Commission Agenda Item No. 2
Presenter: Justin Halvorsen

Action
Financial Overview
August 27, 2020

I.          Executive Summary: The staff will present a summary of the Texas Parks and Wildlife Department (TPWD) Fiscal Year (FY) 2021 Operating and Capital Budget, including the Capital Conservation Account, Texas Parks and Wildlife Code section 11.032(c) deposit options regarding boat-related fees, and the Texas Parks and Wildlife Commission’s (Commission) Budget and Investment policies.

 

II.     Discussion:  The staff will discuss the following with the Commission:

• Staff will present and discuss the FY 2021 Operating and Capital Budget, including the Capital and Conservation Account (5004);

• Staff will summarize the Commission’s Budget Policy and Investment Policy;
• Staff will discuss Texas Parks and Wildlife Code section 11.032(c) which permissively allows TPWD to retain all boat fees in Fund 9, or to transfer of up to 15 percent of those fees into Fund 64 on a monthly basis.

III.     Recommendation: The staff recommends the Commission adopt the following motions:

“The Executive Director is authorized to expend funds to operate the Texas Parks and Wildlife Department in accordance with the proposed FY 2021 Operating and Capital Budget (Exhibits A, B), the Budget Policy (Exhibit C), and the Investment Policy (Exhibit D).”

“The Commission concurs with retaining 100 percent of all boat registration, title, and sales tax revenue collected in Fund 9 to begin FY 2021. Staff will carefully monitor fund balances and, if conditions warrant, notify the Commission should modifications become necessary later in the fiscal year.”

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Commission Agenda Item No. 2
Exhibit A

 

FY 2021 Agency Budget by Strategy 

Strategy	FY2021
A.1.1. Wildlife Conservation	35,338,093
A.1.2. Technical Guidance	9,923,789
A.1.3. Hunting and Wildlife Recreation	2,331,533
A.2.1. Inland Fisheries Management	15,812,568
A.2.2. Inland Hatcheries Operations	7,090,202
A.2.3. Coastal Fisheries Management	14,289,140
A.2.4. Coastal Hatcheries Operations	3,603,688
B.1.1. State Park Operations	82,086,268
B.1.2. Parks Minor Repair Program	4,987,638
B.1.3. Parks Support	5,724,167
B.2.1. Local Park Grants	12,663,302
B.2.2. Boating Access and Other Grants	8,604,118
C.1.1. Enforcement Programs	59,822,291
C.1.2. Texas Game Warden Training	2,730,481
C.1.3. Law Enforcement Support	2,782,462
C.2.1. Outreach and Education	3,879,658
C.2.2. Provide Communication Products	5,541,827
C.3.1. License Issuance	8,143,409
C.3.2. Boat Registration and Titling	1,670,280
D.1.1. Improvements and Major Repairs	46,085,552
D.1.2. Land Acquisition	2,322,566
D.1.3. Infrastructure Administration	6,808,555
E.1.1. Central Administration	10,234,251
E.1.2. Information Resources	13,695,133
E.1.3. Other Support Services	4,343,894
Fringe Benefits	74,097,239
Total	444,612,104

Method of Finance	FY2021
General Revenue	171,874,130
GR Ded-Game, Fish, and Water Safety	136,430,497
GR Ded-State Parks	60,445,719
GR Ded-Other	181,999
Federal Funds	70,137,572
Other Funds	5,542,187
Total	444,612,104

Note: 5% reduction is not included

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Commission Agenda Item No. 2
Exhibit B

FY 2021 Operating and Capital Budget by Division/Object of Expense

Division	Salaries & Other Personnel Costs	Operating	Grants	Capital Budget	Fringe Benefits	Total Budget	FTE’s
Coastal Fisheries	10,836,448	5,686,902		200,817	4,439,237	21,163,404	198.0
Communications	4,670,837	3,336,609	320,000	33,459	1,811,955	10,172,860	74.0
Departmentwide		28,412,266		1,529,698		29,941,964
Executive	2,020,156	283,881			688,119	2,992,156	22.0
Financial Resources	6,149,525	838,714			2,375,262	9,363,501	119.0
Human Resources	2,225,821	305,707			830,281	3,361,809	34.0
Information Technology	5,574,975	1,040,265			2,091,095	8,706,335	84.5
Infrastructure	7,202,880	615,552		201,788	2,694,425	10,714,645	94.0
Inland Fisheries	11,740,683	6,701,718	500,000	831,642	5,267,583	25,041,626	208.0
Law Enforcement	47,211,887	11,688,228		4,919,658	19,455,117	83,274,890	673.7
Legal	1,013,283	70,870			351,538	1,435,691	11.0
Local Parks	1,556,409	723,863	15,982,422		555,948	18,818,642	20.0
State Parks	58,392,131	25,445,857		6,238,889	26,479,314	116,556,191	1,326.7
Support Resources	1,988,386	3,229,576			766,276	5,984,238	33.0
Wildlife	19,480,231	13,952,353	4,581,899	659,161	6,291,089	44,964,733	325.0
Capital Construction				45,385,552		45,385,552
Capital Information Technology				6,733,867		6,733,867
Capital Land Acquisition						0
Total	180,063,652	102,332,361	21,384,321	66,734,531	74,097,239	444,612,104	3,222.9

Note: The above FTE numbers are budgeted FTEs.  GAA FTE cap for TPWD is 3,169.2

5% reduction is not included

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Commission Agenda Item No. 2
Exhibit C

 

BUDGET POLICY (CP-009)

It is the policy of the Texas Parks and Wildlife Commission (Commission) to authorize the Executive Director to approve and execute (or have executed on his behalf) expenditures, budget adjustments, and transfers as follows:

1. Adjust the budget to bring unexpended balances forward from prior-year approved budgets.
2. Adjust the budget for transfers between budgetary units, major expense categories, or line items.
3. Adjust the budget to increase funds to allow payment of appraisal fees, witness fees, and investigation expenses on land acquisition and construction projects.
4. Approve and/or execute contracts and interagency agreements necessary in the daily operation of the Texas Parks and Wildlife Department (TPWD).  Revenues derived from interagency agreements may be budgeted and expended.
5. Adjust the budget for appropriated revenues, such as sale of equipment, donations, concessions, escrow, refunds, insurance proceeds, and publications revenue, so long as the expenditures are in agreement with the stated program goals and there will be sufficient cash during the fiscal year.
6. Approve and/or execute construction, repair, or renovation budgets, contracts, interagency agreements, and change orders if necessary to complete a project as approved by the Commission.  Adjust the budget from one TPWD facility major repair or development project to another or from available revenue to cover increased project costs or changes in scope.
7. Allocate super combo license revenue to the related stamp funds according to the documented methodology and authorize the related transfers of revenue to appropriate accounts.
8. Adjust the budget to cover the costs of lawsuits or settlements if deemed to be in the best interest of TPWD.
9. Adjust the budget to place a TPWD facility into reasonable operation when its condition poses a health or safety hazard or seriously hampers its ability to function.
10. Authorize classification changes anytime during a budgetary year, providing that such changes have been thoroughly justified and funds are available.
11. Increase the number of positions when new facilities are placed into operation and/or new programs are implemented, staying within the authorized full-time equivalency (FTE) limit.
12. Adjust the budget to make capital expenditures for construction projects funded in part with proceeds of bonds issued by the Texas Public Finance Authority.
13. Approve and/or execute the reimbursement of construction project costs with the proceeds of tax-exempt bonds issued by the Texas Public Finance Authority, pursuant to federal Internal Revenue Code guidelines.
14. The Chair or Vice Chair of the Commission, or a Commissioner designee of the Chair or Vice Chair, is authorized to increase, decrease or otherwise adjust the budget during the fiscal year based on revenue and expenditure information and document those actions as noted below.  Any budget adjustments that exceed a threshold of $250,000, excluding federal and bond funds, require the prior approval of the Chair, Vice Chair, or Commissioner designee through such means as a conference call or memo. Donations or gifts exceeding $500 shall be accepted by the Chair, Vice Chair, or Commissioner designee on a monthly basis, with Commission acknowledgement of the acceptance of the donations at each scheduled Commission meeting.

Subject to notification of the Commission of any changes to previously discussed purposes or uses of funds, TPWD is authorized to use dedicated accounts and sub-accounts for purposes consistent with those outlined in relevant statutory provisions or administrative rules as set forth in the Texas Administrative Code.

This policy shall rescind any existing policy on budget adjustments and transfers.

APPROVED this the 27^th day of August, 2020.

In official recognition of the adoption of this resolution in a lawfully called public meeting of the Texas Parks and Wildlife Commission, we hereby affix our signatures this 27^th day of August, 2020.

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Commission Agenda Item No. 2
Exhibit D

INVESTMENT POLICY (CP-016)

 

All funds paid to Texas Parks and Wildlife Department (TPWD) pursuant to the Texas Parks and Wildlife Code (Parks and Wildlife Code) or allocated to TPWD per §151.801 of the Texas Tax Code are required by §11.042 of the Parks and Wildlife Code to be deposited in the treasury with two exceptions, the Operation Game Thief Fund and the Texas Park Development Fund.  The Operation Game Thief Fund is held outside the treasury and, as authorized by Parks and Wildlife Code §12.201, is invested according to rules adopted by the Operation Game Thief Committee.  Therefore, the investment of the Operation Game Thief Fund is not governed by this Investment Policy. Although not required, the Texas Park Development Fund is and will continue to be deposited in the treasury and invested by the Comptroller.

Parks and Wildlife Code §11.065 authorizes the Texas Parks and Wildlife Commission to adopt rules for investment of the Lifetime License Endowment Account.  The Lifetime License Endowment Account is and will continue to be deposited in the treasury and invested by the Comptroller.

In addition, TPWD has established an account at The Texas Treasury Safekeeping Trust Company, an organization created by the Texas Legislature to invest and safeguard funds for the state and various subdivisions whose sole shareholder and director is the Texas Comptroller of Public Accounts.  TPWD’s account at The Texas Treasury Safekeeping Trust Company is for the purpose of accepting donations of marketable securities which shall be held only until accepted by the Commission.  Donations of marketable securities shall be sold promptly upon acceptance by the Commission and the proceeds shall be deposited into the treasury.

1. Objectives of TPWD
   1. Suitability of the investment to TPWD requirements
   2. Preservation and safety of principal
   3. Liquidity
   4. Marketability
   5. Diversification of the portfolio
   6. Yield
2. Policy Guidelines
   1. TPWD funds shall be held in the state treasury and invested by the Comptroller under Texas Government Code §404.024.
   2. Mitigation funds distributed to TPWD shall be deposited in the state treasury and accounted for separately.
   3. Bank accounts authorized by the General Appropriations Act of the 86^th Legislature, Article VI, Rider 3, and Texas Government Code §403.241-403.252 and §660.025 (petty cash accounts and imprest accounts for the purchase of evidence) should be either interest-bearing accounts or accounts with no fees.  Any interest earned in excess of bank fees shall be deposited in the General Revenue Fund. The establishment of any petty cash or imprest bank accounts must be approved by the TPWD’s Chief Financial Officer (Signature and Approval Policy OP-03-03).  Continuance of bank accounts is dependent upon timely and accurate record keeping and reporting. 
3. Texas Public Funds Investment Act:  Investment Officer Designation and Reporting
   1. Pursuant to Texas Government Code §2256.004, the Texas Public Funds Investment Act (PFIA) does not apply to TPWD funds which are deposited into the state treasury and which are managed by the Texas Comptroller of Public Accounts in accordance with Texas Government Code §404.024.  Therefore, TPWD does not presently have any funds on deposit outside the treasury subject to the PFIA.
   2. In the event that TPWD funds are deposited outside of the state treasury and become subject to the PFIA, the TPWD Executive Director, or designee, shall identify and designate an Investment Officer or Officers.
      1. The designated TPWD Investment Officer(s) shall perform the functions and responsibilities required by the PFIA.
      2. The Investment Officer(s) shall attend investment training at least once each state fiscal biennium from a program recommended by the Texas Higher Education Coordinating Board.
      3. The Investment Officer(s) are required to disclose any personal business or familial relationship with a business organization offering to sell investments to TPWD.
      4. The Investment Officer(s) are required to provide a written copy of the investment policy to every business organization engaging in investment activity with TPWD and must obtain written acknowledgement that the policy was received and reviewed and appropriate procedures and controls are in place to preclude unauthorized transactions.
      5. The Investment Officer(s) will ensure that all TPWD funds outside the state treasury held in bank accounts are insured by Federal Deposit Insurance Corporation (FDIC) up to the FDIC deposit insurance limit, currently $250,000.  If at any time deposits exceed the FDIC deposit insurance limit in any financial institution, the custodian of the affected account(s) is required to obtain collateralization that meets state requirements to cover the amount exceeding the deposit insurance limit.
      6. Reports of investment transactions for all funds managed under the PFIA shall be prepared within 45 days of the end of each quarter and distributed to members of the Texas Parks and Wildlife Commission, the Executive Director, and the Chief Financial Officer as required by § 2256.023.  These quarterly reports shall comply with state requirements for content.
      7. To the extent that the Texas Legislature modifies any provision of the PFIA that is applicable to TPWD’s funds, a report summarizing those legislative changes to the PFIA shall be prepared and distributed to members of the Texas Parks and Wildlife Commission, the Executive Director, and the Chief Financial Officer within six months of the end of a regular legislative session.
4. Review — The Texas Parks and Wildlife Commission shall review this policy at least annually.

APPROVED this the 27th day of August, 2020.

In official recognition of the adoption of this resolution in a lawfully called public meeting of the Texas Parks and Wildlife Commission, we hereby affix our signatures this 27^th day of August, 2020.