Commission Agenda Item 1
August 22, 2024

• Item Type: Action
• Presenter: Reggie Pegues

Financial Overview

I. Executive Summary:

Staff will present a summary of the Fiscal Year (FY) 2025 Operating and Capital Budget, Texas Parks and Wildlife Code section 11.032(c) deposit options regarding boat-related fees, and the Texas Parks and Wildlife Commission (Commission) Budget and Investment policies.

II. Discussion:

Staff will discuss the following with the Commission:

• Staff will present and discuss the FY 2025 Operating and Capital Budget.
• Staff will discuss Texas Parks and Wildlife Code section 11.032(c), which permissively allows Texas Parks and Wildlife Department (TPWD) to retain all boat-related fees in Fund 9, or to transfer up to 15 percent of those fees into Fund 64 on a monthly basis.
• Staff will summarize the Commission’s Budget Policy and Investment Policy requirements.

III. Recommendation:

Staff recommends that the Commission adopt the following motions:

Motion one: “The Executive Director is authorized to expend funds to operate TPWD in accordance with the proposed FY 2025 Agency Budget by Strategy (Exhibit A), the FY 2025 Operating and Capital Budget by Division/Object of Expense (Exhibit B), the Budget Policy (Exhibit C), and the Investment Policy (Exhibit D).”

Motion two: “The Commission approves retaining 100 percent of all boat registration, titling, and related fees collected during FY 2025 in Fund 9.”

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Exhibit A – Commission Agenda Item No. 1

Fiscal Year 2025 Agency Budget by Strategy

Strategy	FY 2025
A.1.1. Wildlife Conservation	$36,778,304
A.1.2. Technical Guidance	9,292,666
A.1.3. Hunting and Wildlife Recreation	2,342,451
A.2.1. Inland Fisheries Management	16,578,472
A.2.2. Inland Hatcheries Operations	7,635,480
A.2.3. Coastal Fisheries Management	15,435,248
A.2.4. Coastal Hatcheries Operations	3,972,043
B.1.1. State Park Operations	96,487,082
B.1.2. Parks Minor Repair Program	11,209,946
B.1.3. Parks Support	6,741,460
B.2.1. Local Park Grants	19,836,931
B.2.2. Boating Access and Other Grants	12,669,975
C.1.1. Enforcement Programs	64,840,070
C.1.2. Texas Game Warden Training Center	3,098,738
C.1.3. Law Enforcement Support	3,733,773
C.2.1. Outreach and Education	2,974,505
C.2.2. Provide Communication Products	5,811,397
C.3.1. License Issuance	8,408,213
C.3.2. Boat Registration and Titling	1,960,169
D.1.1. Improvements and Major Repairs	49,351,007
D.1.2. Land Acquisition	5,482,442
D.1.3. Infrastructure Administration	7,910,410
E.1.1. Central Administration	10,774,304
E.1.2. Information Resources	17,881,286
E.1.3. Other Support Services	5,221,360
F.1.1. Salary Adjustments	21,114,329
Estimated Unexpended Balances (UB)	472,493,787
Fringe Benefits	86,564,119
Total	$1,006,599,967

Method of Finance	FY 2025
General Revenue (GR)	$469,576,374
GR Ded-Game, Fish and Water Safety	204,685,638
GR Ded-State Parks	45,421,369
GR Ded-Other	12,012,109
Federal Funds	243,131,097
Other Funds	31,773,380
Total	$1,006,599,967

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Exhibit B – Commission Agenda Item No. 1

Fiscal Year 2025 Operating and Capital Budget by Division/Object of Expense

Division	Salaries & Other Personnel Costs	Operating	Grants	Capital	Fringe Benefits	Total Budget	FTEs
Coastal Fisheries	$11,738,640	$6,272,876	$55,600	$166,817	$4,690,516	$22,924,449	188.0
Communications	5,510,473	3,067,476		15,500	1,811,831	10,405,280	65.0
Departmentwide	21,114,329	28,284,393				49,398,722
Executive	3,506,047	377,550			1,158,647	5,042,244	30.0
Financial Resources	5,916,508	1,252,281			2,417,549	9,586,338	90.1
Human Resources	2,292,303	417,106			841,001	3,550,410	35.0
Information Technology	7,175,410	845,026			2,632,461	10,652,897	80.0
Infrastructure	7,888,990	436,632		25,000	2,894,259	11,244,881	96.0
Inland Fisheries	14,110,566	5,900,033	1,192,817	519,442	5,446,417	27,169,275	202.0
Law Enforcement	52,666,396	13,594,505		3,343,002	20,730,135	90,334,038	656.0
Legal	1,031,371	73,260			352,421	1,457,052	10.0
Local Parks	2,841,356	679,690	23,175,665		931,999	27,628,710	26.0
State Parks	73,358,102	26,574,744		12,862,435	35,230,841	148,026,122	1,349.8
Support Resources	2,145,059	3,538,344			813,958	6,497,361	31.0
Wildlife	19,603,867	14,886,229	4,540,118	312,161	6,612,084	45,954,459	302.0
Capital Construction				49,351,007		49,351,007
Capital Information Technology				9,882,935		9,882,935
Capital Land Acquisition				5,000,000		5,000,000
Total	$230,899,417	$106,200,145	$28,964,200	$81,478,299	$86,564,119	$534,106,180	3,160.9

Estimated UB						$472,493,787
Total with UB						$1,006,599,967	3,160.9

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Exhibit C – Commission Agenda Item No. 1

BUDGET POLICY (CP-009)

It is the policy of the Commission to authorize the Executive Director or their designee to increase, decrease, or otherwise adjust the budget during the fiscal year based on revenue and expenditure information. Changes to the budget may include:

• Adjust the budget to bring unexpended balances forward from the prior fiscal year’s approved budgets.
• Adjust the budget for transfers between budgetary units, major expense categories, or line items.
• Adjust the budget to increase funds to allow payment of appraisal fees, witness fees, and investigation expenses on land acquisition and construction projects.
• Approve and/or execute contracts and agreements necessary in the daily operation of TPWD. Revenues derived from interagency agreements may be budgeted and expended.
• Adjust the budget for appropriated revenues, such as the 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 to cover the budgeted amounts during the relevant fiscal year.
• Approve and/or execute construction, repair, or renovation budgets, contracts, agreements, and change orders (if necessary) to complete a project. 
• 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.
• 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.
• Adjust the budget to cover the costs of lawsuits or settlements if deemed to be in the best interest of TPWD.
• 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.
• Authorize classification changes anytime during a fiscal year, provided that such changes have been thoroughly justified and funds are available.
• 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.
• Adjust the budget to make capital expenditures for construction projects funded in part with proceeds of bonds issued by the Texas Public Finance Authority.
• 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.

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 on a monthly basis by the Chair, Vice-Chair, or commissioner designee, 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 law including administrative rules as set forth in the Texas Administrative Code.

Review

The Commission shall review this policy at least annually.

             APPROVED this the 22^nd day of August 2024.

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 22^nd day of August, 2024.

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Exhibit D – Commission Agenda Item No. 1

INVESTMENT POLICY (CP-016)

All funds paid to Texas Parks and Wildlife Department (TPWD) pursuant to the Parks and Wildlife Code §11.042 or allocated to TPWD pursuant to Tax Code §151.801 must be deposited in the treasury with two exceptions: the Operation Game Thief Fund and the Texas Park Development Fund (Parks and Wildlife Code §21.101). 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 of Public Accounts.

Parks and Wildlife Code §11.065 requires the 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 of Public Accounts.

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 Comptroller of Public Accounts. [1] 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.

Finally, the Centennial Parks Conservation Fund is established as a trust fund outside the treasury to be used only for the creation and improvement of state parks (Tex. Const. Art. III, §49-e-1). This fund is held and invested through the Texas Treasury Safekeeping Trust Company in accordance with Parks and Wildlife Code Ch. 21A and is therefore not subject to this investment policy.

I. Objectives of TPWD

• Suitability of the investment for TPWD requirements
• Preservation and safety of the principal
• Liquidity
• Marketability
• Diversification of the portfolio
• Yield
• TPWD funds shall be held in the state treasury and invested by the Comptroller of Public Accounts under Gov’t Code §404.024. 
• Mitigation funds distributed to TPWD shall be deposited in the state treasury and accounted for separately. 
• Bank accounts authorized by Gov’t Code §§403.241-403.252 and the General Appropriations Act (petty cash accounts and imprest accounts for the purchase of evidence and/or information and surveillance) 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 Chief Financial Officer (Signature and Approval Policy OP-03-03). Continuance of bank accounts is dependent upon timely and accurate records keeping and reporting.

II. Policy Guidelines

Texas Public Funds Investment Act: Investment Officer Designation and Reporting

• Pursuant to Gov’t Code §2256.004, the Texas Public Funds Investment Act (PFIA) does not apply to TPWD funds that are deposited into the state treasury and which are managed by the Comptroller of Public Accounts in accordance with Gov’t Code §404.024. 
• In the event that TPWD funds are deposited outside of the state treasury and become subject to the PFIA, the TPWD Executive Director, or the Executive Director’s designee, shall identify and designate an Investment Officer or Investment Officers (Gov’t Code §2256.005). 
  • The designated TPWD Investment Officer(s) shall perform the functions and responsibilities required by the PFIA.
  • 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.
  • The Investment Officer(s) are required to disclose any personal business or familial relationship with a business organization offering to sell investments to TPWD.
  • The Investment Officer(s) are required to provide a written copy of this Investment Policy to every business organization engaging in investment activity and must obtain written acknowledgement that the policy was received and reviewed, and that appropriate procedures and controls are in place to preclude unauthorized transactions.
  • The Investment Officer(s) will ensure that all TPWD funds outside the state treasury held in bank accounts are insured by 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 collateralizations that meets state requirements to cover the amount exceeding the deposit insurance limit.
  • The Investment Officer(s) shall prepare reports of investment transactions for all funds managed under the PFIA within 45 days of the end of each quarter and distribute them to the members of the Commission, the Executive Director, and the Chief Financial Officer, as required by Gov’t Code §2256.023. These quarterly reports shall comply with statutory requirements for content. 
  • To the extent that the Texas Legislature modifies any provision of the PFIA that is applicable to TPWD’s funds, the Investment Officer(s) shall prepare a report summarizing those legislative changes to the PFIA and distribute it to the members of the Commission, the Executive Director, and the Chief Financial Officer within six months of the end of a regular legislative session.

III. Review

The Commission shall review this policy at least annually pursuant to Gov’t Code §2256.005.

[1] Texas Treasury Safekeeping Trust Company

TPWD jointly manages another Texas Treasury Safekeeping Trust Company account for the purpose of holding funds recovered under federal and state laws by the designated natural resource trustees for the State of Texas (TPWD, General Land Office, and Texas Commission on Environmental Quality) for restoration of natural resources lost or injured by the unauthorized discharge or release of oil or hazardous substances. A decision on use and any investment of these funds is exclusively the joint decision of the designated natural resource trustees and does not involve the Commission.

                  APPROVED this the 22^nd day of August 2024.

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 22^nd day of August 2024.