Texas Parks and Wildlife Commission
Ad Hoc Infrastructure Committee

Nov. 1, 2006

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

BE IT REMEMBERED, that heretofore on the 1st day of November, 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 PARKER: Okay. First order of the business, approval of the previous Committee meeting minutes, which have already been distributed.



COMMISSIONER PARKER: Commissioner Holt makes the motion, Commissioner Ramos makes the second. Is there any discussion?

(No response.)

COMMISSIONER PARKER: Hearing none, all in favor?

(A chorus of ayes.)

COMMISSIONER PARKER: The motion carries. The first item is going to be Land and Water Update.

Mr. Cook, will you make your presentation?

MR. COOK: Thank you, Commissioner Parker.

Just a few notes right quick. The World Birding Center of Rio Grande at Weslaco was opened to the public in June of '06. This is the second State owned and operated park dedicated to birding in Texas. They're doing very well. We've partnered, as you might recall, with the City of Weslaco to develop this site. And we're making good progress there on several different areas associated with that Park.

The original 1933 CCC era portion of Indian Lodge out in the Davis Mountains has been restored, was opened to the public in July of '06, and we recently had a grand opening event that was well attended by locals, and elected officials, and went over very, very well.

COMMISSIONER BIVINS: Did we get some pictures of that, or do we have any ‑‑

MR. COOK: Absolutely. We can get them for you. You bet.

The Choke Canyon Callahan Unit State Park was reopened to the public on September 1 of '06, following emergency repairs to the water system there. The grand reopening of the San Jacinto Monument took place September 7 of '06, following modifications to the elevator in the Monument shaft to get in compliance with the Fire Safety Standards and mechanical loops there they were having problems with. And it was very well done. Our contractor there did a great job, folks on staff in our Infrastructure Division really pulled off a good one there in a short period of time.

In September 2005, Hurricane Rita damaged facilities at 11 of our sites, including seven state parks, one fish hatchery, and three wildlife management areas. Our force account crews, our employees, our guys that do ‑‑ men and women that do repairs to these places, are completing repairs at Village Creek State Park, and construction repairs at Martin Dies, Jr., and the Jasper Fish Hatchery are currently under way.

Thank you, sir.

COMMISSIONER PARKER: Now also ‑‑ would you tell them also about Sea Rim, and the Hurricane?

MR. COOK: I may have to get a little help on that, but I know Sea Rim, we're looking at, you know, the possibility of a substantial donation, and ‑‑ the thing on money?

MR. WHISTON: Yes, certainly. Thank you. For the record, my name is Steve Whiston, and I'll cover Hurricane Rita repairs in a little more detail in my briefing to follow. But Sea Rim is the only park currently that remains unopened to the public. All the other facilities that were affected by the Hurricane have now had substantial repairs, or, you know, things to happen to allow them to be in operation, or at least operating on a limited basis in some cases. So Sea Rim is the only park at this point in time that remains unopened. We have some critical issues there regarding infrastructure, waste water, damage, damage to the electrical system. And as soon as those things are addressed, we'll, hopefully here in the near future, be able to start reopening that facility to the public.

COMMISSIONER HOLT: A question I had just with that, did we get Federal ‑‑ any Federal funds for any help with that?

COMMISSIONER PARKER: Commissioner Holt, I think he is going to make that presentation to you.


COMMISSIONER PARKER: So are you finished?

MR. COOK: Yes, sir.

COMMISSIONER PARKER: At this time, Mr. Steve Whiston is going to make a presentation regarding several items. Item Number 2 is the Bond Program and Capital Project Update. Number 2.

MR. WHISTON: Yes, sir. Thank you, Commissioner Parker.

Good morning, Commissioners. Again, for the record, my name is Steve Whiston, Director of Infrastructure Division. I would like to begin, as is usually our case, with an update on the General Obligation Bond Program. Commissioners, if you recall, the beginning of each fiscal year, we establish for ourselves, or set expenditure goals based on our available resources, based on the number, and the scope, and magnitude or complexity of the projects that are on board for that year, and do our best to try to meet that goal in terms of overall end of year expenditure.

I'm pleased to report that the total year-end expenditure for the last fiscal year, FY '06, exceeded the goal that we set for ourselves. Our target expenditure was a little over $20.6 million, and our actual expenditure at the end of August was $22 million. I share that information with you, not just to pat ourselves on the back, but really to emphasize that this is a real collaborative effort. This is not just Infrastructure. This is an effort on all the Resource Divisions working together in Project Teams, working independently in some cases, to expend money, to continue to drill down our Capital Program.

A big part of our success in FY '06 was because we had so many projects in the pipeline, so many projects that had been planned and designed in the previous year, and then going into '06 all those projects went into construction. And it's during construction phase that we spend, you know, the majority of those funds. So we had a successful year, in my opinion, in '06, and I'm happy to report that result.

With fewer infrastructure staff available to us this current fiscal year, and with out inability to kick off as many projects, our projection, our goal that we've set for '07, is going to be a little bit less. As reflected in this slide, we're proposing, or estimating, or projecting a year-end expenditure in '07 of about 19 million. We are off to a good start, however. Since September, we've expended a little over $2.4 million, which is tracking pretty closely ‑‑ if you'll notice the blue line as it overlays the yellow anticipated expenditure curve for this year. So we're off to, I think, a reasonable start.

Just as a reminder, and I'm sure, as you all well know, the Legislature has approved Prop 8 funding about ‑‑ so far today, about $54.8 million of that original $100 million plus authority that was provided to us in 2001. We received 36.7 million in FY ‑‑ in January of 2003, and then we received, in this last session authority, to issue another 18.1 million of bond proceeds over this '06-'07 biennium.

So the unappropriated balance, the money that's now available yet to us in Prop 8 bonds that we have included in our Legislative Appropriation Request, in pink in this slide, is $46.03 million. When this Program ‑‑ when this bond, this General Obligation Bond Program is complete, as you'll note in the far right hand column, we expect to have implemented $69 million worth of statewide repairs over this eight-year period, which averages to a little over $8.5 million per year, if you divide it over those eight calendar years.

Prop 8, when it's said and done, will ultimately fund $12.3 million for the restoration of the San Jacinto Battleground; $12.5 million, with the approval of the Legislature, for the Battleship Texas; $350,000 was expended previously for the repairs at the Admiral Nimitz State Historic Site before that facility was transferred to the Texas Historical Commission; and the $2.6 is earmarked still for the completion of the ‑‑ or has been spent ‑‑ excuse me ‑‑ for the completion of the Sheldon Lake Learning Center; and then $4.1 million has been partially spent and the balance earmarked for the development of the Levi Jordan Plantation and new historic sites located near Houston.

Our FY '03, on that original $36 million bond proceed that we received has funded 141 separate projects. Most of those projects are now complete. We have expended, or encumbered, $35 million of that issue. In a later slide, I'll share with you our anticipated completion date, when we expect to have that fully expended.

With the FY '06 issue, we received the first issue of money, the first bond proceeds, this past April. Rather than issue bonds in this particular Program in a lump sum number ‑‑ a lump sum amount in the beginning of the fiscal year, bonds are going to be sold and issued to us throughout this biennium and into the next on an as needed basis. The revenue from this $18 million issue is going to fund 45 projects, one of which is already complete, 11 are in design, and three are in construction at the present time. All the balance of funds ‑‑ I think it's important to recall, all the balance of funds that are unobligated right now, are allocated to specific projects, to an approved list of projects. So we know, and fully anticipate, how we're going to expend those dollars.

We are holding, however, in reserve, and you'll notice at the bottom, the note, about ‑‑ a little over $400,000 of these bond proceeds to be used for emergency repairs, just for unanticipated needs as the year goes on, and for increases to project costs as we incur those along the way. And over time those monies will be obligated and spent as project funds.

Before moving on to our update this morning on specific capital projects, I thought it would be well worth our time to take a few moments ‑‑ your time ‑‑ to take a few moments to brief you on the project management process. This slide illustrates the steps that lead up to a capital project, and then the phases and the time line that we typically encounter in implementing a capital project, a capital repair or construction project.

We originally developed this slide four or five years ago for a Commission presentation at the time, and we continue to refer back to it from time to time. We thought it would be helpful to show you once again this morning. As you well know, a project starts, obviously, with the appropriation authority from the Legislature. We then ‑‑ if you'll notice the blue bullets, or circles, at the top ‑‑ we then confirm our project priority needs. And then with your approval, we submit our bond request to the Texas Public Finance Authority, or TPFA, for their approval and subsequent sale and issue of the bond proceeds.

Once we have those monies in hand, and for the purpose of this slide, it's at this point that we can ‑‑ that the meter starts running for us, the clock starts ticking. Depending on the size and the complexity of the project, as you'll see in the boxes toward the bottom of the slide, it takes from two to eights months to typically complete the planning, the scheduling, and selecting the design consultant for a project. On average, it takes the design consultant then, again, depending on the size of the project, from two to eight months to design and prepare the plans and specifications for a project.

Soliciting bids for construction, and preparing and awarding a construction contract usually takes three to four months to comply with all the rules and regulations we are required to comply with to make a project award, or construction award. Actual construction, as you well know, can last, again, depending on the size of the project, from eight months to a year and a half to get completed. And then finally, the steps to close out a project can take one to three months. That's the time it takes to get the as built drawings. We're not expending money, per se, during that period of time, but to get as built drawings, to get final payments made to the contractor, and clear and close those contracts.

Again, and in summary then, depending on the size of the project, it takes a total of 18 to 38 months on average for us to complete a project and fully expend the project funds. The red line at the bottom kind of illustrates the point I made earlier. That illustrates kind of the expenditure curve that is typical with ‑‑ over the life of the project. We'll see a slight increase during the design phase, we'll spend money to pay for the design, or the execution of the design of the project. But then the bulk of the money takes place in that last 18 to 20 months of the life of the project when we're in construction. So the it's the later stages of that project that really the monies are expended.

I guess my primary intention for presenting this slide is just to emphasize the point, that I think you all appreciate, is that projects don't start and stop over the two-year period between Legislative Sessions. We can't fully expend all the money that's appropriated to us by the Legislature by the time the next Legislature starts up again. It takes, you know, a real amount of time for us to successfully execute those projects.

Just as an example, here's the slide that reflects the actual encumbrance and expenditure of that $36.7 million that was issued in January of '03. We we've plotted both our encumbrance of the money, how we obligate the money toward projects, and then the actual expenditure in the red line below. With FY '03 funds we fully expect that we will encumber and obligate to a contract all the funds by April, and then fully expend the money by the end of this fiscal year, coming up in this August. And we'll be at that point, going into the Legislative Session, having closed that Bond Program.

So the implementation of the FY ‑‑ the $36 million took a little over four years from the start ‑‑ the time we started to the time we anticipate having fully expended those revenues. Likewise, I think if we were to plot this new $18 million we got in FY '06, because of the handful of those large multimillion-dollar projects that we're managing, we expect it's going to take another three years plus to fully execute and expend those revenues.

The last thing that ‑‑ of my presentation this morning is to report on some specific Capital Projects. This slide actually is ‑‑ I wanted to share with you, is a picture of the recently completed Education Center at Gus Engeling Wildlife Management Area, a facility that we're proud of, a building that's being well used by wildlife as we speak.

I'd first like to begin to answer some of the questions you raised at the beginning of the presentation, to brief you all on the status of our efforts to repair sites damaged by the Hurricane Rita, and to recover Federal reimbursement from FEMA. We are currently working very diligently to complete the repairs and obtain reimbursement for the costs that ‑‑ for damage that we sustained right now for at nine project sites. That number, as you recall, as Bob mentioned earlier, was originally 11. One of the sites was Lake Houston that we recently transferred to the City of Houston, so we're no longer pursuing repairs there.

The 11th site is the ‑‑ is a site, Wildlife Management Area site, the Tony Houseman WMA, really sustained pretty minor damage, and as we got into the FEMA program, discovered that the cost ‑‑ the anticipated cost of that repair was well below the threshold that FEMA determined is eligible for reimbursement. So those repairs are made, we've kind of taken it off our radar screen at this point.

So there's nine sites that remain. As I mentioned earlier, only Sea Rim at this point in time is ‑‑ remains closed to the public. Our total estimated damages for those nine sites totals $3.1 million. If we are ultimately determined eligible by FEMA, and we can comply with all their long list of requirements, we can anticipate up to $2.8 million of reimbursement, which is about 90 percent of our cost.

And we've got a long way to go before we get there, however. Our biggest struggle right now, the dilemma that we're trying to wrestle with here is that we are ‑‑ we've still not learned, or been informed by FEMA, what our insurance costs are going to be for these sites. They have determined that, in order for us to be eligible for reimbursement at specific sites, or certain sites affected by the Hurricane, that we are going to have to provide proof of insurance.

So we're going to have to have insurance in order to get coverage, or reimbursement from FEMA. We've yet to learn from them, or hear from them, what specific sites those are and what level, or what extent of insurance that is going to be required of us so that we can then step back and evaluate, you know, the cost benefit of doing that, and whether or not it would be in our best interest to secure that insurance, to entitle us to the reimbursement.

In the meantime, we're not leaving it at that, we have, under Bob's signature, drafted ‑‑ or submitted rather, a letter to the Commissioner of Insurance at the Texas Department of Insurance, requesting that he waive or exempt us from this insurance requirement. If we're successful with that, and the Commissioner of Insurance grants us that exemption, and FEMA has indicated and has verified that they will waive that requirement, and then we'll be fully eligible for the full reimbursement.

So it's been a long struggle. We're approaching it from several different angles and hopefully we'll be successful with the Department of Insurance, and get around this whole insurance requirement thing. We are hopeful that this will be resolved in the next few weeks. We are trying to stay on top of it to the extent we can, and get some answers.

MR. COOK: Commissioners, I just inject here, we've had a number of people working on this in the Infrastructure Division, Law Enforcement Division, there are several claims there, and also, of course, it's one of those frustrating things that we've been involved in. Well, I won't say one of the most, but ‑‑

MALE VOICE: Top ten.

MR. COOK: It's ‑‑ well ‑‑


MR. COOK: You know, when that came back to us after ‑‑

MALE VOICE: Top ten this year.

MR. COOK: ‑‑ almost a year, 10 months, 11 months, and said, well, we think maybe you should be insured, but if it's okay if you're retroactively insured. I mean, we're not insured now, but it would be like if we went and got some insurance, it would be retroactive, and then they'd consider it. That's what it is.


MR. WHISTON: That is, the insurance insulates them from future costs. They'll be willing to reimburse us for the past occurrence, if we can demonstrate we have insurance, so it won't come back to them later.

COMMISSIONER HOLT: Because we don't normally carry insurance in these ‑‑

MR. WHISTON: Oh, no.

COMMISSIONER HOLT: No, I would assume you did not.

MALE VOICE: Is that insurance in perpetuity, or just on an annual basis?

MR. COOK: Yes. For the lifetime of the facility, yes.

COMMISSIONER HOLT: Yes, they'll want you to keep guaranteeing that you'll keep paying a premium.

MR. COOK: ‑‑ therefore, any discussions that's got into really Texas Department of Insurance and the Director over there, after several back and forth with several of us. We're just going to get him to exempt us, if he possibly can, and move on.

MR. WHISTON: I really chose not to get into the whole ugly details of this negotiation, or this struggle, you know, but FEMA's coming back to us and wanting us to insure picnic tables and insure, you know, storage buildings, you know, facilities, or architecture ‑‑

MALE VOICE: The bottom line is ‑‑

MR. WHISTON: ‑‑ is not insurable.

COMMISSIONER HOLT: Yes, you can't do it.

MALE VOICE: The bottom line is here what percent you can be repairing and getting these sites back open, and we'll fight this battle ‑‑

COMMISSIONER HOLT: Yes, after the fact.


COMMISSIONER FITZSIMONS: On the subject of FEMA reimbursement, where are we on the reimbursement of Law Enforcement, on costs from Rita and Katrina?

MR. WHISTON: Actually, good news. Pete, would you join us ‑‑ we got great news ‑‑


MR. WHISTON: ‑‑ recently.

MR. FLORES: Mr. Cook, Commissioners, Peter Flores, the Law Enforcement Director. We received $604,000 reimbursement from Katrina. That's already ‑‑ the Agency has received it and it does come with the Federal Authority that we asked for. The additional $1.3 million for the Hurricane Rita event, we're in the final stages of that process as well. And that also will encompass expenses from the Wildlife Division, and the Infrastructure Division. So we're very well on track there.

COMMISSIONER FITZSIMONS: So total reimbursement of the two is 1.9-, almost 2 ‑‑

MR. FLORES: Yes, sir. Almost $2 million, yes, sir.

COMMISSIONER HOLT: Good. Something's moved along.

MALE VOICE: Thanks, Pete.

MALE VOICE: Thank you.

MR. WHISTON: Next, as Mr. Cook introduced, I'd like to brief you a little bit about our successful completion of the $2.2 million renovation of the San Jacinto Monument. Since we last met in April, as Mr. Cook shared with you, we have completed that project. We celebrated the grand reopening of the elevator and the observation deck in September.

This was funded with emergency funding from the last session, and allowed us to make extensive repairs to the Monument to comply with Life Safety Codes and Fire Codes, and installed new fire suppression systems, fire alarms, fire harden the elevator shaft to separate it from the stairwell, and made a lot of structural and internal infrastructure repairs to make that facility safe.

COMMISSIONER HOLMES: Phil, go back to that slide.


COMMISSIONER HOLMES: It does give everybody an opportunity to understand the challenges to this Battleground site.

MR. COOK: By the way, that's not the ‑‑



MR. WHISTON: That is the cultural landscape, the grounds, the San Jacinto Monument.

MR. COOK: We're not on the typical tourist ‑‑


COMMISSIONER HOLMES: You know that there have been a couple of accidental releases from plants out there where they had to use the Monument, to get inside the Monument to let the fumes pass. As Phil says, it's an environmental shelter.

COMMISSIONER HOLT: It's the green space for the fort. Right. That's a great story.

MR. WHISTON: This project is not a real photogenic project, so ‑‑ and I'm doing most of the work ‑‑

MALE VOICE: Makes me dizzy.

MR. WHISTON: ‑‑ most of the work was done, you know, out of public view, it was above the ceilings and behind the walls and under ground. As I mentioned, you know, part of the scope of the project was to fire harden, or separate, the elevator shaft. This is looking down the elevator shaft in the tower. A lot of work done in key areas of the shaft to provide that safety barrier.

A big part of the project scope was the installation of this sprinkler system, which involved a lot of extensive pipeline that we had to introduce into the building to be able to provide that safety protection for ‑‑ you know, for the facility.

The grand reopening event was hosted by the San Jacinto Museum of History Association. It was attended by Senator Gallegos and Representative Wayne Smith. I also want to thank Mr. Cook and Commissioner Parker for attending, and for representing the Department in the neat event that we held, and since that time we're back in business.

COMMISSIONER FITZSIMONS: And the tireless work of Sarita Hixon.

MR. WHISTON: Pardon me?

COMMISSIONER FITZSIMONS: And the tireless work of Sarita Hixon.

MR. WHISTON: Oh, yes, by all means. Yes, sir.

It probably goes without saying we are not giving up on our plans to secure funding for the long term preservation of Battleship Texas. As you know, rather than continue to tow the ship, as we have discussed previously, tow the ship ‑‑


MR. WHISTON: Rather than continue to tow the ship for cyclical repairs every 10 to 12 years, you know, we determined that it was in our best interest, and for the long term preservation interest of the ship, to try to create or develop a permanent dry berth, a cradle system in which the ship could sit out of water and be no longer subject to those corrosive ‑‑ that corrosive environment.

Our estimated total cost for this project, when it's all said and done, is estimated to be over $51 million. The dry berth alone, the cost to construct, to remove the ship, to do the dredging that's necessary, and build this dry berth is estimated at almost $24 million. The additional ship repairs that are now needed for the ship, once the ship is brought back in and set ‑‑ and it resides on the cradle, the remaining ship repairs is estimated a little over $27 million, to replace all the mass ‑‑ do the structural repairs, to place all the necessary ship's steel hull, to do superstructure repairs, to repaint, to replace the wood deck on the ship. A big price tag for those repairs.

The good news is, that we do believe that after these extensive repairs are made, that the cost to maintain the ship, as long as it's out of water, will be manageable for us, and then our long term interest will be a doable thing.

The bad news, recently, I'm sure you'll have been made aware, is that funding for the project that was to come from the $16 million of Federal Highway Enhancement Program funds, the SAFETEA Program and the funds we've made application for, that has been reviewed now by the Federal Highway Administration and determined to be ineligible. We are, however, working really closely with TxDOT. TxDOT has the lead at this point, and they have assured us that they'll work with us to resubmit the application to the Federal Highway Administration to try to do whatever is necessary to hopefully persuade them to re-evaluate, or reconsider that determination.

Indications from TxDOT is that there's a, you know, a fair chance that that might happen, but it's unknown at this point in time. We're hoping to resolve that issue here shortly, or at least by the end of this calendar year, so we'll know ‑‑ have a better idea of where we stand funding-wise.

COMMISSIONER HOLMES: Commissioner Parker, may I ask ‑‑


COMMISSIONER HOLMES: ‑‑ a question before we get away from the Battleship?

Steve, there have been quite a lot of estimates ‑‑

MR. WHISTON: Certainly.

COMMISSIONER HOLMES: ‑‑ on the Battleship over the last few years. I saw one recently by an engineering firm called URS.

MR. WHISTON: Correct. Yes, sir.

COMMISSIONER HOLMES: Do you know about that one, and do ‑‑ have you evaluated that?

MR. WHISTON: No, sir. We have ‑‑ only briefly. URS has approached us, we've met with URS, they've shared with us the general scope of the approach that they would propose to take with that restoration. We've not had an opportunity to see in detail what that estimate is, and Commissioner, in fact, we did that on purpose because ‑‑ and met on several occasions with URS because if we want to consider URS as a potential design consultant, or constructor for this project, we really can't be meeting with them and conferring with them in advance. We don't want to jeopardize the competitive ‑‑

MALE VOICE: Disqualify them.

MR. WHISTON: ‑‑ you know ‑‑ and potentially disqualify them as a potential, you know, vendor or, you know, resource to accomplish this work.

So on the surface, you know, we're interested and it looks like a reasonable proposal, but we're not familiar with enough ‑‑ enough with it at this point in time to know whether it has much validity or what.

COMMISSIONER HOLMES: And so the numbers that are on the screen are internally generated absolutes.

MR. WHISTON: Yes, sir. Internally generated. And our best estimate at this point in time, to pursue the design solution that we presented to you in the past ‑‑

COMMISSIONER HOLMES: Without benefit of a ship architect engineer.

MR. WHISTON: Correct. And that would be the first step. Once we were able to obtain funding, we would turn this project over first to, you know, to a Naval Architect, a Marine Engineer, to do the ‑‑ first the ultrasound, all the engineering and testing to first determine whether the ship is even structurally sound enough to be moved, or to be set on a cradle. And then they would engage with us to, you know, to determine what the best solution would be, and what that cost is going to, you know, ultimately ‑‑

COMMISSIONER MONTGOMERY: Is this ‑‑ given the unique nature of this asset, is this ‑‑ or this liability really ‑‑ is this project not suitable for design build of some sort of fashion, a modified design build?

MR. WHISTON: Oh, certainly ‑‑


MR. WHISTON: Oh, no, we will. We will consider ‑‑


MR. WHISTON: ‑‑ you know ‑‑

COMMISSIONER MONTGOMERY: It seems like you have to work through so many details.

MR. WHISTON: ‑‑ we're looking at construction manager at risk, a number of different project delivery methodologies that have been successful in the past, that, I think, help us ‑‑

COMMISSIONER MONTGOMERY: I just think there's going to be value engineering every time you turn around ‑‑

MR. WHISTON: Oh, I agree completely. This project will not lend itself to the traditionally approach we ‑‑


MR. WHISTON: ‑‑ take in designing ‑‑

COMMISSIONER MONTGOMERY: We're not doing that. That's ‑‑ we're not doing it. Okay.

COMMISSIONER HOLT: We factored that into these dollars?

MR. WHISTON: Yes. To the extent we can.


MR. WHISTON: No, the additional funding outside of the SAFETEA Grant, as you know we have included in our Legislative Appropriation Request. We included the appropriations for Prop 8 funds, as well as an additional appropriation of general revenue, or whatever funding that the Legislature might determine appropriate to enable us to fund this $51 million project. As well as we're counting on the support of the Battleship Texas Foundation and their fundraising efforts to help finance the cost of the project.

COMMISSIONER BROWN: Once we ‑‑ I mean, we accomplish this, get the funding, then what is your estimate on the annualized funding requirement going forward with the production.

MR. WHISTON: Excellent question, Commissioner Brown. We don't have those numbers yet, but we are, you know, currently engaged in doing that, but that is something that we understand that we're going to have to determine so that, you know, we can confirm the viability of all this. But I do not have those numbers at this time.

COMMISSIONER HOLMES: The last time I saw those numbers, which were very back of the envelope, it looked like the entrance fee would pretty much offset the running cost, but that assumed you spent the enormous amount of capital to bring it back ‑‑

MR. WHISTON: Up front.


COMMISSIONER FRIEDKIN: But after that, self-funding, from what you saw?

COMMISSIONER HOLMES: Yes, but that was ‑‑

COMMISSIONER HOLT: Well, that's ‑‑



COMMISSIONER HOLMES: ‑‑ a year or so ago.

MALE VOICE: I suspect that was pure marginal operating cost, and no ‑‑


MALE VOICE: ‑‑ replacement reserve either.

MALE VOICE: Of course, these aren't our numbers either.

MALE VOICE: No, no, they aren't.

MALE VOICE: What's the visitor numbers?


MALE VOICE: You know, the Battleground has a really big number ‑‑

MALE VOICE: 47,000 annually.

MALE VOICE: How do you separate either the ship or ‑‑

MALE VOICE: To the Battleship?

MALE VOICE: Well, there's a separate fee to go to the Battleship. And we didn't charge any fee for the Battleground until this year. Right?

MALE VOICE: And it's a dollar a car.

MALE VOICE: And there are about, what, 600,000 or 700,000 people a year that go on the Battleground?

MALE VOICE: But they're not paying.

MALE VOICE: Not paying.

MALE VOICE: No. It's a dollar a car. Right?

MALE VOICE: It's a dollar a person.

COMMISSIONER HOLT: What's it cost to get on the ship?

MALE VOICE: A dollar a person.

COMMISSIONER HOLT: A dollar a person to get ‑‑

COMMISSIONER HOLMES: No, no, the ship is ‑‑

COMMISSIONER HOLT: What's it to get on the ship?


MALE VOICE: It's $10 a person to go on.

COMMISSIONER HOLT: Well, what do you think it is, 47,000 getting on the ship, or just ‑‑

COMMISSIONER HOLMES: I thought it was more than that, but maybe that's ‑‑ maybe it's the paying group.


COMMISSIONER HOLMES: My guess is whatever we estimate now in terms of operating costs and offset ‑‑

MR. WHISTON: Commissioner, we have done some preliminary estimates, but I don't lay a lot of stock in those yet. Those really need ‑‑ will need to be re-evaluated. Not to paint a gloomier picture, but, you know ‑‑


MR. WHISTON: These estimates are last year's estimates.

COMMISSIONER HOLT: Oh, yes, see already ‑‑

MALE VOICE: Don't outdo yourself.

COMMISSIONER HOLT: Yes, you get another 10 percent back.

MR. WHISTON: ‑‑ experiencing significant increase ‑‑

COMMISSIONER HOLT: Construction cost.

MR. WHISTON: ‑‑ see a loss ‑‑


MALE VOICE: Well, listen to ‑‑


COMMISSIONER MONTGOMERY: Can I ask the elephant in the room question? At what point do we reconsider display of the ship, and either portions of it that are salvaged, or some limited replication, because at some point we might as well build a replica. I don't where that number is either.

MALE VOICE: Or move it to where ‑‑

COMMISSIONER MONTGOMERY: Yes. I just wonder whether we've really done an analysis of alternatives heretical though that may be. But these are bigger ‑‑ these are getting to be huge numbers.

MALE VOICE: These are huge numbers.

COMMISSIONER HOLMES: I think there's some alternatives being looked at by local groups within the Battleship Friends Group.

COMMISSIONER FITZSIMONS: Now the good news is, and there's not a lot of good news on this subject, but there are some battleships, not dreadnought class, this is a unique ship, but there are those that have some pretty good visitorship numbers, but they're just in a place where tourists ‑‑ where you're in the tourist loop. And what would be the numbers on the Lexington, do you have any idea? They're in Corpus.

MALE VOICE: The numbers on what?

COMMISSIONER FITZSIMONS: The Lexington. It's in Corpus. Part of the big tourist loop down in Corpus. And I guess that's one of the ideas being considered in the Houston area, is to move it where the people are.

MR. WHISTON: Right. But the numbers are excessive. The numbers are quite large.

MR. COOK: Well ‑‑

MALE VOICE: But you know the Lexington ‑‑

MR. COOK: ‑‑ certainly it's something you could increase ‑‑ depending on something like that, you could increase visitation. But I don't think you're ever going to generate revenue from visitation to refurbish, refloat ‑‑

MALE VOICE: Oh, no, no.

COMMISSIONER FITZSIMONS: Not $50 million plus operating.

MR. COOK: I mean, it's just not going to happen. But we are in constant communication with the Battleship Foundation folks, or a lot of groups down there about that topic. This issue ‑‑ where we are right now, I think, is actually in a very open position of going to the Legislature and saying, you know, this is what it's going to cost to do what we believe is a long term viable solution. It is costly, but some decision needs to be made here. And we have, in our action, have asked for the Legislature to weigh in and to consider where we go from here.

And, you know, we may be in a completely different note, as we would say, come June 1 of '07. We may be looking at a lot of different alternatives. But, you know, in the last three years, that Battleship has ‑‑ we woke up in the morning and found that Battleship sitting at about a five to seven degree list. And we go back in and pump it out and patch it up temporarily.

MR. WHISTON: I'm glad Chairman Fitzsimons brought up the Lexington as an example. We are approaching a time when this ship will no longer ‑‑ it'll reach a stage of decay, or deterioration, like the Lexington, that it will no longer be able to be moved. It will be permanently residing where it sits right now, in the mud, you know, or will sit, as it will not be able to ‑‑

COMMISSIONER RAMOS: My only comment ‑‑ I agree with Commissioner Montgomery, I mean, at some point you say enough is enough. You know, that's a lot of money and it's amazing what we could do in state parks and in other areas ‑‑ and I'm not at all being insensitive to that, but, you know, you reach a point where you say, you know, it's just cost prohibitive. It's just not realistically reachable. And at that point, I think we need to go to a different plan.

COMMISSIONER FITZSIMONS: Fifty-one million dollars is ‑‑

COMMISSIONER RAMOS: It's just a ton of money.

COMMISSIONER FITZSIMONS: ‑‑ what we'd have to acquire, develop and open up two 5,000-acre state parks.

COMMISSIONER HOLMES: With a little bit of change left over.

COMMISSIONER RAMOS: And then you wonder ‑‑ and, again, I'm ‑‑ you wonder where do we get the biggest bang for the dollars, where do we get the most exposure, where do we get more people to reap benefits from it. So, you know, it's ‑‑ the economics here are tough.

COMMISSIONER HOLMES: It is a very difficult issue, yes, because we don't have the money to do it. The Legislature's going to have to make their call.

COMMISSIONER HOLT: Are there any political champions for it in the Legislature at this point, coming out of the ‑‑ one of delegates?

COMMISSIONER HOLMES: Yes, there are a couple.



COMMISSIONER HOLT: ‑‑ they're not ‑‑ they don't know the numbers yet, at this ‑‑ or do they?

MALE VOICE: They know that ‑‑

COMMISSIONER FITZSIMONS: We discussed it at the LAR meeting ‑‑


COMMISSIONER FITZSIMONS: ‑‑ the Senate Finance, and they're aware.

COMMISSIONER HOLT: So they're aware.

COMMISSIONER FITZSIMONS: ‑‑ that it's ‑‑ that, as I said ‑‑

COMMISSIONER HOLT: But this is probably a minimum number.

COMMISSIONER FITZSIMONS: ‑‑ that would pay for a lot of other things.

COMMISSIONER HOLT: Okay. Get it on their list.

MR. WHISTON: Commissioners, that concludes my presentation.

Commissioner Bivins, I will get pictures of Indian Lodge for you.

I'll be happy to answer any other questions you might have.

COMMISSIONER PARKER: Any other questions?

(No response.)

COMMISSIONER PARKER: Okay. Thanks for that presentation. We'll now go to Item Number 3.

MR. WHISTON: Thank you, again, Commissioner Parker. Again, for the record, my name is Steve Whiston, I'm the Director of Infrastructure Division.

As you'll recall, in the last Legislative Session, the Legislature approved the appropriation of Freshwater Fish Stamp revenue to fund the debt service to issue $15 million of revenue bonds to construct the new East Texas Fish Hatchery located ‑‑ to be located near Jasper. This Agenda item, which I will present to you again tomorrow, requests your approval of a bond resolution that will be directed to the Texas Public Finance Authority to request that they proceed with the financing and sale of those revenue bonds.

We need to set this process in motion now. The design of the new hatchery will be completed this coming Spring, in 2007, and we anticipate the start of construction of the hatchery next summer. So we need to get under way and get the process rolling with TPFA to provide the bond proceeds for this project.

So with your concurrence tomorrow ‑‑ or with your concurrence today, I will request tomorrow that you adopt the following motion: That the Texas Parks and Wildlife Commission adopts by resolution, or Exhibit A, the resolution authorizing a request for the financing and execution and delivery of the documents required to effect such financing.

And I'll be happy to answer any questions.

COMMISSIONER PARKER: Any questions about ‑‑

COMMISSIONER HOLMES: Yes, 15 million may not be enough.

MR. WHISTON: That is actually correct, 15 million ‑‑

MALE VOICE: That's a promise?

MALE VOICE: Phil may like to join us?

MALE VOICE: Yes, so where do you get ‑‑

MR. WHISTON: Fifteen million ‑‑

MALE VOICE: ‑‑ the other ten?

MR. WHISTON: ‑‑ was our original estimate of available bond revenue. Our anticipated cost for the construction of this facility exceeds 15 million.

MR. DUROCHER: Mr. Chairman, Commissioners, I'm Phil Durocher for the record, Director of Inland Fisheries. We're projecting a fairly significant increase in the cost from the original 2000 projection, and we are in the process right now, the staff and I, of putting together some detailed description of what these increases are. We're preparing this for the Legislature, and we'll send this around to the Commission as soon as we've completed it.

But the bottom line is, the price has increased for two basic reasons. First, an increase in the scope of the original project, and second, inflation and increased construction costs that have occurred in the last three or four years. Basically that's the two things ‑‑ the two elephants driving this.

Back in the last Legislative Session, we asked the Legislature for the authority to spend the $15 million in projected revenue from the Stamp on the East Texas Fish Hatchery. We asked for 15 million because that's all that we projected was going to be in the fund at the end ‑‑ by the end of this biennium. So we asked for authority to spend that 15 million.

That 15 million then became the cost of the facility. But since we've selected a site, because of the suitability of the site, and particularly in terms of long term operating, what we can save in the long term building this site, Mr. Cook, and the staff and I, and Scott, and Gene, have made a decision that it'd be in the best interest of the Agency and the best interest of the people of Texas, that we build as big a facility here as we can, on the site.

So what's being drawn up now is a facility that is 30 percent larger than the original facility that the original price was put on. For instance, instead of a 50-acre fish hatchery, we are going to maximize the acres on that site and we're going to build 65 acres. That's our hope right now at this time. So that's a 30 percent increase.

So if you go back at the $15 million initial estimate and add 30 percent to it, you're up to $19 million ‑‑ and $2,000 ‑‑ from the original projection of the project. And if you conservatively say that prices ‑‑ the cost of construction has increased 35 percent in the last five or six years ‑‑

MALE VOICE: Too low. That's too low.

MR. DUROCHER: ‑‑ that's a real conservative estimate. It's not hard to see how the price of this thing has increased from that original projection in 2000. And that's where we are.

And I need to say ‑‑ I'm sorry, Mr. Chairman ‑‑


MR. DUROCHER: We're in the design phase right now. It's hard for us to actually put a real accurate number on this until we get some plans and we can start working on them and cutting things out and maybe reducing the scope somewhat from what our hopes were. But that's going to be driven by the costs.

The bonds actually ‑‑ you know, when we were ‑‑ the Legislature required us to issue these bonds, there was a lot of consternation from anglers and people about why are we doing this, why aren't we spending the cash. I think when we sit back and look at it now, at the position that we're in, it's actually a good deal for us. Because without this bond, without the $15 million bond, it would probably be two to three years down the road before we'd have enough revenue to construct, to start construction, without this bond.

The rest of the money is ‑‑ we're asking at this Legislative Session the authority to spend the rest of the money that's in that account right now, on top of the 15 million, and that'll get us to where to we need to be. We're not asking for any new money, we're just asking for the authority to spend that money. What we have concluded, and I think I told you this last time, is that the interest we're going to pay on the bonds is going to be cheaper for us in the long run than accruing these increased construction costs.

I mean, what's happened in the last several years since the Hurricanes, have been unbelievable. And we want to get the project started. As a State Agency, we can't issue a contract for construction until the money's in the bank. So with the $15 million bond, it will allow us to make sure we have enough money in the bank next summer to be able to issue a contract to tie these numbers down.

COMMISSIONER PARKER: So tell them how many dollars worth of fishing stamps the anglers ‑‑

MR. DUROCHER: We estimated initially that we would generate about $5 million a year on the Freshwater Stamp, and the first three years we've generated about $6 million, $6.2-. So we're doing better than we expected.

MALE VOICE: Per year.

MR. DUROCHER: Per year.

COMMISSIONER MONTGOMERY: Does the expansion of scope allow you to reduce any of the other obsolescence expenditures that were planned in the original forecast that we looked at? There's usually a ten-year forecast in building a new one, and upgrading or replacing an old one.

MR. DUROCHER: We're upgrading some other facilities.

COMMISSIONER MONTGOMERY: Are any of those going to be decommissioned, or we're going to keep everything out there and just build a bigger one now?

MR. DUROCHER: You know, we have a priority list and we're going to go down that list and get as far as we can, you know. And that's one of the reasons that this is ‑‑ I think the bonding is a good thing right at this point in time because it allows us to take any surplus we have in that account and start a new project, and get a contract on working on something else that we were going to do and get that tied down, get those costs tied down as quickly as we can. So I think it's a good business decision that was made.

COMMISSIONER FITZSIMONS: Can you explain real briefly how this capacity productivity issue is measured with a fish hatchery, because does this 30 percent more surface area mean 30 percent more production, or ‑‑ explain that part of it, because that was a direct question that the Senate Finance Committee of just how you measure productivity.

MR. DUROCHER: The limiting factor in production of fish is pond space. I mean, you can raise so many fish per acre of pond. No matter how efficient you are, you reach a point where you can only raise so many fish per acre of water. So to increase production, you increase acreage. And that's what we're projecting to do. That's what we're hoping to do, increase from 50 acres of ponds to 65 acres of ponds, which is all we can put on the site. I mean, we plan to maximize.

COMMISSIONER FITZSIMONS: So you'll build it to capacity.

MR. DUROCHER: Build it to capacity to the site.

COMMISSIONER FITZSIMONS: All right. And will you do a ‑‑ when you flesh out the answers to these questions for the Legislature, will you show a comparison of what it would cost to replace that capacity from scratch, in other words, building a new hatchery for that next ‑‑

MR. DUROCHER: We'll certainly do that.


MR. DUROCHER: ‑‑ do that.

COMMISSIONER FITZSIMONS: ‑‑ down the road? Because I think that's the narrow ‑‑ I mean, we can eliminate that and reduce this cost overrun as some people are referring to it, but down the road you're going to have to do this eventually.

MR. DUROCHER: You know, one of the biggest ‑‑ the reason this site is ‑‑ we like the site ‑‑ there were lots of good sites that we had an option of picking ‑‑ this site we felt was the best site, and you all heard this, is because the biggest cost we have on fish hatcheries is pumping water to the site. Most places we're pumping water uphill to a storage reservoir then it comes back into the ‑‑ we have the option here in this site of a fairly substantial amount of time being able to use a site where we ‑‑ all we need is a little pumping to start the syphon and the water's going gravity flow to the hatchery.

So our operating costs will be reduced significantly every year. So that's why we decided, in the long term, this is the ‑‑ would be the best thing for the people, best for the State of Texas, to maximize this site, the use of this site. And that's ‑‑

COMMISSIONER HOLMES: And you may have an opportunity to respond to the question of could you phase the additional 15 acres of ponds, and if so, how would that work? One, is it feasible physically in the way we construct it, and, two, is there some incremental cost in phasing over and above completing it all now. And the additional question is, the additional capacity in fish production of that 15 acres, is it needed now? I mean, if I were sitting there, I'd probably ask you that.

MR. DUROCHER: Yes, let me just say ‑‑

COMMISSIONER HOLMES: Sitting here, I'll ask you now.

MR. DUROCHER: ‑‑ that we have ‑‑ the people that are working on the design, the design team that we've contracted with, we have told them to give us all the options. Because the way the costs have gone up, you know, we don't know what's going to happen. We said, you know, let's go back with the basic facility that we initially started with and then everything else after that is an add on, as an optional bid, something to bid on.

And we're going to see how all those things work out, and we're going to try to get the best deal we can. But we're going to address all ‑‑ we can certainly address all the areas of increased production and those type of things.

COMMISSIONER HOLMES: But do we need the additional production that would be provided ‑‑

MR. DUROCHER: Oh, absolutely.

COMMISSIONER HOLMES: ‑‑ by the 15 acres?

MR. DUROCHER: It's not going to get us to where we can meet 100 percent of the needs. You know, a lot of people ask questions about why we need to stock fish in Texas anyway, you know, why can't ‑‑ we're at a point where ‑‑ my projection is, we're going to need more fish and not fewer, because of all the needs for water now, and all the people accessing water, our reservoirs are fluctuating very seriously, and that has a tremendous impact on fish production, on natural fish production.

So we're going to maintain the quality of the fishing we have now in Texas. With everything else that's happening and the demands for water, we're going to need to supplement Mother Nature, I think, even more to maintain what we have.

COMMISSIONER HOLMES: I think that's a powerful argument that you want to develop this incremental 15 acres.

COMMISSIONER FRIEDKIN: When will we have a sense of total scope and cost?

MR. DUROCHER: By this summer. They should have us something to begin chewing on in the summer. But the costs, you know, the costs are just jumping up and down, and I'm not, you know, we may reach a point next summer where the costs actually begin to decline, if things just settle a bit ‑‑ not decline, level off.

COMMISSIONER HOLT: No, no, the percentage growth slow down.

MR. DUROCHER: Yes, sir?

COMMISSIONER RAMOS: And I don't know, a follow-up to Ned's question, and that is, based on the current production, if we were to build it to that capacity, how much more fish would we have that we don't have now? In other words, what is the projected incremental ‑‑

MR. DUROCHER: We produce anywhere ‑‑ let's just use Florida bass for instance ‑‑ we produce anywhere from 100,000 to 150,000 fingerlings per acre of production pond. So 15 more acres would give us a million and a half to two million more fish every year ‑‑ of bass during that time.

COMMISSIONER RAMOS: Yes, but taking our production today in comparison to the future production, how much more ‑‑ in other words, are we going to double, triple ‑‑

MR. DUROCHER: Are you talking about the old Jasper fish hatchery ‑‑


MR. DUROCHER: ‑‑ as compared to the new one ‑‑

COMMISSIONER RAMOS: As to what ‑‑ what we're producing today versus what we will produce two years.

MR. DUROCHER: I would ‑‑ right now we're producing anywhere from six to seven million fingerlings a year, and the projection is, when this new facility is done ‑‑ and, Bob, these guys are going to flinch back here ‑‑ but I'm projecting anywhere from 10 to 11 million.


COMMISSIONER RAMOS: So we're doubling.


MR. DUROCHER: Thirty percent.

COMMISSIONER HOLT: Yes, four ‑‑ about four million.

MR. DUROCHER: Because right now the Jasper facility is a fairly large facility, but it's not efficient. We produce about a million and a half, two million fish there a year. When you have 65 acres, you figure 100,000 an acre, that 600 ‑‑ that's six and a half million, which is an increase of four and a half million over what we do now on the ‑‑ at the current site.

COMMISSIONER BIVINS: What did you say our total statewide production is?

MR. DUROCHER: Six to seven million.



COMMISSIONER HOLMES: And you have demand for that?

MR. DUROCHER: Oh, absolutely. We have demand for 10, 11 million.



COMMISSIONER HOLT: ‑‑ versus years ‑‑

COMMISSIONER HOLMES: I think that's an important part of the presentation.

MALE VOICE: Yes, it's a good point.

COMMISSIONER BIVINS: What sort of escalation do you see in demand on an annual basis?

MR. DUROCHER: That's pretty hard to project. Right now, you know, the request for fish come in from the field biologists who survey the lakes and they make the request for fish. And we're pretty stringent on what we allow them to submit as a request. We need to make sure that the needs are there. I'm not saying ‑‑ the point is, some of the requests that they are making, they're we're not currently allowing, are probably very valid.

So it'd be hard to make that projection now. But we look at that all the time, we know what our need is. You know, we went through a point in time where we wouldn't let them request any more than we were producing. And that's not ‑‑ that was a mistake.

COMMISSIONER HOLT: Yes, we need to know what we really need.

MR. DUROCHER: Absolutely.

COMMISSIONER RAMOS: You know, in the older days, we used to be able to get fish from the State for private lakes, many years ago. Do we anticipate at any given point in the future that we might be able to raise our production to where there'd be a surplus and we may be able to sell or otherwise stock private lakes, or that's just not realistic?

MR. DUROCHER: I would hope not. There's been a tremendous private agriculture industry that's developed in Texas to meet that need. So we want to let them meet that need, and we'll take care of the public water, just like we don't want them coming in our business. I think things are working well right now the way they are.

COMMISSIONER HOLT: Yes, I was just asking a question about privatizing. I mean, is there any thought process to privatizing and find somebody to produce this on a contractual basis for us, so we don't have to come up with the 20, $30 million.

MR. DUROCHER: We look at that. Almost every Legislative Session that question comes up, and in terms of quality and reliability, there's just ‑‑ that capacity's not out there right now, not even close.

COMMISSIONER HOLT: No, I understand it's not there now ‑‑

MR. DUROCHER: In terms of the sport fish like bass and other things, now catfish, that capacity's probably there.

COMMISSIONER HOLT: Yes, because catfish ‑‑

MR. DUROCHER: Because, I mean, it's ‑‑

COMMISSIONER HOLT: ‑‑ are a retail business.

MR. DUROCHER: ‑‑ big industry.

COMMISSIONER HOLT: Because no state's, nobody's doing it that way? Has anybody ever tried it that way, relative to the State contracting with a private contractor to supply so many fish per year?

MR. DUROCHER: I'm not aware of any, but I'm not going to say ‑‑ but I'll certainly look into it.

COMMISSIONER PARKER: You know, Pete, one of the big factors of this increased production was the savings on the energy cost to pump that water uphill. Placing the Hatchery where we did, you spoke about siphoning, that's going to be about a 18 ‑‑ 15 to $18,000 per month savings in energy cost.

MR. DUROCHER: On the months we don't have to pump.

COMMISSIONER PARKER: Right. On the months we don't have to pump, we're going to be saving $15- to $18,000, and that translates into how many fish, Phil? You told me once, but I don't remember. I think ‑‑

MR. DUROCHER: I don't know want to lie again.

COMMISSIONER PARKER: I think you said about 300 ‑‑


COMMISSIONER PARKER: Any other questions?

(No response.)


MALE VOICE: Thanks, Phil.

COMMISSIONER PARKER: ‑‑ I'll place this item on Thursday's Commission Meeting Agenda for public comment and action.

I think this Committee has completed its business. We'll move on to the Regulations Committee. Pass the gavel to Chairman Friedkin.

MALE VOICE: Just don't throw it. Here you go.


MR. COOK: Reconvene the Conservation Committee and go into ‑‑



(Whereupon, the Ad Hoc Infrastructure Committee meeting was concluded.)


MEETING OF: Texas Parks and Wildlife Commission, Ad Hoc Infrastructure Committee

LOCATION: Austin, Texas

DATE: November 1, 2006

I do hereby certify that the foregoing pages, numbers 1 through 51, inclusive, are the true, accurate, and complete transcript prepared from the verbal recording made by electronic recording by Stacey Harris before the Texas Parks and Wildlife Commission.


(Transcriber) (Date)

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