TEXAS PARKS AND WILDLIFE COMMISSION
FINANCE COMMITTEE MEETING
LA ORILLO BALLROOM
203 S. ST. MARY'S STREET
SAN ANTONIO, BEXAR COUNTY, TEXAS
AUGUST 25, 2010
BE IT REMEMBERED, that heretofore on the 25th day of August 2010, there came to be heard matters under the regulatory authority of the Texas Parks and Wildlife Commission in the La Orillo Ballroom, International Center, San Antonio, Texas, to wit:
THE TEXAS PARKS AND WILDLIFE COMMISSION:
Antonio Falcon, MD, Rio Grande City, Texas, Committee Chairman
Peter M. Holt, San Antonio, Texas, Chairman
Mark E. Bivins, Amarillo, Texas
Ralph H. Duggins, Fort Worth, Texas
T. Dan Friedkin, Houston, Texas
Karen J. Hixon, San Antonio, Texas
Dan Allen Hughes, Jr., Beeville, Texas
Margaret Martin, Boerne, Texas
S. Reed Morian, Houston, Texas (Absent)
THE TEXAS PARKS AND WILDLIFE DEPARTMENT:
Carter P. Smith, Executive Director, and other personnel of the Texas Parks and Wildlife Department
P R O C E E D I N G
COMMISSIONER HOLT: Welcome to our August meeting, which is a public meeting. So this afternoon at 2:00 we will have the public part of the meeting, this morning, the committee meetings.
I want to thank everybody on staff, TPW staff for setting all of this up. It is a very nice room. Yes. It works out very well so this is fun. And I also want to remind everybody, all of the Commissioners, these mics are on at all times. Okay. There is no on and off switch, like we have in Austin, and I am the one that probably better be careful. Speaking or saying something you may not want heard by the rest of the world.
But with that, we will get started. The meeting is called to order, August 25, 2010, at about 9:10 a.m. Before proceeding with any business, I believe Mr. Smith has a statement to make. Mr. Smith.
MR. SMITH: I do. Mr. Chairman, thank you.
A 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 record of this meeting. Also Mr. Chairman, if I could, Sandy Jenkins from the San Antonio Parks Department was just extraordinary in working to support Michelle and Carole in helping to set up this facility, and help enable this Commission meeting in San Antonio. They have been a great partner, as you know, here in San Antonio. I know you and others and Commissioner Hixon had a lot of involvement with them, and I just want to publicly thank her. She has really been great.
COMMISSIONER HOLT: Wonderful. Good. Thank you. Thank you, Mr. Smith.
We will begin with the Finance Committee this morning. Chairman Falcon, please call your Committee to order.
COMMISSIONER FALCON: Thank you, Mr. Chairman. I now call the Finance Committee to order. For the meeting of today, the 25th of August. We have a long agenda and lots of presentations. So please bear with me. The first order of business is the approval of the previous committee meeting minutes from the May 26 and July 20 meetings, which have already been distributed. Is there a motion for approval?
COMMISSIONER FRIEDKIN: So moved.
COMMISSIONER BIVINS: Second.
COMMISSIONER FALCON: Commissioner Friedkin, Commissioner Bivins. All of those in favor, say aye.
(A chorus of ayes.)
COMMISSIONER FALCON: Opposed, same?
COMMISSIONER FALCON: The first item on the agenda is the update on Texas Parks and Wildlife Department progress in implementing the Parks and Wildlife Department Land and Water Resource Conservation and Recreation Plan. Mr. Smith.
MR. SMITH: Mr. Chairman, thank you. I am going to keep my report mercifully brief this morning. But a couple of things. One thing that is not on our agenda, and I know tomorrow we are going to appropriately fete our colleague Walt Dabney with his retirement celebration.
But I also want to welcome in Brent Leisure, who is our next new State Parks Division Director. Scott Boruff led a great process, that involved a lot of internal folks inside the Parks Division, inside other divisions. Brought in a lot of external partners. Had a wonderful recruitment process. We had some very, very talented applicants who applied for that job.
Brent, as I think many of you know, has been with us for about 20 years. He is our regional director, overseeing operations from Government Canyon to Huntsville State Park. He is just going to do an extraordinary job, and we are very excited about Brent Leisure joining our team, and I saw him. Brent is right there. Brent.
MR. SMITH: Mr. Chairman, I also, as required by the Sunset legislation, I am required to provide a brief update on Internal Affairs activities. Grahme and his team have just done an extraordinary job. Caseload is at a pretty normal level. A couple of things that I want to make sure that you are aware of.
They really did a very, very good job of completing the investigation into the tragic and accidental death of biologist Wes Littrell, there at the Engeling. That report was submitted to the Executive Office, as well as to the Accident Review Board that is being led by Mike Mendiola, our Chief Safety Officer, to look into new policies, procedures, training that we can put in place to ensure that our colleagues are safe, and working in conditions that are as safe as possible, dealing with heavy equipment.
Chairman Holt has requested that we provide a report on those recommendations at the November Commission meeting, and we will be following up on that.
Also, the Internal Affairs team has responded recently to a number of threats that have been made against TPWD law enforcement officers. One, down in South Texas against one of our Game Wardens, in which we got great help from the Texas Rangers and DPS to apprehend somebody who was threatening one of our Wardens and some recent threats that have been made against Park peace officers. So they have been very busy with that, as well as assisting the Texas Rangers and DPS and local sheriff's authorities with the shooting incident out in West Texas that happened several months back. So it has been a busy time for them.
I know that Mike Jensen is going to provide a very detailed summary of our Legislative Appropriations Request. But also, just in follow-up to the Budget Workshop, we did get the Natural Agenda submitted in July. Gene and Mike and Julie Horsley just did an extraordinary job with that. As you know, that is the Legislature's kind of strategic plan that they ask for from the agency. We cross-walked that with our Land and Water Plan, and got that submitted in a timely fashion, and it was kind of the lead up to the Legislative Appropriations Request, which we formally submitted Monday, at I think, 4:59 and 59 seconds. So anyway, that is all done, and I wanted to let you know that. So Mr. Chairman, with no further ado, I turn it back over to you, unless you have any questions.
COMMISSIONER FALCON: Thank you, Mr. Smith. Any questions from the Commission?
COMMISSIONER FALCON: All right. We will go on to our next item, and that is Committee Item 2, Financial Overview.
Mr. Jensen, would you please make your presentation?
MR. JENSEN: Good morning, Commissioners. For the record, my name is Mike Jensen. I am the Division Director for Administrative Resources Division. This morning, we are going to have kind of like four segmented blocks in this presentation.
We are going to go over the revenues for 2010, the budget for 2010. We will give you a high-level summary of the Legislative Appropriations Requests, and then we will hit the action items that will be addressed tomorrow.
Through July 31, park receipts are very well. They are slightly ahead of last summer, about $90,000. About .3 percent. You have to remember, the last summer was a very strong summer. It was the strongest June that we have ever had, and July was probably one of the top three Julys that we have had in history.
And just keep in mind that during this period, we also implemented the TxParks system, and Scott Boruff did a great job of getting that into production, and Walt and his staff, and IT and AR are working together to get that to work well. In terms of revenue, miscellaneous revenue is down by 18.9 percent. However, park passes are up 4.1 percent, and concessions are slightly down about 1-1/2 percent. Facilities are about even, and entrance fees are up 1.6 percent.
Boat Revenue, it continues the same trend that we have reported in prior meetings. Registrations are up and the registrations revenue is actually up as well. That is primarily due to the fee increase that became effective back in September. Titles are about even with last year, maybe almost three-quarters of a percentage up.
COMMISSIONER FALCON: Mike, excuse me. Can you just hold on for one minute?
COMMISSIONER HOLT: Yes. I think we are having some technical difficulties. Is everybody broken down there?
COMMISSIONER FALCON: Go ahead, Mike.
MR. JENSEN: Ready to resume? Okay. Revenue is up about 7.14 percent, or 1.3 million for boat revenue, and we are still facing poor sales transactions with respect to sales tax. I believe law enforcement and AR staff met with some associations this past week. And the report to us was, even the manufacturers for a period were not even building boats, because the demand was so low. So that accounts for why the sales tax is poor. And you have to remember last year was very poor as well with respect to sales tax, and we are comparing against a poor year. So sales tax, they are just not selling boats in this economy right now. License sales revenue, we have a strong performance for combination licenses. We have a strong performance for residential hunting. And on the other, the little blue graph down there on the bottom, we have strong performance, but some of that is spillover, because of the increase in lifetime licenses at the end of last year. So many people bought them at the old rate, that their staff was just ‑‑ there was so many with the volume, that they were unable to record that revenue until this fiscal year. So that does create a small anomaly.
The next slide will kind of give you a comparison. July 31, 2010, versus the same period in 2009 and 2008. Residential fishing licenses are up in both years, compared to 2009, we are up about $508,000.
Non-residential fishing licenses is down in both years, and that is the area of concern, both resident and non-resident. We can improve hopefully in the future. Resident hunting, a strong year. 2009, we are up $819,000. 2008, we are up comparatively, $947,000.
Non-resident hunting licenses are down compared to 2008, but they are almost even with 2009. The combination licenses are doing well, with respect to revenue. And what we have done on this slide is the total down there on the bottom, when you compare 2008 and 2009, against 2010, that is considering all of the different types of licenses that we sell, including these major categories.
But what we are doing on the bottom is, we are splitting out the lifetime license sales. So that Fund 9, that is a pretty good estimate as to what the Fund 9 revenue is. That is the Game Fish and Water Safety account. That the Resource Divisions and the split divisions need for their funding.
So when you pull that out, Fund 9 is up about $2-1/2 million compared to 2009. It is up about $1.2 million compared to the same period in 2008.
When you look at the total number of licenses sold, in terms of volume, because of the fee increase, we are slightly behind in most of the major categories.
However, the residential hunting category, we are positive on that. We have improved even in spite of the fee increase. So we are almost even with 2009, with 2.3 million sold. But we are behind compared to 2008. In 2008 was the standard year, the banner year that we have been comparing against. This slide gives you the variance between both 2008 and 2009.
COMMISSIONER HOLT: Let me stop you just a second. Gene, how are other states doing? Do we keep up? Do we benchmark at all? On just total licenses sold. I mean ‑‑
MR.MCCARTY: Not really. We don't do a lot. I mean, we look at what other states are doing, but we don't benchmark to those.
COMMISSIONER HOLT: I mean, are they up, down, the same?
MR.MCCARTY: What we are seeing across the board is that everybody is down.
COMMISSIONER HOLT: We are one of the few states that is kind of holding its own?
COMMISSIONER HOLT: I mean, as our population is growing, and we are flat.
MR.MCCARTY: As a percentage of population, we are significantly off.
COMMISSIONER HOLT: Yes.
MR.MCCARTY: In terms of just the total hunting population, we are staying pretty flat.
COMMISSIONER HOLT: All right. Okay.
MR. JENSEN: When you look at this slide presentation, does the variance on the volume, the count comparison. You can see that we still have concerns about the fishing licenses. We were much more negative than that. Just a quarter ago. So we have been making improvement. But we are still, in terms of volume, about 4 percent behind 2009. Almost 5 percent behind in residential fishing licenses in 2008.
Non-resident, it is about the same percentages, but it is not as significant in terms of the actual numbers and volume.
Residential hunting licenses, we are performing well there, with respect ‑‑ we are ahead of 2009, and 2008, and non-resident hunting license, we are behind 3.7 percent of 2009, 12.8 percent 2008. But again, those volumes aren't real high. So the volumes relate to lower revenue amounts as well.
Combination licenses, this is actually, we are behind .2 percent compared to 2009, .3 percent to 2008, and that is actually better than we thought we were going to be. Because of the fee increase, we thought we might actually drop, in terms of volume, about 2 percent, 1-1/2 to 2 percent on those. So when we look at the total amount. We are behind about .7 percent in 2009 and about half a percent, when we compare to 2008. But overall, we are doing well.
This slide is going to compare the Comptroller's biennial revenue estimate against the actual revenues that were collected, and we focus on four primary categories.
The first category there is Game Fish and Water Safety. That is what we have heard as Fund 9. We have achieved the BRE. State Park Fund, we have about 92 percent of the fiscal year elapsed, and we have collected almost 94.2 percent of that target. We do believe we are going to achieve the BRE. It depends upon how we perform in August, and last August ‑‑ if we meet what we did last August, we will achieve that BRE target that was established by the Comptroller.
The Local Park Fund, which was also Fund 467, we far exceeded the BRE and part of that is tied to some federal funds that were included earlier in the fiscal year, and we have also far exceeded in the other category, which includes artificial reef donations. It also includes lifetime licenses, and the Conservation Funds.
When we last met back in April, the adjusted budget was $536.4 million. Since then, there have been some additional allocations of federal funds. We have done the final allocation of the Wildlife Restoration Funds. So the adjusted budget as of July 31 is $547 million and this breaks it down in the categories.
The two largest categories are going to be salaries and other and the capital projects. We are ‑‑ overall, we are doing well. It looks like we have an inflated budget. But really, this is how it is designed. We do have UB authority, unexpended balance authority, that many other state agencies do not have. So some of these amounts as a percent remaining will be moving into the 2011 budget. Especially in the capital projects category.
This next segment ‑‑ this segment we just finished, we won't be going over again tomorrow, and this next segment, we won't be going over tomorrow. This is the Legislative Appropriations Request summary. As Carter mentioned, we did submit this on Monday, at right before the close of business and that request is based upon what we have in our current biennium, 2009. Actually, 2010, and '11. We start there, as a starting point.
And then we have instructions to make reductions. We had a 5 percent reduction and so we implemented that, and then we followed the instructions provided by the Governor's Office and the Legislative Budget Board and prepared the base request.
And then in addition to that base request, the Executive Office worked with staff to come up with exceptional item requests. We have a slide that will get into greater detail for that. And we were also instructed to prepare a supplemental schedule for 10 percent reductions that would be proposed or possibilities.
This slide shows the actual 10 percent reduction target amount of $48.9 million that we are instructed to hit. You will see down there on the bottom, there is a footnote that says, proportionality is encouraged but not required. The percentages and the dollar amounts that we have here are not really proportional but this is probably what the Legislature would prefer. They would prefer to see a higher GR amount, over GR-dedicated, and so we have a General Revenue of 35.9 and General Revenue dedicated of 13, and that adds to the target of $48.9 million for a cut.
COMMISSIONER HOLT: Why don't you explain the difference between the two again?
MR. JENSEN: General Revenue dedicated, we have either rules or statute that prescribes what we can use those funds for. Whereas the General Revenue has a greater ability to be used for more things.
MR. SMITH: Mike, again, so like a General Revenue-dedicated example of that might be fishing license revenue, stamp funds, migratory game bird stamps.
MR. JENSEN: And the General Revenue, an example, when we get to the method of finance would be the sporting goods sales tax that comes in. When it comes in, the sporting goods sales tax is treated as Fund 1, which has a wide ability to be used, and we actually receive it that way, and the Appropriation Bill, we put it to different accounts according to the directions we get from the Legislature.
COMMISSIONER HOLT: So you have more flexibility with it?
MR. JENSEN: There is more flexibility with it.
COMMISSIONER HOLT: Right. I have got you. Okay.
MR. JENSEN: This shows you the 10 percent reduction schedule. The first item that is on there is the Coastal Erosion Project funding that flows from TPWD out of sporting goods sales tax to the General Land Office. If we cut $11.9 million, that still leaves $11.9 million that would be passing through.
The second item on there is the data center contract of $3.7 million and the third is off-highway vehicle tied to Rider 30, $300,000 approximately. Reduction, proposed reduction of local park grants of $5.7 million. That would still leave approximately $20 million in the biennium, even after this cut, to continue that program. State Park Capital Development, on the schedule, we have included $26.9 million and Capital Construction, about $300,000.
As part of the LAR submission, we also have an opportunity to express concerns about policy, policy direction. We are asking for a rider to exempt interns from the FTE cap. The Legislature gives us a limit on the number of employees that we can have.
Currently, our intern program, those interns count against that cap. There are other agencies, I believe DPS and Teachers Retirement System that have a similar rider that exempts their interns. So we are seeking similar consideration to remove them from that calculation.
COMMISSIONER HOLT: How many interns would we have today, versus our FTE cap, or as part of our FTE cap?
Any idea? Just rough numbers?
MR.MCCARTY: We hire about 120 to 140, not FTEs, but interns over the summer. It equates to about 30 FTEs.
COMMISSIONER HOLT: Okay.
MR. JENSEN: If we removed them from the cap, we would have the ability to probably bring more in.
COMMISSIONER HOLT: Right.
MR. JENSEN: Provided that we have the funding for it. A second item on there relates to program income. When we have federal funds, and we acquire an interest in real property, and another activity takes place on that property that generates revenue, many times the federal government considers that program income. And their rule is that we reduce the amounts that are reimbursed to us by the amount of program income. This is not a problem for other states because basically, they take that program income and put it right back into that same project. We can't do that without appropriation authority.
So we are seeking a rider to have appropriation authority to put that program income amount right back into that project. So that we have the full value of those federal funds.
We are also seeking increased transferability between strategies of 25 percent. Currently, all state agencies are limited to transferring between strategies of 12-1/2 percent. That was a change that was put in place about four years ago and the reason we are asking for this is, to have greater flexibility for our fisheries divisions, Inland Fisheries and Coastal Fisheries Division.
The fourth item on there is benefit costs for border security. Currently, the core salary costs, and the fringe benefit costs are paid by DPS. That is sort of an informal agreement. We would like to more formalize this with a rider and perhaps even with a memorandum of understanding.
We are also seeking authority to provide meals at the Game Warden Training Center, and we would like to have appropriation authority and the ability to provide meals for volunteers who are providing volunteer services in remote areas of the state, perhaps at a park, developing trails or other types of volunteer work.
COMMISSIONER BIVINS: Can I ask, what is the process to get this done, I mean, on these new riders? What do we have to do to get these in the LAR?
MR. JENSEN: Well, we coordinate with the Executive Office. We also coordinate with our governmental relations staff and they are dealing with staff, for Senate Finance Committee, House Appropriations Committee, and also the Cultural Resources and Tourism Committee. It is a matter of our staff working with the staff who work for the legislators.
And as Executive staff work with Chairman Holt and each of you Commissioners, there may be areas where you can assist us. Where you have the ability to reach out and talk with constituents and other stakeholders who could assist us in pushing some of these things forward. That is generally how we do it.
MR. SMITH: Mike, if I could elaborate too. We expect that at some point we will have hearings with Senate Finance and House Appropriations, while we are laying out our budget, and our 10 percent schedule. We will also highlight these riders, their value to the agency and we will see what questions the legislators may have and, as Mike said, work with appropriate legislative staff, to see if we can get these included in the Appropriations Act as Rider 4. So that would help us.
COMMISSIONER BIVINS: Well just as a specific example, I mean, I was shocked to find out that the Game Warden Training Center, we do not have the money to [inaudible]. I mean, that is ‑‑ that is fundamentally wrong in some way. We have got to fix that. I mean, that is just ‑‑
MR. SMITH: Yes, sir. You all made that very clear and we are very focused on that, and I think there is a way forward on which we can do that. We completely agree, having the cadets there for seven months, and exercising every part of their minds and bodies, we ought to take care of the meals, and make sure they are well nourished and fit for all of the training. So we absolutely will. That is a very high priority for us.
COMMISSIONER BIVINS: Okay.
MR. JENSEN: And all of these items are included in the Legislative Appropriations Request. There is a schedule for rider revisions and each one of these things are included as proposed new riders, with appropriate language. DPS does have a rider that allows them to provide meals for their cadets in their training academies through a payroll deduction sort of scenario.
COMMISSIONER BIVINS: So there is a precedent.
MR. JENSEN: So we started with that as a precedent. The bullet there for meals and volunteers, that may be harder. But I think it is important to try to pursue. Because on the information we provided to the Legislative Budget Board, we explained to them that the millions of dollars worth of value that these thousands of volunteers provide.
So it is not like we are going to provide them all a meal, all the time. But if it is appropriate to do so, when they are in a remote area, like Big Bend State Park, we would like to be able to do that.
COMMISSIONER HOLT: Hamilton County is known for its restaurants. Maybe you have to drive 25 miles to the nearest café.
MR. JENSEN: This slide shows the exceptional item options. This slide was prepared on Thursday. The LAR was submitted on Monday. So there are a couple of minor tweaks and changes to it.
The first item on here is for capital construction development, where we would be seeking an additional $50 million in general obligation bonds and the second item is data consolidation contract. Which you may have seen tied to the cut. This $1.1 million here would be basically restoring what we cut in this biennium. Because the contractor is so far behind in doing the services that they had planned to do.
The third item on here is listed as law enforcement security and communication but it is actually broader in scope than just law enforcement from the Law Enforcement Division. It has two components to it. It would include in-car, in-vehicle automation for our Game Wardens, as well as our State Park police, so that they would be on par with what the county has, the county governments and DPS. And then there is another component in this $10.7 million that is tied to becoming FCC compliant with our radios, with our repeaters and our devices. By 2013, we are supposed to be compliant with the standards that have been set by the FCC. If we are not, we run the risk of losing our licenses. So this is an important exceptional item from that standpoint.
The fourth item that we have on here, the slide says Game Bird Stamp fund balances. The LAR is going to label this as habitat enhancement and hunting leases. Basically, this is to improve habitat for game birds, and to provide enhanced opportunities for the public to actually hunt these types of birds.
COMMISSIONER HOLT: Can I stop you there? So these are exceptional item options, versus riders, versus new riders?
MR. SMITH: Right. These are specific items that we are asking for, Chairman, that are supplemental to our base budget, and so, we typically lay out a series of exceptional items, that we feel like are additional needs that are not included within our base budget.
And so we went through an exhaustive process to really prioritize what we felt were the most critical things that we needed that, if at all possible, could be funded, and so these are the four items that we identified as a management team.
MR. JENSEN: And the rider revisions are more of a policy nature. You are not necessarily asking for funding. You are asking for authority to use the existing funding more efficiently.
COMMISSIONER HOLT: Okay. The other one ‑‑
MR. JENSEN: These exceptional items are asking for additional funding, in addition to ‑‑
COMMISSIONER HOLT: The exceptional, we are asking for additional funding. Okay. I have got you.
MR. JENSEN: There is one more item that is not on this slide, that was finalized late. It would be enhanced border security, to provide additional patrol boats along the border.
The rest of the presentation that we have, you will probably get even a faster version of this Thursday, and this is going to require an action item tomorrow.
The 2011 operating budget, the capital budget as well as two policies, the budget policy and investment policy and the conservation account 5004 projects, will require an action item tomorrow. You do have exhibits for all of these items. We have an Exhibit A, B, C, D and an E that have greater detail for these things which will be part of the action item tomorrow.
In developing the 2011 fiscal year budget, we start with the General Appropriation Act. It has different sections that we look at. We also look at riders and we also focus on the full time equivalent that the cap on employees, and make allocations.
This slide shows that Article 6, the Natural Resources article of the Appropriation Bill where we fit. We start with $290.4 million. Then we look at what is available in Article 9. There is $2.3 million there, and that is related to the Schedule C pay increases, and is also related to border security funds, and a little bit of conservation capital license plate funding that we have authority for.
Then we add in supplementals and adjustments of federal funds of $3.5 million from approximately 16 different sources ‑‑ appropriated receipts, donations from about 11 sources, interagency contracts with the Water Development Board, and then we have $88.6 million in capital construction unexpended balance forward from 2010 into '11.
Then we have the $9.3 million of proceeds from the Eagle Mountain Lake sale, that we are going to move into 2011 and probably, hopefully, utilize for State Park acquisition, at least, the land. And then we have fringe benefits, and benefits replacement pay of $42.2 million. When we had the budget discussion in July that was a slightly different amount, on fringe, with better number and better analysis that has increased slightly from 41.6 to 42.2 in this presentation.
And then we were instructed to do the 5 percent reduction for the biennium of 2010 and '11. That was not necessarily an equal amount between the two years. The amount that is being reduced in 2011 is $13.9 million. So our total operating budget for a starting point in 2011 is $423.2 million.
The next slide shows you the reduction amounts, the 5 percent reduction for 2011. The coastal erosion funding is being reduced by the full 5 percent for the biennium of $1.3 million. The data center consolidation amount, $1.1 million.
COMMISSIONER HOLT: That is going on now.
MR. JENSEN: This is going on now in 2011.
COMMISSIONER HOLT: Right.
MR. JENSEN: This is actually tied to what we cut in 2010. In 2010, we had to reduce $8.3 million. In 2011, we have to reduce approximately $13 million to get to the target of $21.4 million that the Legislature ‑‑
COMMISSIONER HOLT: And that is our base then, another 10 percent off of that.
MR. JENSEN: Then the 10 percent would be in addition to this. Yes, sir.
COMMISSIONER HOLT: That you turned in last week. I have got you. Okay.
MR. JENSEN: And we did reduce the Canadian River corridor $228,000. The local park grants, $5.8 million. Rider 27, which was for merit pay, and enhanced pay for good work, $2.3 million. Capital construction, $1.4 million. Capital transportation and equipment, $881,000.
And actually, we have an Item 9, but we don't have it in '11. We had it in '10. It was basically an operations reduction and we had an LBB adjustment of $770,000, based upon how they were working with all state agencies in pulling this together. So our total is 13.9 reduction out of 2011 ‑‑ million.
This slide shows you the method of finance on a very high level, of what we have. If you look at this pie chart, the largest piece that we have down there on the right, is General Revenue of $113.9 million. When that comes in, a majority of that is sporting goods sales tax. About $66.5 million of that is sporting goods sales tax that gets allocated into the State Parks account, Fund 64, about $52.6 million. It is going to be moved into Fund 64. $7.7 million goes into the Parks and Recreation Account 467 and about $1.77 million goes into the large county and small municipality account. And another $5.1 million goes into Account 5150.
We have other funds, which is ‑‑ a big piece of this is appropriated receipts and donations of $10.8 million, about 3 percent. Federal funds, about $54.4 million, 13 percent.
Fund 9 is Game, Fish and Water Safety, from license sales, $129 million, 30 percent. We start with Account 64 from receipts and from different activities that take place on some of the land. For example, gas royalties, $45.4 million. That is 11 percent and we do have GO bonds of $64.7 million and other GR-dedicated at $5.1 million.
This slide gives you by object of expense the breakdown of the budget again. The two larger categories are salaries and other personnel costs, and the capital budget, and I already mentioned earlier that we did a slight adjustment from July to this presentation on the fringe benefits.
So the total fiscal year budget is $423.2 million, and it is allocated among ‑‑ this is very high-level object of expense.
The next two slides give you a breakdown by division of how funds are allocated. Administrative Resources, $9.4 million; Coastal Fisheries, $18.9 million; Communications, 9.5; Department-wide, there is another slide on that, 17.4; Executive administration, $3.5 million; Human resources, 2.1; Information technology, 12.9; Infrastructure 7.9; Inland Fisheries, 20.1.
And the larger resource divisions are on this slide. Law Enforcement, $58.4 million; Legal, $1.1 million; State Parks, $92 million; Local parks, $18.5 million; Wildlife, $30.3 million; Capital construction, $98.4 million; Capital Land Acquisition, $11.4 million; and the Coastal Erosion Transfer Fund is $11.3 million.
This slide gives you a breakdown, a more detailed breakdown of the department-wide budget. This budget is established to serve all of the other divisions. For example, we have debt service on the older bonds that we have, for which ‑‑ that aren't through TPFA, the way the current bonds are.
Debt service of $7.4 million. Payments to licensed agents, such as the Academys, the Walmarts, $3.7 million; the license system itself with Verizon, $3 million; State Office of Risk Management assessment; our department's allocation is $900,000. Every state agency has to contribute to that for workers compensation and other issues.
Airport Commerce Park is a facility about three miles from headquarters where we have outreach programs, have a training facility. Different divisions are located there. The general budget is really a strategic reserve for the Executive Office of $2.5 million. We have approximately $300,000 for the automated financial system which we are going to a newer version on September 1. So that is a big project underway. We budgeted $200,000 for claims and settlements. And Riders 14 and 30 has $160,000. Rider 14 deals with license plate revenue, 30 deals with off-highway vehicle revenue, and we have $64,000 for the motor pool, for a total of $18.9 million.
COMMISSIONER DUGGINS: Mike, before you leave that, what did you say the $3 million is for the license system?
MR. JENSEN: That is the Verizon ‑‑ that is the company that we actually have an agreement with, where if you want to purchase a license online, that they developed that tool, and that is their fee for providing that system; the online system. It is the tool that we use to report to you the revenues, the counts. It captures massive amounts of data, and Verizon is the company who provides that service.
COMMISSIONER DUGGINS: Is there no way to bring that in-house?
MR. JENSEN: Probably not. I mean, when they did the analysis and they went with Verizon, they considered in-house, and they considered outsourcing it. We are actually getting a pretty good deal. We have looked at this agreement. We have compared to other providers and we are getting a better deal than we think that we could get if we put this on the street, and re-solicited it today.
The issue, if we tried to do this in-house is, we have limitations on the number of FTEs, and we also have the data consolidation issue. This is a massive, massive software package. It would significantly increase the number of staff internally that we would need, and it would pose challenges with having to put things in the data center.
Right now, this operates outside of the data center, because it is entirely outsourced with Verizon. So we are ‑‑ we are not 15 percent transformed on Verizon, because Verizon does not have to be migrated into the data center. Those would be some operational concerns that I would have, that George would have, and the Executive Management would have, if we tried to move internally.
COMMISSIONER FRIEDKIN: Mike, on the department-wide budget, 18.9. Is that fiscal year 2011?
MR. JENSEN: That is 2011, yes, sir. That is the fiscal year that starts in this ‑‑
COMMISSIONER FRIEDKIN: Just making sure. And then department-wide on the summary sheet is 17.4. What am I missing there? Is that just ‑‑ go back a few to fiscal year 2011, division budgets. Department-wide is 17.4, and then the budget is 18.9 on a few slides later. Is that a rider thing [inaudible] or what? Am I looking at the right thing?
MR. JENSEN: I'm going to have to call you, Lance.
MR. McCARTY: I think that is just an error in the slide.
COMMISSIONER FRIEDKIN: Just an error in the ‑‑
MR. McCARTY: Yes, sir.
COMMISSIONER FRIEDKIN: Okay, got it. Thank you.
COMMISSIONER HOLT: Commissioner Duggins, did you get your questions answered on Verizon?
COMMISSIONER FRIEDKIN: Yes, sir. Thank you.
COMMISSIONER DUGGINS: No problem. But, like Dan, I have a question on the amounts. Because going back several slides, you have a number of total operating ‑‑ an adjusted budget of $547 million for 2010, if I remember right, and then the current budget is 423. It is a giant difference, and do you understand ‑‑ do you remember the slide I am talking about?
MR. JENSEN: I do.
COMMISSIONER HOLT: What is the difference in those two numbers?
MR. JENSEN: There are a large amount of federal funds that come into this current fiscal year 2010. There were additions of the bond money that came in. And I may ask Lance Goodrum, the Budget Director, to come up, and he can add some greater detail.
MR.GOODRUM: I am Lance Goodrum, Budget Director. If you go back to the $547 million, you have got all those bonds are being UB'd forward out of '10 into '11. So you can't compare those two numbers, because they are using the same numbers for both years.
Until we actually UB that forward, that is our estimate of what we think we are going to UB forward. So you are seeing the same numbers in both years. But we are only going to spend it once. Does that make sense? $547 million, $88 million of that is going to go forward. So really, our real 2010 budget is ‑‑
COMMISSIONER HOLT: 423 at some point.
MR.GOODRUM: I am sorry.
COMMISSIONER HOLT: It will go into the 423. It will add to the 423.
MR.GOODRUM: No, that 423 consists of that. That 547 is going to go down really, $88 million. When it is all said and done.
COMMISSIONER HOLT: Okay.
MR.GOODRUM: Because we are just giving you a picture. A picture of right now, in '10, that is our budget as of now. This is what we project our budget will be in '11, after we UB all of this stuff forward.
COMMISSIONER HOLT: Okay. So the 423 has that moved forward into it.
COMMISSIONER HOLT: But it hasn't been subtracted out ‑‑
COMMISSIONER HOLT: Okay.
COMMISSIONER FRIEDKIN: So maybe for clarification we could just, in the future, have a line item that takes that out, so we are comparing apples to apples.
MR.GOODRUM: Sure. Absolutely. We can tighten this up.
MR. JENSEN: And also in the Appropriation Bill, between the two years, in 2012, and '13 for the LAR, we tried to be as equal as we could between the two years. But there is almost a difference of nearly $100 million in the appropriation between the base, between the two also.
For example, we started from the Appropriation Bill of approximately $381 million in '10, and '11 starts with 291. So that is how the Legislature also allocated it. There is a big difference there as well. That is part of it.
MR.GOODRUM: I think that some of the confusion is, we are trying to give you a picture in time, and then we are trying to project what we think the future budget is. We haven't really made any accounting adjustments, yet. We are just ‑‑ so maybe we will get together, and get some ideas on how to present that a little better.
COMMISSIONER HOLT: Okay.
MR. JENSEN: The next slide is the capital budget by category. We just have one slide on capital. As you can see, we have a base of $9.8 million. We are anticipating an unexpended balance forward of 88.6 for $94 million. We have construction minor repairs base of $3.4 million, land acquisition $2.15 million plus the 9.3 of Eagle Mountain Lake, for 11.45.
We also have capital budget in our Rider 2 for information technology, $4.8 million; transportation items, $5.6 million; capital equipment, $1.5 million; and master lease of approximately .13 million. The total base is 27.3. We are anticipating a UB of 97.9 for a total of $125.28 million.
And just for additional information on this, out of this UB, we have about $25 million in bonds related to the Battleship. We have almost another $4 million related to donations for the Battleship. Small projects, about $40 million in projects underway. Then we have additional appropriated receipts related to the Cedar Hill to rebuild a road of about a million dollars.
And then additionally, we have about $3.1 million in federal funds that are also being moved forward, as part of that UB. So a big piece of the unexpended balance forward is going to be the Battleship Texas. Plus some federal funds, and some donations, along with the bonds.
This slide gives you a summary of the limitations the Legislature imposes in terms of the number of employees we can have, full time equivalents. In 2010, our actual cap was 3,178.3. In 2011, the actual cap in the bill is going to be 3,180.3. But due to the 5 percent reduction where we cut the Canadian River Corridor, we are going to have remove five FTEs from that cap.
We do actually budget slightly higher than the actual cap, because we are anticipating attrition, retirements. And we manage that ‑‑ and we manage that also, in the department-wide budget, throughout the year. The next two slides show the allocation of FTEs by division. We have 138 in Administrative Resources; 201 in Coastal; 85 in Communications; 35 in Executive Office; 27.5 in Human Resources; 90 in Information Technology; 137 in Infrastructure. Inland Fisheries, 225. Law Enforcement, 657.5; Legal, 11-1/2; Local Parks, 17; State Parks, 1,352; and Wildlife at 319.5. And we are budgeting 3,296 FTEs for 2011.
The next three or four slides tie to an action item for tomorrow. Account 5004 is a Conservation Capital account that ties to the license plates. We have statute and some rules that state that we have to get Commission approval of the projects that for which we can apply these funds.
We have approximately $1.57 million in this account, with appropriation authority that we can use for the projects, if they are approved, and we have an Exhibit C that has more detail on what these projects are, for your review.
But a summary is Wildlife ‑‑ they use a portion of these funds for the Wildlife Action Plans, for diversity sponsorships, for TWMS development and other software development. They do a number of research projects for different species. Managed Land Deer Permits as well as some surveys and some other publications. Communications also uses a portion of these funds for marketing, and that tends to improve the amount of revenues that are available.
We are not limited to just the $1.57 million. If we actually collect more above that, we are able to use that. The rider allows us to do that. Inland Fisheries uses a portion of this funding for some of their freshwater resource management projects, stocking, some habitat improvement research. State Parks also uses it for equipment.
COMMISSIONER DUGGINS: But before you leave that, is there any portion of this proposed to be dedicated research for upland game birds?
MR. JENSEN: No. I got a no back here. Let me make sure. Clayton.
MR. SMITH: No. You are correct, Commissioner. There is not any proposed here. Now we have just presented a plan for the current year, to our Upland Game Bird Committee, and Migratory Game Bird Committee about how we will expend stamp funds in fiscal year '11 from Upland Game Bird Stamp and the Migratory Game Bird Stamp.
And so we laid out a host of research priorities utilizing those stamp funds from those two stamps that would go to research, habitat enhancement, work on Wildlife Management Areas, grants to partner organizations that we are doing outreach to benefit upland and migratory game birds and so forth. But we have a pretty significant suite of dollars that are going to certain research priorities from those two stamps.
COMMISSIONER DUGGINS: But is there any reason why some of this ‑‑ why some of this 1.57 shouldn't go to that as well?
MR.MCCARTY: This revenue, this $1.57 million revenue is directly related to the sale of the license plates. So you have the horned toad license plates, which is kind of focused towards diversity kinds of issues. That is why diversity projects are here. And then you also have the deer license plate which is focused towards deer research. We don't have a game bird license plate. So we don't utilize these funds for game bird initiatives.
We have a Game Bird Stamp, in which we focus revenues from the Game Bird Stamp on game bird initiatives. But these revenues that are coming specifically through this account are from those specific revenue streams of Deer and Horned Toad, or Diversity.
COMMISSIONER DUGGINS: I still think you could take some of the horned toad money and allocate it to upland game birds.
COMMISSIONER HOLT: Now wait a minute. The Horned Toad people won't like that.
COMMISSIONER DUGGINS: Let's have an upland game bird plate then.
COMMISSIONER HOLT: How do you get other plates? What if we wanted to have a Game Bird plate?
MR. SMITH: You have to pursue legislation to get a specific plate. Do we have authority? Okay. So we do have authority to create that plate if the Commission wanted to pursue that. Is that correct, Gene?
MR. JENSEN: We could sponsor a plate. But you have to understand that there is a limited population. The more plates you create, they are competing with one another. So you may increase in aggregate a little bit, but you are going to be diluting what are going to some of the other plates.
MR. SMITH: If I could, if I could call your attention back to our LAR request, and the exceptional item, in which we ask for $2 million that are in funds, that hunters have paid for, through their purchase of upland game bird and migratory game bird stamps. We have built up balances in those funds over the years. So there are dollars there, that could be expended, if appropriated on the kind of things that we are talking about here. So I guess I might suggest that would be a great place to focus right now.
COMMISSIONER HOLT: We'll have you out there making license plates.
MR. JENSEN: We have two policies that are required to be reviewed on an annual basis by the Commission. And the first one is the Budget Policy. There really are no changes to this policy. This policy gives the authority to the Executive Director to manage the Department's budget.
Last August we added these sub-bullets to the first item. Just to point out that funds are authorized for any use permitted by statute or rule. I think, in the past, there have been some self-imposed limitations on how to use funds. We want to be able to have as much discretion as we can, as allowed by statute.
The only other item that is on there, and I think Chairman Holt and Chairman Falcon see this regularly, are donations and gifts. They must be accepted by either of those Chairpersons, and they must be acknowledged at the Commission meeting.
Investment Policy is only a couple of small changes. It's required by statute for all agencies to have one. Most of our funds and our monies are actually held either within the Treasury or the Safekeeping Trust. Texas Park Development Fund, Lifetime Endowment Fund are held within the Treasury, even though they are not required to. Operation Game Thief is held outside the Treasury.
And one of the changes that we are going to request in the policy, is for Operation Game Thief board to identify an investment officer, so that we can coordinate reporting with that officer. We are also asking for the discretion to be able to add an additional investment officer, should we need one, and allow the CFO to do that. Other than that, the policy remains unchanged. And tomorrow when we review the 2011 Operating Budget and we review the Conservation Plates, and these two policies, we are going to ask that you consider this recommendation for a motion. I am not going to read it today. But tomorrow, I will read it into the record at that meeting.
I would be happy to try to answer any other questions that you might have. This is the extent of the presentation that we have for this morning.
COMMISSIONER FALCON: Does anybody have any questions?
COMMISSIONER FALCON: Any comments?
COMMISSIONER FALCON: Mike, does that complete your presentation?
MR. JENSEN: That is it. Yes, sir.
COMMISSIONER FALCON: All right. If there are no further questions or discussion, I will place the following, number one, FY 2011 Operating and Capital Budget, and Approval of the Capital and Conservation Account Funding Project Section, and two, Budget and Investment Policy Resolution items on the Thursday Commission meeting agenda for public comment and action.
The third item on the Committee Agenda today are the audit reports. Mr. Carlos Contreras.
MR.CONTRERAS: Good morning, Chairman Holt, Commissioners. For the record, my name is Carlos Contreras, Director of Internal Audit. The last time I had the opportunity to give you some information on our completed projects and activities was in the March meeting.
So I am going to take this time to give you an update on audit reports that we have brought out, and some of the activities that we have got going currently. One of the audits that we completed back in March was the TAC 202 Compliance Review. The Texas Administrative Code Chapter 202 contains the security standards that are applicable to state agencies and institutions of higher education.
Once we completed the work, we found a satisfactory framework within the IT Division for compliance with the Administrative Code. However, we did find a number of areas where we could improve operations.
One of the things that we discovered is that we needed to augment user security practices and policies by having the data owners periodically review user accounts, not only for having the correct individuals having access to the applications, but also at the corresponding level, to be commensurate with their responsibilities. We also asked to develop an ongoing security awareness program for current employees.
What we do, is that we do that one time, when they come in. TAC 202 says that they require an ongoing security awareness program, and so I know IT is in the process, amongst all their other duties, of setting up an awareness program that they are going to do on a yearly basis.
Vendor acknowledgment of the agency security policies and procedures. Currently, what we have is a form in there. It protects our confidential and proprietary information, and it doesn't necessarily address the vendor's compliance with our internal security policies and procedures. So IT is also taking the role of creating that.
We had asked for the development of an agency digital signature policy, and there was also some ‑‑ one specific application where we needed to define the password parameters to coincide specifically with our agency policy.
Some additional things that we found in TAC 202. We had been doing a business continuity plan for a number of months, and the agency has been working on it. What we have asked is for them to enhance and to test that documentation and then to document the results of the testing.
If memory serves me correctly, we have updated the plan. But we haven't tested it, since '04. So one of the things that is critical, when you put together a fund like that, is to have those desk reviews, to learn from them, and to go ahead and to improve the plan. Find out where the problems are, and to correct that.
Another thing that is related to our recovery area, is to prepare a risk assessment that is related to the classification of system data. Now, we have to go throughout the agency and find out which applications are the ones that are critical.
The ones that we are going to bring up first, in the case of a natural disaster, and that is one of the things. Currently, within the business continuity plans and documentation, each of the specific divisions has their own applications and support-type systems that they recognize are critical for them. But we have to do that risk assessment related to system data for the entire agency.
Finally, the last thing is, in the change control documentation practices that we have. What we need to do is to ensure that the change control work is being done in a test environment, as opposed to out in the production environment. That was one of the issues that we went ahead and brought forward. I think that that has already been corrected.
In May, we took a look at the LEO offices, for cash handling. This is the second year that we have done that. We took a look at 16 offices, over two rounds that we did. The findings for both rounds were typically the same. We had control over petty cash, and the petty cash funds requiring proof.
We also found that unissued boat decal stock required improvement to make sure that all that consigned stock is adequately safeguarded and taken care of at that time because there is a valley to that consigned stock.
What was interesting is in the second round, we went ahead and followed up to last year, and we had a number of offices that we had provided recommendations to. They hadn't quite addressed those deficiencies yet. So we reported that information to Colonel Flores, and Lieutenant Colonel Hunter, and they were going to take the appropriate action with those offices.
And again, in the second round, cash and petty cash needed some improvement, and again, the boat decal, the consigned stock needed some work.
In June, we did an audit of the accounts payable. Again, we found that administrative resources has a satisfactory framework. Certainly, one of the ‑‑ I guess, enhancements in this process is going to come from the implementation of bids here in the future. So there were three areas that we needed to do some improvements on.
That was the reconciliations of the AP balance. It should be prepared to identify the erroneous entries and to ensure our liabilities are accurately stated. We found some problems in there. Administrative Resources has also been proactive. They have already straightened some of the procedures, to make sure that the vendor invoices are made and distributed in a timely fashion.
What was happening is, we had numbers of dates of receiving the invoices, whether it was out in the field, or internally, and that was throwing us off, because we do have a 30-day prompt payment act that is in effect.
And so what we wanted to do was make sure that when we receive those invoices, it was all being done. We are date-stamping it with a common standardized time.
There was some access issues that were out there, for the system. There were people that had ‑‑ they weren't actively engaging in using the access, but the access was out there, and we had to ‑‑ we removed it.
If, in this specific instance, it was for an individual who had the capability of releasing payroll. So what we did is, we went ahead, and since it wasn't germane to their specific job responsibilities, we had AR and IT.
And the last completed audit was this month. And this is information, general control review. Now in IT, you have a general control environment in which all of your specific applications reside. Now that general environment needs to be conducive, and everything else underneath those specific applications that are owned by more of the specific divisions or the data owners.
They are able to reside there, and have adequate controls, so that the data owners can have some assurance that IT in their custodian role is protecting their data. One of the things that we found out was that we needed the actual data owners to go out there.
And this ties in a little bit to the previous TAC 202 audit. In that we need the actual data owners to go out there and review their user accounts and to identify to IT when to remove those.
And we are talking about, in some instances, like auditors, people that had worked for the agency. External ‑‑ you know, people that came in and did maintenance. All of the accounts were out there, and we were just asking IT to work in conjunction with the data owners to remove those folks.
One of the things that we noticed was HR notification for employee transfers. If for instance, an individual has access to say the Texas License, and he transfers to another area where he doesn't need that specific access, there was no way for a notification to be made to Administrative Resources. They would learn after the fact, or ‑‑ there wasn't a structured method for them to pass that information.
So what we are asking is HR to notify each of the data owners that were involved in this audit, to apprise them of the fact, that somebody moves, so that they can go ahead and change that access. Either remove it, or augment it, or do whatever they need to do. We also asked for a network blackout. Most of the specific applications that we have out there that generate revenue, you know, license connection, BRITS, some of those. They all have timed out ‑‑ they have a lockout mechanism. Where after a certain amount of minutes, the application will lock out. People will have to go back in, and sign in to get into it.
What we don't have is, out in network, in just our regular network, that lockout ability, and what the concern with that is, if you have a supervisor or somebody working on confidential information, maybe performance evaluations, budget, that type of information, someone, if they leave their machine, someone can come in and actually access it. So what we were asking for is a 30-minute lockout. There is no activity on that machine, it locks out. It is going to require the user to come back and sign in. Of course, anytime they come in, they could come in at 29 minutes, and move their mouse, and it would reset it. So it is not foolproof, certainly. But it is better than having that network systems open, and having that ability for someone to come in, and either take a look at the information or manipulate it, or do whatever. Something that is against our policy.
COMMISSIONER HOLT: Can we do all of this ourselves, relative to being on this statewide system and all of that? I mean, is this stuff we can do internally?
MR.CONTRERAS: Yes, sir.
COMMISSIONER HOLT: Okay.
MR.CONTRERAS: Yes. A lot of what we are seeing out there are, for lack of a better word, are housekeeping issues that have gone by the wayside. But that are important.
One of the things that we had asked for was related to the Texas License Connection was to require a SAS-70 audit, a specialized audit. Now, Verizon, would have to [indiscernible] and we probably need to include it in contracting. One of the things about the SAS-70 audit is, it is an independent auditor that comes in, makes an assessment of the controls that is in that system, and reports to us on it, specifically. Their assessment of the controls, and how they are functioning.
Currently, what is going on with Verizon is that they are using a capability and maturity model that is indexed. What it is, is Verizon is essentially making a self-assessment of their own controls, and using that to report to us, and that isn't really an examination.
What it is is a review of their existing controls that they have got, and they place it in different levels. You have from level 1 to 5, 5 being the optimized level. So that is what they are reporting to us. It is akin to the fox guarding the henhouse to a certain extent. So that is one of the things, certainly, to consider.
COMMISSIONER HOLT: Yes. I had better stop you there, when you use those kind of terms. Is that, I assume that is something that ‑‑ how long have we been in the contract with Verizon, now? I know Gene isn't here. I can't remember.
MR. SMITH: Yes. We have been with a contract with Verizon for a number of years.
COMMISSIONER HOLT: Thank you.
MR. SMITH: In fact, we met with them last week. They have done every single thing we have asked of them.
COMMISSIONER FALCON: Okay.
MR. SMITH: With respect to looking at their system, improving it. They have been very open to that. If there was additional cost burden to them, it wasn't anticipated as part of the contract, obviously, we need to negotiate that.
But I want to make it abundantly clear, they have been a great cooperator. This has been one of those private-public sector partnerships in the technology, and it has worked very well. So just ‑‑
COMMISSIONER HOLT: I think Carlos has a point maybe, in our next ‑‑ I don't know when the contract comes up again. With a third party, sometimes, at least once during that contract, I don't know whether ‑‑ is it roughly a 10-year contract? I can't remember.
MR. SMITH: Yes, and I am sorry.
COMMISSIONER HOLT: A fairly long time. I know Gene isn't here right now. Maybe Mike knows.
MR. JENSEN: It was through 2013. I think it started approximately 2002 or '03.
MR. SMITH: Yes. It is about 10 years old.
COMMISSIONER HOLT: A 10-year contract.
MR. SMITH: Ten years old. Yes.
COMMISSIONER HOLT: So I think Carlos is making a good point. It seems to me at least once in a 10-year contract, there should be some kind of third-party assessment relative to an audit or ‑‑ this SAS-70 audit is a full, pretty complete type of audit?
MR.CONTRERAS: Yes, sir. There's two types of reports. One is a higher-level Type 1. But in our instance, we would be better off actually with a Type 2 report that gives an assessment of the controls themselves and ‑‑ for that specific audit.
COMMISSIONER HOLT: Okay.
MR.CONTRERAS: A development of an inquiry only role. Right now, in the Texas License Connection, you get access to actually update the information, even if you are just in there to try to gather information or to look at it.
For example, I guess if one of my auditors would want to go there it would grant him actually access into the application itself. So what we are ‑‑ TLC management is doing is working with Verizon to develop the inquiry-only role, and they are also working to develop a procedure to retain the system access documentation. They weren't doing that.
So there weren't any records of who they granted access to, when they took it off, things of that nature. So they are working on that also, as we speak. Again, [phonetic] and testing business and recovery plan, it had to do specifically with the LEOs that are out on the coast.
We had asked the LEOs to see if they could come up with an adjunct evacuation plan, per se so that they could identify specific information, calling trees, things of that nature, in case we have a natural disaster, since we obviously have had a few here in the past decade, and right now, LE is working to develop that.
And what they want to do is go ahead and set it up for the offices that are on the coast, and then expand that to all of the offices within the state. But it is I guess, a pilot that they are doing right now, and they are going to enhance those plans eventually, statewide.
We had some carryover audits that I want to talk a little bit about. We are going to see an audit of selected federal grants. There is going to be a procurement card review that is not listed on there. Both of those right now are in the reporting phase. We were in ‑‑ we've been meeting with executive management to talk about both of those areas.
The bottom two, the audit of the local park grants process, and infrastructure, and contracting instruction. Those are in the ‑‑ starting the field work phase. We expect to see those reports probably before the end of the first quarter of FY 2011.
COMMISSIONER DUGGINS: Before you leave that, when you say you are auditing the local park grant process, are you talking about the ‑‑ only the internal segment of that, how we evaluate and recommend the grants? Or are you actually going out and looking at them?
MR.CONTRERAS: Part of the process, for when the grants go out is the actual monitoring. Are they doing ‑‑ you know, is that money being used as it was intended, and so one of the things that we will do with the field auditors is actually go out there. Take a look at boat ramps, construction, whatever ‑‑ they take some pictures, that type of thing. Just for that verification.
We have a couple of additional assignments. There was a spring follow-up review that is an internal report. That was for the outstanding audits that we have had. We are going to continue that follow-up process, and be doing it every spring and fall, and we are going to be doing it in April and October and that way we can keep current.
Previously, we had had a process that was ad hoc, and we would go and pick up one or two. This way, it will be cyclical, and all of the audits that we have done, all of the recommendations, we are going to follow up on. Finally, we provided a small amount of assistance to Internal Affairs when they went to look at the LEO offices that appear to be having some problems.
As far as tomorrow is concerned, my agenda item is for the FY 2011 annual audit plan. The Government Code Chapter 2102, which is the Texas Internal Auditing Act, says that each state agency has to have a program of Internal Auditing includes an annual audit plan. We use risk assessment techniques to develop it. And it will also need the planning to identify the specific individual audits that will be ‑‑ and the detail will be in tomorrow's presentation. Other section of the Code talks about the audit plan being developed by the internal auditor must be approved by the Governing Board, and as you all know, I provide you with reports for Executive Management and to you on a regular basis, as we complete them.
So tomorrow, my description of projects that we are going to have, we are going to have operational program, information technology audits, and there is ‑‑ I put in, I have had some discussions with Executive Management, and increased the amount of hours as we go into this legislative session for Commission and Management requests, and we have already got a couple of those. One from Mr. Smith and another one that I am currently working on to see if we can assist one of the divisions.
So certainly, there is, as we move forward into the fiscal year, into the new fiscal year, I want you all to be aware that if there is any requests or any type of work that you would like for us to do, we have got a set amount of hours, and we can provide those services to you. Those are the end of my comments. Do you all have any questions for me?
COMMISSIONER HOLT: Any questions for Carlos?
COMMISSIONER FALCON: Any questions? Any more discussion?
COMMISSIONER FALCON: Okay. If there are no further questions or discussion, I will place the approval of the FY 2011 audit item on the Thursday Commission meeting agenda for public comment and action.
Committee Item 4, Results of the 2010 Survey of Employee Engagement. Mr. Alan Bingham and Jim Lopp.
MR.BINGHAM: Good morning, Commissioners. For the record, my name is Al Bingham. I am the Human Resources Division Director, and with me this morning is Jim Lopp, our Deputy Director and our resident organizational development guru, who is going to brief us on the results of the 2010 Survey of Employee Engagement. As you know, the agency values and gets a lot of feedback and information from a myriad of external stakeholders. Of equal importance to the feedback that we get from our external stakeholders is the feedback that we get of course from our employees.
Of all of our stakeholder groups, probably our employees are more intimately knowledgeable of the inner workings of the organization. They get to see firsthand the good, the bad, and sometimes the ugly out there. So they are in a position to really provide good information about ‑‑ from their perspective as to how the agency is doing.
The Survey of Employee Engagement, every two years, we get an opportunity to get feedback from our employees, and this is more than just an employee satisfaction survey. It really is a strategic tool, used by Executive Management to make improvements and to identify strengths and areas for improvement.
Again, I applaud the efforts put forth by Mr. Carter, Scott Boruff, Gene McCarty, Ross Melinchuk, in holding their feet to the fire to take action on ‑‑ appropriate action on recommendations that are put forward by our employees. With that, I am going to turn it over to Jim. I will be available to answer any questions.
MR. LOPP: Good morning, Mr. Chairman, Commissioners. For the record, my name is Jim Lopp. I am the Deputy Director for Human Resources. As Al mentioned, our purpose this morning is to provide a high-level, concise executive overview of the Survey of Employee Engagement. We are going to concentrate on all three bullets up there, but specifically talk about the score analysis, which would be essentially the trends associated with the survey and then the game plan for the agency, moving forward.
Al talked a little bit, very well about the background of the survey. I am going to talk a little bit about why we survey. We are an agency that prides ourselves on making decisions based upon good science, and in the survey world, this is as good as the science gets. So we value that.
Virtually every state agency participates virtually every cycle. What we get, we get a full complement of reports. There is a report which will go, and the survey is in sync every other year, with the legislative session. So there are several reports that will go the Governor's Office, go to the Legislature, go to the Legislative Budget Board as well.
We use, essentially for the survey, internally, the same process that we use for the Texas Conservation Forums that were done in consolidation with the update of the recent Land and Water Plan update. So that as Al said, we make a concerted effort to talk with our employees about issues, questions, concerns that they might have. Consolidate that to include their recommendations and bring that forward for executive review and decision.
The survey cycle is a classic closed-loop continuous-process improvement cycle. For example, the last time we surveyed was December/January timeframe, 2008, and we came across in the circle there, over to interpretation, made significant interventions and then retested in the January/February timeframe.
Survey highlights, talk just a little bit about this. This is really the score card for the manager. This is the dashboard associated with how well we are doing, in employee engagement. The spike in participation speaks to the fact that in the 2008 survey, we had really peaked in terms of our participation rate. That is, the submission rate on behalf of our employees at 54 percent. 2006, we had been 54 percent. 2004, we were just at 39 percent.
So when we came before you, challenged is a hard word, but you encouraged us to raise the bar up to about 65 percent, and Commissioner Duggins encouraged us to move the timeframe, out of that December/January timeframe over into January/February.
And naturally, we did all of that. The result was that we did have that spike in participation, over a 50 percent increase, from 54 percent to 84 percent. Personally, I attribute that to two things: The first thing was, that as Al mentioned, Executive staff hears the input from employees and takes action on that. The second thing is, we had one of our leadership development programs do a full-year project on the survey, specifically on non-compensatory remuneration or the kinds of things that we can do to motivate employees, absent dollars. So we think that is significant.
Continuous improvement, overall. All of our scores are getting better every year. The best single measure of that is what is called the synthesis score. That is the average of the 19 constructs that we will talk about in just a minute. Basically, 375 is the agency's score on the overall average, and we will see in just a minute that anything that is at 375 on a scale of one to 500 is a significant strength.
So we start off being an average of 375, and that is a 23 percent increase from where we were in 2008, and that is 12 points higher than what the average state agency is. Favorable comparison with benchmark agencies, we will take a look at that in just a minute. That is one of the advantages of consistently participating in the survey. We get that over time ability to do that.
Suffice it to say at this point, just as an executive recap, of the three benchmarks that we have, that is the average state agency score, a benchmark in terms of mission agencies, that is other natural resource agencies, and then agencies in comparable size, that is 1,000 to 10,000, we scored higher on 19 of the 20 constructs in similar mission agencies and similar size agencies.
So we feel pretty good about that. However, the reason that we do that is not that we can brag about it if we do well. But so that we can look to see what other agencies may be doing that we can benefit from, and vice versa.
The fourth bullet up there is important as well, a confirmation of core strengths, and our core strengths would be those constructs that we consistently score highly on, and we will look at those in just a few minutes. They are, however, what we would call signature strengths, and they are for us, not surprisingly, strategic orientation, external communication and quality. Quality in this context being continuous improvement and customer service.
On the flip side of that, however, we do have a couple of continuing challenges, and we will talk about those in just a minute. But specifically at this point, the one which is always problematic for us is the pay issue, and on that, Mike Jensen referred to Rider 27.
And we want to thank Executive staff and you, the Commission, for supporting us on Rider 27 to get the money that we needed for fair pay for employees. Both salary equity adjustments and the merits that we talked about. So I think that is one reason that our pay score, which we will see, jumped up about 23 points, between 2008/2009. It is still a challenge for us, but we are getting arguably, incrementally better.
Survey organization at its highest level, it consists of five different workplace dimensions. Right below that, there are 14 what are called constructs. They are organized in those five areas.
And then new this year, a little bit of a shift of emphasis, more emphasis on employee engagement. So there were five added constructs in there, with 11 questions. So collectively, there are 71 questions, and we were able to analyze them at these three levels up here.
Take a look now. This is a fairly busy chart. But let me set it up for you. At the bottom, you have the 19 constructs, and they are organized into those five dimensions that I just talked about.
Over on the left hand side, from bottom to top, the range of scores can be a low of 100 to a high of 500. You can see up there, a red bar and a blue bar. The red bar is 325. Anything that is below a score of 325 on that scale of one to 500 is considered to be a weak score. We have just one of those, and that is that pay that we were talking about. There are a couple over on the right hand side that challenge that just a little bit.
And then up at the high bar up there, at 375, we have 12 of the 19 that are at that level, and we talked about those things that we would call core strengths or signature strengths. The three in blue are the highest scoring constructs. In addition to that, quality is consistently, year in and year out, one of our highest scoring constructs, and I mentioned also external communication would fall into that category as well.
As far as challenges, pay is an issue up there. We looked back at that systemically. We look at the last seven iterations of the survey, going all the way back to 1988. We have progressively gotten better in that pay issue. But I would say again that this is a challenge not just for us.
And one of the reasons that we look at all agencies, not just ourselves over time, is to see what systemically, what challenges we're facing that every other state employee faces, and that is the reason that as an agency, Executive staff in that 2008 time frame said we will, as a team, take on that pay issue, and they did, and Rider 27 was a result of that, and we thank them for that.
Having said that, all other state agencies struggle with that challenge as well. So when you see our signature strengths up there. You see those things that we struggle with, just a little bit, as well.
Statewide comparison, to get out of doing an eye exam with you, or for you this morning, what we did was to kind of separate the wheat from the chaff. We took the 19 and took out those medium-scoring constructs. Then we looked at averages in terms of both comparably sized agencies, 1,000 to 10,000 and comparable mission. We outscored those like I mentioned, and 18 of the 19, we took those off.
So what we are comparing here is ourselves against the highest bar, and that is the statewide average score. On those signatures strengths that we talked about, and in addition to that, some areas that we struggle with, and you can see up there, that the scores are very tight, even in those areas where we outstrip the average.
What I would say in context is that everybody believes their agency is unique, and ours truly is because we are a very large agency to begin with. We are a geographically dispersed agency, with 77 percent of our people in the field, 93 parks, and you know the configuration with Coastal Fisheries, Inland Fisheries, Wildlife. We have several hundred different installations out there, and in addition to that, we have a very complex mission as well, and a large budget.
So we face a lot of unique challenges, in terms of maximizing that communication capability. So but we have paid a lot of attention there. You can see on internal communication, as an example, it is about 325, it is not at 375. So it is a construct in transition. When we looked back at that, back to 1998, we are today almost 80 points higher than what we were then, and compared to last year, we are 37 points higher.
As far back as 2003, we did a leadership development program. On that, a project which Lydia Saldana was the sponsor for. In 2006, which is just two iterations ago, our staff went out and did focus groups with every division, specifically on those constructs, to include internal communications that we were not scoring where we needed to be, and then in 2008, we had the Natural Leader project that I talked about, our leadership development program. So we are working very hard on those scores up there.
As far as our game plan, moving forward, this is pretty much what you saw and approved in 2008. I want to assure you that we have traction in each one of those areas. All of the dates over there that you see that are in the past, in fact, those actions have been taken to include the update on Executive staff.
We have done the one-on-ones with all of the Division Directors, and the focus with those one-on-ones is to look with the divisions at their individual report, and those areas that may be unique to them, because of what it is that they do and how they can maximize their scores.
The briefing today, we appreciate your time. And then we have Division-wide presentations that we are scheduling now for the latter part of August, which is obviously this and next week, and then September as well. And then moving forward, we will do those agency focus groups. Bring those recommendations forward to Carter and Executive staff. Do those implementations. And then we will be back here, two years from now, wherever the Commission meeting is, and reporting even higher scores, we hope.
One thing, late breaking news, if you would, just last week, the agency was designated as a Best Practice by the UT School of Social Work. That is a state sponsor for the survey. That is a really a congratulations to you, for the support that you have provided us, and Executive staff as well.
Essentially, what that means is, we are already working with two UT doctoral students to prepare a white paper. Best practices, in addition to that, the templates that we use, processes and systems that we use, that will go into that white paper. That will go up on a website which all state agencies can access, and then we will be, and have been in the past as well, resources for other agencies.
Thank you for your time. We thank you for your support. If you have any questions, I would be happy to try to answer them for you.
COMMISSIONER HOLT: Yes. Can I ask you to go back to that busy chart that had the yellow, blue and reds? I should have asked you earlier. It is the one ‑‑ yes. There you go. Just help me a little bit. Climate. I am over on the right. Climate feedback, climate management. What are you measuring there, when you say climate?
MR. LOPP: Yes, sir. Those last five, you see there on the right, all of those that are prefaced with the climate, are new to those employee engagement measures over there. The two that we look at, maybe three actually, climate fairness is at 350.
What that means is, the employee ‑‑ there are two questions there. The employee believes that I am being treated fairly, and the employee believes that, if I am not, that the agency will take action to correct that, or to protect me. On the other hand, climate feedback is that the employee believes that my feedback will be welcomed, that my voice is heard, and that actions will be taken when I voice that.
Coming back to that issue of internal communication ‑‑ and I really think climate management ought to be an internal communication issue because there are two questions there. And when we talk with our divisions and even with the Executive staff, those two questions are, upper management makes a concerted effort to explain the rationale behind decisions that they make. And the second part of that is upper management makes a concerted effort to be visible and accessible. Because we are a large agency. It is a big state, and our Division Directors and Executive staff have a wide span of control. So what that goes to say is, that employees want to see, want to hear.
We have one of the best, if not the best, Communications Divisions in the state. They do a very good job of getting the word out. They are doing even a better job. The "Tracks and Trails," which has been our hard copy kind of newsletter for employees has been converted over to the "Inside Track." They work in social media. Mr. Smith has been active in that social media as well. He and Executive staff are very active in Town Hall meetings for employees. So we are doing many things. But maybe the last thing is for our managers to understand that employees want to hear from them, and they want to talk with them, and they want to get the rationale behind what is going on.
So those five are new, and the three that I talked about specifically are ones that we are paying attention to. Since we just have really one cycle of experience with them, at this time next year, we will have a little bit more experience and know a little bit more of what those may mean for us. But at this point, that is the way we would interpret those.
COMMISSIONER HOLT: Climate though, would indicate that the sense, if I am an employee filling out one of these surveys, that I feel that the climate in the agency is X. Is that what it is referring to? Is it the whole agency? I am trying to understand climate.
MR. LOPP: That is a good question, and I appreciate that. A core of us have been working over the years on this survey. This year, in the 2010 iteration, there was a concerted effort to differentiate between my workplace, and my agency. So some of these questions, the 71 that I talked about, are getting at my work unit, and some of them are getting at my agency.
And the reason that I highlighted that climate management there with upper management, it depends on where I am in the hierarchy. If I am an individual contributor, that may be my regional director. Or it could be my district leader. If I am a deputy division director, it is my division director, and my deputy Executive Director.
So it depends on where I am sitting. But each of those questions is carefully worded, to try to differentiate. In my work unit, or in my organization. So we can make that differentiation.
COMMISSIONER HOLT: You do ask that.
MR. LOPP: And we are able, when we get those reports, over the last three cycles, and Parks and Law Enforcement were happy to be able to do that, was to get their individual regional reports because their regions are big enough to do that. So we bring that information down to that level. We will be working with individual regions, within parks. In fact, we are doing that right now.
COMMISSIONER FRIEDKIN: So your intention would be to present that information, and separate it so we would get a feel for satisfaction with their unit climate, as well as department-wide, or ‑‑
MR. LOPP: Could you say that again, sir?
COMMISSIONER FRIEDKIN: Well, how are you going to present it? Are you going to present that ultimately in a final report? Is it going to be in a ‑‑ can we break that out to get a sense of how people feel within their own unit? As well as how they feel department-wide?
I am just trying to get down to the climate a little bit more, and drill down a little bit more on climate. How we define it, and what it really means. Because I am still a little bit unclear with it.
MR. LOPP: Yes. We are going to roll that information back to the employees. Because they have set a high bar for us, that 30 percent,30-point increase there says that now they are going to expect that we are going to act on it, and we are going to feed back to them that information.
In fact, we will do that through all of the channels that I talked about just a minute ago. So we will roll that information back to them. Get them engaged in those focus groups, and then get their recommendations and suggestions. So we will get that closed loop that we talked about just a minute ago.
COMMISSIONER FRIEDKIN: So we will get more detailed information. Okay. Thank you.
MR.BINGHAM: Our challenge is, as Jim said, we get a slew of information, and a lot of it is useful to the Division. Again, getting back to the work unit. Finding a way to present that to you in a report that kind of gets at differences between the work unit and the organization, it is a little bit of a challenge. But we will look for ways to do that, separate that out a little bit.
MR. LOPP: The limitation that we have there is that the report that comes to us is going to be an Executive Summary of the agency, and we have one for each one of the divisions, and then we have one for the regions. But it is not parsed down, and it may be intentionally so.
Because sometimes, employees, the smaller the unit gets to be, the more intrusive the demographic questions, the less willing they may be to complete it, or the less willing that they be to complete it candidly. So we have got that perspective out there as well.
But the lowest level that we can bring it down to at this point is the regional level, where our two largest divisions, that is Law Enforcement and Parks. But what we do is, when we talk with the divisions, and we get those focus groups, that is the opportunity to get the individual employee input on that. You know, this is what you are telling us in the survey.
And then from the focus group, we are asking questions that are around what should we start doing, stop doing, or continue doing, but maybe change it up a little bit. So there is a gap there, but it is not one that we can easily bridge, short of those focus groups that we talked about in the individual supervisors, sitting down with small groups of employees, which is what we highly encourage.
COMMISSIONER FRIEDKIN: Sure.
MR. SMITH: Commissioner, I just want to make sure that I understand your question too. Are you wanting to see a greater level of detail, that drives down into different divisions and below that? Or do you just want to make sure that we have the ability to stratify that way? And where we have got specific areas that we can probe and concentrate, and address issues that need to be addressed.
COMMISSIONER FRIEDKIN: The latter, and that we clarify climate, when we ultimately present it. So we all understand what that means.
MR. SMITH: Well, and I think that is a great point. And Jim has been working very hard on that, about trying to distinguish between an individual's workplace and the agency as a whole. I think certainly, when we think about it, we think about how do we create an atmosphere in which every colleague is valued, respected and heard and communicated with, and that is obviously what we are aspiring to, throughout the agency.
COMMISSIONER FRIEDKIN: Great. Thank you.
MR. LOPP: We are working with a couple of divisions right now to come up with division-specific surveys that can come down to a lower level. But again, it is going to be a dialogue back and forth with those focus groups to really get to that individual employee or small clusters of employees.
COMMISSIONER FALCON: Commissioner Duggins.
COMMISSIONER DUGGINS: I have questions and comments. First, it seems to me from looking at this slide, we can't really do a lot about pay without help from the Legislature. And we are very close on the other two.
So as a general proposition, this slide, plus the statewide comparison slide, I think, shows that the agency is doing a very good job, and I want to commend Carter and all of the agency for what appears to me to be, I think, an overall good positive report back.
That said, I went back and looked at our minutes from the May 2008 meeting, where you last reported this. The concerns that were expressed then were fair pay was number one, team effectiveness, flow of information within the organization, readiness to change based on new information or ideas and lack of cultural diversity.
And only two of those are carryover: fair pay, the internal communication issue. So it seems to me that this internal communication issue is the one that we can do the most about until we get some help on money for pay.
To follow up on the Chairman and Vice-Chairman's comments on climate management, do you have the ability to identify individuals who felt like upper management were not adequately explaining decisions and the rationale behind them, to get them in the room with whoever the upper management is, and try to decide, or try to discuss how to fix that? Or at least how to address the concern that is expressed?
MR. LOPP: No, sir. We don't. But we do get a data report, and I love data. And it is a very thick report, and it comes in, and it looks at every single question. It looks at the standard deviation. So the way we get the one to 500 up there, is that the individual employee is rating each one of those questions, one to five.
So we know, for every one of those questions, in every one of those divisions or regions, not who, but we know how many people responded to ‑‑ I strongly disagree. I disagree. I am neutral on it. I am okay with it. It is very good. So we have the ability to go in and do that.
But not the by name ability, and the reason is, because it is really scored by a third-party vendor. So we get the survey, and we administer it. The survey goes, and it is analyzed, and then it comes back to us and reason is so we won't have that information. But we do know statistically, that the significance, that it doesn't take that many people saying that we need to improve pay, or that we need to improve internal communication for us to understand, yes we need to do that, and we need to work on that.
Now moving forward on our time line, you will see that immediately following this session, we will put together some recommendations to move forward to Mr. Smith and his staff about what we need to work on, and you put your finger, sir, on probably the ones that it will end up being. Pay, again we move the bar from 239 to 263, in a large part because of that Rider 27.
Not to belabor the discussion, but one of the challenges that all state agencies have, is that the state of Texas does not have a compensation philosophy, but it has a practice. The practice is not to lead the market, or match the market, it is to lag the market, but to make up for that with benefits.
So that is part of the understanding that needs to come into it, and, in that context, is the reason that we had the Natural Leader strategic project in 2008, to look at the nonmonetary motivating things that we can work with. So we will continue to work on that one.
And it may well be that internal communication is one that we work on again. Again, that bar has been raised. But now, with what Lydia and her folks are doing, with social media, and the conversion of the Tracks and Trails, the hard copy, over to online, may be beneficial there.
But coming back to your point on climate management, again, it is those of us that are in the management area, 500 out of those 3,200 employees that we have, the onus upon us is to be more visible, to be more receptive, to be more communicative, on an individual basis, on a small group basis. And that's the way, I think, what the literature tells me, and in employee engagement, is the way that we are going to bridge that gap and raise those scores.
COMMISSIONER DUGGINS: But the score would indicate this is not an agency-wide issue, and what I am asking is, does the data allow you to at least identify the Division within the Department so that at least within that division, there can be discussions, face to face discussions and try to air out whatever these communication issues are.
MR. SMITH: Jim, I think that is what they are most interested in is how far can we drill down. We can certainly separate it by division, which we have done. And within the big divisions, we can also partition out by region. Is that correct?
MR. LOPP: Yes, sir. The other part of that discussion is, and we did this at the Executive presentation for the divisions and with the division presentations as well, is that ‑‑ again, we lack statistics. But just what you need to know here, in the amount of time that we have available. But what we also do is go back. And we know, and we show it to the divisions, exactly what their score is compared against the agency average. So in the division reports, and the regional reports that will show zero point is the agency. And they are above the line or below the line of every single one of those. So we know, yes, sir. Or the division directors know, and I am hoping they are carrying those reports with them this morning.
The other part of that discussion is that we also graph for Mr. Smith and his staff in the division directors, the highest score and the lowest score on every one of those 19 constructs. So we know what the spread is, so to speak. What is the range of scores against the average? So each one of those divisions knows exactly.
And the reason that we do those one-on-one with the divisions is and you are exactly right. Internal communication is a challenge for all of our divisions. Some less than for others. But if it is a particular challenge for a division, we talk with them about that. What are they doing. What can they do.
And then we have got that, those recommendations that came out of the 2008/2006 reports. So we are able again, to bring that down, and the two largest divisions, Parks and Law Enforcement down to the regional level. At the divisional level, we are able to get that down to that level as well.
And then there are some additional questions in there, that are TPWD-specific questions, that we can bring it down even to the division level again, or the regional level. But again, to go lower than the regional level, it needs to be those focus groups that we talked about.
COMMISSIONER DUGGINS: One of the other construct areas that you say is viewed as a relative concern, is the information systems. The extent to which computer and information systems enhance the employee's ability to get the job done. Were you here when Carlos presented his report on the audits, and the security, working on security access?
MR. LOPP: This morning?
COMMISSIONER DUGGINS: Yes. This morning.
MR. LOPP: Yes, sir.
COMMISSIONER DUGGINS: Is there any ‑‑ I mean, would you explain exactly what it is, which construct it is here, and what is the concern?
MR. LOPP: Yes.
COMMISSIONER DUGGINS: Is Carlos's ‑‑ do Carlos's recommendation somehow come into play here?
MR. LOPP: That is a very good question, and I appreciate it. There were two changes made to the survey in terms of the constructs. One of them was that employee engagement was added.
The other one was, in the information area, there are three areas within that dimension. Availability of information was removed and information systems was put in there. So exactly what you are getting at is that, first ‑‑ this is the first time that those inquiries have been made.
And George Rios and I have talked about this, and I know Carter will get involved in this as well. Part of the question is, is internal communications an issue because of the hardware or technology? The other part of that question is the human factor.
Is it there because of the systems and processes that we operate? The reality is, we think it is both. So we will work with, and I know Executive staff will work with, and look and see. Do we have the systems and processes. Do we have the support from DIR to get compatibility of systems, so we don't have people on, some on Mac, and some on desktop units, or different versions of Word or Explorer, or whatever it might happen to be. Anything that we can do to promote that communication.
The other challenge we have, is that we have 500 people that are not on the network. Seasonal hourly employees that don't have offices, per se. That are out in the parks, primarily. But maybe in the Wildlife Management Areas, fisheries as well. So the challenge there, you can't get them through technology. You have to go out and get them the old fashion way, just eyeball to eyeball.
COMMISSIONER DUGGINS: Okay. Thank you.
COMMISSIONER BIVINS: I have one other question. If you have given us this data, I am sorry. On the 85 percentile, can you compare that to other departments? Other agencies?
MR. LOPP: Do we ‑‑
COMMISSIONER BIVINS: I am sorry. Other agencies.
MR. LOPP: Do we talk with other agencies?
COMMISSIONER BIVINS: The response number, the total responses.
MR. SMITH: How does our response rate, Jim, compare with other agencies ‑‑ the 85 percent response rate. How does ‑‑ what was TCEQ's response rate? What was Water Development?
MR. LOPP: Yes. The 84 percent rate is compared, the average is 80 percent. So we were at 54, jumped to 84. The average state agency is at 80, and they jumped from 62. So everybody was better.
So I called over, and talked to our counterparts over at UT and asked them what they thought accounted for that, and they said, they thought increased marketing, the conversion over, and there was a lot of buzz about this now being the Survey of Employee Engagement versus the Survey of Organization Development. But the other thing was going online. We had been online for the last five cycles, but many agencies have not been. So the convenience.
The other thing was a reduction in the number of questions. It is pretty daunting if you have a survey that is over 100 questions. Well, they pared that down a little bit, made some simplifications, and the bottom line is the use of technology and marketing.
COMMISSIONER BIVINS: Great. Thank you.
COMMISSIONER HOLT: And then on the ‑‑ we are designated as a Best Practice organization. For these various things that you have here, how does that compare? I mean, you indicated that UT, the individuals at UT make these decisions, make these designations?
MR. LOPP: Yes, sir. UT School of Social Work, they sponsor this. So they sent us a letter, and it said, we have been impressed over the years with the Executive-level attention and support and the follow-up and follow-through on that in these three specific areas.
So we will work with them, and then they will put that up on their website, as a State of Texas Best Practice, and that is a tribute to our Executive staff.
COMMISSIONER HOLT: Good. Would there be a designation then that says, we aren't Best Practices in any areas? I just don't know how they do this.
MR. LOPP: Well, there have been other agencies in the past ‑‑
COMMISSIONER HOLT: I'm talking about us. From them, would there be anything that says, TPWD is designated as not a Best Practice organization for something specific?
MR. LOPP: Well, we just got that letter last week. So I am not sure if they are going to send something formally.
COMMISSIONER HOLT: I just don't know how they work. Do they do that also?
MR.BINGHAM: No, sir. They would not do something like you just ‑‑
COMMISSIONER HOLT: They would not?
MR.BINGHAM: They would not do that.
COMMISSIONER HOLT: So they only tell you when you do well, but not when you have done ‑‑
COMMISSIONER HOLT: I mean, I am glad to have it. But you could argue really, I would rather have the other information, so I can work on it.
MR.BINGHAM: We have been a Best Practice with them for a long time.
COMMISSIONER HOLT: In these areas?
MR.BINGHAM: Well, no. That is just examples of the things that they considered, probably.
COMMISSIONER HOLT: Okay. I have got you. Okay. So this is a Best Practice organization.
MR. LOPP: Just in the C context.
COMMISSIONER HOLT: Just what?
MR. LOPP: Just for the survey.
COMMISSIONER HOLT: Okay.
MR. LOPP: So yes, the heading up there should be TPWD designated as Best Practice Organization for the Survey of Employee Engagement.
COMMISSIONER HOLT: Yes. Okay. But all agencies do that survey?
MR. LOPP: Right.
COMMISSIONER HOLT: Okay.
MR.BINGHAM: So what that means is, we will get calls from other agencies saying, Hey, this is what you guys are doing. What is the outcome from doing that? What do we need to do to work with our Executive team to improve our scores? That sort of thing.
COMMISSIONER HOLT: Okay. On the Best Practice Organization, do many get this? Many agencies do get this, or do not?
MR. LOPP: No.
COMMISSIONER HOLT: Get this designation.
MR. LOPP: There are just two or three up there now. But they are redesigning the website. So on this cycle, we are the only agency at this point that has been designated as a Best Practice, so it would be ‑‑
COMMISSIONER HOLT: Out of how many agencies? 200-plus agencies?
MR. LOPP: A single one.
COMMISSIONER HOLT: Wow.
MR. LOPP: TDI has been up there in the past for ‑‑
COMMISSIONER HOLT: Who has? I am sorry.
MR. LOPP: TDI. Texas Department of Insurance.
COMMISSIONER HOLT: Okay.
MR. LOPP: And a couple of others have been up there. But this designations is for the 2010.
COMMISSIONER HOLT: Congratulations. I did understand that right? We are the only agency that has received this up to this point? I guess?
MR. LOPP: At this point. Yes, sir.
COMMISSIONER HOLT: Wow.
MR. LOPP: And if we are not the only one, we are the first, and that is good too.
COMMISSIONER HOLT: That is always good too. Yes. Well, congratulations. No, I mean that sincerely, and for the participation rising dramatically, which to me is so important. I mean ‑‑ okay. Wonderful. Good. Thank you. Any other questions?
COMMISSIONER FALCON: Chairman Holt, this Committee has completed its business. I want to thank all of those that worked so hard in the preparation of the budget. It was difficult with the cuts that have been requested from above, and so I want to thank staff, Carter and Gene and Mike and everybody else that participated. I know it was a lot of hard work, a lot of hours, and a lot of magical things that had to happen for us to come up with the right numbers. So thank you very much.
COMMISSIONER HOLT: Sure, I agree with you. Prioritization is a tough one. And then we will have to ‑‑ you know, push through the Legislature and let me say it the right way, convince them that these priorities are the right priorities. Because we are not ‑‑ every agency is going to have the same issues.
Yes. Okay. Chairman Falcon, thank you. We now will move on to the Regulations Committee.
Chairman Friedkin, please call your Committee to order.
(Whereupon, at 10:59 a.m., the meeting was concluded.)
C E R T I F I C A T E
MEETING OF: Texas Parks and Wildlife Commission
LOCATION: Austin, Texas
DATE: August 25, 2010
I do hereby certify that the foregoing pages, numbers 1 through 87, inclusive, are the true, accurate, and complete transcript prepared from the verbal recording made by electronic recording by Penny Bynum before the Texas Parks and Wildlife Commission.
On the Record Reporting, Inc.
3307 Northland, Suite 315
Austin, Texas 78731