Texas Parks and Wildlife Commission
Finance Committee

Aug. 29, 2001

Commission Hearing Room
Texas Parks & Wildlife Department Headquarters Complex
4200 Smith School Road
Austin, TX 78744
                                                                        1

           5            BE IT REMEMBERED, that heretofore on the 29th day

           6   of August, 2001, there came to be heard matters under the

           7   regulatory authority of the Parks and Wildlife Commission of

           8   Texas, in the Commission Hearing Room of the Texas Parks and

           9   Wildlife Headquarters Complex, Austin, Texas, beginning at

          10   9:00 a.m., to wit:

          11

          12   APPEARANCES:
               THE PARKS AND WILDLIFE COMMISSION:
          13
               FINANCE COMMITTEE:
          14   CHAIR:   Ernest Angelo, Jr., Midland, Texas
                        Donato D. Ramos, Laredo, Texas
          15            Carol E. Dinkins, Houston, Texas
                        Philip Montgomery, Dallas, Texas
          16            John Avila, Jr., Fort Worth, Texas, Absent
                        Alvin L. Henry, Houston, Texas
          17            Katharine Armstrong Idsal, San Antonio, Texas
                        Mark E. Watson, Jr., San Antonio, Texas
          18            Joseph Fitzsimons, San Antonio, Texas

          19

          20   THE TEXAS PARKS AND WILDLIFE COMMISSION:
               Andrew H. Sansom, Executive Director, and other personnel of
          21   the Parks and Wildlife Department

          22

          23

          24

          25


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           1                 CHAIR IDSAL:  Our next meeting will be the

           2  Finance Committee and I think I had made this announcement

           3  during the budget workshop, but Ernie Angelo is the new

           4  chairman of the Finance Committee and Phil Montgomery is vice

           5  chairman of the Finance Committee.

           6                 Ernie.

           7                 CHAIRMAN ANGELO:  Thank you, Madame Chairman.

           8  First we have the minutes of the previous meeting.  Do we have

           9  a motion that they be approved or are there any corrections?

          10                 COMIMSSIONER WATSON:  So moved.

          11                 COMMISSIONER RAMOS:  Second.

          12                 CHAIRMAN ANGELO:  All in favor say aye.

          13                 ("Aye").

          14                 CHAIRMAN ANGELO:  All opposed?  The minutes are

          15  approved.  Mr. Sansom, would you go over the Chairman's Charge

          16  with us, please.

          17   Item 1:  Chairman's Charges

          18                 MR. SANSOM:  Yes, sir.  The mission of this

          19  committee is to assure the financial stability of the

          20  department and seek self-sufficiency by maximizing revenues,

          21  promoting entrepreneurial behavior, optimizing operational

          22  efficiency, and complying with the Appropriations Act.

          23                 The Sunset Bill did have several specifics

          24  provisions which will be overseen by this committee.  First to

          25  limit contracts for publication and then of specific note


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           1  there we will need to terminate any contracts the department

           2  has for the advertisement of tobacco.  We'll need to develop

           3  guidelines for employee fundraising above $500, create a

           4  business plan for statewide commercial projects, update

           5  department policy and analysis to reflect current State and

           6  Federal economic opportunity laws, equal opportunity laws.

           7  Identify and assist nonprofit organizations that partner with

           8  the department, and of specific interest there we will need to

           9  establish an official nonprofit partner.  Participate, as

          10  appropriate, in the effort to obtain voter approval for a bond

          11  issue in the November election.  That bond issue is

          12  Proposition 8 and -- on the ballot, and it would provide the

          13  department with some $103 million for deferred maintenance,

          14  for annual maintenance over the next several years, and for a

          15  number of specific projects.  We will develop a program to

          16  identify and classify participants in the vessel and outboard

          17  motor industries in the State.

          18                 In addition, the 77th Legislature will require

          19  us to evaluate the potential for issuance a revenue bond for

          20  the Admiral Nimitz Museum and to adjust rates for licenses in

          21  each the commercial fishery programs.

          22                 In addition we will review and implement the

          23  State Auditor recommendations and review all fees to increase

          24  revenue and ensure a fair fee structure for our customers.

          25                 Thank you, Mr. Chairman.


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           1                 CHAIRMAN ANGELO:  Are there any questions or

           2  suggestions about the Chairman's Charges?  If not, we'll

           3  proceed to the other items on the agenda.

           4   Item 2:  FY02 Operating and Capital Budget and Texas Parks

           5   and Wildlife Investment Policy

           6                 CHAIRMAN ANGELO:  Our second item is the review

           7  of the Fiscal '02 operating and capital budget and our

           8  investment policy.  And these will be briefed by Suzy

           9  Whittenton.  Suzy.

          10                 MS. WHITTENTON:  Good morning.  Thanks.  We're

          11  having some technical difficulties.  I'm going to start today

          12  with a brief year-end revenue update on our three major

          13  revenue sources and then look at the funds available for the

          14  coming fiscal year including revenue estimates for those major

          15  funds, and then I'll lay out a recommended budget with

          16  information on -- that will include full-time equivalents,

          17  allocation of supercombo revenues to stamp funds, and then

          18  give you some information on the budget and investment

          19  policies.

          20                 In license sales for the year ending this

          21  August we sold about $3.2 million of licenses, permits, and

          22  stamps which was about 2 percent less than we had sold in the

          23  previous year, but it resulted in the $2.9 million in

          24  additional revenue.  The increase in revenue was due primarily

          25  to the continued shift from -- from regular licenses into the


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           1  supercombo and also to the increase to the saltwater stamp

           2  fee.

           3                 Hunting sales were up 3.5 percent in total

           4  sales.  If you look, that includes combinations but all

           5  hunting-type licenses were up and revenue was up 6.6 percent

           6  there.  Fishing revenue was also up 3.7 percent.  And in the

           7  current year, the year that started -- the new license year

           8  which begins selling licenses on August 15 and for that year,

           9  for the FY02 license year revenue is already up a half million

          10  dollars over '01 which is about 12 percent.  And I think

          11  that's due primarily or partly at least to the promotion that

          12  we did where we gave away the couple of shotguns and a rod and

          13  reel, so.

          14                 In boat fees, boat fees are up about $385,000

          15  over last year and -- but they're also at about the level

          16  where we estimated them for our original revenue estimate

          17  which was $13.5 million is what we estimated and we're going

          18  to come in, we think, at about 13.6 million as of -- by the

          19  end of August.

          20                 In -- in park fees we started the year being

          21  significantly down as you'll probably remember from the

          22  previous year due to the weather that we had in the fall and

          23  the winter months.  But as of the end of July revenue was down

          24  just 4 percent.  And at the May meeting I reported that

          25  revenue was down 10 1/2 percent, so we've made up quite a bit


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           1  of difference there.  And we project that total park revenue

           2  will be about $23.8 million at the end of the year, at the end

           3  of August, at the end of our fiscal year.  Our original

           4  estimate was for $23 million, so we still exceeded our

           5  original estimate by a little bit even with the poor start

           6  that we got.

           7                 Expected ending cash balances at 8/31 are as

           8  follows:  In the State Parks Account we'll have about

           9  $1.87 million left over.  In the Account 9, about

          10  $3.8 million.  And then in the Local Parks Account

          11  approximately $8 million.  These funds can be used toward the

          12  FY02 budget.  I thought I would show you what the revenue

          13  estimates are made up of in the three primary funds, general

          14  revenue, Fund 9 and Fund 64.

          15                 In general revenue we'll get approximately

          16  $37.7 million.  This comes from the unclaimed refunds of motor

          17  boat fuels tax.  Boat and motor boat sales and use tax.  And

          18  then you'll remember we got additional money from the

          19  Legislature the last session of $4.2 million for specific

          20  State parks for the World Birding Center.  We've got various

          21  other general revenue that we could use.  We can use general

          22  revenue for any -- any use pretty much.  It can be used for

          23  parks or any of the Fund 9-type activities which would be, you

          24  know, wildlife and fisheries and law enforcement.

          25                 In the State Parks Account we're expecting


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           1  about $52 million.  The Park Revenue Account includes entrance

           2  fees, concessions, Texas conservation passport, and some

           3  public hunt money.  They also get federal funds that go into

           4  the State Park Account for the National Recreational Trails

           5  and we get some land and water money that goes in there.  We

           6  also get $15.5 million of sporting good sales tax.

           7                 In Fund 9 we're estimating license revenue at

           8  $61.6 million.  Boat fees at $13.5.  We have federal funds

           9  from various sources at $47.6 million.  We're also

          10  anticipating that the commercial shrimp fee increase that just

          11  went into effect will bring in about $600,000 the saltwater

          12  stamp increase will bring in an additional $1.4 million.

          13                 The other categories includes public hunt,

          14  fines, the boat tax, some interest in the revenue generating

          15  thing kinds of activities for a total of $140 million.

          16                 And when you roll it all together from all

          17  sources we've got about $263 million to work with.  However,

          18  some of these funds are set aside for specific uses.  They

          19  can't be used for just anything, but the total pot is about

          20  $263 million.

          21                 Just as a reminder the Legislature passed some

          22  much needed employee benefit increases and pay raises that

          23  impacted our funds.  They also approved House Bill 2071 which

          24  requires that State agencies pay reimbursement for statewide

          25  services through a cost allocation plan.  And the estimate


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           1  during the Legislative session that it would cost Fund 9 about

           2  $600,000.  So these were all kind of unexpected increases that

           3  we'll have to pay out of our current funds.  Other impacts

           4  just to kind of general operating expense impacts that we've

           5  been experiencing for a year or so now is the increases in

           6  electric costs and natural gas costs and then gasoline.  And

           7  the Legislature also increased the travel rates reimbursement

           8  rates for employees when they stay overnight, and so we'll be

           9  absorbing all of these costs as well in our base budget.

          10                 The meeting last month at the budget meeting

          11  workshop we looked at the gap between the requested needs and

          12  the funds available.  That gap is about $12 million, however,

          13  most of our funds can only be used for specific activities.

          14  So when you look at it by fund you can see that between Funds

          15  9 and 64 we've got a difference of about $19 million of

          16  unfunded needs.  So in order to make all these numbers work

          17  we're recommending a budget that starts at 97 percent of the

          18  FY01 base budget and includes some provisions for each

          19  division to give up an additional 2 percent in salary lapse,

          20  that's salary savings that will be achieved through delayed

          21  hiring tactics and leaving some positions vacant.

          22                 We are recommending that $3 million be set

          23  aside for small maintenance and repairs.  And there are no

          24  major capital projects included in this recommendation and

          25  there are no new bond funds available.  You remember we drew


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           1  down our last installment on our revenue bonds last February

           2  and those funds are still -- they were all allocated to

           3  projects.  Some of that money will be spent during the year,

           4  but it's not going to be budgeted.  It's already budgeted in

           5  previous years.  And then we've got, of course, Proposition 8

           6  on the ballot for November but even if that proposition

           7  passes, we won't have the authority to spend any of that money

           8  until fiscal year '03.  So there are no bond funds in this

           9  proposal.  The recommended total operating budget is

          10  $197.8 million.  And it includes some supplemental funds, some

          11  dedicated funding and some revenue generated projects.  The

          12  supplemental numbers include pay raises and the employee

          13  benefit costs.  That's why that may look a little high.  Other

          14  supplementals that are included in this budget which take the

          15  place of other base items are increased cost to the hardware

          16  and software maintenance.  These are costs that we have to pay

          17  no matter what of a little under $200,000.

          18                 Parks and Wildlife magazine has experienced

          19  costs in postage and paper that's pretty significant and they

          20  need an additional $150,000.

          21                 The game wardens had as one of their priorities

          22  wanted to get computer equipment to some of their field game

          23  wardens and they've managed to set aside $300,000 to get some

          24  computers out there.  They're going to have to stagger this

          25  across several years to be able to get them all out there.


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           1                 Then in the Sunset Bill we're required to do an

           2  inventory of State lands so we've set aside some money to

           3  outsource that activity.

           4                 In order to make the cuts needed we're doing a

           5  lot of delayed hiring, some delayed vehicle and boating

           6  equipment purchases, we've cut some of the unfilled positions

           7  and we're delaying expansion of our Wide Area Network.  We've

           8  cut some general costs such as travel and supplies and those

           9  sorts of things from the operating budget and most

          10  significantly we've delayed some capital projects.

          11                 You see in the capital budget we had requests

          12  of $19 million come in from all the divisions and we're only

          13  able to recommend $5.2 million.  Most of the that is in small

          14  maintenance and repairs.  We've got some acquisition money set

          15  aside, $1.6 million that's land and water money that wouldn't

          16  be able to be used really for anything else, also includes

          17  funds for the Bastrop Hinckley purchase.  And then the major

          18  repair item there is for the railroad.

          19                 The recommended grant budget, these are

          20  pass-through funds primarily -- is $41.8 million.  This is

          21  higher than we had last year, but these funds would not be

          22  able to be used for other operating budget uses so we're going

          23  to go ahead and recommend that that all be set aside for

          24  grants.  When you add up the three budget types it's a total

          25  of $244.8 million.  This number is not significantly lower


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           1  than last year's in total, but the funds are being used

           2  differently.  There are more grant funds and less operating

           3  and capital funds.

           4                 This slide compares available cash to

           5  recommended budget by fund and that -- so that last column

           6  shows amounts of cash left unbudgeted.  Some of those funds

           7  are dedicated funds.  But you can see that the cash balances

           8  that we once had are no longer really there.  We don't have

           9  significant cash balances available anymore.

          10                 As you know, our appropriations bill includes a

          11  cap on the number of full-time equivalent employees that we

          12  can have and we can't exceed those caps.  In Fiscal Year 01

          13  that cap was 2,954.  We overbudget full-time equivalents

          14  because of the lag in hiring and we overbudgeted in the

          15  current year by about 2 percent and at the end of August we

          16  expert our total FTEs to come in at under 2,900 so we'll be

          17  significantly under the cap, the legislative cap.  So we're

          18  recommending for the Fiscal Year 02 that we again overbudget

          19  FTEs and with delayed hiring and leaving positions vacant, I

          20  don't feel like there any cause for concern that we could

          21  possibly exceed our cap.  The reason the cap increased from

          22  '01 to '02 was for the exceptional item for parks.  There were

          23  81 positions that the Legislature gave us that were for

          24  specific park openings and for the World Birding Center.

          25  Those positions are allocated just to those places.


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           1                 And as you'll recall, the State Auditor noted

           2  that -- that we didn't have a documented methodology for

           3  allocating supercombo sales to the stamp funds and so at this

           4  time I'm going to ask Gary Graham to assist in presenting this

           5  recommendation on this year's allocation.

           6                 MR. GRAHAM:  I'm Gary Graham, Director of the

           7  Wildlife Division.  The State Auditor's report directed us to

           8  do an analysis of the allocation of funds into the various

           9  stamp funds and to develop a methodology to reliably track the

          10  allocation of those funds.

          11                 With respect to the analysis we found that the

          12  funds had been held constant since the inception of the

          13  supercombo license in 1996 except last year those funds were

          14  increased by 8.6 percent.  We have found that the actual stamp

          15  sales are well documented but if we look at the true picture,

          16  the complete picture, the potential for stamp sales by those

          17  supercombo buyers is -- is not very well documented, and that

          18  the methodologies used to estimate those potential sales are

          19  inconsistent across the stamp funds.  And even within a

          20  particular stamp fund they're not particularly rigorous.

          21  Consequently, there is in fact a real need to establish a

          22  uniform and reliable methodology for estimating the potential

          23  stamp sales.  Consequently, we have recommended and staff have

          24  worked on -- on developing a methodology whereby we would

          25  conduct surveys of the supercombo license holders for two


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           1  years to reliably estimate a number of probable stamp users.

           2  Then we would take that number and -- and -- and add it to the

           3  actual buyers of the stamps and multiply that by the

           4  discounted stamp value to come up the amount that would

           5  actually be placed into the various stamp funds.  In order to

           6  do that it's going to take a couple years before we can have

           7  confidence in those numbers of the potential stamp buyer and

           8  during that time over the next two years we will hold the

           9  stamp funds that are being allocated, the funds that are being

          10  allocated to the stamp funds at the same level as they are in

          11  FY01.

          12                 CHAIRMAN ANGELO:  There's a possibility that if

          13  that's done that some of funds will actually get less than

          14  they're getting now?

          15                 MR. GRAHAM:  Yes.  These just show you the

          16  range of discounted values as we -- as we look at them today.

          17  We took the value of the supercombo and divided that by the

          18  value of all the stamps and the licenses combined, and then

          19  came up with these discounted values.  And so that's what the

          20  numbers of potential and actual users if we -- if we have that

          21  number would multiply it by these values to determine the

          22  amount that would actually go into each of the funds.  And

          23  this just shows you the distribution of -- of those funds

          24  allocations over the past six years including the increase

          25  FY01 that shows where they would be held constant over the


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           1  next two years.

           2                 COMMISSIONER MONTGOMERY:  So the proposal is

           3  simply to hold steady for two years while they survey?

           4                 MR. GRAHAM:  Yes.

           5                 COMMISSIONER MONTGOMERY:  Can we make some

           6  explicit statement rejecting the proportional allocation of

           7  the supercombo in our methodology?

           8                 MR. GRAHAM:  Say that again.

           9                 COMMISSIONER MONTGOMERY:  The auditor's

          10  criticism or question is if we allocate proportionally, you

          11  know, we're underallocating to some of these funds.  I would

          12  like to have the Commission recognize and acknowledge and deal

          13  with that issue.  If we're going to -- I think we need to

          14  acknowledge that methodology as one way of doing it and decide

          15  if we intend to do it that way or not so we're on record.

          16                 CHAIRMAN ANGELO:  Are you suggesting we go on

          17  record as opposing.

          18                 COMMISSIONER MONTGOMERY:  If we're not going to

          19  do it, I think we ought to not -- clearly say we're not doing

          20  and the reasons we're not doing it.

          21                 CHAIRMAN ANGELO:  As opposed just by doing it

          22  by osmosis or whatever.

          23                 VICE-CHAIR MONTGOMERY:  We don't have to but I

          24  think -- I think there's flaws in that methodology.  I think

          25  we ought to say what the flaws are.


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           1                 CHAIRMAN ANGELO:  I totally agree with you

           2  that --

           3                 COMMISSIONER MONTGOMERY:  We deliberate and

           4  make a decision.

           5                 CHAIRMAN ANGELO:  The proportional methodology

           6  would not be proper, would not be correct.

           7                 VICE-CHAIR MONTGOMERY:  I'm satisfied it's not

           8  either, it's just --

           9                 CHAIRMAN ANGELO:  Well, does anyone -- is there

          10  any objection to that that to stating that we reject the idea

          11  of proportional distribution of the funds based on the sales

          12  of supercombo license as one methodology?

          13                 VICE-CHAIR MONTGOMERY:  And what the reason is.

          14                 CHAIRMAN ANGELO:  Yeah.

          15                 COMMISSIONER RAMOS:  I would rather not just

          16  say that but rather they say that we are now implementing

          17  something that perhaps will be more accurate because I'm not,

          18  I mean that was the best perhaps that we had at that point and

          19  I'm not convinced that it's necessarily, well, we know it's

          20  not accurate but that's the best that we had.

          21                 CHAIRMAN ANGELO:  But what we've actually done

          22  is -- is give hold harmless on it so that they were getting

          23  the same amount that they were getting before, but the auditor

          24  is suggesting that we should have done is as the sales of

          25  supercombo licenses went up, that we should have


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           1  proportionally given additional money to each of the stamp

           2  funds in relation to the rate at which the sales of supercombo

           3  license went up.  And the Commission has felt that that was

           4  totally inaccurate because or false because the people who are

           5  buying the supercombo licenses and thereby getting the stamps

           6  are not intentionally buying the stamps and would not have

           7  been buying the stamps had the supercombo license not existed.

           8                 VICE-CHAIR MONTGOMERY:  And that's the point,

           9  it's the sale of --

          10                 CHAIRMAN ANGELO:  What Commissioner Montgomery

          11  is suggesting is that we state as opposed to just having done

          12  that that we state that our opinion is that a proportional

          13  adjustment based on the increased sales of supercombo licenses

          14  would not have been a correct way to do it and that we don't

          15  think that it should be done at this time either.  And because

          16  of that we're conducting this two-year study to see if there

          17  is some better way to allocate rather than the hold harmless

          18  that we've been doing in the past which I think had a

          19  substantial basis in the rationality as to why it should be

          20  done that way.  But I don't think there's any -- no one

          21  objects to going ahead and stating it further to see if there

          22  isn't a better way which as I point out may very well result

          23  in some of the stamps actually getting less money than they're

          24  getting down the hold harmless.  Does that sate what you

          25  were --


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           1                 VICE-CHAIR MONTGOMERY:  Yeah.  People buying

           2  the supercombo would not necessarily be buying, you know,

           3  archery, saltwater, muzzle loader licenses or any of the

           4  others, therefore proportional allocation is not -- would not

           5  be good judgment on our part.  And we are explicitly

           6  acknowledging that here, that that's not a valid methodology

           7  in your opinion, in our judgment.

           8                 CHAIRMAN ANGELO:  Does anyone object to that to

           9  be part of the record that that's our position?  While we're

          10  discussing this -- this allocation or whatever, this may not

          11  be the appropriate time to do it, but I would certainly like

          12  to see that we evaluate the white wing stamp for the purpose

          13  of possibly going to the Legislature and asking that that

          14  statutory authority or the obligation to have that stamp, if

          15  that's the current status, that that be -- that we consider

          16  having that removed because it appears to me that the white

          17  wings are no longer in need of that kind of support and might

          18  replace with it a quail stamp.  I'm being facetious there

          19  probably.

          20                 MR. GRAHAM:  We appreciate that guidance.  In

          21  fact, we have talked about the need for an upland game bird

          22  stamp where you would -- you would not have it just restricted

          23  to white wing dove but we would be able to use it for turkey,

          24  doves, mourning doves, and quail.  And, you know, we have

          25  enough time to really work with you and the public to see if


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           1  that's a feasible idea between now and the session.

           2                 COMMISSIONER RAMOS:  I like that idea.

           3                 MR. GRAHAM:  Thank you.

           4                 MS. WHITTENTON:  Okay.  Just quickly in your --

           5  with your recommended budget we've got a budget policy.  The

           6  policy is the same as we've had for several years but includes

           7  a change in wording.  The current policy states that budgeted

           8  adjustments that exceed $100,000 require the notification of

           9  the -- to the chairman of the Commission and chairman of the

          10  Finance Committee and then adjustments that exceed $150,000

          11  actually require signatures of each of the two chairs.  The

          12  only difference in this year's budget policy is that we're

          13  asking for an exclusion for new or additional Federal funds

          14  and that would allow the staff to budget those funds without

          15  bringing adjustments to each of the two chairman.

          16                 CHAIRMAN ANGELO:  Those grants go with specific

          17  authority and directions as to how they be spent anyway.

          18                 MS. WHITTENTON:  They're very limiting in what

          19  you can do with them.  Also have an investment policy.  The

          20  investment policy is required by statute for all agents -- for

          21  agencies that have -- they have to be reviewed annually and

          22  this applies to all Parks and Wildlife funds not the

          23  foundation funds or the operation game fee funds.

          24                 The policy provides for all the funds to be

          25  deposit in the treasury.  We have some existing stock that


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           1  could possibly be sold.  We have been just retaining that.

           2  We've had some stock it's only about $27,000 worth that we've

           3  had since the '50s.  We currently aren't making much money on

           4  that stock and think that it perhaps would be better off in

           5  just convert it to cash and deposited to the treasury.  So

           6  that's one of the changes.  That's the only change to this

           7  investment policy is that that stock may possibly be sold if

           8  can we can find an opportunity to sell that.  We periodically

           9  will report to you-all on the status of our funds.

          10                 CHAIRMAN ANGELO:  That completes your report.

          11                 MS. WHITTENTON:  That concludes.

          12                 CHAIRMAN ANGELO:  Before asking the Commission

          13  to offer questions or suggestions or whatever, I wanted to say

          14  that the staff from top to bottom has -- has done an

          15  extraordinary job I think in reviewing the spending policies

          16  and the spending needs of the department and have really done

          17  a highly commendable job in my opinion of reaching the

          18  recommendations that have been presented to you today.  And I

          19  also want to point out that the Commission has -- members have

          20  had a lot of involvement this year in the budgeting process

          21  and I want to particularly think the vice chairman of the

          22  Finance Committee, Phil Montgomery, for the extensive amount

          23  of time that he has put in working with staff particularly

          24  with Suzy and getting us to this point.  I think it's an

          25  extraordinary accomplishment that they need to be commended


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           1  for and I certainly appreciate the effort that Suzy and her

           2  staff, but all of the department personnel have put into this

           3  effort.  Do we have any questions or further comments on the

           4  budget?

           5                 VICE-CHAIR MONTGOMERY:  If I could I do want to

           6  add my thanks to Suzy and the department heads.  I know

           7  you-all put a lot of time in on it and we asked for a lot of

           8  material.  But thank you very much.  It was helpful to me

           9  being new to the game to get up to speed and, Andy, you too.

          10  Thanks.

          11                 CHAIRMAN ANGELO:  I think there's been

          12  exceptional involvement on everybody's part.  It's much

          13  appreciated.  Are there any other comments or questions?  If

          14  not and there's no objection, this item will be placed on the

          15  Commission's agenda for public comment and action tomorrow.

          16  We'll move on to Item No. 3 which is the discussion of fees,

          17  fee system and so on.  And Suzy again will review that.

          18   Item 3:  Fee Review

          19                 MS. WHITTENTON:  Okay.  Thank you.  As we just

          20  saw, the reality of the budget situation is that we've got --

          21  we're only looking at about a million dollars less in total

          22  than we had in 2001.  However, the differences are that we're

          23  spending a lot more on -- we have a lot more grant money this

          24  budget, quite a bit fewer capital dollars, and fewer operating

          25  dollars.  We did get new money for the State Parks


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           1  $4.2 million and then we had to absorb those legislative

           2  increases on employee pay raises and benefits.

           3                 Here's just some of the issues that have led up

           4  to this discussion on possible fee reviews.  There were the

           5  legislatively mandated pay raises.  This is for the current

           6  year or the FY02 was a 4 percent pay raise.  There's also a

           7  potential 3 percent pay raise included in the coming -- in the

           8  following year, in FY03 that is contingent upon the

           9  Comptroller certifying funds.  I've been told by the

          10  Comptroller staff that it is likely that she will certify

          11  funds.  So I think we have to kind of plan ahead for that.

          12  That will cost us an additional $3 million on top of the

          13  $4 million that this coming year has already cost.

          14                 CHAIRMAN ANGELO:  The certification of those

          15  funds would not require that she certify we have the funds

          16  available, we'll have to find the funds.

          17                 MS. WHITTENTON:  That's correct.

          18                 CHAIRMAN ANGELO:  I want to point that out.

          19                 MS. WHITTENTON:  We did have increased health

          20  insurance cost of about $2.5 million that will compound, you

          21  know, as we get into the following year.  As you saw, we have

          22  a lack of cash balances that we once had.  We were directed by

          23  the Legislature a few years back to spend down those balances,

          24  which we've done.  There's not much left there.  I'm going to

          25  show you in a few slides here that most of our fees have not


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           1  kept up the pace of inflation, but it's something to consider.

           2  The last fee increases were done in 1996 for the most part and

           3  that was kind of an across the board Commission increased

           4  license fees, boat fees, and park fees in 1996.  The only fee

           5  increases that have happened since then have been in the park

           6  fees where park fees are set by range and they vary from park

           7  to park.  And the staff has the authority to raise fees within

           8  those set ranges and so the park -- the parks division does

           9  yearly adjustments to those fees within ranges and they always

          10  do market studies before they do those.

          11                 When we look at the cost of these identified

          12  funding needs when you add in the 4 percent pay raise with 3

          13  percent pay raise, increased health insurance, and other

          14  employee benefits.  So if you take into account that we didn't

          15  fund capital items at the level that we normally fund them,

          16  we're looking at a difference of about $24 million in

          17  long-term needs.

          18                 MR. SANSOM:  Now, Suzy, may I stop you here and

          19  ask if the bond issue, Proposition 8, passes then that could

          20  potentially remove the item on the list that you see as

          21  unfunded capital items.

          22                 MS. WHITTENTON:  That's true.  It would help

          23  significantly there.

          24                 VICE-CHAIR MONTGOMERY:  Let me add one thing

          25  too.  This doesn't include the accumulation of any reserve


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           1  during the year for emergencies.

           2                 MR. SANSOM:  No.

           3                 MS. WHITTENTON:  Right.  I did add the last

           4  line item there, the minimum supplemental needs as sort of to

           5  deal with some of the new things that need to be done that we

           6  aren't able to do.  It's just kind of a minimal level there.

           7  And in looking at consumer price index and how it compares to

           8  the fees, I looked at fees from 1996.  This one is resident

           9  hunting licenses.  In 19 -- I'm sorry, from 1965.  From 1965

          10  the hunting license was $5.15.  If that had kept the pace

          11  of -- with inflation that would cost more like $30 today.

          12  Right now it's $19.  So there's quite a gap there.

          13                 However, fishing licenses are a little

          14  different story.  In 1965 a fishing license only cost $2.15

          15  and I guess somewhere along the line in early '90s that was

          16  adjusted to be equal to the same price as a hunting license.

          17  So this one did surpass the consumer price index.  Most other

          18  fees do not.  In boat registrations, boat registration fees

          19  are set by the size of the boat and they're paid every other

          20  year.  So I pulled the most two common boat sizes which are

          21  the two smallest ones, up to -- up to 16 feet and then the

          22  next range is from 16 to 20 feet boats, and you can see the

          23  pink line is the consumer price index.  The actual fees have

          24  not quite kept up although they're on a similar line.  We do

          25  transfer of ownership fees with boats also.  It's a $5 fee.


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           1  If this fee had kept up with the same pace of consumer price

           2  index it would be about $6 today.

           3                 In looking at specific fees as compared to just

           4  the 1996 level when we created the supercombo license it was

           5  set at $49 in 1996.  If that had received incremental

           6  inflationary increases it would cost $55 today, a little over

           7  $55 today and that's in '01.  I can't get '02 numbers yet.  A

           8  boat registration of $40 would cost $45 and park entrance of

           9  $5 would be about $5.67.  And that's just since '96.

          10                 I've been asked what -- what would a fee

          11  increase possibly produce in terms of dollars, so I just --

          12  I'm not advocating any kind of across the board percentage

          13  increase, but this is just kind of some ballpark numbers on

          14  what if we did anywhere between, you know, a 10 to 25 percent

          15  increase what that might produce.  It would probably bring in

          16  somewhere between $6 to $7, $21 million just depending on --

          17  on how those fees -- depending on the elasticity factor what

          18  the market could bear.  And what would that mean for specific

          19  existing fees, supercombo a 10 percent increase to the

          20  supercombo would be $54; 20 percent would be $59 and

          21  25 percent increase would be $61.  You can see those other

          22  examples there of what those ranges of increases would

          23  translate into in terms of a specific fee.  When we study the

          24  fee increases we'll look at elasticity.  I looked at just what

          25  happened after the 1996 increases and licensed sales dropped


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           1  4.8 percent after that fee increase but they were up again by

           2  the following year after that back up to about level.  I don't

           3  know if that was directly related to the fee increase 1996 was

           4  a drought year, it could be that, you know, fishing and

           5  hunting opportunities weren't as good that year.  I don't

           6  know, we need a little bit more time to study this.  We didn't

           7  see much impact to the boat registration and titling the

           8  numbers after that increase in '96 and we haven't seen much

           9  impact to park entrance rates people coming to the park after

          10  the increases.

          11                 CHAIRMAN ANGELO:  Suzy, would you elaborate a

          12  little bit on what the process is on the park fee increase

          13  which is different from the others.

          14                 MS. WHITTENTON:  Because the park fees are set

          15  by range every year, the parks department reviews those fees

          16  on a park by park basis and they actually look at the market

          17  conditions around each park and they look to see what, you

          18  know, the other camp sites are charging and they try to set

          19  their fees at a competitive rate.  And they've been doing that

          20  yearly so we don't see much impact.  Do you want to add

          21  anything, Walt, to that?

          22                 MR. DABNEY:  Those fees vary depending on where

          23  you are.  They may be for similar size it might be different

          24  in different locations in the state.

          25                 CHAIRMAN ANGELO:  I think the key point is


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           1  though that you're updating them every year in effect or

           2  frequently.

           3                 MR. DABNEY:  We have and we've got some ideas

           4  of some things we could do pretty quickly now that can make a

           5  difference.

           6                 MS. WHITTENTON:  The range is set by the

           7  Commission but then within the range the staff makes minor

           8  adjustments or has the authority to make minor adjustments.

           9                 Our strategy for looking at these fees is to --

          10  to start by meeting with some of the constituent groups.  We

          11  have had one very brief meeting with the boating trades

          12  association people.  We want to study the fee structures, look

          13  into elasticity factors and then eventually hold some public

          14  hearings.  The time table is just kind of a proposal is that

          15  we would start scoping now on all of our fees.  Also, remember

          16  that the Legislature directed us to increase commercial

          17  fishing fees -- yeah, commercial fishing fees.  I'm sorry.  We

          18  would maybe lay out some options, could lay o ut some options

          19  on boat fees or state park fees and then between November and

          20  January we'd look at license fees both recreational and

          21  commercial lay those out later in the year maybe in the

          22  spring.  We can't really make those effective until August if

          23  we -- if you-all should decide to make any changes to those

          24  fees.  That's just kind of a proposed time line.  And that was

          25  all I had on the subject.


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           1                 CHAIRMAN ANGELO:  Are there any questions or

           2  comments with respect to this fee review?  Any advice or

           3  instructions.

           4                 CHAIR IDSAL:  I want to mention that I will be

           5  creating a State Parks Advisory group in the near future and I

           6  hope that that will provide a venue for feedback and scoping

           7  and getting a good feel for elasticity in -- in park fees and

           8  whatnot.  I just wanted to mention that now.

           9                 MR. SANSOM:  Members, we will start a process

          10  of scoping almost immediately to bring our customers in here.

          11  We will go over the fixed costs that have been increasing so

          12  they hopefully understand what the issues that we're facing

          13  are and get their input across the board long before we

          14  formulate any proposals that we might bring back before you.

          15                 VICE-CHAIR MONTGOMERY:  I was just going to

          16  pass on a couple of observations having gone through the

          17  budget exercise.  Again if you go back to this funding

          18  needs -- identified funding needs shortfall going forward it

          19  is very clear to me that our option -- let me put it in the

          20  negative.  If we don't increase fees we've got to squeeze down

          21  something and it's not real pretty.  You know, the staff did a

          22  great job of going through several iterations of juggling

          23  priorities, the management team, two or three rounds of

          24  juggling priorities figuring out how to live with various

          25  options now living with largely the same service package and


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           1  not deferring capital maintenance of significant number that

           2  we said let's leave in there.  And living with the same

           3  dollars by deferring capital, you know, stretching out

           4  employment and juggling for this year while we wait for the

           5  bond money which we hope will pass in November and to deal

           6  with this fee increase issue.  But so that nobody misses the

           7  point here without that we will not be able to sort of catch

           8  our breath next year and move forward 'cause we've got --

           9  there's some continuing inflation in salaries and other costs

          10  that are going to have to meet that.  And that's the only way

          11  we can deal with a lot of the supplementals that are purely

          12  being deferred right now that when we got back to the policy

          13  discussion we had last time there was a lot of comments about

          14  not cutting services and continue to charge fair prices for

          15  what we do.  I think that is really where the rubber is going

          16  to meet the road next year that we're going to need to

          17  increase fees at some level in order to do the job we're

          18  supposed to do.

          19                 So, you know, very clearly to me a fee increase

          20  is going to be called for here.  And while we're not

          21  specifying it and shouldn't specify it until we've got a lot a

          22  public comment, there is no question in my mind that it's

          23  coming up and we need to be ready for it.  And in these public

          24  hearings make sure that we describe the trade-offs probably

          25  more than they're described here to people what you get at one


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           1  fee and what you don't get.  So that it's not just by the way

           2  we're going to raise prices on you, but you're really getting

           3  something for it and the department's worked hard to make sure

           4  it's operating as efficiently as it can.  Probably more on

           5  that we all need to do going forward in the fall prior to

           6  January 'cause it's an ongoing exercise, but I think that --

           7  for what it's worth.

           8                 CHAIRMAN ANGELO:  Those are all very good

           9  points and I think one other one is that the shortfall is not

          10  a onetime thing it's -- it tends to be cumulative.  So that

          11  the longer you wait to address it the -- the more substantial

          12  it becomes and you reach a point after a while where you can't

          13  actually address it which is the situation that the department

          14  found itself in with respect to capital improvements and

          15  maintenance which we finally caught it up with that and it

          16  would be a shame to fall back into that same problem.

          17                 VICE-CHAIR MONTGOMERY:  We're seeing in this

          18  budget we're not letting ourselves fall behind.  We're not

          19  going to get back in that trap.

          20                 CHAIRMAN ANGELO:  That's right.

          21                 VICE-CHAIR MONTGOMERY:  And appreciate

          22  everybody's discipline in that department 'cause you know it's

          23  a mess and I think the other thing the Commission ought to

          24  understand is really no slack for drought or other seasonal

          25  problems that can have a big impact on our budget in the


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           1  absence of fee increase when Suzy and Ernie and I looked at

           2  it, the only way you really build in a reverse is to put these

           3  fee increases in place in January.  The department had

           4  historically done a great job --

           5                 CHAIRMAN ANGELO:  The ones that we can.

           6                 VICE-CHAIR MONTGOMERY:  Yeah.  Running expenses

           7  so that we had a cushion.  That's been pushed out by the

           8  Legislature and really don't have that ability in the

           9  political arena to operate in, although, I personally think we

          10  ought to go back to something like that going forward just to

          11  send -- this my personal vote -- signal to everybody that we

          12  need to do that.  I would hole lot rather defend that in front

          13  of the legislature and I volunteer before the committee than

          14  defend why we're shutting down operations 'cause that's really

          15  the choice if we have a problem.

          16                 CHAIRMAN ANGELO:  There are factors that effect

          17  that income that are totally beyond anybody's control or

          18  anybody's ability to predict and that's a very important

          19  point.

          20                 VICE-CHAIR MONTGOMERY:  The only way we build

          21  in that reserve is again through fee increases that will come

          22  in the first half of the year why we run a lean budget to let

          23  us kind of reload the reserve going forward.

          24                 COMMISSIONER FITZSIMONS:  Your point is well

          25  taken if you don't do it now then you go back into that


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           1  cumulative debt.

           2                 COMMISSIONER MONTGOMERY:  It's a much uglier

           3  problem a year from now than it is if we go ahead and deal

           4  with it now and get on it.

           5                 CHAIRMAN ANGELO:  Commissioner Watson?

           6                 COMIMSSIONER WATSON:  Also, you know, I don't

           7  think that we should be -- I don't think our situation should

           8  change because of Proposition 8 because, you know, that is

           9  debt.  I mean we got to pay that money back.  So I think that

          10  we should have our fee structures, you know, positioned for

          11  what our needs are going to be and if Proposition 8 happens,

          12  it happens, but again whatever we get out of that we've got

          13  to, you know, we got to pay that back.  And I just -- I just

          14  think that it's such and uncomfortable operating position to

          15  always be, you know, under the knife that it looks like to me

          16  that the -- even at 25 percent, you know, these don't seem to

          17  be unreasonable amounts of money, you know, that we're asking

          18  people to pay.  I just don't see -- I don't see anything

          19  objectionable about, you know, the supercombo license at $61.

          20  I mean, that's -- I think if we had the right to focus

          21  focussing groups, I mean, I think we can clearly demonstrate

          22  that $61 for the supercombo license is still one heck of a

          23  buy.  So I don't think we ought to be timid about this at all.

          24                 CHAIRMAN ANGELO:  Any other comments?  If not,

          25  we will move on to the next item on the agenda which is


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           1  grants.  And, Suzy, thank you again for all your efforts.

           2                 COMMISSIONER DINKINS:  Ernie, I do have a

           3  question.  What is the process that we would go through to

           4  raise the fees and what would the timing need to be?

           5                 CHAIRMAN ANGELO:  That chart we had up there

           6  showed us.  There's a couple of the areas of fees that could

           7  only be done in -- for it to be effective in August of next

           8  year.  The balance of those could be done in the January

           9  meeting and become effective.

          10                 MR. SANSOM:  But in all cases --

          11                 CHAIRMAN ANGELO:  Would that be January or --

          12                 MR. SANSOM:  For parks and boats.  In all cases

          13  the process would be complete by April.

          14                 CHAIRMAN ANGELO:  All right.

          15                 MR. SANSOM:  So there would be no action beyond

          16  April.

          17                 CHAIRMAN ANGELO:  Right.  It wouldn't become

          18  effective until August for the two bottom categories but the

          19  others could become effective earlier.

          20                 COMMISSIONER DINKINS:  Well, I knew -- I knew

          21  the two bottom came, I just got my license.

          22                 CHAIR IDSAL:  You don't have to come up with

          23  any more.

          24                 CHAIRMAN ANGELO:  There won't be an extra

          25  assessment.


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           1                 COMMISSIONER DINKINS:  I'd be glad to put in an

           2  extra assessment if it would help on the budget.  Really what

           3  I was asking is backing up from this when would we be

           4  considering fee increases to get the first opportunity?

           5                 CHAIRMAN ANGELO:  In order for those boat fees

           6  and park fees to become effective in January they would have

           7  to be --

           8                 MR. SANSOM:  Back up before you in November at

           9  the previous meeting.

          10                 COMMISSIONER DINKINS:  Okay.  Yeah.

          11                 CHAIRMAN ANGELO:  So November would be the

          12  earliest then.  I think that would be the answer to your

          13  question.  November meeting would be the --

          14                 COMMISSIONER DINKINS:  Are these things that

          15  would not be published in the Texas Register.

          16                 MS. WHITTENTON:  It would have to be.

          17                 COMMISSIONER DINKINS:  And so how would we get

          18  to the place where we would approve them in the November

          19  meeting?

          20                 MS. WHITTENTON:  You couldn't.  I don't think

          21  we were suggesting that they be adopted in November but that

          22  they be adopted in January then they could be effective, I

          23  think, it's 20 days after the vote, the final adoption day.

          24  They could actually be effective in February.

          25                 CHAIRMAN ANGELO:  The action in November would


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           1  be to publish them if that is what the Commission --

           2                 COMMISSIONER DINKINS:  And I think that's where

           3  I was getting lost was I was trying to back up into the public

           4  notice and the approval out of public meeting and that sort of

           5  thing.  It was too many numbers for me.  And then you add

           6  those to the dates.

           7                 MR. SANSOM:  Here's a way to think of it.

           8  Notice for boats principally and any changes in Commission

           9  action that might be required for parks and boats in November,

          10  action in January.  Notice for recreational hunting and

          11  fishing fees any commercial fees in January for action in

          12  April.

          13                 COMMISSIONER DINKINS:  Thank you.

          14                 CHAIRMAN ANGELO:  Any other questions?  If not,

          15  Jim, are you prepared on the grants presentation?

          16   Item 4:  Grants

          17                 MR. HOGSETT:  Yes, sir.  Thank you,

          18  Mr. Chairman.  Members of the Committee, I'm Tim Hogsett,

          19  Director of the Recreation Grants Program in the State Parks

          20  Division.  I'm here today to talk to you about the grant

          21  programs that you will consider for funding tomorrow.

          22                 The first of which is part of the Texas

          23  Recreation and Parks Account our largest grant program of

          24  outdoor recreation grants to local units of government.

          25  You'll of course recall these are 50 percent matching grants


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           1  to local governments for parks and recreation lands and

           2  facilities.  And these applications are taken twice a year and

           3  we bring funding recommendations to you twice a year.

           4                 The group that you will be considering tomorrow

           5  includes 43 applications, all of which were received for our

           6  January 31st, 2001 deadline, total request of $16.1 million in

           7  matching funds.  All of the applications have been scored by

           8  the staff and we have rank ordered them, and you can find

           9  those in Exhibit A of the agenda item for tomorrow.

          10                 And essentially we're recommending approval of

          11  the top 14 applications in the amount of $5.58 million

          12  tomorrow.  And this is the entirety of the amount of money

          13  that we have available at this time.

          14                 COMMISSIONER HENRY:  Mr. Chairman, question.

          15  Mr. Hogsett, very briefly would you describe for us the

          16  process, internal process, that you use with staff in

          17  determining whether or not a grant needs to be?

          18                 MR. HOGSETT:  I'll be glad to.

          19                 COMMISSIONER HENRY:  And even before that,

          20  please.  When you say local governments are the units that are

          21  eligible for these grants, tell us the various entities that

          22  constitute what you consider to be local governments.

          23                 MR. HOGSETT:  Local governments typically are

          24  cities, counties, river authorities.  In some cases municipal

          25  utility districts.  Basically the law says that for a local


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           1  government to be eligible for our assistance they have to have

           2  as part of their responsibility providing public outdoor

           3  recreation.  An exception to eligibility, for example, might

           4  be a school district.  They are not considered eligible as

           5  local governments because that's not their primary

           6  responsibility.  In terms of the process that we go through,

           7  we take applications, again, twice a year for the program with

           8  a deadline being set.  Those then applications are grouped

           9  together and considered as a group.  Typically we have will

          10  have 45 to 50 applications every six months.  And we have a

          11  scoring system that the Commission has adopted based on public

          12  input that's used to evaluate those projects.  It's

          13  essentially an issues based scoring system.

          14                 The -- some of the more important criteria or

          15  ranking criteria include things such as whether or not the

          16  local government has a locally adopted parks and recreation

          17  master plan where they've gone through the process of

          18  establishing priorities for what they think needs to be done

          19  locally.  If they then ask for high priority items out of that

          20  master plan, that enhances the score for their application.

          21  Additional priorities are given for projects that are related

          22  to water, water type recreation.  Additional priority is given

          23  to projects that have a conservation element related to them,

          24  things such as wetlands, natural areas, set asides of open

          25  space in urban areas.  Additional priority is given based on


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           1  demographic issues such as ethnic minority, low income, and

           2  elderly.  And there are, you know, a number of other criteria

           3  but basically it's a way that we can with a large number of

           4  applications received hopefully make some intelligent

           5  recommendations to you based on the system that you've adopted

           6  of which projects that should receive priority.  Typically

           7  we're only able to fund a third or less of the applications

           8  received in any given review.

           9                 COMMISSIONER DINKINS:  Mr. Chairman.

          10                 CHAIRMAN ANGELO:  Yes, ma'am.

          11                 COMMISSIONER DINKINS:  Excuse me.  I noticed in

          12  this group and let me say that I've always found your scoring

          13  system to be very commendable and I've heard complements about

          14  it being fair and objective to the extent you can be with

          15  something this complicated.  But in this -- in this group I

          16  had several questions.  One of them was that there are, I

          17  think, three Travis County proposals in the top ranked group

          18  and I wondered if you had within your evaluation and

          19  recommendation system or process a way to sort to make sure

          20  that we're not perhaps clustered within a particular part of

          21  the State but that over time the money is spread around the

          22  State because it is such a big state.

          23                 MR. HOGSETT:  First I will say this is a little

          24  unusual.  I noted the same thing that we have Round Rock U

          25  Brushy Creek, Fern Bluff and then here is one another in the


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           1  Austin --

           2                 COMMISSIONER HENRY:  Williamson County.

           3                 MR. HOGSETT:  The only rule that the Commission

           4  has adopted to now related to allocation is that any given

           5  local government can only submit one application in each

           6  review.  Other than that, we really don't consider geography

           7  in -- in this mix.  It is, of course, something that you

           8  could -- could propose that we do and take public input and --

           9  and do that.  Generally I think that in most reviews there is

          10  a pretty wide mix around the State of geography in terms of

          11  funding but I had noted in the same thing.

          12                 COMMISSIONER DINKINS:  Would it be difficult to

          13  go back over several years and see whether this has

          14  happened --

          15                 MR. HOGSETT:  Not at all.  Not at all.

          16                 COMMISSIONER DINKINS:  -- before?  Because I

          17  think that it would be well for the Commission to consider

          18  whether we need to be attentive to geographic distribution

          19  given how this one fell out in this particular group of them.

          20  But let me say also that I thought that having -- being able

          21  to support what -- was it in Williamson County looked like

          22  several different pieces of the same type of project that we

          23  had considered previously and that was so exciting with the

          24  caves and other things.  I really thought that was most

          25  beneficial, you know, to concentrate this one cycle in a place


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           1  where you were going to have some real potential for return

           2  on -- on public recreation and interpretative possibilities

           3  for that one locale.  But I just -- I just think it's

           4  something that, you know, if there is that return it's one

           5  that we should be aware of and recognize and support.  But if

           6  we on the other hand are just kind of stumbling a little bit


           7  by the scoring system and to concentrating the money in Travis

           8  County and the environs around Travis County and not getting

           9  it out to West Texas or South Texas or East Texas that we

          10  should be mindful of that and that shouldn't happen by just

          11  circumstance.

          12                 MR. HOGSETT:  Very well taken point and we can

          13  analyze that and I would propose that we come back and talk to

          14  you about that in January when we bring the next group.

          15                 CHAIRMAN ANGELO:  Mr. Ramos.

          16                 COMMISSIONER RAMOS:  Yes.  In line of that is

          17  your scoring system such that if, for example, if a particular

          18  government applied for a grant and did not get it, does

          19  that -- does that then become a higher priority or can you

          20  theoretically stay at a low priority, do you automatically

          21  move because you've been looked over or passed over two or

          22  three times?

          23                 MR. HOGSETT:  What we do is if an applicant

          24  falls below the line, we offer them the opportunity to

          25  resubmit their application in the next review.  And we also


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           1  offer them the opportunity to come in and sit down with the

           2  staff and go through the evaluation of how the project was

           3  ranked and give them some suggestions of how they might want

           4  to improve it.  Many of these applications, in fact if you

           5  look at the list on Exhibit 2 it's on Page 50 in the priority

           6  in the full Commission meeting all the applications that have

           7  an asterisk by them are resubmissions.  And many of the

           8  projects that do come back as resubmissions improve their

           9  score and come back and receive funding at a later time.

          10                 COMMISSIONER RAMOS:  Does staff share with the

          11  applicant ideas as to how they could better improve their

          12  chances?

          13                 MR. HOGSETT:  Absolutely.  That is the key of

          14  what we do when we have those meetings.  We, you know, make

          15  suggestions of how they might want to restructure what they're

          16  asking for or make sure that we were absolutely cognizant of

          17  what they were trying to tell us in their application, what

          18  they were trying to do.  With this many to review, sometimes

          19  it's a little difficult to understand without having that.

          20                 COMMISSIONER RAMOS:  Does any part of your

          21  scoring system include taking the historical data as you might

          22  say of funding for particular counties and see, for example,

          23  if over the last five years a particular area of the State has

          24  gotten five times more money than another part of the State?

          25                 MR. HOGSETT:  No, we don't and I think that's


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           1  what Ms. Dinkins was asking about as well.

           2                 COMMISSIONER RAMOS:  I think that would be

           3  helpful to ensure a balance.

           4                 CHAIRMAN ANGELO:  One of the things that

           5  probably comes into play to some extent that's beyond your

           6  ability to change but by proximity the communities in the near

           7  vicinity of Austin are much more -- have an advantage of being

           8  able to come in and take the benefit of your people in helping

           9  them, I would think.  Is there some merit to that or --

          10                 MR. HOGSETT:  Yeah.  I don't know.  We see

          11  these folks a lot more than we see the ones from --

          12                 CHAIRMAN ANGELO:  That's nothing we can do

          13  anything about.

          14                 MR. HOGSETT:  Sure.

          15                 COMMISSIONER FITZSIMONS:  That -- at the

          16  expense of piling on here on this issue, but my perspective

          17  having lived in a rural county for many years and seeing that

          18  this in these smaller and poorer counties is usually done by a

          19  group of volunteers.  And in the more urban counties you

          20  essentially have professional or at least paid people who are

          21  adept at the grant process.  In addition, to the -- to the

          22  geographic distribution you mentioned, Carol, I'm concerned

          23  about I think, Donato, what you're getting it is some of these

          24  underserved counties primarily rural counties that just are

          25  not adept at the process.


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           1                 CHAIRMAN ANGELO:  Which is addressed to some

           2  degree on the small grants.  That was the intent of that of

           3  course.

           4                 COMMISSIONER HENRY:  Isn't the break at 50,000

           5  population.

           6                 MR. HOGSETT:  For the small grant program, yes,

           7  50,000 is what we did under our pilot.  And that's -- if we do

           8  come back to you with a recommendation to continue that

           9  program, that's one of the key things we need to consider

          10  whether that is a good break point or not.

          11                 COMMISSIONER HENRY:  But smaller communities

          12  can apply for the local?

          13                 MR. HOGSETT:  Yes.  Yes, absolutely.

          14                 COMMISSIONER HENRY:  Therefore we get the

          15  Cranfills Gap.  Pardon my ignorance, but tell me, where is

          16  Cranfills Gap?

          17                 MR. HOGSETT:  I'm not sure.

          18                 COMMISSIONER RAMOS:  It's up by Meridian if you

          19  know where Meridian is.  Bosque County.  Up in that area.

          20                 COMMISSIONER FITZSIMONS:  Close to Walnut

          21  Springs.

          22                 COMMISSIONER HENRY:  I was wondering why they

          23  weren't in the smaller -- the smaller communities can come

          24  into the bigger picture.

          25                 MR. HOGSETT:  Actually the small grants program


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           1  is not just small communities, it's also -- it is small

           2  communities in that 50,000 or less, but it's also trying to

           3  meet the need of communities that say we just need one thing.

           4  All we need is a ball field or all we need is a pavilion.  We

           5  don't want to ask for a half million dollars for a huge park

           6  development.  That was the other thing that we were hoping to

           7  address with that that smaller communities program.

           8                 CHAIRMAN ANGELO:  Smaller in money.

           9                 MR. HOGSETT:  And it's important that we keep

          10  that simple so that applicants in those situations have a

          11  simple process that they don't necessarily have to go out and

          12  hire a consultant or -- or not have the -- because you're

          13  right, they don't have the full-time resources that the larger

          14  communities have.

          15                 COMMISSIONER HENRY:  But doesn't that defeat

          16  part of the process that you discussed earlier with regard to

          17  scoring, you know, open spaces, water conservation and all

          18  these items that cause your scoring to be higher?  When you

          19  talk about a community that just wants a ball field, I don't

          20  see how they could ever score above.

          21                 MR. HOGSETT:  That's exactly the point that we

          22  got when we last went out and did public hearings.  We said,

          23  you know, how is the larger program working for you and the

          24  smaller communities said, well, if we need to ask for a huge

          25  park or for the -- or acquisition of a major piece of property


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           1  it works well for is.  If we just need one thing it's not

           2  working very well for us and that was the idea behind the

           3  pilot program to reach some of these people that we knew that

           4  we were not reaching that needed and deserved those

           5  opportunities.

           6                 COMMISSIONER HENRY:  I see.

           7                 COMMISSIONER DINKINS:  Jim, it was really

           8  exciting to read the small grant applications this time.

           9                 MR. HOGSETT:  Uh-huh.

          10                 COMMISIONER DINKINS:  You know, and to see what

          11  had happened in response to that pilot program.

          12                 MR. HOGSETT:  We got really what we were

          13  looking for in that program.

          14                 COMMISSIONER HENRY:  Let me say going in also

          15  that this is something that we discussed not long after I came

          16  on the Commission and I support, along with my colleagues, I

          17  believe as I sit here completely the idea that this should be

          18  a staff function rather than a Commission function, otherwise

          19  we get into the realm --

          20                 COMMISSIONER FITZSIMONS:  We get too many phone

          21  calls.

          22                 COMMISSIONER HENRY:  Strictly politics in some

          23  cases and I think that's to be avoided at all costs.

          24                 MR. SANSOM:  We appreciate that.

          25                 MR. HOGSETT:  We appreciate that very much.


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           1                 MR. SANSOM:  As do the communities at large.

           2                 MR. HOGSETT:  Would you like me to go ahead and

           3  continue with the next one.

           4                 CHAIRMAN ANGELO:  Yes.  Why don't you move

           5  along.

           6                 MR. HOGSETT:  The small communities program, as

           7  I mentioned, it was a response to public input really that we

           8  heard that the smaller communities and people that just wanted

           9  to do one or two things were not being able to be competitive

          10  in the larger program.  And to address that we developed this

          11  pilot and you endorsed the idea of doing it in January, of

          12  setting aside approximately the equivalent of one of the large

          13  grants of $500,000.  And to make that make -- those grants

          14  available to communities of 50,000 or less and for a maximum

          15  of $50,000 in matching funds for each grant.  Again, these are

          16  50 percent match.  We only in the pilot considered development

          17  projects eligible.  We thought that a combination of an

          18  acquisition and development at $50,000 was probably unlikely.

          19  However, we did hear from a few folks that were a little

          20  unhappy about that, so that's one of the things we'll need to

          21  consider when we do go out and do some public hearings and

          22  staff how we're going to come back to you with a

          23  recommendation for a possible continuation of that program.

          24  And we do intend to do that this fall.  We've begun the

          25  process of scheduling around the State public hearings where


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           1  both this program and the regional park grant program that you

           2  have approved projects under a pilot twice previously.

           3                 And we do understand the need to keep this

           4  simple, to keep it a process that's successful and easy to

           5  understand.  It was very successful in the -- if in no other

           6  way than sheer numbers.  We got 64 applications.  People had

           7  from the time that you adopted the idea of doing this in

           8  January until the 15th of May so it was a short time frame for

           9  people to put together 64 applications for $2.2 million,

          10  almost $2.3 million for only 500 -- approximately $500,000

          11  available.  We did have a scoring system that was used very

          12  similar in most regards to the larger outdoor recreation grant

          13  scoring system.  We evaluated them using that system and are

          14  proposing tomorrow to recommend that you a prove the top 12

          15  applications out of those 64.

          16                 COMMISSIONER HENRY:  Mr. Chairman, one of

          17  the -- of the concerns that I have and that our -- led to my

          18  questions concerning eligibility of applicants and that's the

          19  concern of some concern over municipal utility districts

          20  applying because the nature of them are quite different from,

          21  for example, from most other governmental units, the cities,

          22  the counties, et cetera.  Do you guys have any concerns over

          23  entities applying which may be wholly or partially privately

          24  owned?

          25                 MR. HOGSETT:  Well, municipal utility districts


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           1  are constitutionally authorized and they are government

           2  entities.  I recognize --

           3                 COMMISSIONER DINKINS:  They're governmental

           4  subdivisions.

           5                 COMMISSIONER HENRY:  I recognize that.

           6                 MR. HOGSETT:  I recognize what you're saying

           7  though, that in many cases early on in the development of a

           8  subdivision they are the -- not under the complete control,

           9  but under the umbrella control of the developer of that

          10  subdivision.  On the other hand that is the only conduit that

          11  some of the citizens that live in those districts unless they

          12  have a county that's willing to submit an application on their

          13  behalf have to access the program.  So it's something that if

          14  we were to make a change like that it would require a change

          15  in the law, in my opinion.  There are different levels of a

          16  affluence among municipal utility districts and I think that

          17  if I had a concern I would say that would be my concern that

          18  in some cases the municipal utility districts close to the

          19  urban areas particularly in the Austin area are fairly

          20  affluent to begin with.  Those folks are paying taxes.

          21                 COMMISSIONER MONTGOMERY:  Do think our match

          22  funding requirements disproportionately exclude poor

          23  communities at all?  What do you see there?

          24                 MR. HOGSETT:  I don't because we do have in

          25  both programs significant numbers of applicants and typically


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           1  the smaller governments, as one of you mentioned, use

           2  volunteers.  Volunteer labor, donations of equipment and

           3  materials as part or in some cases all of their match.  We

           4  have a small program within our operation for helping to do

           5  planning for small units of government as well.  We actually

           6  will go out and do a master plan for a site for them and at

           7  the same time can talk to them about the resources that they

           8  have and recommend how -- how they look at match and whether

           9  or not they have some opportunities for match that they may

          10  not realize.

          11                 VICE-CHAIR MONTGOMERY:  In that sense we have

          12  not skewed this progressively, the progress versus regress

          13  it's not progressively skewed because of that requirement.

          14                 MR. HOGSETT:  I don't believe so at all.

          15                 COMMISSIONER FITZSIMONS:  Can 100 percent of

          16  the match be donated in kind labor volunteer, that sort of

          17  thing?

          18                 MR. HOGSETT:  Conceivably, yes, but you've got

          19  to have a little bit of seed money to get started because as

          20  it's a reimbursement program.  If it's --

          21                 MR. SANSOM:  You've got to prime the pump.

          22                 MR. HOGSETT:  Yeah, exactly.  If it's a

          23  development project, for example, we've got to see the plans

          24  and specifications before you begin the work.  Somebody has

          25  got to pay for that.  I've seen case where they will go borrow


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           1  a little bit of money and then come back and offset it with a

           2  donation.  But we get the projects to 100 percent of the match

           3  is the value of donated property.

           4                 COMMISSIONER HENRY:  I commend your work

           5  because before I came on the Commission I was involved in one

           6  of those where scraped it together with bake sales and

           7  everything else and finally got it.

           8                 COMMISSIONER FITZSIMONS:  But it's -- there

           9  is -- it is tough for these small especially communities along

          10  the border to pull together the expertise to get it done.  I

          11  commend your work.

          12                 MR. HOGSETT:  The next program that we're going

          13  to ask you to consider funding for tomorrow is the

          14  Recreational Trails Fund.  These are Federal pass-through

          15  monies for the Department of Transportation.  Monies are

          16  appropriated annually by Congress.  This year about

          17  $2.4 million have been appropriated and there is some money

          18  available from some savings and some other projects that

          19  didn't get under -- actually get underway last year.  That's

          20  the difference between $2.4 and the recommended $2.6.  We

          21  received 66 applications requesting $6.2 million in 80 percent

          22  matching funds this is an 80/20 matching program with

          23  80 percent being the Federal share.  This -- these projects by

          24  law are reviewed and scored by a Trails Advisory Board.  The

          25  law requires for our eligibility to receive these Federal


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           1  funds that there be a Trail Advisory Board formed which has

           2  been formed and evaluates the projects and that is it the

           3  basis of the recommendations.

           4                 The scoring system is a bit different in that

           5  rather than a point based scoring system it's a tiered

           6  structured system of four different levels.  In this case

           7  we're recommending funding for the top two levels of projects.

           8                 VICE-CHAIR MONTGOMERY:  What's the utilization

           9  of the trails?  Do you have any data on that?

          10                 MR. HOGSETT:  Any?

          11                 VICE-CHAIR MONTGOMERY:  Utilization, any data

          12  on the utilization.

          13                 MR. HOGSETT:  I don't know.  Andy, have you got

          14  any utilization, do we have data on utilization of trail?

          15                 VICE-CHAIR MONTGOMERY:  Facilities, yeah.

          16                 MR. GOLDBLOOM:  Facility once they're built?

          17  Really, no.  No.

          18                 VICE-CHAIR MONTGOMERY:  Do we have a map

          19  showing where they all are?

          20                 MR. GOLDBLOOM:  Not a comprehensive map but

          21  we've got like the State Parks System.  We've got maps where

          22  the system and prizes have been funded from this program are

          23  only probably about 10 percent or 5 percent of what's actually

          24  existing out on the ground.  But there isn't really a good

          25  comprehensive inventory.


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           1                 VICE-CHAIR MONTGOMERY:  Is there a way for the

           2  users or the users who intend to use them for them to know

           3  what's out there in a comprehensive way or you just have to

           4  stumble into them?

           5                 MR. GOLDBLOOM:  They really have to work with

           6  their local governments and local areas with the State.

           7  There's been a lot of State Park information, they would get

           8  information there.  For example, for motorized recreation

           9  there's not a good inventory.  There's a lot of private sites

          10  but we just, frankly we haven't had the staff to update the

          11  inventory.

          12                 MR. HOGSETT:  More for the record this is Andy

          13  Goldblum from Recreation Grants Program.  He administers the

          14  trail program.  And finally this is a program that is not

          15  under -- under the jurisdiction of recreation grants but for

          16  time purposes I've been asked to present it today.  This is

          17  the national hunter education target range program.  These

          18  are, again, Federal grants.  This is from the Robinson

          19  Wildlife Restoration Act.  These are 75 percent matching

          20  grants can be either for local governments or private

          21  enterprise.  And the purpose is to enhance hunter education

          22  opportunities through infrastructure related to hunting target

          23  ranges and other infrastructure related to hunter education.

          24  We are recommending funding for three projects for a total of

          25  the annually available $150,000.  I'll be glad to answer any


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                                   Austin, Texas  78746
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           1  other questions that you have.

           2                 CHAIRMAN ANGELO:  Any further questions or

           3  comments on the grants program?

           4                 COMMISSIONER HENRY:  They say it's 100?

           5                 VICE-CHAIR MONTGOMERY:  Just to --

           6                 MR. HOGSETT:  A hundred and fifty.

           7                 VICE-CHAIR MONTGOMERY:  I'm not sure exactly

           8  what docket the trails program it seems one of the things we

           9  can do at pretty low cost at least on our website is show

          10  what's out there for the recreational user to have an

          11  interest.

          12                 MR. HOGSETT:  It seems to me that that would be

          13  an issue for the Trails Advisory Committee to take look at it.

          14                 VICE-CHAIR MONTGOMERY:  Just a thought.  One

          15  thing the agency ought to do.

          16                 CHAIRMAN ANGELO:  I know of at least one trail

          17  we've got that there's a lot of concern by the adjoining

          18  landowners that we ought to not have it.  At some point we

          19  need to discuss that.

          20                 MR. HOGSETT:  Trails tend to do that sometimes.

          21                 CHAIRMAN ANGELO:  Any other discussion?  If not

          22  this item, if there's no objection this item will be placed on

          23  the agenda for tomorrow's meeting for public comment and

          24  action.

          25                 Is there any other business to come before the


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           1  Finance Committee?

           2                 Madame Chairman, I believe that concluded the

           3  business of the Finance Committee.

           4

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                                ESQUIRE DEPOSITION SERVICES
                        3101  Bee Caves Road, Suite 220, Centre II
                                   Austin, Texas  78746
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           1   THE STATE OF TEXAS )

           2   COUNTY OF TRAVIS   )

           3            I, KIM SEIBERT, a Certified Court Reporter in and

           4   for the State of Texas, do hereby certify that the above and

           5   foregoing pages constitute a full, true, and correct

           6   transcript of the minutes of the Texas Parks and Wildlife

           7   Commission on August 29, 2001, in the Commission hearing room

           8   of the Texas Parks and Wildlife Headquarters Complex, Austin,

           9   Travis County, Texas.

          10        I FURTHER CERTIFY that a stenographic record was made by

          11   meat the time of the public meeting and said stenographic

          12   notes were thereafter reduced to computerized transcription

          13   under my supervision and control.

          14        WITNESS MY HAND this ____ day of ____________________,

          15   2001.

          16

          17

          18                      ___________________________
                                  KIM SEIBERT, Texas CSR 4589
          19                      Expiration Date:  12/2002
                                  3101 Bee Caves Road
          20                      Suite 220, Centre II
                                  Austin, Texas  78701
          21                      (512) 328-5557

          22

          23

          24

          25


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                                   Austin, Texas  78746
                           (512) 328-5557  FAX:  (512) 328-8139



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