Texas Parks and Wildlife Commission
Finance Committee Budget Workshop

July 22, 2009

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

BE IT REMEMBERED that heretofore on the 22nd day of July 2009, there came to be heard matters under the regulatory authority of the Texas Parks and Wildlife Commission, in the Commission Hearing Room of Texas Parks and Wildlife Department Headquarters Complex, Austin, Travis County, Texas, beginning at 10:00a.m., to wit:





JULY 22, 2009

10:09 a.m.

CHAIRMAN HOLT: Welcome, everybody. We’re going to have a fairly short meeting today, in the middle of July. I appreciate our commissioners coming today and having a quorum today because we do have to vote on a few things. And I want to welcome our new commissioner, Dan Allen Hughes, so, welcome sir.


CHAIRMAN HOLT: Glad to have you here and appreciate you coming in today particularly, and also going through the orientation and you’ll see some times we have exciting meetings and sometimes have rather dull meetings. Duggins says it has to do with my personality, but…


COMMISSIONER MARTIN: We never have dull meetings.

CHAIRMAN HOLT: We never have dull meetings? Thank you, Margaret. Ralph wasn’t quite as diplomatic. (laughter) I’m picking on you, Ralph. Anyway, welcome everybody and thank you and welcome Dan — appreciate you being here.

We’ll get started. The meeting is called to order, July 22, 2009. Before proceeding with any business, I believe Mr. Smith has a statement to make.

MR. SMITH: I do. Thank you, Mr. Chairman. Public notice of this meeting containing all items on the proposed agenda has been filed in the office of the 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 records of the meeting. Thank you.

CHAIRMAN HOLT: Thank you, Mr. Smith. I now call the Finance Committee to order. Okay, Committee Item Number 1, Adoption of Supplemental Appropriations Budget, HB4586, 81st Texas Legislature 2009. Mr. Mike Jensen. Mike, please.

MR. JENSEN: Good morning, Commissioners. For the record, my name is Mike Jensen. And I’ve been very happy and it’s been my pleasure to be with the Department since June first, so I’m relatively new. This presentation is actually in your binder under the Finance tab, but we also have it in a PowerPoint and we’ll go through it fairly quickly for you. It’s a very brief presentation on the supplemental appropriations bill.

CHAIRMAN HOLT: Why don’t I go ahead and stop you, with new commissioners, and I always need to be kinda reminded — walk through what a supplemental appropriations bill or budget is, quickly please.

MR. JENSEN: Real quickly, they have the basic base bill — the General Appropriations Act — and then they also have omnibus bills that they tack on — they function sort of like riders, where different agencies have opportunities for additional funds. And this supplemental appropriations bill isn’t just for Parks & Wildlife, but it’s for all state agencies. It has nearly a hundred sections in it and we have about six or seven sections that refer directly to the Department and these funds — in this supplemental bill most of them are for the current state fiscal year that ends on August 31st, but there are a couple provisions that actually apply to the next fiscal year that Gene McCarty will address in his presentation. So, basically, there is the base bill and the supplemental bill is add-ons to the base bill that give certain requirements, might have some contingency requirements, contingent upon legislation passing that different agencies can get additional appropriations. And, in this supplemental appropriations bill, we did get additional appropriation authority related to Hurricane Ike.

I don’t know if I explained it well enough for you.

CHAIRMAN HOLT: No, no you did very well. And, when’s the fiscal year end and when’s the new fiscal year start?

MR. JENSEN: The fiscal for 2009 is going to end on August 31st and the new fiscal year begins on September 1st and that’s the state fiscal year. And, federal fiscal year is a month later, so there is sometimes confusion when you’re talking about federal funds about fiscal years. So I’ll try to say state fiscal year, generally.

CHAIRMAN HOLT: Fair enough. Any questions? No, Mike, great. Thanks for the bit of overview that helped me too, thank you.

MR. JENSEN: This go around the supplemental appropriations bill was House Bill 4586. As I mentioned, there were several sections that were relevant to the Department, but the three main points that are important on this slide are $15 million dollars additional appropriations. The majority of that is related to Hurricane Ike. There are 12 million that are related to conducting repairs at Galveston Island State Park. Then, there’s — also included within that are the wildlife management areas that were impacted in southeast Texas. There is a different section that speaks of $2 million dollars specific to Sea Rim State Park.

And, although this last bullet is in there for a million dollars, it’s not really related to natural disasters. A couple years ago the state entered into an agreement through the Department of Information Resources (we call them DIR). They have an agreement with IBM that provides IT, data-related support for the larger state agencies in the state of Texas. Our department was very efficient before we went into this contract and as a result of this contract we actually have to pay more. Other agencies are getting some savings, but because we were so efficient, we’re not realizing savings for Parks & Wildlife Department, so we need an additional $1 million dollars to contribute towards that statewide contract with DIR and IBM.

CHAIRMAN HOLT: Can I stop you there, Mike? Because I want to give Carter some credit on this. The consolidation probably is the right thing for the state of Texas and the agencies of the state of Texas-the total agencies. You could argue it wasn’t the right thing for us — it’s costing us a lot more money for all our IT and data needs. And, so we have been talking to the leadership and the legislature for the last two sessions about how we’re having to take money from other places to cover those costs and Carter was able to visit with the Lieutenant Governor’s office (I give them credit too) — that they understood it and were able to get this in here, so this is a big deal. Because otherwise it comes out of other budgets, okay? Out departments — wildlife, fisheries, game wardens — wherever, and so this was very important to us. I want to give Carter a lot of credit.

MR. SMITH: Well, and Gene too and others –

CHAIRMAN HOLT: Gene, yea, right, everybody.

MR. SMITH: Thank you for acknowledging.

CHAIRMAN Holt: And the Lieutenant Governor’s office — I’m mean they got it and helped us get this.

MR. SMITH: Mike, it might be helpful, particularly if I could, Mr. Chairman, for Commissioner Hughes, who hasn’t heard it –


MR. SMITH — We talked a little bit about this in your orientation, but as you will recall, we had almost $100 million dollars in damages and recovery and estimated rebuilding costs to Parks & Wildlife facilities associated with Hurricane Ike. And, so although these funds, by no means, encompass all of the needs that we have to fully rebuild, they do encompass the funds that we can expend in the immediate future on certain projects like our wildlife management areas and then also all of the advanced master planning and site design and archeological surveys, natural resource surveys and construction documents to get ready to how we’re going to rebuild Galveston Island State Park, for instance.

So, we’re going to need all of that information as we go back to the legislature next biennium to give them a fuller accounting of what we’ll need for particularly Galveston Island State Park. But, this was a great investment in the needs of the Department and Speaker Pro Tempore Eiland and all the legislative leadership gave us a lot of support on this. So I just want to acknowledge them there too.

CHAIRMAN HOLT: How are we on fed funds? Any? I lost track of our fed funds.

Mr. MR. SMITH: — on the reimbursement? You want a comment on that?


MR. JENSEN: On the reimbursement, the article 12 stimulus money? The $1.7 million?

MR. SMITH: No, he’s talking about on the FEMA on the overarching reimbursement for the funds that we’ll expend for the recovery on Hurricane Ike and what we’re likely to regain in reimbursement costs. There’s still a lot of uncertainty and work that needs to be there, but do you want to elaborate a little on that process?

MR. JENSEN: I’d have to go back and find out the details. Do you have that?

CHAIRMAN HOLT: Okay, fair enough.

MR. SMITH: No, its okay, I can-I can, our infrastructure team is working very, very closely with FEMA on estimates for this. And so this is going to be a long protracted process. There are no easy answers to it. You know, in theory, FEMA would reimburse the agency for 75% of the costs that we’ve accrued. We should probably not expect to get all of that reimbursement, realistically. But, ultimately, until we get the work done, we won’t know exactly how much they’re going to reimburse us for.

CHAIRMAN HOLT: Mike, you’re fine. Gene, maybe you can speak to that relative to Katrina and Rita. If you don’t mind, just kinda general because it lets you know it’s an on-going issue relative to trying to get funds out of — from FEMA , back into the state. And not just for us, but for all the states. It’s one of your favorite subjects, I can tell.

MR. SMITH: Chairman, the one thing I will say –

CHAIRMAN HOLT: You know, I’m not trying to get way off, but it kinda all ties together because it’s-we’ve been hammered, Katrina, then Rita, then Ike and that southeast part of our state and I mean we’re in a constant rebuild mode over there.

MR. JENSEN: And, Chairman, I don’t have the details on the parks, but before I came here I did sit down with a few folks at SOC, and statewide they were having a problem –


MR. JENSEN: That’s the State Operations Center which is with the Governors Division of Emergency Management. A lot of people call them GDEM. The State’s overall problem was they didn’t have funds to make the match. They had about $100,000 dollars in their account and at the time they had about, I think it was, 110 million in allowable expenses. So during this past session, they have addressed that and I believe they’ve funded the Governor’s Division of Emergency Management on a statewide basis to at least be able to cover the state’s 25% match because that has been a problem for at least the last 12 years.


MR. SMITH: I’m going to complicate this one step further, chairman-

CHAIRMAN HOLT: that’s okay, I probably should have never asked the question –

MR. SMITH: No, this is really important because we do have the proposed FEMA reimbursement for all the capital repairs and the replacement of damages.

CHAIRMAN HOLT: Yes, I knew that.

MR. SMITH: But the other part of this that Mike is eluding to, for example our law enforcement team. Pete’s team had, you know, 400 game wardens that were deployed to the coast and east Texas to help with this and those expenses that the agency front-end loads are reimbursable by FEMA. And so, Major Willie Gonzales who is our Chief of Emergency Management worked with FEMA and, I believe, we’ve received most all of the reimbursement on that front.

CHAIRMAN HOLT: Can we ask law enforcement, anyone? Yah, good, good. Well, that’s something

MR. SMITH: I just wanted to provide that.

CHAIRMAN HOLT: Okay great. Thank you, sorry to get on all this other stuff, but-

MR. JENSEN: Well, I learn that for the next meeting.

CHAIRMAN HOLT: No, that’s alright I appreciate it.

MR. JENSEN: This is actually the last slide on the supplemental appropriations bill. And, the first bullet here talks about $1 million dollars that’s going to be pass-through money that comes through the Department that is going to be sent to the Texas State Railroad. I think you all may already be aware of that but the underlying scheme of this is that there’s an operator that has a contract with the Texas State Railroad that has signed a promissory note and the legislature told us to be the vehicle to get the funding to the Texas State Railroad. So, we do have, as a department, a memorandum of understanding with the Texas State Railroad that does have provisions that do hold us harmless in the event that there’s something that becomes problematic with the promissory note because we really don’t have control over that underlying agreement, we’re just being used as a pass-through vehicle and all those agreements have been approved by the Legislative Budget Board. So that transfer should take place once we have approval from the larger committee from this group.

And, I have that last bullet in there just as a piece of information, it doesn’t really need action, but I want you all to be aware that the legislature did come up with a retention payment for all state agency employees who have been employed since March 31st through August 1st with an agency who have salaries of under $100,000. The reason I bring it up in this slide is this particular house bill had a provision that excludes all Parks & Wildlife Department folks who are covered by the equity adjustment that was exceptional item number one. And so, our schedule C folks and those who are scheduled for an equity adjustment in the next fiscal year on September 1st are excluded from this $800 payment.

But, the way that this is structured is one of those who the legislature “shall” which means that every state agency shall make this payment and they didn’t necessarily appropriate funds for it, so every state agency including our department is coming up with the funds. It’s been a not necessarily a struggle, but great work with Gene McCarty and Al and staff to come up with that list, because what you all have approved as exceptional item #1 that was approved impacts a significant proportion of staff. At least-

MR. SMITH: 1,400.

MR. JENSEN: 1,400.

CHAIRMAN HOLT/MR. SMITH: Out of roughly 3,100.

CHAIRMAN HOLT: Good. Okay. And we found the money?

MR. JENSEN: We have the money. We have the money for that. We just need to finalize the list and clean up the list and make sure we do the validation updates with Al Bingham and HR.

MR. SMITH: Now, let me clarify this Chairman. There’s 1,400 colleagues that will be receiving a salary equity adjustment come September and then –

CHAIRMAN HOLT: Oh, there’s 1,400 getting salary equity adjustments.

MR. SMITH: and there’s a much larger percent getting the $800.

CHAIRMAN HOLT: Oh, so that many for salary equity? This was our big push in the legislature, oh congratulations, oh good, I’m glad. Okay. And, game wardens ended up in good shape coming out of the legislature. All law enforcement did.

MR. JENSEN: Yes, sir.

CHAIRMAN HOLT: So, we’re in pretty good shape then for about 75% of our group got some kind of salary adjustments and the rest will get at least $800. Am I saying that correct?


CHAIRMAN HOLT: Good, okay.

MR. JENSEN: Staff has done a great job, Gene McCarty has done a great job working with Al and Carter and Scott on that and now that Ross is here we’ll — they’ll be working on a great team. We have a great team here.

CHAIRMAN HOLT: Wonderful, wonderful.

MR. JENSEN: And, this last slide is just for informational purposes for this subcommittee. And when you have the full committee as a whole, we’ll basically run through this same information on the supplemental appropriations bill and at that time, we’ll ask that you consider this motion at that time.

And that’s really all I have for my very short presentation. If you have any questions I’d be happy to try and answer them.

CHAIRMAN HOLT: Commissioners, any questions?

COMMISSIONER MARTIN: I’d like to just thank you and welcome you on board. It’s great to meet you and we appreciate you coming on board.

MR. JENSEN: Thanks, I look forward to being here hopefully for a long time.

CHAIRMAN HOLT: Where’d you come from, Mike?

MR. JENSEN: I came directly from the comptroller’s office, and before that I worked for the Animal Health Commission as their CFO.


MR. SMITH: Mike grew up right down the street over in Del Valle, so he’s a local boy-

CHAIRMAN HOLT: Did you really?


MR. SMITH: His dad had always encouraged him to go to work for Texas Parks & Wildlife so he’s found a good home and we’re delighted to have him. He’s been a great addition to the team.

CHAIRMAN HOLT: Wonderful. Gene’s happy to, isn’t he?


CHAIRMAN HOLT: Look at him smile, he’s beaming over there.


CHAIRMAN HOLT: Thank you, Mike.

MR. JENSEN: Thanks.

CHAIRMAN HOLT: Appreciate it. Okay.

(direction from Mr. Smith to Chairman Holt about the next topic)

MR. SMITH: Now we’ve got Gene.

CHAIRMAN HOLT: Don’t we move into the-

MR. SMITH: This is still finance committee

CHAIRMAN HOLT: ah, excuse me, we’re still in the finance committee — I’m not reading my stuff here.

MR. SMITH: ….we’ll come back here at commission and vote on that.

CHAIRMAN HOLT: Okay, we’re now moving to Executive Summary. Gene?

MR. McCARTY: Mr. Chairman, Commissioners, for the record my name is Gene McCarty; I’m Deputy Executive Director for Administration. The presentation before you today is an overview, a briefing of our fiscal year ‘10 budget which you will be- we will be requesting you adopt at the August Commission meeting. We have historically had a special commission meeting during the month of July as soon as we kind of finish up the budget preparations so that we can give the Commission kind of an overview kind of a snapshot of the budget so at least you’ll have a little bit of information to base your decision on when you come to the August commission meeting for final adoption of that budget. So, I’m going to try to keep this very informal just to let you have as much feedback as you wish to give in terms of the budget and try to provide you with as much information on the FY10, the fiscal year 10 budget.

This is not going to be one of those boring meetings, this is budget stuff, this is riveting. (laughter)

CHAIRMAN HOLT: It is the heart and soul of — getting anything done, that’s for sure.

MR. McCARTY: That’s right..

CHAIRMAN HOLT: Yah, yah, I’m sorry I said that, Gene. I apologize.

MR. McCARTY: To start with, I do have Mike Jensen and Lance Goodrum our budget director with us here today to help me answer any questions that you may have so that we can provide you with as much information as possible. And I’d also like to thank the Divisional Budget Coordinators and our Budget staff for a lot of hard work this last summer. Doing the budget after a legislative year is always very, very tough because we get started late, we have to wait until the appropriation is finished, but we still have the same schedule, we still have the July commission meeting and we still have the august commission meeting for adoption. So, everybody gets about two months taken off their normal schedule, but they still have to produce the same product and these guys have done a great job this year with a budget that is significantly different than in prior years and they’ve addressed all those issues and I think prepared us a good budget for you to look at today.

CHAIRMAN HOLT: Are we talking the presentation that’s in the back of the book here?

MR. McCARTY: Yes, sir.

CHAIRMAN HOLT: Good, okay. Everybody see that under presentation behind budget workshop there.

MR. McCARTY: To follow along in the back of your notebook, there’s a tab called Presentation, that is my presentation for today and you can follow along with the slides there.

CHAIRMAN HOLT: Just to stop you, so we won’t be voting on that here, we’ll vote on this in August regular meeting up in Ft. Worth.

MR. McCARTY: Yes, yes, sir. This is an informational an interactive presentation only just for your information just to try to give you as much information about the budget. You know, you can take this information home and think about it and give me a call later if you want and we can continue discussing issues or concerns that you may have.

We will be presenting this budget, or- Mike will be presenting this budget in August.


MR. McCARTY: Formally, for your adoption.


MR. McCARTY: What we’re going to try to do today is go over our FY10 operating budget process — how did we come up with the budget we have, what are the processes that we used to get there? We will go over the FY10 operating budget and summaries of the different budget categories. We will go over the fiscal year ‘10 capital budget. We’ll go over our full time equivalents. That is the number of people, actually, positions we have working for Texas Parks and Wildlife and how they’re allocated. We’ll go over some of the key budget riders that are part of the GAA. The GAA is the General Appropriations Act. You’ll see that referenced in a number of different places. That is basically the piece of legislation in this particular year Senate Bill 1 — the piece of legislation that the legislature actually has to pass every time they come to town which appropriates the funding or the authority for state entities, state government entities to function and operate. And, we will go over other budget issues that I want to make you aware of that you’ll — that will be coming before you in the August commission meeting for adoption.

Any questions? Anything else you want to talk about?

CHAIRMAN HOLT: That ought to be enough.


MR. McCARTY: Well, we’re gonna try — last year this went a couple hours, I’m gonna try to get it under that.

CHAIRMAN HOLT: Yah, we’re all at the beach, you know. (laughter)

COMMISSIONER MARTIN: I’m at the edge of my seat.

MR. McCARTY: You’re riveted, you’re riveted — all right, good (laughter)

Alright, let me recap the budget process and what we did. We used the appropriation Senate Bill 1 as our starting point. So, we go back and look at how the dollars are appropriated between the different strategies of the agency. And the way the budget is set out is it’s set out by strategy. And strategies principally relate to some of the goals and objectives of the agency and our strategic plan. They relate back to the divisions also — so it’s kind of a cross-reference between our strategic plan and our divisional function. That’s how the budget is laid out — appropriations act is laid out to look at — to make sure that our strategy funding is adequate to go against our divisional funding.

Then, we establish our operating budgets and in this particular year, we established our operating budgets for our divisions, at least the base budgets at a 100% or close to a 100% of what they were funded in the previous year in 2009.

We allocated exceptional items, these were the exceptional items that we requested funding above the base through the appropriations process. If you’ll remember, we had nine exceptional items that we requested through our LAR — our Legislative Appropriations Act — Legislative Appropriations Request — for this last legislative process in SB1. And we got a pretty good portion of those, actually, in some form or fashion. So we allocated those exception items to the appropriate strategies and appropriate divisions in building the budget.

The other thing that we have to do is we have to balance the Fund 9 and Fund 64 funding that is applied to our support divisions. Because of the fact that we have statutory limitations on the use of both Fund 9 and Fund 64. Fund 9 being our Game, Fish and Safety fund — principally the source of revenue from Fund 9 is hunting and license sales and boat registration and titling. That can only be used to support the functions of the agency that are associated with game and fish conservation and management and boating safety. Fund 64 is our state park fund — the fund that receives the revenues associated with gate receipts with state parks. It can only be used to operate state parks or support the functions of state parks. So, to balance those funding to make sure our support divisions, those divisions that do the support work for both state parks and fish and wildlife conservation, we have an allocation methodology that we work out. And, for most parts of Parks and Wildlife the allocation methodology is 53% Fund 9 — 47% Fund 64. So that’s the way you would fund a strict support function, like the Executive Office. Executive Office — 53% of the funding that goes into the Executive Office comes from Fund 9 and 47% comes from Fund 64 so that we stay in balance for a support element as to the amount of effort that it puts into supporting one side of the house or the other.

And then, additional budget requests for additional money are dealt with only if they bring additional funding and additional authority. So, we don’t have additional funding or additional authority beyond our current base. So, we’re not-we don’t have money to hand out is what that’s saying.

And, our capital items were budgeted at 100%. We have the authority to budget- to grow our capital by 25% if we have the funds or we’ll have to shift funding from operating to capital and we’ve done that in prior years. Two years ago we grew our capital by 25%, we shifted money out of operating into capital. The last two years, last year and this year, we have funded at 100% capital and not grown our capital because we simply do not have the operating dollars to shift into capital — to buy additional capital equipment.

So that’s how we basically are building our base budget and that’s the process that we went through to develop the budget numbers that we sent out to the divisions for the divisions to then utilize to allocate within their operational funds.


MR. McCARTY: Yes, sir.

COMMISSIONER DUGGINS: I’m still confused, when you say capital items budgeted at 100%, 100% of what?

MR. McCARTY: 100% of what- of the appropriated authority.


MR. McCARTY: Okay. If we were appropriated a million dollars for capital, we budget it at a million rather than a million 250 thousand which is what we have rider authority to grow our capital to.


CHAIRMAN HOLT: Law Enforcement — how does that budget? Where’s that? How do those dollars flow?

MR. McCARTY: I will get into that in just a minute. I’ll show the budget by object of expense and then by division.


MR. McCARTY: Law Enforcement is pretty much a Fund 9 entity. They’re funded almost entirely through Fund 9 and federal dollars. We do get some boating safety federal dollars that support Law Enforcement.

Okay, let’s look at how we finance the budget. Our authority to finance the budget comes from the general appropriations act. Basically, everything has to tie back to the General Appropriations Act to get the authority to spend the dollars. We get additional funding through Article 9 and Article 12. And in this particular case, Article 9 of the Appropriations Act gave us the additional funding necessary to fund the pay raise for the Game Wardens. Article 9 is an article of the appropriations act which deals with all the different authorities, in this particular case and/or limitations above and beyond your base budget. In this particular case it’s all your salaries and all your salary structures are in Article 9.

We gained additional authority and funding through Article 12 and Article 12 was basically your federal stimulus funds. And so, in Article 12 funds we did get some federal stimulus funds for law enforcement — Byrne Justice funds. Our expectation is we probably will not realize that funding. While the appropriation act gives us the authority, it also says it’s subject to the grant coming from the federal government and we do not believe that the state of Texas is actually going to get this grants, so we probably will not get that funding, but just to be on the safe side, we’re going to go ahead and budget it and have at least the commission authority to expend the dollars if the grant were to come through, but our expectation and the word we’re getting from the governor’s office is not to expect that. Have you heard any changes other than that recently?

MR. FLORES: Peter Flores, Director of Law Enforcement. I’ve not heard much deviation from that other than there possibly might be $500,000 dollars in other stimulus money that in lieu of the Byrne grant that might be available to us.

MR. SMITH: Just to elaborate a little bit, we don’t need to go into to much detail here, but there was a deadline for a grant submission that apparently was missed somewhere in state government. And so, that’s what’s causing us concern about not being able to access those funds. And so, if there are some surrogate funds that would certainly be helpful because as I recall there was about a million three or so for –

MR. FLORES: Yes, there was a million 700 thousand that we were, ourselves, and DPS for example, are in that whole line item.

CHAIRMAN HOLT: And my assumption is that was going to be one-time-only money though.

MR. FLORES: Yes, sir, one-time-only. And it was primarily for equipment, operating and overtime — both for us and for DPS.

CHAIRMAN HOLT: We could probably live with equipment but — okay, okay, fair enough. Again, not anything we’ve done –

MR. FLORES: — No, sir.

MR. McCARTY: No, those are administered through the governor’s office and homeland security and we have to work through.

COMMISSIONER DUGGINS: I think you just answered my question, that we didn’t — the Department — did not drop the ball.

MR. SMITH: No, sir.


MR. SMITH: — and we’re not pointing fingers at anyone, I just think there was some confusion legitimately, and I don’t know all the details, but just those funds that look like they’re highly uncertain, but if we are able to go back and capture them, we wanted to make sure that we had appropriation authority from y’all to be able to use them. So-


MR. McCARTY: And then lastly, what the Appropriations Act caps our FTEs, our full-time equivalents, that’s the number of people or positions that we can have-the full-time positions that we can have in the agency at 3,178. Now that’s a pretty significant growth over last year. We had 3,100.


MR. McCARTY: And this growth comes principally through many of the exceptional items requested through the legislative process.

CHAIRMAN HOLT: Oh, okay. okay

MR. McCARTY: And I’ll go over those in more detail in just a minute. Next, what we did is we want to crosswalk the General Appropriations Act back to the budget — the budget that you will see. The General Appropriations Act through Article 6 budgets $380.9 million dollars to Texas Parks & Wildlife Department. As a point of reference, for FY09, the budget year that we’re just ending up right now, the General Appropriations Act appropriated $327 million dollars to Parks and Wildlife so you can see that budget growth, and that budget growth is principally through those exceptional item requests that we made.

Article 9 appropriates $2.3 million dollars — like I said this is principally the game warden pay raise and also a little bit of money associated with a new license plate that — it’s not a new license plate, the license plate has been — it’s one of the specialty license plates that’s been in existence for a number of years but they’ve now transferred it to Parks & Wildlife for management as opposed to TxDOT.

And then, Article 12, the stimulus funds, the federal stimulus funds at $1.7 million dollars this is a grant through the Governor’s Office that we do not think we’re going to get. It was principally for equipment for border security, river boats and safe boats and overtime for wardens working in border security.

Our adjustments that we make to the appropriations to get this budget — 716 million is in appropriated receipts, this is principally increases in federal funds, well no, let me see which one this is..

CHAIRMAN HOLT: Appropriated receipts 716 thousand?

MR. McCARTY: Yes, sir, 716 thousand in appropriated receipts. 3.1 million in federal funds — this is increases to our federal fund base through SWG -State Wildlife Grants — and some of our other wildlife restoration and sport fish restoration funds. About 1 million of this is in oyster disaster relief program. Interagency contracts of 61 thousand, supplemental appropriations — that was what you just heard from Mike. Remember he brought to you $15 million dollars.

CHAIRMAN HOLT: for Galveston

MR. McCARTY: We’re gonna UB that because most of the vast majority of that is capital construction and we will be UBing that forward so we’re gonna be looking at 14.6 million of that 15 million coming forward from FY09 budget which you are approving at this commission meeting to be in the operating budget for FY10 through the UB process — so it becomes an adjustment at this point.

COMMISSIONER DUGGINS: And what does UB mean?

MR. McCARTY: It is unexpended balances that we’re allowed to move forward from one fiscal year into the next.

CHAIRMAN HOLT: Which normally they don’t like to do, for obvious reasons. They want you to spend it or lose it.

MR. McCARTY: They do not like to do a lot of UB — in this particular case because it was a supplemental appropriations and it had a two-year life span there is the expectation that it will be UBd from one year to the next.

CHAIRMAN HOLT: But that — you were going to elude to that, okay, now these are capital construction projects, we all know how long they’re gonna take.

MR. McCARTY: They have, but-

CHAIRMAN HOLT: Will you be able to roll them into ‘11 if you haven’t gotten them into ’10?

MR. McCARTY: No, sir. They’ve got a two-year life span, so we-

CHAIRMAN HOLT: including ’09?

MR. McCARTY: They’ll go from ’10 to ’11 they’ll go-they have a two year lifespan from the date in which they were appropriated which was June 19th of 2009, so we’ll go through June 19th of ’11.

CHAIRMAN HOLT: June of ’11, yah, okay good. Okay, good. Yah, we’re not going to get all that done ’10.

MR. SMITH: They just have to be encumbered.

CHAIRMAN HOLT: Oh, okay, so as long as you have a contract-

MR. SMITH: Yah, yah.

CHAIRMAN HOLT: Just so y’all know, Dan you’re new, you’ll realize just to build a bathroom-anything over $25,000 dollars, it’s- you might as well build a $100 million dollar highway. The processes that you have to go through relative to state law and requirements. And so it just takes a long time to get a contract in place to get something built. It’s just a reality, I mean, it’s not anybody’s fault, it’s just the way the system works.


CHAIRMAN HOLT: And so what happens is a lot of times you can lose some dollars because you can’t get there. So that’s why I was asking the question about do we have till — so I’m glad we have until June 2011 to get these encumbered. Okay.

MR. SMITH: And, typically the expectation, just, Commissioner, so you know, when we get this infusion of funds to help with major capital repairs for our construction projects there’s an expectation that we’ll have that expended within five years. Hopefully before that, but the legislature understands that’s kind of our typical cycle and structure. So, we will typically care a fairly large UB, or unexpended balance, from year to the next depending on where we are in the cycle of getting our construction funds allocated. So that’s something you’ll see in all budgets going forward.

CHAIRMAN HOLT: But, Gene will tell you if you have unexpended balances going into another session — you’re gonna spend a lot of time explaining why you have them.

MR. SMITH: Yah, yah.

CHAIRMAN HOLT: Okay, and that’s why you at least try to get them encumbered before you go into the next session.

MR. McCARTY: There’s a reasonable cycle that we have to go through and they understand the construction cycle, but they also really want to push it as hard as we can and that’s something that Infrastructure’s been doing here recently to try to speed up the process and try to get those monies encumbered quicker, so that we don’t have large unexpended balances from one biennium into the next.

We have another UB of the Battleship Bonds. Again, this is another situation of authority that we had in the prior biennium that was to some extent beyond our control as to when we were finally authorized to issue those bonds which was late in this last fiscal year. And so, we got the bonds now, but we have to do an adjustment and bring them forward in FY10 for expenditures. So you’ll have the $25 million dollars for the Battleship Texas restoration bonds will be coming forward as an adjustment.

And then, lastly, fringe benefits and benefit replacement pay for employees is not in the General Appropriations Act — it doesn’t show up in our appropriations stream, but it does show up — we do budget it. And these expenditures come directly from our funds but they come from the comptroller, but we want you to budget those so that when we make an adjustment to the General Appropriations Act authority for the budgeting purposes. And that’s about 40.5 million. And this is basically your insurance costs, and your retirement costs for the employees within the agency.

Next I’d like to go through the exceptional items that were an add-on to this budget so you can get an idea of what additional funds we picked up through this last appropriations process which has built our budget.

First is our salary equity — our total compensation program. We had originally requested about $20 million dollars — we did get $11 million dollars appropriated 5.1 million of that $11 million dollars that we were appropriated over the biennium will be coming into this fiscal year ’10 budget. This will be used to do salary enhancements, principally in our professional staff across the agency, if you’ll remember when we developed this total compensation plan, the salary equity initiative through the legislature we identified several areas in which-inside the agency our biologists, principally, that were way under, you know, represented from a standpoint of their salary when you do comparisons to other state agencies in Texas and other agencies like Parks and Wildlife in other states.

Our statewide capital repair and construction — we did receive $28 million dollars of that request. This is principally to go to repair needs across the state. In prior years, we’ve gotten capital construction authority for repair, but it was limited to state parks, this one is not limited to state parks, it can go to all elements of the agency for repairs of infrastructure and facilities whether it be wildlife management areas, fish hatcheries, or state parks.

We got $750,000 dollars for aquatic vegetation control. We had this in exceptional item for expanded public access because many of our public reservoirs are getting choked with aquatic vegetation where we can’t even use many of our boat ramps and many of the boat lanes and get access to many parts of the reservoir, so we did get some additional appropriations to start addressing some of that problem.

We received $740,000 dollars for Panhandle Off-road Vehicle Recreation site. This is going to be a new facility up on the Canadian River in an area in which we- one of the few areas in the state which are exempted from the prohibition on the use of off-road vehicles in public river beds. And — so it’s become a real problem and a real issue in that area of trespassing on private landowners and just access and control and general bad behavior in the area. So we’ll be trying to get up there and get a little bit of a handle or control on that area. We received some additional FTEs and additional funding to make this happen.

CHAIRMAN HOLT: Well — you go ahead sorry -


CHAIRMAN HOLT: Well I was just going to make a funny remark about Commissioner Bivins, where is he? (laughter) Guess I’ll save that one for August (laughter)

COMMISSIONER DUGGINS: If he’s not here I don’t think he ought to get the money. (laughter)

MR. McCARTY: Well, we only got a small portion of the money that we need, so –

COMMISSIONER DUGGINS: Well, I just-actually it’s a serious question in that we say expanded public access, if we’re trying to limit riverbed use by four wheelers, why are we promoting expanded access?

MR. McCARTY: Well, in actuality, what we’re trying to do is get control over an area and allow reasonable public access to the area instead of the, I guess, the free-for-all that’s going on up there right now. This is not a family use area — at this particular point in time. But we’d like to turn it into a reasonable public access-public opportunity for anyone who wants to go up there.

COMMISSIONER DUGGINS: I think it ought to be reworded then.

MR. SMITH: Commissioner, just as a point of clarification — we had — there were a number of items that we had requested as part of that exceptional item to try to expand the public use into the out of doors. And there were probably a half dozen things that we asked for. That was the only thing that was funded under that item, so it’s a little bit of a misnomer if you look at it just in terms of this Canadian River Off-road Park.

I do want to just say another word about what Gene said, because we did receive half of what we asked for to try to make this work and as Gene said this is an area with a lot of unlawful activity. It’s going to put a lot of stress on the system to set up a kind of park that we’ve never operated before ourselves in Texas which is an off-road vehicle park for people to come to with a ATVs and off-road vehicles in a riverbed. A lot of work with private landowners, there are a lot of security issues and there’s only going to be so much that we can do to put this in place in the upcoming biennium and so we’re going to need to be talking with the legislature about some of those challenges and make them aware of what we can and can’t do with the funding that was provided. So, I just want to make sure we set expectations appropriately for this.

COMMISSIONER HUGHES: Carter, are we talking about having Parks & Wildlife game wardens up there regulating?

MR. SMITH: Well, we’re actually — we have that now, when they can. The game wardens patrol that, we are actually talking about having a formal park site that would be established on the riverbed. And, in conjunction working with our partners with the National Park Service and so it would be policed by our State Park peace officers although we’d certainly get assistance from our game wardens up there that would help augment that when appropriate. There are some weekends, there’s an annual sand-drag, for instance, that they have up there in which there will be upwards of 20,000 people on this reach of the Canadian River. And, so it is a challenge to say the least — we had a game warden that was shot in that area a few years ago. It’s a dangerous situation.

CHAIRMAN HOLT: It’s not a good situation. For law enforcement, for general public and, of course, they opted out. They wanted to leave the river open. They made their choice and now the private sector, the landowners, are really having a problem because of trespassers, too. So it’s an issue inside the river itself and it’s an issue of people going in and out of the river wherever they want to go in and out of the river. And now it’s become a party a scene, and the whole thing, so — we’re trying to get some help for the private landowners up there and the citizens of those counties up there actually. It’s become a real issue. That’s why Pete’s starting to hang out up there a little more, right, Pete? (laughter)

MR. SMITH: You ought to see him on a four-wheeler—

CHAIRMAN HOLT: Yah, I want to see that –

MR. SMITH: — wearing’ that seersucker jacket

CHAIRMAN HOLT: yah yah yah, he’s got a flap jacket up there


CHAIRMAN HOLT: But, it has become a law enforcement issue hasn’t it, Pete? I think we better speak to this because this, I think, is going to be an on-going issue we’re going to have to deal with in this Commission in this Texas Parks and Wildlife agency.

MR. FLORES: For the record, Peter Flores, Director of Law Enforcement. Our people in Region 6 up the in the panhandle have been working the Canadian River consistently for a while — a long time on a number of matters. And the sand-drag is a big event and we work very closely with local law enforcement, the sheriff’s offices, national park service to try to have some — to keep the peace in the area and it is quite an event. Billy Hefley was the warden who was shot there about six years ago. It was a murder that had occurred that we walked upon and was in a fight for his life and he came out alright. But, it’s one of those deals where hopefully with a state park established there the state park peace officers there on a permanent basis and augmented by the game warden service and working- and the mechanism that’s already established we’ll kinda get a handle on that on the Canadian River.

CHAIRMAN HOLT: Is this the only river that opted out? I can’t remember. Is this the only place where we’re really having a problem?

MR. FLORES: Yes, sir. That’s the — the Canadian and the Red River, but the Red is in Oklahoma. The Red River itself is Oklahoma.

COMMISSIONER DUGGINS: You said they opted out who/what opted out?

MR. SMITH: There was a specific legislation, I think it was SB155 that -

CHAIRMAN HOLT: A few years ago

MR. SMITH: — precluded driving motorized vehicles in the riverbed. And so there was a provision in that legislation that excluded both the Canadian and the Red Rivers from that prohibition.


CHAIRMAN HOLT: (inaudible)

MR. SMITH: There was an interest by –

CHAIRMAN HOLT: I’m sorry, I’m interrupting. I was very involved in that — this was before I was a member of the Commission. Because of some landholdings and others — a bunch of us got involved San Antonio, Houston, other groups to stop it because it had become a major issue in all the rivers. And the only way we could get it passed was an opt-out provision in there. And it just, it just, the legislation the votes you had to have. So, we got, I guess, 99 percent of the rivers and streams and public waterways in the law and they opted out and now they’re — unfortunately, hindsight 20/20.

COMMISSIONER DUGGINS: They opted out — Was that the county commissioners opted out or –

CHAIRMAN HOLT: Ah, well no, yah, they’re the ones that put pressure on the state legislators from that area to say, you know, we want an opt-out clause where we can make our own local choice. That was the only way we’d get the bill passed.


MR. McCARTY: Alright, anything else on that one?

State Parks Fiscal Controls — as you know, we’ve gone through a process after the State Auditor’s Office audit two years ago in which we’ve implemented a much more robust fiscal control system within state parks. But, that has cost us considerably in terms of manpower and effort to implement that to have segregation of duties and the other things that we needed. We asked for funding and received it and this brought with it a significant number of new FTEs and the funds to support their salaries so we can have the number of people in the offices in state parks to provide adequate fiscal controls but we can get the rangers back in the field doing their work and doing the interpretive and the maintenance and the customer service work that we needed them doing as opposed to them being in the office doing fiscal control. So this is a very good exceptional item and we appreciate getting this one.

CHAIRMAN HOLT: So these dollars we got, but not the demand for most FTEs? So these are dollars to use with the FTEs we put in place starting -

MR. McCARTY: No, we got — out of this we got 35 additional FTEs with these funds.

CHAIRMAN HOLT: Do we need 35 additional FTEs?

MR. McCARTY: Yes, sir.

MR. SMITH: We actually asked for more.

CHAIRMAN HOLT: I remember that — okay, okay.

MR. SMITH: We’d asked for about a –

CHAIRMAN HOLT: I thought we’d already added those- you’re talking about at to the parks themselves.

MR. McCARTY: Yes, sir.

CHAIRMAN HOLT: Not the auditors we’d added prior.

MR. McCARTY: Right, right, right. These are in the parks themselves.

CHAIRMAN HOLT: Now I got it.

MR. McCARTY: These are actually principally clerks in the front office

CHAIRMAN HOLT: in the parks themselves

MR. McCARTY: Yes, sir.


MR. McCARTY: Yah, this wouldn’t be 35 new auditors.

CHAIRMAN HOLT: Good lord, we’ve got more auditors than — anyway — than businesses 10 times our size.

MR. McCARTY: IT Data Center Consolidation — as Mike had talked about in terms of data center consolidation, the $1million dollars additional funding we got in FY09, we had asked for additional funding going into the next biennium in FY10 and FY11 biennium which received through an exceptional item budget and we have $1.5 million dollars of additional for-to address that data center consolidation needs.

And then, Land Acquisition and Development — 9.3 million.

Governor’s Border Security Initiative — 825 thousand, this will fund 15 new FTEs on the border. And these will be 15 new game wardens that we’ll put along the border. That’s in addition to the 15 that we received last biennium.

CHAIRMAN HOLT: Okay, now just to get some clarification of border. Border defined as, is that including going up the coast to Houston, for example or did that get cut out of it — is it strictly the border?

MR. McCARTY: We’re defining the border as being that portion of the state that is along the border with Mexico.

CHAIRMAN HOLT: Okay. At one time part of that had been — I mean they kinda wanted us to do homeland security all the way up the Texas coast along with the border. So this is part of the change that’s gone on.

MR. McCARTY: There was a great deal of discussion about the port cities — that the port cities were serving as border security and homeland security, but we’re not interpreting it as that. Yes, sir.

COMMISSIONER DUGGINS: On the land acquisition, that’s not a UB item, that’s not Eagle Pass, is it?

MR. McCARTY: Well, it is. It is a UB item, but it’s not a UB item. They reappropriated the funds that we had already received. The 9.2 mllion-9.3 million that we’d received from the sale of Eagle Mountain Lake — they reappropriated to us. They didn’t have to do that, we had the UB authority for those funds, we could have UBd them, but they chose to go ahead and reappropriate them.


MR. McCARTY: You can handle it either way. And in this particular case, they chose to reappropriate.



MR. SMITH: It’s not found money

MR. McCARTY: It’s not additional money 9.3 million.

MR. SMITH: There is another 4 million more or less in the base budget for land acquisition purposes that we have, but, yah, this 9.3 does tie back to Eagle Mountain Lake.

MR. McCARTY: We received an additional 21 FTEs and $386,000 dollars through Rider 27 — this is the rider that provides us the authority to utilize any funds generated above the biennial revenue estimate and in this particular case, they also gave us 21 FTEs specifically for the purpose of state parks — to provide additional state parks seasonal help and to address those peak service needs that we have in the state parks.

We received off-highway vehicle decal receipts of $368,000 dollars — this was about two biennium ago we created the off-road vehicle decal program. Basically, if you’re operating an off-road vehicle on a public land you need to have purchased a decal from the Department. It’s generating about $120,000 dollars a year in revenue right now. We’d only been appropriated $40,000 per year in previous bienniums so we’re burning down some balances and quick revenue — and projected revenue. These will principally go into a grant program — to grant for utilize as either for matching funds or direct grants for local communities for the development of off-road vehicle parks.

State Parks weather-related damages — $10 million dollars. This is another bond issue and it’s to address some weather-related damages that we’ve had at three parks, specifically. Mother Neff State Park up near Waco, which is from time to time inundated by Lake Belton, I believe it’s Lake Belton — that backs water up into the park during flood events. So this will allow us to move some of the facilities, principally offices and other major infrastructure out of the flood plain up into higher land.

Also Government Canyon has received some flooding events over the last couple years before it stopped raining — I guess that’s four years go.


MR. McCARTY: And Palo Duro where we continue to have problems with some of our facilities that are in the flood plain down on Palo Duro, so this will allow us to move some of those facilities up to higher ground.

Technical adjustments for plates of $137,000 dollars — this is — they basically gave us some additional appropriation authority for the license plates.

CHAIRMAN HOLT: oh, license plates.

MR. McCARTY: The schedule C salary increase of $1.4 million dollars.

A Bexar County special needs park-

CHAIRMAN HOLT: Explain Schedule C — just so we understand.

MR. McCARTY: Okay. Schedule C is game wardens. Our game wardens are on schedule C. Schedule C is that pay schedule for all of your principal law enforcement of the state whether it be DPS, TABC or game wardens. And schedule C received a salary increase this last year and so this is-these are the funds associated with that.

Bexar County Special Needs Park — 5.5 million — this is an additional appropriation for a grant to Bexar County to fund — to be a matching funds for a special needs park that’s being developed there which will provide outdoor recreational opportunities for individuals with special needs.

CHAIRMAN HOLT: This is a very unique situation down there (states the name of the person) in San Antonio. It doesn’t happen very often. I give him credit ‘cause he has a special needs daughter and got involved and one thing led to another and he’s pushed this thing to legislature — and we’re gonna decided to be the guys to deal with it. And that’s fine.

MR. McCARTY: We’re basically the pass-through of grant funds. And then those will go through the local parks grant program. And the good thing about this is that these are funds in addition to — they’ll not be taken out of.

CHAIRMAN HOLT: yah, that’s what you worry about some times. Because when they do that you gotta use your own agency money. Yah.

MR. McCARTY: And then lastly, a contingency for House Bill 1745 which was a bill that transferred the Marine Conservation License plate from TxDOT to Texas Parks and Wildlife for management purposes and we can appropriate the funds for that — that is the gulf coast conservation license plate so we’ll be passing those through to gulf coast conservation-Coastal Conservation Association.

Alright. So, that’s the highlights of our exceptional items. Let’s take a quick look at the budget and how the method of finance lays out.

You can see here about $136 million dollars of this budget is in General Revenue. That’s 29% of our budget is General Revenue. This is principally, we’ve got the General Revenue at 136 million is the biggest portion of that is the transfer of sporting goods sales tax. Okay. So, of this, 55 million of that is sporting goods sales tax that’s going to state parks, 18 million of that is sporting goods sales tax that is going to the local grant program-local park grant program and 1 million of that is sporting goods sales tax transferred to the capital fund which will go to fund capital construction repair in state parks. So that’s 74 million of that 136 million is sporting goods sales tax.

Fund 9, as I said that’s our game, fish and water safety account — that’s 129 million.

Account 64 that is our, basically, our gates receipts from state parks — at 41 million.

Our federal funds — these are our Wallop-Breaux, Dingle-Johnson, and Coast Guard boating safety funds at 53 million.

Other GR dedicated — these are some of our smaller GR dedicated accounts that we have specially set up for whether it be shrimp license or other kind of specialty uses at 5.8 million.

Kind of a General Other category — at 4.9 million.

And our bonds at 96.3 million or 21% of our budget.

So that’s kind of a quick summary/high-level summary of our, I guess, allocation of our funding methodology. Any questions on that?

COMMISSIONER HUGHES: Gene, where are the license sales-plain license, fishing license sales, is that in the general?

MR. McCARTY: That’s in the Fund 9.


MR. McCARTY: That goes into Fund 9- our boating safety, game/fish and wildlife boating safety fund.

CHAIRMAN HOLT: And Fund 64 is where entrance fees come, those kinds of things. Gene, maybe an interesting, if you could answer a question — if you look at our total 468 million, how much of it do we raise relative to all the things that we do. Of course, hunting and fishing licenses, trailer fees, I mean — agency?

MR. McCARTY: Well, the principal funds that we have direct responsibility for raising, is the Fund 9, the 129 million and the 64 which is the 41 million. Now, you could argue that we have direct impact on the federal funds because they’re reimbursements and they’re excise taxes on manufacturers of hunting and fishing items at 53 million. And, you could make a similar argument on at least 74 million of the GR which sporting goods sales tax. But, that that we directly raise ourselves is Fund 9 at 129 million and Fund 64 at 41 million.

CHAIRMAN HOLT: Gotcha. (inaudible)

COMMISSIONER MORIAN: Will you explain federal funds? What is that again?

MR. McCARTY: Federal funds are those funds that are the — principally reimbursed grants that we get through Wallop-Breaux which is sport fish restoration or Dingle-Johnson or Pittman Roberts which is wildlife restoration.


MR. McCARTY: And we also get some boating safety from the Coast Guard.

CHAIRMAN HOLT: But those dollars are — most of them are coming from taxes and various things –

MR. McCARTY: yes, sir, sporting goods

CHAIRMAN HOLT: sporting goods, ammunition, fishing tackle, all those things — that’s your point about it being somewhat directly related.

MR. McCARTY: Yes, sir

CHAIRMAN HOLT: It’s not coming out of general revenue, it’s not being created in some form or fashion.

MR. McCARTY: yes, sir.


COMMISSIONER MORIAN: Your question leads me to — how much of this is appropriated legislature pocket?

CHAIRMAN HOLT: Yah, it’s, yah, you know we’re one of the few agencies that has potential to actually raise some money through, obviously licensing fees and boat trailer fees and those kinds of things and then of course, state parks entrance fees and the various charges of concessions there. So, and that’s what we’re trying to push- to try to figure out how to raise more and more dollars ourselves for obvious reasons.


MR. McCARTY: You know, it’s 37% is — of our budget — we raise directly.


MR. McCARTY: Anything else?

Alright, let me go over our different budget summaries and the different elements within the agency of how we’re budgeting these dollars.

Let’s start by object of expense. As you can see, of the $468 million dollars that we’re applying to the budget $146 million is going in salary and other personnel costs. 76 million is going into operating costs. 39.7 million is going into grants — that’s our local park grants along with the $12 million dollars that we are passing through to the GLO for coastal erosion. $40 million dollars is benefits — that’s basically what we’re paying in terms of retirement benefits and insurance cost benefits for employees. 158 million is in our capital budget — and that’s a capital budget not only just capital construction but also capital equipment and acquisitions. And 7.5 million is in debt service. And that debt service for a number of different bond issues that we currently have and the new bond issues that we’ve gotten authority to issue in this coming year that’s $28 million dollars in that original capital construction and the $10 million dollars for the other weather-related construction.

COMMISSIONER DUGGINS: How much did you say that portion was for the GLO pass-through for coastal erosion?

MR. McCARTY: 12.5 million.

COMMISSIONER DUGGINS: Well, I thought the local park grants was 15.8 or 15.6.

MR. McCARTY: It’s — local park grants are about $20 million dollars when you add in some federal funds and some other available funding that we have there. They’re almost 20 million.

COMMISSIONER DUGGINS: What’s the diff-well, that still leaves you with -

MR. McCARTY: About-


MR. McCARTY: about seven million dollars in grants that we make that are federal funds that we have for boating access comes out of Wallop-Breaux/Dingle-Johnson and then we also have the –

COMMISSIONER DUGGINS: is that boating ramp?

MR. McCARTY: yes boat ramps- we make direct grants to local communities and we also have trail grants. Some of the funds that we’ve gotten- federal funds — that we’ve gotten for off-road vehicle trail development so that’s kinda the breakdown of — 20 million for your local park grants about 7 million for your boat and trails and about 12 million for your GLO pass through.


MR. McCARTY: Yes, sir. Any other questions on the budget by object of expense?

Okay, let’s look at the budget by division:

CHAIRMAN HOLT: Yah and this is good ‘cause it has the percentage that’s another thing I was interested in. You spend a lot of money over there, buddy.

MR. McCARTY: Almost 13% of the budget.

Any questions?

That is — I went through our budget by object of expense and then our budget by divisions.

Let’s look at departmentwide — that $25 million dollars we have in departmentwide. 7.5 million of that is for debt service and that’s basically paying the debt service on all the past bond issuance and the new bond issuance which includes Proposition 8 bonds, Proposition 4 bonds and the bond issuance for the freshwater fish hatchery.

Construction and -

CHAIRMAN HOLT: The fish hatchery is being built as we speak.

MR. McCARTY: Yes, sir. Construction and capital items at 4.7 million — this is basically Fund 9 capital construction that we haven’t allocated. We have it here as a pot. We haven’t identified the projects we want to allocate those dollars to so we’re holding them here in the departmentwide until those projects are identified and the dollars are allocated.

Payments to license agents at 3.7 million. We pay our license agents who sell our hunting and fishing licenses a transaction fee on every license sold.

COMMISSIONER MARTIN: How much is that?

MR. McCARTY: It’s 5% of the license value and that is about $3.7 million dollars. And then our license system cost which is 3 million and that’s basically the fee that we pay Verizon for managing the license system. And that’s an additional cost. The license system which roughly generates $90 million dollars — we’re paying $7 million dollars in basically administrative costs. Yes, sir.

COMMISSIONER DUGGINS: This probably isn’t the time to get into a full-blown discussion about it, but it seems to me if we sold and promoted more on-line sales of licenses we could save a substantial amount of those commissions — I mean keep the commission instead of paying out the 5%, keep that 5% for us.

MR. McCARTY: That is true and we’re running the numbers on it and looking at it all the time. The real issue for us is fulfillment.


MR. McCARTY: Fulfillment — because while you sell that license over the internet someone still has to print that license and all those tags out, fold it up, write up-put a form letter with it and mail to you. Because you have to get a — you can’t just print a license out at your home — you have to have the license that has the controlled tag systems and everything, so the fulfillment costs are, you know, kind of a wash right now. We’re trying to figure out how to drive our fulfillment costs down to where maybe we can become more efficient and save money through the internet licensing system. One thing certainly, the most controversial part of that is, well let’s try to figure out how you can print your license at home off of your printer and not have to have fulfillment and then you drive down your costs significantly. And that’s ultimately where we’re going — to paperless licenses and that will save you a lot of money. But, you’re absolutely right, we need to drive people to that technology.

CHAIRMAN HOLT: On the licenses, another thing I’ve always wondered is why are we paying the — a lot of people — it helps bring traffic into their stores.

MR. McCARTY: It does, it does. We continue to negotiate lower and lower fees and have over time. We’re paying a lot less for — to our license vendors today than we were several years ago when it was all paper licenses with the little carbon paper and all that kind of stuff.

CHAIRMAN HOLT: Right, now that isn’t going to work, you can argue. But now, it’s -

MR. SMITH: But, it’s a loss leader for them, chairman, if you look at how much we pay them for a license and their transactional costs it certainly is a convenience to us –

CHAIRMAN HOLT: you mean for the transaction itself –

MR. SMITH: yah.

CHAIRMAN HOLT: Yah, but it’s driving people into their stores.

MR. SMITH: yah, no, absolutely.

CHAIRMAN HOLT: Bringing, not driving them –

MR. SMITH: But again, if they’re buying hunting and fishing equipment and the

CHAIRMAN HOLT: exactly and buying beer and whatever they’re buying.

MR. McCARTY: It does cost some clerk time and especially during certain times of the year that can be a bit of an annoyance to them.

COMMISSIONER MARTIN: The clerk doesn’t know how to run the machine. I get a lot of phone calls, were here — expletives — and the clerk doesn’t –

CHAIRMAN HOLT: Yah, that’s a problem, no I understand. I understand your issue too. And I know you have __________ during the last four or five years since I’ve been here, but — well obviously you’re focused on it.

MR. McCARTY: Yes sir.

CHAIRMAN HOLT: We’ve got more potential to create more dollars –

MR. McCARTY: We continue to look at how we can use technology to save us money, decrease our costs and provide more convenience for the customer.


MR. McCARTY: Yes, sir.

COMMISSIONER MORIAN: The three million, what was that thing?

MR. McCARTY: The three million is what we pay Verizon to manage the system. We pay them a transaction cost for every license sold. They own the system — the license system. They developed it they basically incurred all the costs of developing our license system, so they own it and we pay them a transaction cost.

COMMISSIONER MORIAN: Regardless of how it’s generated, we pay them.

MR. McCARTY: Yes, sir.

State Office of Risk Management — about $760,000 dollars, this is our workman comps payments.

Airport Commerce Park — we rent another fairly large office complex here in Austin, fairly close to here and that’s our cost of annual rent of that facility.

General Budget of 1.2 million — this is basically emergency, I guess, contingency emergency funds that we have set aside just in case something major breaks.

Oracle Project — this is the — basically, the re-write of our financial program — financial system that we’ve been working for a number of years, at 395 thousand.

Claims and Settlements at 200 thousand — this is always in our base budget and is available there for legal claims and settlements.

Riders 25, 27, 30 and 14 at 3.3 million — of this 3.3 million, 221 thousand is for Rider 14 which is license plates receipts. We’re holding these dollars in departmentwide until we find out how those license plates are going to perform over the year and then we allocate them to the divisions. If they under perform, then we don’t allocate as much money — if they over perform, we don’t necessarily have the appropriation authority for them to over perform, but if they under perform, we don’t allocate as much money because it’s kind of a — you gotta raise it to spend it situation, so we hold those monies in departmentwide.

$750,000 dollars for the statewide aquatic vegetation program — remember, that was an exceptional item where we’re holding those dollars in departmentwide right now until we determine how we want to allocate them.

CHAIRMAN HOLT: What rider was that?

MR. McCARTY: Yes, sir.


MR. McCARTY: That’s Rider 25-

CHAIRMAN HOLT: oh, 25, sorry okay gotcha.

MR. McCARTY: And then Rider 27 at 2.3 million — if you remember we received 5.1 million of total authority through Rider 27 for the salary equity. We’ve allocated about 2.7 million of that to the divisions for the first round of salary equities. We are going to see how licenses perform, license sales perform through mid-year and then we’ll do a second round. And in the meantime, those dollars are sitting in our departmentwide budget.

And then Rider 30 which is our off-road vehicle recreational grants at 48 thousand — again, we’re holding those dollars until we see how the stamps perform then we’ll allocate those to the appropriate division.

And then the motor pool of 64 thousand — we’ve had this in departmentwide for a number of years and basically that’s to replace vehicles in the departmentwide motor pool.

Any questions on departmentwide budget?

COMMISSIONER HUGHES: We’re not replacing very many vehicles.

MR. McCARTY: No, sir. It’s not a very big motor pool either. Actually, every division has their own motor pool, but we do have one central agency motor pool here in Austin for Austin staff to utilize. I believe we only got 12 or 14 vehicles in that motor pool and we replace a couple every year or so.

MR. SMITH: Commissioner, this is not a replacement schedule for the entire state. Just for the Austin-based motor pool.

CHAIRMAN HOLT: At one time it was though.


CHAIRMAN HOLT: It was bad. How are we in vehicles in terms of size? We’ve got to be much better. It was a disaster

MR. McCARTY: Oh, we’re much better than we were — you know-

COMMISSIONER MARTIN: _______________ went up, you know _______ went up

CHAIRMAN HOLT: That’s how they run.

MR. McCARTY: with the new funding that we received for state parks last year, last biennium, that got state parks up and running and of course it will take them a number of years to get caught up, but they do have the funding to do that. Law Enforcement’s in very good shape.


MR. McCARTY: I think Inland and Coastal are in reasonable shape, we have a reasonable replacement schedule, we’re a little behind in Wildlife, but we’re working at ways to address that.

Let’s look at our capital budget.

CHAIRMAN HOLT: How many vehicles do you think this agency runs?

MR. McCARTY: Over 2,000. I can’t remember exactly, what — Scott was — yah, Scott do you know the total numbers? It’s well over 2,000.

CHAIRMAN HOLT: Yah, I’m just asking ‘cause it’s a lot of vehicles.

MR. McCARTY: Let’s look at our capital budget by category. Our first category is major construction at — we were — our capital budget was $50 million dollars and then we have $77 million dollars in UB and that unexpended balances that we’re moving forward for a total of $127 million dollars in our major capital. And most of this is bonded dollars although some portion of that is direct appropriation principally in Fund 9 and it’s a fairly minimal amount — about $3.7 million dollars a year.

CHAIRMAN HOLT: Does that include the battleship? In those numbers-

MR. McCARTY: That’s included-

CHAIRMAN HOLT: That’s included in the 25 million?

MR. McCARTY: Yah, it’s in that 77 million UB.

MR. SMITH: Plus, a lot of the money we got for state park repairs in the 80th session — was $44 million, yah.

CHAIRMAN HOLT: Is it moving along?

MR. SMITH: It is, it is moving. In fact-


MR. SMITH: We expect to get most of that encumbered in the fall of this coming year. So, I think we’ve made a lot of headway they’re working hard on that.

CHAIRMAN HOLT: Those are dollars from not last session, but the session before.

MR. McCARTY: — the session before. Some of them go back two biennium.

MR. SMITH: But remember, we only got approval to start using those funds, really, back in August or September. So, basically-

CHAIRMAN HOLT: Yah, that’s right, yah, you had to go through –

MR. SMITH: Yah, part a fact of timing, but we’re gonna get those encumbered by the fall, but the January meeting you’ll see that go down appreciably.

CHAIRMAN HOLT: Y’all are more patient than I am.


MR. McCARTY: Construction Minor Repair is 3.44 million. This is our minor repair program in state parks. This is the first year that you’ve seen this line item this way. It used to be just embedded in state parks operational budget. This last year the legislature chose to pull the minor repair program out and line item it in our capital construction. So, that’s the minor repair program at 3.44 million.

Land Acquisition — as you see, the 2.15 I talked about is our base funding for land acquisition and then the 9.27 which is Eagle Mountain Lake bringing your total of 11.4.

Information Technology at 6.0 million. It’s important to note that of this IT 6.02 million, 4.2 of that is directly associated with data center consolidation. The remaining dollars are what we have available to us to buy technology, whether it be computers, mainframes, etc.

Transportation items — this is principally your vehicles, but it is also boats and boat motors, at 7.5 million.

Other capital equipment — this is lawnmowers, tractors, that sort of thing at 1.69 million.

And then the master lease program at 130 thousand.

Any questions on capital budget?

Let’s go on to our FTE recap at — in 2009 we had an FTE cap of 3,100.1 FTEs. We budgeted 3,220.1 — this was basically a 3.8 percent lapse rate that we pre-budgeted to allow people to have — to keep people on and have the people that we needed in the face of turnover and other things. That worked fine, we did not exceed our cap in FY09. In FY10 we have a cap of 3,178. We are budgeting 3,296 which is a 3.7 percent lapse. We expect that we should be able to reach just as we did last year through management of turnover. If we’re pushing the cap, we’ll slow down our hiring rate, if we’re not, we’ll try to speed it up. We’ve historically managed our FTEs in that way in terms of just managing how we do replacements in turnover.

COMMISSIONER MARTIN: How do you get a point one?


CHAIRMAN HOLT/MR. SMITH: Part-time/seasonal employees.

MR. McCARTY: You have a seasonal employee who’s working for a couple of months-

CHAIRMAN HOLT: — like in the parks

MR. McCARTY: — and if they’re only working for a couple of months and they’re only working half time, then they’re really a point one FTE. Because a one FTE is an individual who’s working twelve months out of the year 40 hours a week.

COMMISSIONER MARTIN: That’s what I’d understood, that’s why I-

CHAIRMAN HOLT: Theoretically, that could be three or four people filling that one role.

MR. SMITH: Like in the summer, part-time.

CHAIRMAN HOLT: Yah, like in the summer in the parks particularly — is where you get a lot of part-time people.

MR. McCARTY: Let’s see how our FTEs are allocated per division.

  • Administrative Resources at 138 FTEs
  • Coastal Fisheries at 201
  • Communications at 90
  • The Executive Office at 29
  • Human Resources at 27
  • Information Technology at 91
  • Infrastructure at 148
  • Inland Fisheries at 225
  • Law Enforcement at 657
  • Legal at 11
  • State Parks at 1,339
  • Local parks at 17
  • Wildlife at 321
  • Giving us that total of 3,296 FTEs that we have budgeted.

    CHAIRMAN HOLT: Now, we have that budgeted, but our cap is 3,178. Explain the difference between those numbers and how that works.

    MR. McCARTY: The cap is the number that we are authorized to have — that we cannot exceed those number of FTEs and we have to report that to the Legislative Budget Board every-on a quarterly basis. So you cannot have expended more FTEs than that in a given year, but you can budget more and an individual who is — if they’re not on the payroll at any given time, they’re not counted as an FTE, they may be in your budget as a person, but they don’t exist if they’re not here.

    CHAIRMAN HOLT: They’re not employed

    MR. McCARTY: if they’re not employed. So, because of turnover, historically, the agency has turnover rates that are in the 10 percent range 10 to 12 percent. We are expecting that to go down, quite frankly, given the economic climate — we probably will not have that kind of turnover rate, but we are only budgeting 3.7 percent at this particular point in time, so we should be able to manage that — in that regard.

    CHAIRMAN HOLT: Does that make sense to everybody? Okay, I just wanted to make sure. When I first came on board, it took me a while to figure it out — but okay, I just wanted to make sure every body understood.

    MR. McCARTY: Alright, let’s look at key riders real quick. Rider 17 — this rider gives us the ability to grow our capital budget if we’re using federal funds. Rider 25 — is a rider that directs how we use that $750,000 dollars of statewide aquatic vegetation funding that we go. Rider 26 is a Sunset contingency rider — it basically says if we incur additional costs associated with our Sunset bill then we get to use our own money to do it. It doesn’t really appropriate new money for it. Rider 27 — really, Rider 26 basically says any- any costs associated with implementing Sunset are reasonable/acceptable costs for the agency. Rider 27 is appropriation of receipts out of GR-dedicated accounts. This is the rider where we get additional appropriation authority for funds that we raise that are in excess of the Comptroller’s biennial revenue estimate. If the comptroller in their revenue estimate said we’re going to raise $100 million dollars and we actually, through the year, get 110 million, that additional 10 million we get the authority through this rider to expend. And that’s the case this year in- for our salary equity program. Basically, if we raise additional funds, we can use those dollars for our salary equity program. Rider 28 is an informational listing. This is the first time they’ve done this. It’s basically — is just informational on how the sporting goods sales tax is allocated. Rider 32 is the rider that authorizes us to utilize this 5.5 million of additional funding for the special needs park. Rider 33 is Game Warden Academy — this is a good rider that Pete and law enforcement worked hard on and we got in. This helps us with our FTE cap, quite frankly. What this says is when a cadet, a game warden cadet, is in the academy, they don’t count as an FTE, so they don’t count against our FTE count.

    CHAIRMAN HOLT: That is good, yah.

    MR. McCARTY: So, this allows us to expand our FTEs a little bit. And then, Rider 35 is a local park grant to Missouri City. This is kinda the opposite of Rider 32 as we were talking. This actually directs us to spend $1 million dollars at Missouri City as opposed to giving us — of existing appropriation as opposed to giving us additional appropriation.

    Other budget issues — a couple things I want to talk about real quick that will be coming to you in August is a modification of our budget policy. In August every year, you adopt a budget policy for the agency which kind of directs us as to how the Commission wants us to manage our budget. In this particular case, I want to make two amendments to that budget policy. The first one is that over the last few years, the Commission through several programs and through several license fee increases have dedicated certain funds associated with those fee increases to specific purposes. In this particular case, I’m talking about Shrimp Buy-back/Shrimp License Buy-back. The Commission dedicated the fee increase on a number of commercial licenses back in 2000 and 2001 to the Shrimp Buy-back Program. We have — and they also dedicated the full portion of the $3 dollar increase on the saltwater stamp to buy-back. We are raising a little bit more money than what’s necessary through those programs and rather than dedicate all of those dollars specifically to that purpose, we would like to be able to utilize the revenue that’s in excess of what we need in order to fulfill the shrimp buy-back program which right now we’re currently budgeting about $1.2 million dollars a year to the Shrimp Buy-back, but those additional funds beyond above that we would like to be able to use for any of the statutory purposes that those funds are authorized, which, in this particular case, it’s commercial fishing licenses which could be used for any of the fishery and law enforcement initiatives. And then the saltwater stamp funds could be used for management — protection and enhancement of saltwater resources. So, we would like to basically as the Commission to allow us to, I guess, not have that Commission-dedication for those funds above what’s currently being utilized for Shrimp License Buy-back. Any questions on that particular issue?

    Additionally, we would like to change the donation approval. Right now, when we get a donation in, it — we — the budget policy requires the signature and approval of both the Chairman of the Commission and the Chairman of the Finance Committee. And, what we would like to ask is that we — that it be an and/or not the chairman of the commission and the Chairman of the Finance but it be either the Chairman of the Commission and/or the Chairman of the Finance Committee so that we could expedite the movement of those donations into budgeting in a quicker manner. So, that would be the two things that we will be asking you to adopt as amendments to the current budget policy. We will be asking you to do that at the August Commission meeting.

    Any other questions?

    Wasn’t that riveting?

    COMMISSIONER MARTIN: I was at the edge of my seat.

    CHAIRMAN HOLT: Very good, it was very good.

    COMMISSIONER MARTIN: I didn’t fall asleep. (laughter)

    MR. McCARTY: Any other questions, discussions or issues of concern for the budget? As I said, we’re giving you this opportunity to have kind of a quick snapshot. You can look at this information and call me at any time and we can further discuss any issues or concerns that you have.

    CHAIRMAN HOLT: We have summaries behind too — just so you — it’s another tab.

    COMMISSIONER MARTIN: I think we’re fortunate, really, in these times that we are as in good a shape as we are. We have so many of our other states and areas that are not quite in the situation that we’re in, so –

    MR. McCARTY: Absolutely, I think we — there’re a couple of things we — the state as a whole faired well. And, Parks and Wildlife, particularly I think we came out of the session in pretty good shape.


    CHAIRMAN HOLT: Well, I give everybody credit. ‘Course staff, Carter, Gene and others and then all the commissioners helped when needed. And I certainly — over the last four to six years particularly, I think we built up some credibility and spent a lot of time on education between sessions. We’ve learned a lot of lessons about doing that relative to — you show up the day they show up you’re in trouble. I mean, you’re just one in ten thousand others showing up. If you haven’t spent a little time on education of the process what they’ll be looking at before you get there, your in trouble. That’s a lesson I’ve learned anyway. So, I think it paid off this time, don’t you, Gene?

    MR. McCARTY: I think so.

    MR. SMITH: Absolutely.

    CHAIRMAN HOLT: Yah, good session — and, like you said, the state’s in good shape financially relative to certainly any other large state, that’s for sure.

    MR. SMITH: We also had some very, very strong support from constituent groups — Texas Outdoors Partners, in particular was there-Texas Wildlife Association, Texas Conservation Coalition, I mean they were there day in and day out and were very, very strong champions for the needs of the Department. So really, without their leadership, too this would have been very, very difficult budget for us.

    CHAIRMAN HOLT: That’s true. But I want to give you all, the Department a lot of credit too in working well with all those constituent groups. I think that, like you said, when we walk the halls we’re in line step and I think it really paid off. Good point. But you all managed those relationships very well.

    COMMISSIONER DUGGINS: Question for ya-

    MR. McCARTY: Yes, sir-

    COMMISSIONER DUGGINS: On this Missouri City directive, for a million dollars –

    MR. McCARTY: Yes, sir-

    COMMISSIONER DUGGINS — is that gonna require that we pull that money out of the local park grant funds that otherwise we –

    MR. McCARTY: Yes, sir-

    COMMISSIONER DUGGINS — we, determine based on need, and –

    MR. McCARTY: Yes, sir. It is a legislative directive to — on those dollars that they appropriated specifically to the grant, they want one million dollars to go to Missouri City.

    COMMISSIONER DUGGINS: Without regard to any assessment by the Department?

    MR. McCARTY: Yes, sir. That’s correct. That’s a major improvement over last year when we had $17 million dollars worth of directives…

    CHAIRMAN HOLT: Yah, we really learned some lessons from the last session, so we actually- ah, use whatever term you want — fought back or pushed back enough that there were probably another 15 that showed up at the start or end of the session that we were able to say hey, that’s not the way the system works and you gotta stop. This one literally got snuck the midnight of the last second when they were signing the bill. We won’t talk about it any further you can talk to me later if you want about it. And it was just one we were not aware of. A legislator got it in and, you know, pretty savvy pro and he knew how to get it in there where we had no chance of stopping it. But, we’ve done a lot better where we’ve got — we’re very aware of this and, again, this is education process, particularly with leadership, understanding the local grants program. There’s a process in it that makes a lot of sense, but you gotta let the process work.

    COMMISSIONER DUGGINS: That’s the reason I raised it –

    CHAIRMAN HOLT: No, no you make a very good point. Again, staff did a great job of holding off — like I say, we did so much better than we did last — previous session.

    COMMISSIONER DUGGINS: I’d also like to say that you’ve been very generous in handing out credit to the Department and the Commission and the constituent groups, but you deserve an enormous amount of credit for the time and leadership you’ve shown in the — you never ask for it or seek it, I’m just saying, it’s obvious you’re hand has been significant and I thank you on behalf of the rest of us for all you did.

    CHAIRMAN HOLT: I really appreciate that. Yah, it’s big money I’m making up here as chairman. (laughter) No, and I thank you, Ralph. You know this one was an easy- I won’t say it’s easy, ‘cause Gene would kill me, ‘cause it’s never easy, but -

    COMMISSIONER MARTIN: (inaudible)

    CHAIRMAN HOLT: but, everybody really worked well together, so I just want to make sure everybody gets credit because, you know, a lot of times when you’re chairman or something you tend to get credit and we all know it’s a real team effort. And if you don’t have the team effort, it won’t work or at least that’s been my experience and so I just want to make sure that the team is recognized. So, I appreciate you recognizing me, but boy I tell you what this was- and Gene’s been through a million of them, a lot more than I have and don’t you think this was certainly one of the smoother ones.

    MR. McCARTY: Absolutely was one of the smooth ones.

    CHAIRMAN HOLT: Yah, yah.

    MR. McCARTY: I appreciate all your work up there and Carter’s work.

    CHAIRMAN HOLT: Well, thank you — you too, Gene.

    MR. McCARTY: Carter’s presence was felt.

    CHAIRMAN HOLT: Yah. But we had leadership that understood, you know — the education process paid off big time. And, then luckily, with Joe Strauss, ‘cause of course remember he was a new Speaker of the House coming in he gets it and has real respect for the Department and so we kinda had instant credibility with him. And I think that certainly helped ‘cause he was the new guy on the block and he was the one we were worried about, well you know, obviously we hadn’t focused on him like we had the Governor and Lieutenant Governor’s offices and those kind of things. But Joe picked it up quickly and understood what we were trying to accomplish and was a big help for us.

    MR. McCARTY: Okay.

    CHAIRMAN HOLT: Thank you, sir.

    COMMISSIONER MARTIN: Thank you, Gene.

    CHAIRMAN HOLT: Yah, appreciate it. Any other discussion? Okay. This committee has completed its business and we will move on to the special called commission meeting.

    [Adjourned Finance Committee Meeting at 11:45 a.m.]

    Transcribed by:
    Amy Donaldson
    Administrative Resources
    Texas Parks and Wildlife Department
    4200 Smith School Road
    Austin, TX 78744
    July 22, 2009