care of that infrastructure.

COMMISSIONER FITZSIMONS: And if the state's going to grow, you have to grow with it.

COMMISSIONER HOLMES: It's going to get bigger if you're going to grow. We have 114 that we're taking care of now.

COMMISSIONER FITZSIMONS: Look at it this way. If you look at the maps, the state demographer, Murdoch ‑‑ and you start showing the maps of suburb and exurban growth, then you realize that every time that happens you need more local parks. And then at some point you need another state park. When you tie those two together you realize that it's not ‑‑ unless you're encouraging us to stop economic growth, you're not going to stop.

COMMISSIONER PARKER: It's in the ten-year plan that you helped write.

COMMISSIONER BIVINS: When are you going to have some hard numbers that we can ‑‑

COMMISSIONER FITZSIMONS: Montford told them the next meeting.

MR. BORUFF: July 14 is the next meeting of the Advisory Committee. My understanding is Mr. Montford wants to put together a report immediately following that meeting which would articulate the hard numbers.

COMMISSIONER FITZSIMONS: The Governor's Office has asked for a report the end of July, first week of August, so that they can be prepared.

COMMISSIONER BIVINS: And is there an aspect of this Committee that's going to look into private dollars as well?


COMMISSIONER FITZSIMONS: Would you discuss that? He's got a subcommittee on that.

MR. BORUFF: There are other items. One of the things they are looking at is other sources of funding, not just private, but any other sources of funding, private being one of those. We have made some preliminary efforts within the Agency to look at those opportunities and will continue to do so. I will say that in general they've not been very successful, because folks really don't want to fund operations too much. They might want to build a building now and then, but it's very difficult to get somebody to give money to fund operations. Clean the bathrooms is a hard one to ‑‑

COMMISSIONER FITZSIMONS: That's a really good point, Robert. We don't have the money to operate on, they give it to us.


MR. BORUFF: One point of clarification. You may hear a number of $122 million that came out of the meeting last week, which is different from the number I just reported to you. I just wanted to make sure you understood. I do believe the Committee and then the staff working together came up with a $100 million or $102 million number, in that range. The way the information was presented in summary at the end of the meeting last week was a little bit confusing, because it added to that number, the $20 million that we already get in sporting goods sales tax. So, the way the number was presented, I did get some calls, from some folks that were confused ‑‑ particularly some press were confused about the number. So if you hear the $122 million, that's the difference, that $122 million.

I think what they were trying to do is organize the information to kind of say, if we were going to go for the sporting goods sales tax, here's the sporting goods sales tax hit. If the $102 million was a good number, then it would be, given this year's $20 million.

COMMISSIONER HOLMES: Scott, it would be helpful to me and I suspect, others, if we would take the presentation that was made to the Committee that totals $100,433,000 and add to that, that which we already received, then allocate that through the various items, so that we can see what that total budget is, rather than just the add-ons, because we're not sure what we're adding it to, to see what the total is.

COMMISSIONER PARKER: We had the same request from several legislators. We are working on that.

COMMISSIONER FITZSIMONS: That is the goal at the very end, everybody's understanding. I want to reiterate that what's happening right now at that Advisory Committee and Advisory Subcommittee level is an exercise. We run out of there with any of those numbers and say, this is the number, but it's based on some assumptions and very broad questions from the Chairman of that Advisory Committee, Montford, wanting to know essentially the broadest reach of the meeting.

MR. BORUFF: There was no recommendation. In fact that was made pretty clear during the meeting that these were not recommendations. It was just an exercise to kind of hone the numbers down, as Mr. Montford had requested.

COMMISSIONER FITZSIMONS: Of that Committee that I appointed, it's got some real horsepower, people who really understand.

COMMISSIONER BROWN: That is a great committee.

COMMISSIONER FITZSIMONS: We have Montford; Alexander, former member of the House; Andy, of course, former executive director; Al Henry, our former commissioner; Paul Serff from Texas Tourism and Travel. It's a great group.

COMMISSIONER HOLMES: And we appreciate the work they're doing.

COMMISSIONER FITZSIMONS: Some of them I don't think really ‑‑ Montford's put in the work. Let me put it that way.



COMMISSIONER HOLMES: Any further questions for Scott?

(No response.)

COMMISSIONER FITZSIMONS: Thank you very much, Scott.

This is nearly taking as long as a Regulations meeting. Item number four, legislative review. Mr. Cook and Mary Fields.

MR. COOK: I think we'll talk a little about our administrative process and where we are. Usually in the spring of the year prior to the session, here within the various divisions we start talking about legislative issues, statute changes, whatever it is that we may be looking at and that we will be coordinating very closely with you as we go through the summer. Our Legislative Appropriation Request, the official document that lays out our request, we submit. Mary is here to help us get through this, but we submit that request in early to mid-August ‑‑ is when that document must go in. So it will be pretty well finished by mid-July. So we're trying to stay in synch with this Advisory Committee, because obviously part of their work is going to be an integral part of our Legislative Appropriation Request.

Mary, I think you might click on a slide for me. The basic issues ‑‑ from each division we may have seven or eight different legislative issues that they bring up, but put all the focus on this time and what we've all agreed that we want to keep it pretty straightforward ‑‑ there are several key issues: number one, top of the list, the state park funding needs. I don't want to spend any more time on that. You can tell that we're very deep in that process of developing those numbers, justifications behind those numbers. It ends up in a three-ring notebook about that thick on each park, each site folder on the major repair needs for the future.

Our capital equipment replacement needs. That's general revenue and Fund 9. There again you're talking trucks ‑‑ anything from garbage trucks to patrol vehicles for our law enforcement people, trucks for our wildlife guys, fishery guys to haul fish in, computer equipment. A lot of our information technology ‑‑ the equipment involved in that is behind times, and we have struggled with our funding issues to keep up with that. Boats. Those are the kind of issues that you see on those lists.

The Fund 9 part of that, kind of interesting. We have funds available, but they just haven't been appropriated, and that's an area that we're again really going to talk to them about, about folks who've paid these revenues for their hunting and fishing licenses, and here's our needs, our justifications. And we would hope to pull some of that out.

The one on law enforcement is one you've seen from me every session, and that involves the work that our game wardens and park police officers do, but particularly our game wardens. They are certified Texas peace officers. That means if they encounter some sort of major violation ‑‑ they're not stopping people from running stop signs or going 75 miles an hour. If they run into violence, they run into robbery, they run into some real major problem, by law they are required to stop and assist and try to shut that operation down and get it settled ‑‑ by law. In addition, our Homeland Security issue has just continued to increase, for instance the emergency response that your heard and saw and knew about to Katrina and Rita. Those men and women, their salaries are paid by hunting and fishing licenses, the revenue collected. We need some GR to offset a small percentage ‑‑ maybe a couple $3 million, in that range ‑‑ to offset part of this other law enforcement responsibilities and duties that they have.

The Pittman-Robertson funding that we get in the Agency basically makes the promise that we will spend hunting and fishing license dollars on hunting, and fishing, and wildlife, and those kinds of things. If you're spending hunting and fishing license dollars, which these men and women, these officers, are paid with, then you're in violation of that rule, as far as Pittman-Robertson, DJ, and those kind of things. So, there are funds, $25-$26 million at risk every time we go there. For instance, before we went into New Orleans we received approval from Washington for that exercise for that time. We hope to get some of that back through FEMA, but that remains to be seen.

Our freshwater fishery stamp revenue, again Fund 9, income coming in from the freshwater fishery stamp is running at about $5 to $6 million a year ‑‑ looks like. We need that money appropriated so that we can do the work that we committed to do with that revenue. We can't use that revenue anywhere else. It can only be used for that. So, we're going to ask to bring that money all forward so that we can use it as it comes in on the various projects that we've got across the state. We are making good progress on the East Texas Hatchery and you'll hear more about that.

Miscellaneous riders. If we get the opportunity for some sort of omnibus bill or piece-by-piece as the appropriation process goes through.

Rider 27. As Walt so accurately pointed out, we generated more money than was projected. Rider 27 allowed us to use that both in Fund 9 and in Fund 64. We've done well there. It was very helpful. We'll try to get that again. That will have to be renewed. That will have to be restated in some manner.

And a little item there, just to give you a feel for ‑‑ meals for TDCJ. All those volunteer workers ‑‑ the community service workers, the TDCJ guys ‑‑ we can't buy them a lunch. Somehow we have to either through the Foundation, through donations, through some wrangle-jangle method, find a way to buy lunch for those dozens, hundreds, whatever it is, people that come to the various parts of Wildlife Management Areas, fish hatcheries across the state. The current rules prohibit us from doing that, from buying a $5 lunch for those guys. So, we're going to see if we can get that addressed. We have an indication that we might get some help there. That's kind of just a real quick shot at Appropriations.

COMMISSIONER FITZSIMONS: You might want to explain ‑‑ not to make things worse, but you mentioned the diversion issue with Katrina and the emergency work. There's also the environmental enforcement thing ‑‑ about TCEQ.

MR. COOK: Well, yes, TCEQ. We do some kills and spills and that kind of stuff. They provide us $500,000 a year through an appropriation process. So, there is ‑‑

COMMISSIONER FITZSIMONS: That's direct from TCEQ, or that's earmarked as part of the appropriation we get.

MR. FLORES: It comes from TCEQ.

MR. COOK: It comes through them on an MOU.

COMMISSIONER HOLMES: And we think that that ‑‑


COMMISSIONER HOLMES: It's a reasonable offset.

MR. COOK: Yes, it does. Next, statutory changes. As you know the Chairman serves on the Environmental Service Committee. A lot of our big issues ‑‑ environmental flows for streams and bays. That probably should say environmental flows for fish and wildlife. That's where we are; that's who we are. We're working on that inside the Agency ‑‑ the Chairman is working through the appointed committee. Our license structure clean-up ‑‑ Dr. McKinney and all the division directors have worked through the year to look for ways to clean up our licensing system. Not sure yet that that's going to take any statute change in legislation, but it might. Lastly there, just another one of those kind of by-the-way things of interest ‑‑ our volunteers, that same group of people that you're talking about there, they get out in the park, they are not covered insurance-wise by any of the state insurance. So, we'd be looking for a tort protection for them, while they're working in the park, while they're doing things. Let's say they're pulling a wagon, a hay ride or something like that, or assisting a group of kids on a tour, a swimming event, whatever it might be, they are subject to personal liability as it stands right now. So, we'd like to get that approved. That's just a quick shot at it. We will certainly be back with you almost continuously through the summer as we approach this; and working with the Finance Committee very closely as we do our budgets.



MS. FIELDS: Good morning, Commissioners. For the record I'm Mary Fields, Chief Financial Officer. As part of the legislative preview, I'm here to provide an update on the Strategic Plan and the Legislative Appropriations Request, or LAR. In the last meeting we reviewed the background requirements and process for preparing the Strategic Plan, and I reviewed some proposed changes to our budget strategies and performance measures. You'll recall these changes have to be negotiated with the Legislative Budget Board and the Governor's Office.

We met with the Legislative Budget Board staff in mid-April, and all of our proposed changes were approved, with the exception of the deletion of one performance measure. We were requesting that the measure for the number of local assistance planning project requests fulfilled be deleted, because that formal program has been discontinued due to budget reductions. We were advised that local parks may receive some funding in the future, which could reinstate that program. So it was preferred that the measure stay in place. We concurred with this response and really appreciated the time the Legislative Budget Board staff spent with us working through our proposed changes. We received final approval from both the Governor's Office and the Legislative Budget Board just a couple of days ago. The actual draft of the Strategic Plan has been reviewed by the staff and the executive team, and is ready for Commission review. I believe Carol just handed you a draft of the Plan just a little bit earlier today, and we'll look for any review comments from you by June 5th. The actual Plan is due on July 7th. So that's where we are with that.

Moving on to the LAR, you'll recall I mentioned that our base budget for our FY 2008-2009 request is based on projected expenditures from FY 2006 and our FY 2007 operating budget. We're currently in the process of preparing our 2007 operating budget, as it helps us to establish our base. So that's where our main focus is right now. We've not yet received the instructions to prepare the LAR. Normally we receive those instructions in late April or early May, but they have not yet been released. The instructions include the actual due date for our LAR, but as Bob mentioned it's normally due the first or second week of August, and we are on target to meet that deadline. That concludes my comments for this agenda item. Are there any questions?

(No response.)

MS. FIELDS: If not, we will move to the next item.

COMMISSIONER HOLMES: Number five, financial overview.

MS. FIELDS: Again for the record, Mary Fields, CFO, here to provide the financial overview. The focus of our presentation will be to provide a revenue and budget status through March, FY 2006, and to update you on the results of the State Auditor's Office audit of Fund 9.

Let's start with revenue and budget. When comparing state parks gross receipts for March 31 at $15.65 million, we're up 5.5 percent or $809,000 over last year's collection. In reviewing the categories, the park receipts, all of the categories exceed the prior year at this time, except for facilities and miscellaneous revenues.

Facilities are currently behind by less than 1 percent at $33,000, and miscellaneous revenue is down by $36,000. The concession revenue is fairly close to last year's receipts, while entrance fees are up 8.5 percent, and park pass sales are up 29 percent from the prior year. So, overall we continue to do well with revenues in our state parks, and we hope to see this trend continue throughout the year.

Our boat revenue as of March 31 is at $7.4 million. This is down by 9.9 percent or $813,000 compared to last year at this same time. There are decreases in all the categories of revenue. Revenue for boat registrations is down by 14 percent. Titles issued is down by 2.2 percent, and sales tax revenue is down by 1.5 percent. We believe the decreases are due to lake and waterway levels being down because of drought conditions, combined with increased gas prices that we've been hearing about. This is as of March, so hopefully some of the rains that we received in April and May, that have helped the lake levels, will turn this downward trend around. We'll just watch it closely. We do continue to transfer 15 percent of registration and titling revenue to Fund 64, which amounts to $954,000 based on revenues through March. Our license sales revenue is also down as of the end of March. At $71.7 million we're down $1.6 million in revenues as compared to last year, or 2.2 percent. Combo revenue is down 1.8 percent. Fishing is down by 10.3 percent. Hunting is slightly up at 2.8 percent, and the Other category is up by 4 percent. We'll continue to watch the fishing license revenues, which are showing a turn for the better. At the lowest point we were 12 percent behind. Here I'm reporting as of the end of March, we're at 10 percent, and current reports as of mid-May are showing we're behind by a little over 7 percent. So, we are seeing the gap close with these license revenues, which is a good sign.

In reviewing the number of licenses sold, at $2.2 million we're down 1 percent as of the end of March. Hunting is down 3.1 percent, which does not correlate with that revenue category we just talked about. You'll recall that the non-resident licenses sold was up, and that's what drove the revenue up in this area. Fishing is down by 10.5 percent, which pretty closely correlates with the revenue numbers, and total combo sales are up 1.6 percent, when compared to last year's sales at this time.

Now the number of combo licenses sold, again, it includes our military Super Combos, that count, and those do not bring in revenue. So, while we see a slight increase in the number of Super Combos sold, the actual revenue is actually down by almost 2 percent.

Overall we're continuing to gain ground slowly in this area. So, we'll continue to watch it closely.

COMMISSIONER FITZSIMONS: Mary, am I remembering correctly that we got behind essentially during the hurricane season ‑‑ Katrina and Rita?

MS. FIELDS: Yes, sir.

COMMISSIONER FITZSIMONS: All right, and we're just slowly picking that up. It's not a trend from the previous year.

MS. FIELDS: No, it's not. The 12 percent range, that was in the September-October time frame, which was just right after the hurricanes. So we are gaining ground.

COMMISSIONER PARKER: What about the monthly ‑‑ what was the last month, March 31?

MS. FIELDS: This is March 31. Yes, sir.

COMMISSIONER PARKER: How does March compare to March, and February to February, and January to January, and December to December? Can you do that?

MS. FIELDS: I pulled March numbers for you. Best I can do here ‑‑ I have kind of total revenues. It's not broken down by just fishing, but in our last report we were talking about total sales revenue being down by 2.5 percent.


MS. FIELDS: No. That was last month. Now, a year ago we were actually 6 percent ahead of where we were at in '04.

COMMISSIONER HOLMES: So it's up over '04.

MS. FIELDS: In '05 we were up over '04, and now we're slightly down from where we were in '05.



MS. FIELDS: That's a yearly average.

COMMISSIONER PARKER: But you don't have the figures April to April, March to March, February to February.

COMMISSIONER HOLMES: Let me give you something that can help, John. We've started out 12 percent behind from Katrina/Rita, primarily Rita. At the end of March we were 10 percent behind. Today, as of last week, we're 7 percent. And just the math of that, the April number for '06 would have been ahead of '05 in order to close that gap, and so we're making up the ground, which means that the linked month of April '05-'06, we did better in '06.

MS. FIELDS: Yes. Took us from 10 percent to 7 percent.

COMMISSIONER HOLMES: Actually 7.2, I think is what you had told me. To move the dial that much, it was about six weeks. Right, because it was as of last week or so. That's a pretty big movement, because you're moving from September 1. So, you're taking six weeks to move six months ‑‑ seven and a half months.

COMMISSIONER PARKER: What she just said, and what you said, just proves that these minus figures that we're in are hurricane related.

COMMISSIONER HOLMES: Right, exactly, and the recent rains are causing people to buy more fishing licenses.

MS. FIELDS: Commissioner, I do have the month-to-month figures.

COMMISSIONER PARKER: You answered it good.

MS. FIELDS: Moving on to revenue collections, when comparing our FY 2006 revenue collections as of March 31st to the Annual Revenue Estimates, we're progressing as expected in all of the funds with the exception of Fund 9, which is no surprise. With 58 percent of the year elapsed, we've collected 63 percent of our Fund 9 Game Fish and Water Safety Funds. If you compare it at this same time last year, we've collected 70 percent of our estimate. So, again we're seeing some of the impact of the revenue decreases relating to boat revenue that I talked about, and also the license revenue when compared to the prior year.

Let me just mention, while comparing to the prior year is a good gauge for our progress, the real concern here is that we meet the revenue estimate. For this fund, I looked at it with this recent boat revenue information. It's looking like we're going to be pretty close. So, we will be watching it, as I stated, very closely. That's enough said there. The remainder of the funds ‑‑ with 54.6 percent collected for State Park Funds, 73 percent for the Local Park Fund and 56.3 percent for the Other category ‑‑ those really are progressing as they should be. We'll see the State Park Funds pick up in the summer.

In reviewing our FY 2006 budget versus expense, you can see that our budget is at $316.8 million, and we have $169.8 million or 53.6 percent of the budget remaining, with 42 percent of the fiscal year remaining. Salaries, grants, and benefits, as you can see those are pretty much on track. Operating and equipment is showing 51.9 percent of the budget still available. In reviewing that category there are some subcategories, such as consumable supplies and utilities, that have a higher portion of the budget remaining, but we typically see those categories drop off more during the summer. We are showing 67.7 percent of the capital project available. Again we've got several projects in progress, and this balance will continue to decline as the year progresses.

Our overall budget has increased by $8.9 million since February 28th. Mid-year budget adjustments were made during the month of March, and they are summarized on this slide. The miscellaneous adjustments of $7.7 million include bringing in Rider 27 funds of $7.1 million. We have not budgeted all of that Rider 27 funding yet. We are holding back about $1.4 million of Fund 9, and we want to do that as we watch our revenue estimate, and also those Funds are tied to the request to exceed our capital authority that we discussed at the last meeting, and that hasn't been approved yet. So, we're holding off on that. We have heard ‑‑ the oversight agencies have been pretty focused on the Special Session, but we are hopeful that that approval of our request to exceed that capital authority will be approved. The grant adjustments at $1.3 million include one sizable grant for over $946,000 for the State Recreational Boating Safety Program.

The last adjustment on the slide relates to our transfer of the Nimitz to the Texas Historical Commission effective November 1st. According to our agreement, we will transfer funds to the Historical Commission over a four-year period, with each year declining by 25 percent, basically to assist with the transition of that museum.

Next I want to provide an update on the results of the State Auditor's Office audit of Fund 9. Overall we feel the auditors had some favorable conclusions by stating that we have effective processes for collecting hunting and fishing license revenue and boat registration and titling fees. There were certain controls that they wanted to see improved, and I'll review those recommendations in the next few slides. While the State Auditor states the Department collected substantially all license fees and boat registration and titling fees and related taxes, improving certain controls would ensure we collect all of the license fees.

They found that some resident licenses were sold to what appeared to be non-residents, and some individuals paid reduced license fees when they did not meet the age eligibility requirements. The auditors are recommending that we ask license agents to require proof of residency upon the purchase of a license, and also determine that the individual is eligible for the type of license they are purchasing at the counter. While we understand the merit of this recommendation, and we will consider asking purchasers to show a Texas drivers license to help determine Texas residency, we plan to make system improvements in the next implementation of our license system to address the rest of the issues, in lieu of attempting to enforce all of these provisions at the counter with our license agents.

The other recommendation in this area was technical in nature. The auditors want us to be able to produce a list of active agents for a particular time period, such as the time frame they were auditing. By maintaining a list with active start and end dates, we can ensure that fees from all active agents were collected. Again, we will pursue a list of this nature in the next license implementation. Then related to sales here, the auditors are also recommending that we comply with all state and federal laws by ensuring that license applicants provide Social Security numbers and Harvest Information Program certification when required at the time of purchase. Again, in lieu of attempting to enforce these provisions at the counter, we plan to design our upcoming system to require all necessary customer information at the time of sale. At times, some of these rules can be very complex, and we believe that they can be most effectively enforced by correcting the programming of all of the rules within the current system.

The next recommendation was to ensure that net receipts from the sale of stamps are allocated to the dedicated funds associated with each stamp. Specifically, they're asking us to define net receipts, to allocate revenue from Super Combo license revenue to the dedicated stamp funds. Gene has a presentation that will follow mine that will provide more detail on this specific recommendation, along with management's proposal to address it.

We were also asked to establish a restricted fund for the Saltwater Sport Fishing Stamp. We've addressed that already in FY 2006, and they found some technical errors in our funding allocation table, and these issues have already been corrected.

Next, while the auditors found we adequately monitor our license sales system, there were a few controls here that needed improvement. We need to require the contractor ‑‑ in this case Verizon ‑‑ to strengthen their disaster recovery plan and their password controls. We've met with Verizon staff, and those recommendations are being addressed. There's also a technical recommendation that we use a more statistical process in our sample testing of our license agent records, and we're addressing that recommendation.

The next recommendation is to improve our procedures for monitoring license agents that sell licenses on our behalf. The auditors are recommending we develop an audit program to monitor agent's compliance with contract requirements and that we audit high-volume, high-risk agents. They also recommend we discontinue allowing license agents to decline monitoring. Currently we over-sample, so we end up getting enough information from the agents to go on, but there was some concern about us allowing agents to decline. So we are working on that to impact the statistical validity, and finally credit the license agent's accounts only after receiving voided or misprinted licenses. Currently they void automatically in 45 days, whether we have the actual voided documents. We are working to improve that, actually extending that automatic credit to a 90-day time period. So we're working again with the system to address that issue.

Finally, getting to some of the more positive results, where the auditors found that we have adequate controls to ensure that expenditures from Fund 9 comply with applicable restrictions, and that we fully or substantially implement 80 percent of the prior audit recommendations tested. The recommendations outstanding relate to that Social Security number issue that I talked about and our methodology to allocate revenue to the dedicated stamp funds, and we have some proposals there.

Overall, generally, Management agrees with the findings in the report, and as I've stated throughout the presentation, we are addressing the recommendations. Some of them are through modifications to the next license system. And we are addressing the allocation of Super Combo sales receipts to the stamp funds and defining the net receipts. Gene has that presentation to address that recommendation. So I will pass it over to him.

COMMISSIONER HOLMES: We work on this allocation regularly, don't we, Gene?

MR. MCCARTY: Yes, sir. I'll give you a little history of the allocation.

COMMISSIONER FITZSIMONS: There's a lot of history.

COMMISSIONER HOLMES: There's quite a bit of history to this one.

MR. MCCARTY: Mr. Chairman, Commissioners. For the record my name is Gene McCarty. I'm Deputy Executive Director for Administration. As Mary's discussed, the State Auditors recently completed their audit of Fund 9. That's our Game, Fish and Water Safety account. One of the issues that was identified in the allocation of receipts associated with the licenses and stamps that are components of the Super Combo. First let me give you a little background on this issue. The Super Combo was originally created in 1996. This license was created as a one-stop shopping opportunity and a value license. I mean, it was a discounted license. The Super Combo was created by taking the existing combo license and adding all of the available stamps at a discounted price. The revenue allocation, at that time, was done on a do-no-harm policy. Basically what that says is, that dedicated stamp funds were allocated at least as much revenue as they had been receiving prior to the creation of the Super Combo.

In 2001 the State Auditor did a Fund 9 audit. That was the audit that Mary was referring to, that we had completed 80 percent of the findings. The finding of that audit that relates to this issue is that there was not a Commission-approved and documented allocation methodology for revenues associated with the dedicated stamps contained within the Super Combo. In response to this finding, the Department developed the Super Combo allocation methodology. This methodology was presented to the Commission and adopted as part of your Commission Budget Policy. Just as a reminder, what we did was we basically defined the universe of stamp users using a number of existing surveys ‑‑ using U.S. Fish and Wildlife Survey of hunters and fishermen, using the Wildlife Division of Small Game Survey. From that universe we subtracted the direct purchasers, those individuals who purchased a stamp in a direct method, not as a part as of a combo license package. The remaining part of that user group was allocated to the Super Combo. Using that methodology that we presented to you several years ago, that you adopted, and that we've applied to the last few license years, this is how you would see the allocation of license revenue within the Super Combo for last year. This is exactly how it was allocated. This is what went on the books for FY '05.

In the most recent Fund 9 audit there were a number of findings related to the Super Combo allocation. The one that I wish to address here today is the one that says that we should define net receipts for each dedicated stamp in the Super Combo package and allocate revenue in accordance with that definition. It's a little variation, a little twist on the previous finding. Also, however, I want to make another point that is in the auditor's report. They also had some discussion about using a direct proportional allocation methodology. That is, basically, that you take a percentage of the discount and apply it to each stamp independent of usage. While this is probably the easiest, simplest, quickest allocation methodology, we don't believe it provides a fair, and accurate, and equitable allocation of these funds to the dedicated stamps. Just as a case in point ‑‑ there's so much information here I couldn't get it all on one slide, so I'm going to flip back and forth here, but that's how the allocation would look if you ‑‑ and we looked at two different ways: first of all allocating it proportionally by stamp price. So obviously the saltwater stamp is the most expensive stamp out there. So it gets considerably more money. Or allocating it independent of price. Well, all of these are equally unfair to somebody.

COMMISSIONER FITZSIMONS: Saltwater stamp's out of whack because it has proportionally a larger ‑‑

MR. MCCARTY: It's a $10 stamp versus a $5 stamp.

COMMISSIONER FITZSIMONS: ‑‑ by a factor of two.

MR. MCCARTY: So, if you look at the methodology that we're using right now which is based on usage ‑‑ it's based on both usage and price, because you get the number of people who you believe are using that stamp, that are component of Super Combo, and multiply that number by the price, as compared to this proportional allocation methodology that the auditors ‑‑ they haven't actually proposed it, they just kind of discussed it in their text. Based on the current State Auditor's report, we would recommend that the Commission define net receipts in the Administrative Code. We would request that we publish, in the Texas Register, a definition of net receipts for you to adopt in an open public meeting, as the value calculated from a relative weighting, using both the price of the stamp and the purchaser use as established by a dedicated survey.

One other point that the State Auditors brought up was that this survey data was, first of all, not dedicated. It wasn't designed for the purpose of identifying Super Combo stamp users, and it is somewhat dated, because a lot of these surveys only go once every four years or once every five years. So they believe that that data is dated and may not be as accurate, and we have created a Super Combo survey team here within the Agency. In an effort to try to address this answer once and for all, we probably have the most talented team to address this issue that we've ever put together. I want to introduce them: Jeremy Leitz from Coastal Fisheries, John Taylor from Inland Fisheries, Mark Steinbach from Wildlife and Sally Williams from Communications. If you all would stand up and be identified. These guys are the best of the best, and we have them working on the design of a dedicated Super Combo survey, the implementation of the survey, the final analysis of the survey, and to give us the proportional allocation, or at least the allocation as based on this definition of net receipts, if you choose to publish it and ultimately adopt it.

COMMISSIONER HOLMES: Gene, have you taken this recommendation and applied it to the numbers that you had on the screen on the previous couple of slides?

MR. MCCARTY: We don't think it's going to change a whole lot.

COMMISSIONER HOLMES: But some of those numbers were a bit different.

MR. MCCARTY: You mean to the proportional? You mean to this?

COMMISSIONER HOLMES: You had three different ones.

MR. MCCARTY: This is how we allocate now, and it's user-based.

COMMISSIONER FITZSIMONS: Based on the two surveys.

MR. MCCARTY: Based on these surveys which are not dedicated, not specifically designed to address this issue. This is proportional allocation, which has nothing to do with user or anything else. It just basically applies the total number of stamps purchased by percentage ‑‑

COMMISSIONER HOLMES: If you took the recommendation and applied it to '05 and '06, where would that fall?

MR. MCCARTY: We don't believe that it's going to look too much different than this. It's going to be a few thousand here, a few thousand there, but I don't think it's going to look too much different than this, because we did a lot of work to get this together, and had a lot of people working on it. We think we understand what the universe of users looks like. We may be fooled.

MR. COOK: These young people will come up with a sampling process that will be statistically, absolutely grounded for this purpose. It is something that we need to do. We've changed our staff configuration in recent years, and we were ready to do this. And we don't think it'll change those numbers. One of the things I'd ask you to keep in mind, too, is if this number's changed this way a little bit or that way a little bit, it doesn't really change the number of dollars we have in Fund 9, but we want to accurately ‑‑ we have every intention to appropriately and accurately fund each of these stamp programs, because the people that are buying these stamps understand that that stamp has a purpose. And we want to be sure it is addressed and is as accurate as we can.

MR. MCCARTY: As Bob said, we have changed our stamp structure, such that there will be some significant changes in how the dollars line up, because there's no longer a White-wing Dove Stamp, a Turkey Stamp.

COMMISSIONER FITZSIMONS: Isn't that going to make it easier?

MR. MCCARTY: It will make it easier, but for example, the Migratory Game Bird Stamp is going to be the biggest stamp in this deal, because it has all the duck hunters and all the dove hunters, as opposed to how the two used to be separated out. So you'll have a single, fairly large stamp.

COMMISSIONER FITZSIMONS: So if you'd gone to the proportional, that would have been the biggest, when you get the new, combined stamp, rather than the ‑‑

MR. COOK: If you lump white-winged, turkey, waterfowl to the other ‑‑ I mean, there's always different combinations. So, we'll get that squared up in the summer.

COMMISSIONER RAMOS: Maybe I'm missing something. For example, up there we've got the fishing and the hunting being equal. So, I guess our assumption is that if you fish, you hunt.

MR. MCCARTY: Our assumption is if you buy a Super Combo, you bought it for the purpose of fishing and hunting.

COMMISSIONER RAMOS: Now, wouldn't the most accurate way of determining that be the actual user? When I come in to renew and buy a combo ‑‑ to say, although I bought a combo for the last five years, I've never used it for this purpose or this other purpose.

In other words, if I buy a combo, is the whole purpose to determine whether I'm only using two as compared to everything that I bought?


COMMISSIONER RAMOS: And wouldn't the best source be the person that bought it, when he bought it? In other words, if I've had it for the last five years, when I renew it and I say, I've been buying the combo, but really only fish.

MR. MCCARTY: That would be the absolute, best way to do it. However, again we're asking our 18-year-old Wal-Mart clerk to collect that data. We're already having enough problems getting data collection at the point-of-sale. That's why I was going back to a dedicated survey that was specifically going to go to only Super Combo buyers, and specifically ask them what they do. We may find out something, because we're going to ask them, did you hunt, did you fish?

COMMISSIONER RAMOS: So, that's a real important one.

MR. MCCARTY: We may find out that 99 percent of them fish. So, just this equal allocation between the hunting license and fishing license may not occur, because our survey data may tell us that you bought a Super Combo, but you didn't hunt with it or you didn't fish with it. So you're not going to get attributed the fishing license.

COMMISSIONER RAMOS: And I think there's a lot of that. A lot of my friends buy it. They say, because we're helping Parks and Wildlife, and I'll never go fishing, but I'll contribute to the cause.

MR. MCCARTY: We're going to find that out.

MR. COOK: It'll be an interesting piece of information, but remember that other than being dedicated to Fund 9, that money's not dedicated to fishing or dedicated to hunting. It's used in law enforcement; it's used in fisheries. That $15 million in those two categories, it's still in Fund 9.


COMMISSIONER RAMOS: The point I was trying to make is it seemed to me that at the retail level is where you would get the most accurate reflection of what's happening, but if our retailers are not willing to go through that exercise ‑‑

COMMISSIONER HOLMES: You also may be talking about a cheaper license.

COMMISSIONER FITZSIMONS: Yes. The important thing and where the problem arises, as I understand it, take an example of the Saltwater Stamp. Depending on which allocation method you use, if it's a huge percentage of the total of that one stamp program, and that one stamp program has a specific job like buy back of shrimp licenses, that's where you need to be focused and not on the Fund 9 part because that's where ‑‑ the Coastal Resources Advisory Committee says, wait a second. How much money do we have to buy shrimp licenses? Is it 50 percent more than standard or 50 percent less?

MR. MCCARTY: If there aren't any other questions ‑‑ just from a deviation from your agenda a little bit, I would ask for the Chairman's permission to publish a definition of net receipts in the Texas Register for public comment and come back to you in August with an adoption of that definition.


COMMISSIONER HOLMES: Authorize you to publish it in the Texas Register.

MR. MCCARTY: Thank you, sir.

COMMISSIONER FITZSIMONS: It's been reviewed, that definition with the State Auditor?

COMMISSIONER HOLMES: Just a minor detail.

COMMISSIONER FITZSIMONS: We may not get agreement if we're going to sign it.

COMMISSIONER HOLMES: Any further questions for Gene?

(No response.)

COMMISSIONER HOLMES: Item number six, Survey of Organizational Excellence. Al?

MR. BINGHAM: Good morning, Commissioners. For the record my name is Al Bingham, Human Resources Division Director. Today I'm going to brief you on the status of our most important resource, our human resources. The Survey of Organizational Excellence is an employee attitude survey. Every couple of years we survey our employees to get their perceptions of how the organization is doing, what do they perceive the strengths to be, and what do they perceive the areas of concern to be.

A little bit of background about the survey. It began back in 1979 to assess how the average state employee felt about working for the state. Since then it's evolved into more of a strategic tool used to assess organizational strengths and increase employee involvement. The survey is administered by the UT School of Social Work. To date over 75 public and private organizations have used the instrument, and over 200,000 instruments have been distributed. The survey is designed to capture information about individual respondents and their immediate workplace, as well as broader issues and concerns, such as compensation, which are applicable to employees organization-wide.

For 2006, 54 percent of Agency employees participated in the survey and that's a significant improvement over prior years. I want to stress that the higher rates of participation are very important for a couple of reasons. Number one, the higher rates are an indication that employees are engaged with the organization. They have concerns about the organization. They want to be involved in the problem-solving of the organization. From a Management's perspective, higher rates of participation are good, because managers are less inclined to perceive that disgruntled employees are responding to the survey, and as a consequence are more likely to act on survey results. So, that's very important, and we'll continue to try to stress and achieve 100 percent participation in this survey.

A good thing about the survey is that it allows us to benchmark the information over a period of time, both with ourselves and with other organizations of similar size and mission. The survey was administered a couple of weeks back in January and February '06. As I said, our goal was to reach 100 percent of the employees on the payroll at that time. There are over 3,000 surveys were distributed. Employees had the opportunity to take the survey online, and we also distributed paper copies. Just over 1,600 employees responded. Twenty-six percent of the total respondents came from the headquarters, 74 percent from the field, and this distribution generally follows our staffing distribution ‑‑ field and headquarters. The participant profiles generally followed our workforce demographics as far as age, and gender, and ethnicity.

COMMISSIONER FITZSIMONS: Is that age breakdown consistent ‑‑ that's just the participants, but that's consistent with TPW?

MR. BINGHAM: Yes, sir. We have a mature workforce. On a positive note, the vast majority of folks surveyed indicated that they plan to be with the outfit over the next couple of years. Less encouraging, they indicated that they haven't had a lot of promotions and merit increases. I think the fact that we have such a low turnover rate when compared to the State's, speaks to the fact that for most of our employees it's more than just about pay. The employees recognize the importance of our mission, and they genuinely enjoy their jobs.

This particular survey looks at organizational life across five dimensions: workgroup, accommodations, organizational features, information and personal demands, and each of these dimensions consist of several constructs. The dimension scores range from a low of 100 to a high of 500. Here you see the various dimensions and constructs. For example, dimension one concerns workgroup. This dimension relates to the interaction between the employees, and their coworkers, and supervisors, and other folks that are closely involved in their day-to-day activities. It includes such constructs as supervisory effectiveness, fairness, team effectiveness and diversity.

The second dimension, accommodation, it gets to the adequacy of the physical environment and the resources the employees have to do their jobs. It also takes a look at compensation and benefit issues. The third dimension, organizational features, this dimension gets the corporate culture. The fourth dimension, information, looks at the flow of information, both internal and external information, how it's processed in the organization, the flow of information up and down and across divisions. And that final dimension, personal demands, it looks at the degree in which employees are feeling stressed in the job.

The highest-scoring constructs represent areas of strength, and the lowest-scoring constructs represent areas of concern, and as I said, the constructs range from 100 to 500. According to the survey administrators, any score below 300 indicates strong negativity on the part of the employees. Anything less than 200 requires immediate management attention. Here you see the overall scores for the Agency. The highest-scoring constructs are in the blue. The scores are to the right of the bar graph, and the lower scoring constructs are the darker color. There were significant differences between the headquarters employee's perceptions and those of field employees. You see here on this particular graph, headquarters staff generally rated the areas lower than the Agency average generally across the board. On the other hand, the field employees, generally their scoring were a little bit higher than the Agency average. There were also some differences across divisions, and each division was given information about the scoring. As I said one of the good things about the survey ‑‑ we've been doing it since 1998 ‑‑ it gives us the opportunity to see change over a period of time. The crossed mark areas of the graph show the 1998 scoring.

And the solid areas of the graph show the most recent scoring, and in most areas you can see that there was significant improvement in all areas since '98. The most notable concern obviously is in the area of fair pay. That particular area scored lower than we did back in '98. From the employee's perspective, the areas of strength of the organization are strategic orientation, that is how the organization responds to external influences; our adherence to quality principles, how we process external information, how information flows into the organization from external sources and from inside to external constituents.

That area burnout ‑‑ that's not a negative. Basically what that indicates ‑‑ that's a high score there ‑‑ and it indicates that our employees are not feeling overdue stress and burnout on the job. The physical environment, generally folks believe that they have the equipment and supplies needed to do their job, and they believe that it's safe.

The areas of concern. Obviously, one of the areas is pay, how we process internal information, and supervisory effectiveness. One of the things that Mr. Cook and I regularly do is to monitor the comments that employees make when they exit the organization, and consistently while a higher number of our employees, leave through retirement, the higher number note issues with supervisors, as the reason for leaving. I always say employees join organizations but leave supervisors. That's an area of concern that we'll continue to monitor and work with.

Another area is team effectiveness and our change orientation. On a positive note, we've seen adequate improvement in many areas. Seventeen of 20 constructs showed improvements since the last iteration of the survey. Negative changes most notably in the area of pay and compensation seemed to have worsened since the last survey. Here you see the change from the last survey. Again, across the board, generally, we've seen improvement in most areas.

Focus issues. It's easy for us to say we're going to spend most of our time addressing areas of concern, but it's equally important for us not to let the things that employees perceive that we do well slip. For example, if you notice up in the top of the chart there in that area of strategic orientation, while it's still an area of strength for us, it's been a slight drop since 1998. So, we'll continue to work on the areas of concern, as well as ensure that we continue to do the things that we do well, well.

Where do we go from here? Well, we've rolled out this data. We had an initial briefing with Mr. Cook and the other executives back in April. We've asked that each division appoint a division representative to be part of our change team. Our plan is for HR staff to train the division liaison to conduct focus groups within their respective divisions. Then we'll come together and kind of delve into some of the issues that employees have identified, seek recommendations from those employees, and then present them to Mr. Cook, with an idea that we would actively seek to make some positive changes. We would hope to implement any corrective actions over the next six months, with the idea that we would resurvey our employees on separate areas to document the effectiveness of any change noted sometime next spring.

With that, I'm available for questions.

COMMISSIONER FITZSIMONS: Al, you mentioned that you had a breakout between field and HQ on some of those.

MR. BINGHAM: Yes, sir.

COMMISSIONER FITZSIMONS: One that particularly interests me is the internal information, the flow of communication within the organization. Is that area of concern better or worse in the field than HQ? The reason I ask is I often hear from the constituents and people in the field that there's not the best coordination sometimes, whether it's a permitting a regulatory issue or ‑‑

MR. BINGHAM: It seems to be the same in that particular area for both.

COMMISSIONER FITZSIMONS: Pretty much the same for both?

MR. BINGHAM: Yes, sir.

COMMISSIONER FITZSIMONS: Didn't you also test between the two ‑‑ between HQ ‑‑ or am I asking it wrong? Is that measuring communication within the field staff or communication between HQ and field staff?

MR. BINGHAM: No. Basically what this is getting at is communication within a particular work unit division, as well as information that's needed to be transported across divisional lines. Are employees receiving the information that they need to effectively do their jobs?

MR. COOK: It's interesting, and it's a good question, because I've heard that and still hear it. It's something you have to really focus on, but it's no more difficult these days, I think, to get the correct message to the field and understood than it is to get the correct message to the guy in the office next door and understood. We work on that all the time. I guess I'll just say it that way. Within the divisions, within a district workgroup, it takes a good communicator, somebody who's listening. Effective information has to come down; effective information has to be distributed.

COMMISSIONER FITZSIMONS: I'm more concerned about the communication from the field back to HQ. Everybody has their anecdote. The classic story ‑‑ I was out one time with a group of biologists and ran into another group of biologists from a different division. They're like, What are you doing here? And they were essentially doing the same work. Sometimes that's what? That's between divisions in the field, between divisions at HQ.

MR. COOK: We've addressed some of those. I don't believe you can ever reach that point where you're there.

COMMISSIONER HOLMES: Just as a note, Al, in '98 you had four areas of concern that scored under 300. In the latest one you had one area of concern under 300. So just empirically it would look like you had some pretty significant improvements. The one that is the most obvious to all of us, and that's their pay. MR. COOK: That goes back to the thing I was talking about a while ago about classification of our state park employees and the need to adjust. We have the same thing in some of our specialty areas, where you've got computer jocks and the geeks here that are great, do us a super job.

COMMISSIONER FITZSIMONS: All kidding aside, there's one issue I see ‑‑ strategic is the one that's down since '98. I can't help but notice that we've had at least two strategic plans since '98. Is that a communication problem? Where is that from?

MR. BINGHAM: I think it's understanding. We've been working with two strategic plans through the LAR and then the Land and Water Plan. I think more and more as we tie everything to the Land and Water Plan, that they'll improve. I think, basically, it's a lack of understanding which plan were we following.

COMMISSIONER HOLMES: It could be who answered the questions, too, because it's less than a 1 percent move. You've got a 54 percent response to the survey, and it's a pretty small number, whereas that other one is 77. Any other questions for Al?

(No response.)

COMMISSIONER HOLMES: Thank you very much, Al.

Mr. Cook?

MR. COOK: I believe that's it for this group.

(Whereupon, at 11:30 a.m., the meeting was adjourned.)


MEETING OF: Texas Parks and Wildlife Commission, Finance Committee

LOCATION: Austin, Texas

DATE: May 24, 2006

I do hereby certify that the foregoing pages, numbers 1 through 109, 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 Commission.


(Transcriber) (Date)