Additional Information
 

Texas Parks and Wildlife Commission
Finance Committee Budget Workshop

July 19, 2007

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

BE IT REMEMBERED that heretofore on the 19th day of July 2007, there came to be heard matters under the regulatory authority of the Texas Parks and Wildlife Commission, in the Commission Hearing Room of Texas Parks and Wildlife Department Headquarters Complex, Austin, Travis County, Texas, beginning at 1:03 p.m., to wit:

APPEARANCES:

THE TEXAS PARKS AND WILDLIFE COMMISSION

THE TEXAS PARKS AND WILDLIFE DEPARTMENT


FINANCE COMMITTEE
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BUDGET WORKSHOP
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JULY 19, 2007
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1:03 P.M.
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CHAIRMAN HOLT: Good afternoon everybody. I want to open the meeting. The meeting is called to order. Before proceeding with any business, I believe Mr. Cook has a statement to make.

MR. COOK: Thank you Chairman Holt. A public notice of this meeting, containing all items on the proposed agenda, has been filed in the office of the Secretary of State as required by Chapter 551 of the Government Code referred to as the Open Meetings Act. I would like for this fact to be noted in the official record of this meeting.

CHAIRMAN HOLT: Thank you Mr. Cook. Committee item number 1, Fiscal Year 2008 Operating and Capital Budget Overview. Ms. Mary Fields, will you please make your presentation?

MS. FIELDS: Thank you.

CHAIRMAN HOLT: Be a star today.

MS. FIELDS: Thank you Chairman Holt. Yes, I have looked forward to this all year.

CHAIRMAN HOLT: Yes, I bet. You have a fairly friendly crowd.

MR. COOK: That’s not what she has been saying to us.

CHAIRMAN HOLT: Yea, I bet.

MS. FIELDS: Good afternoon Commissioners, for the record I am Mary Fields, Chief Financial Officer, and I am here to present the overview of the Fiscal Year 2008 Operating and Capital Budget. I have Julie Horsley and Doug Noren back here from our Budget and Planning section in the audience with me today to assist in answering any questions that may come up as we go through and discuss these slides. I want to express my sincere appreciation to the budget staff because they really do a remarkable job of pulling all of these budget numbers together. This agency and its method of finance is fairly complex and they just do a wonderful job for us and I really appreciate it. So, let me proceed with the numbers.

First off, just agenda wise, I want to discuss the operating budget process, review financing for the budget, provide some summaries of the budget, review the capital budget and our FTEs, full-time equivalents, and finally I’ll wrap it up with a few key riders.

For the most part, our process for preparing the operating budget is similar to prior years, so I am going to touch on just a few key points here. We did use the appropriations received via the 80th Legislature as our starting point; and I am going to walk through those appropriations a little later in the presentation. With the appropriations that we did receive, we were able to establish the operating budgets at or pretty close to 100 percent of the fiscal year 2007 base budgets. Then we went in and allocated those exceptional items that were for very specific purposes to the appropriate divisions.

For the divisions that support our agency, which is Administrative Resources, Human Resources, Information Technology, those types of divisions, it is important for us to correctly balance the funding for our Fund 9 activities, which is the resource divisions and law enforcement support, versus the Fund 64 activities that support state parks. Our split on financing those divisions used to be roughly 60 percent Fund 9 and 40 percent Fund 64. With the additional funds we received for state parks this biennium, that split has changed to 55 percent Fund 9 and 45 percent Fund 64, so we did have to move some of the exceptional item funding into the support divisions to get that method of finance split balanced appropriately. That is important for us because you will recall on our Fund 9 side, because of the federal funding that we receive there, it is important that our hunting and fishing license revenue and those federal funds are spent only on hunting and fishing related activities, and wildlife and that sort of thing. If they perceive that we are spending that on park activities they will basically pull all of the funding, so we are at risk of what they call diversion. So it is important that we balance those funds.

COMMISSIONER BIVINS: What was the prior split, percentage wise?

CHAIRMAN HOLT: Sixty–forty.

MS. FIELDS: Sixty–forty — and it moved to about 55/45 which resulted in us moving about $2.2 million of Fund 64 in to support those support divisions. So, I just wanted to lay that out because it was pretty tricky for us as we were going through it.

COMMISSIONER PARKER: At what percentage split does it become a problem?

MS. FIELDS: Well, the balance really is related to the activities that support the agency. For example, we look at Human Resources and we basically look at how many FTEs relate to state parks versus how many FTEs relate to the other Fund 9 divisions. We look at that and we come up with a percentage allocation of that for the agency and that is basically how we finance HR. In my shop, in Administrative Resources, I have to break some of my activities down because the license staff is fully Fund 9 driven. The boat registration and titling staff are fully Fund 9, but my accountants and budget staff, you know, accounts payable staff, those type of people support the whole agency, so we look at the financing for the agency and we apply that appropriately to those staff. So, we have —

COMMISSIONER PARKER: So it is just an accounting procedure or assignment.

MS. FIELDS: That is correct. We have a method for each division where we look at what they are doing and make sure that we are funding them appropriately.

MR. COOK: Commissioner, it is a good question because it is one of those issues, and you folks have been on the commission and know, but it is one of those issues that is constantly under the microscope of how are you applying the funding that was appropriated? How are you applying the funding that you bring in from hunting and fishing licenses? I mean the feds for example, specifically want to know. And not only is it a federal law, it is protected by state law. State law says you will use those hunting and fishing license revenues only on law enforcement, fish and wildlife, those kinds of things. You can only use the revenues from state parks there, so we are quite frankly, we constantly tweak that and watch it throughout the year. When you get a significant influx of additional revenues, like we received this year from the Legislature for state parks, that changes that balance and so that is what Mary is laying out here. That is part of this process that worked out because of the shift of some of the duties that have been in state parks, some of the financial controls, some of our reactions to the State Auditor’s report. We are building a state parks finance group inside Mary’s shop. George Rios and his group are taking some. So, it worked out fine. It will be fine. But it’s one — always I encourage the Commission and staff to watch it closely.

MS. FIELDS: And it is just a part of that budget process, so I wanted to mention it to you today. Moving on, on this slide, we allocated all of the funding that was in the appropriation bill to the divisions. So the divisions were allowed to ask for additional funds, which we call supplementals, for any dollars that come in that bring money and authority. Those types of things are our federal funds, donations, those sorts of things. So they did make their supplemental requests. Budget staff reviewed those, and executive staff reviewed them as well, and we approved the appropriate ones and added those to the budget.

Again, this year we were able to meet our budget without budgeting for any salary lapse. Salary lapse is generated — you know we fund all of the positions but some of them are vacant throughout the year and we went ahead and funded all of it up front. We know we will accumulate some lapse throughout the year and we’ll have those funds available to us for kind of contingencies for things that will pop up during the year that we may need to address. So this is one of those things that Bob, when I first got here we were budgeting some lapse to meet our budget and now we are able to get there without budgeting for lapse up front.

CHAIRMAN HOLT: What do you mean by lapse?

MS. FIELDS: Lapse is — We budget the positions at 100 percent.

CHAIRMAN HOLT: Okay.

MS. FIELDS: Some of them are vacant.

CHAIRMAN HOLT: Right.

MS. FIELDS: When that occurs, that funding we set aside basically lapses. We call it a lapse. It is sitting there. It is not lapsing to anyone else; it’s just sitting in a pot that we watch.

MR. COOK: For instance, Mr. Chairman, when a park has — let’s say we allocate nine positions in a park. We fully fund those positions — manager level, ranger level, right on down, are fully funded. If one of those employees quits, or retires, or something like that, there is a period of time between when that person resigns and when we get the job refilled, just going through that advertisement process, interview process.

CHAIRMAN HOLT: Sure.

MR. COOK: Say in those two months, which would be fairly typical — two to three months — that accumulates as lapse and will be available to Mr. Dabney in mid year. It doesn’t get spent. It’s budgeted, it’s there, and we come back in mid year and say okay we’ve got “X” number of dollars of lapse. Do you have any train wrecks? That would be a good example.

CHAIRMAN HOLT: No, that’s Walt’s deal.

MR. COOK: That’s what we refer to when we talk about salary lapse.

CHAIRMAN HOLT: Okay, so there is no salary lapse budgeted to meet demand. I guess explain it one more time.

MS. FIELDS: Well, in past years we were a little tight on meeting the full demand of the budget and so we would go ahead and allocate a portion of that lapse. We would budget up front to hit the demand. Then as the year would progress, we would accumulate those dollars to cover the budget.

MR. COOK: Typically, Mary, correct me if I’m wrong. Typically, in a year’s time, we will run five to six percent lapse.

MS. FIELDS: Roughly in that.

MR. COOK: You’ve got $10 million —

(simultaneous discussion)

MS. FIELDS: We are leaving it fully funded up front.

CHAIRMAN HOLT: Yea, exactly.

MS. FIELDS: So that means, as Bob and I just discussed, as the year progresses we will accumulate some which is just contingency funding we can use.

CHAIRMAN HOLT: Naturally, because you aren’t budgeting it.

MS. FIELDS: Yes, that’s correct.

COMMISSIONER PARKER: Let me ask you one other question.

MS. FIELDS: Yes.

CHAIRMAN HOLT: Go ahead.

COMMISSIONER PARKER: All of his salary, Walt’s salary, is charged to parks. But do you break out — see you don’t hunt or fish. All you do is keep the books.

MS. FIELDS: Well, no.

CHAIRMAN HOLT: Not all. Give her a little more credit than that.

COMMISSIONER PARKER: That is a big chore.

CHAIRMAN HOLT: Fair enough. Fair enough.

COMMISSIONER PARKER: It’s probably a bigger chore than any of these others.

CHAIRMAN HOLT: She has to keep them in line.

COMMISSIONER PARKER: Right. So is all of your budget allocated to Phil, Pete, Walt, Steve, et.al?

MS. FIELDS: That is kind of what we were just discussing a minute ago. Part of mine —

COMMISSIONER PARKER: (inaudible)

MS. FIELDS: That’s okay. I think what you are driving at is when — Walt’s salary lapse would be in Fund 64 and when that accumulates we can’t use those 64 dollars for Phil’s shop or you know — but in the administrative shops we can use a portion of it.

COMMISSIONER PARKER: You do allocate the non — what did you call it — give me an example.

MR. COOK: Let’s talk about the executive director. What she was saying a while ago, John, was it used to be 60 percent Fund 9 and 40 percent 64. That is how we used to fund it.

COMMISSIONER PARKER: Okay.

MR. COOK: Now, because the change in the funding levels, I’m funded at 55/45.

CHAIRMAN HOLT: Mary will be too.

MR. COOK: So they are funded differently. Like she was talking about, our Human Resources Division is funded directly in proportion to the number of employees that are out there in those solid divisions.

MS. FIELDS: That’s correct.

COMMISSIONER PARKER: And we can say to Pittman Robertson, here’s the way we are doing it.

MR. COOK: Yes.

MS. FIELDS: That’s correct.

MR. COOK: Absolutely.

MS. FIELDS: And they have asked to see this methodology in the past and we have showed it to the State Auditor’s when they did their Fund 9 audit a year or more ago. So this methodology has been blessed by them and it is something that we do every year.

COMMISSIONER PARKER: Okay.

MS. FIELDS: But I did want to mention it because of the large influx of dollars; Fund 64 related type dollars. There is GR and other sources too, but it supports those types of activities. It did shift it so I thought it was worth mentioning.

CHAIRMAN HOLT: One more question.

COMMISSIONER BIVINS: From the legislation appropriations, do any of those dollars go to Fund 9?

MS. FIELDS: Excuse me, out of Fund —

COMMISSIONER BIVINS: Out of our appropriations from the Legislature? Does any of that go into Fund 9 or does it all go to 64?

MS. FIELDS: There are some aspects of this that go into Fund 9 for Law Enforcement. I can cover those as we discuss the money coming in, because I have kind of split the additions to state and local parks versus the other divisions. But law enforcement —

MR. COOK: Commissioner, a better way to say it might be that some of the revenue appropriated by the Legislature will be used by Fund 9 divisions. It doesn’t necessarily go into Fund 9 because it’s a different funding, but it will be used by Pete which is law enforcement. The fish hatchery money that was appropriated will be used by Mr. Durocher.

MS. FIELDS: Thank you for saying that because the game warden money really was general revenue.

MR. COOK: It was GR.

MS. FIELDS: But Pete’s shop is thought of as Fund 9 related type work.

MR. COOK: Right.

COMMISSIONER BIVINS: Thank you.

MS. FIELDS. And finally, as far as process, we did go ahead and budget our capital items at 100 percent. We do have authority to raise those line items up to 125 percent, so later in the year when we get some of those contingent monies we were discussing, we may want to pump some of that into capital, and we do have some room there to grow those items up to 125 percent, if the need is out there. So, that kind of covers the process.

Moving into how the budget was financed. We do start out, as I mentioned, with the appropriations we receive from the Legislature via the General Appropriations Act. You’ll see it showing up in here as the GAA and that is House Bill 1. That is where our funding and all the appropriations are laid out. This session was a little more complicated because some of the appropriations that we received were contingent on bills passing, or even the certification of funds. So, as you can see there, I’m showing House Bill 12 and 15 and Senate Bill 3, all of those ended up being passed so we did bring those contingent funds into the budget. I’ll talk a little more about what those are as we move on.

The state employee salary increases were contingent on the Comptroller certifying that there was sufficient funds available, and I think a week or two ago I heard that she did make that certification. So, we will be able to proceed with the salary increases. There are also several rider limits within the appropriations act, specific riders to our agency that limit or direct how funds need to be spent. It also outlines the capital items that, again, we will be discussing in more detail, and also our FTEs, our full-time equivalents and the caps there. Just for your reference, in your binder there is a tab labeled appropriations. Behind that tab is our agency-specific rider information so you can see what the Legislature appropriated. But as I said, the tricky part of this is you look at the total method of financing and it shows $291.1 million there for ’08 in total, but it ended up being more because the contingent funds were in another article, so I will be walking through that with you guys, but it just complicated things for us a little bit more this go around.

COMMISSIONER BIVINS: What is our current FTE number?

MS. FIELDS: Our current — our cap is 2901.8. We’re not filled to that capacity —actually we are filled beyond that capacity right now because of the parks during the summer. We have to average over the year and not exceed 2901.8.

CHAIRMAN HOLT: For each fiscal year?

MS. FIELDS: For Fiscal Year 2007. And we will cover that in here.

CHAIRMAN HOLT: So that changes.

MS. FIELDS: Yes, it does; and we’ll discuss that. Let’s move into — you know, the biggest question we have been receiving from everybody is, we know you got a lot of money, so what did you get? These slides, the next four, are going to cover what we got, or our additions. The first couple of slides highlight the additions to state and local parks and these next couple of slides total $75 million.

CHAIRMAN HOLT: Seventy-five million over the base budget?

MS. FIELDS: Over base.

CHAIRMAN HOLT: So add the base — this is the work that we all did and got that much more over.

MS. FIELDS: That’s correct.

CHAIRMAN HOLT: Over the biennium?

MS. FIELDS: No, this is annually. This is annual.

CHAIRMAN HOLT: Okay.

MS. FIELDS: Most of the numbers you have been seeing and referencing up to this point have been biennial, but this is our annual budget, so this is what we will pump into our budget this year.

COMMISSIONER PARKER: Our base.

MS. FIELDS: Beyond our base. Yes.

CHAIRMAN HOLT: What is the base number, I think is what he is asking?

MS. FIELDS: The base for State Parks —

COMMISSIONER PARKER: Is that in this printed material here?

MS. FIELDS: It is —

CHAIRMAN HOLT: Let her get to it, otherwise you have to dig it out.

MS. FIELDS: I’ll be covering the division budgets, but the base budget was $53.4 million for state parks and when we’re done they are up to $71.7 million.

CHAIRMAN HOLT: The base.

MS. FIELDS: The base.

COMMISSIONER PARKER: The base is $71?

MS. FIELDS: No. The base is $53.4. When we add the things I am fixing to talk about, it will take it up to $71.7 million, but then there are some additional bonds that we will be moving in as well.

COMMISSIONER PARKER: Okay.

CHAIRMAN HOLT: For ’08. Fiscal year ’08 only?

MS. FIELDS: Yes.

CHAIRMAN HOLT: I think, Mary, it will help because I went through this Legislative session working with everybody — at least for me, it took a while to figure out, you know are we talking annual or are we talking biennium? It tends to go back and forth in conversations, so what I would ask today —

MS. FIELDS: It’s all annual.

CHAIRMAN HOLT: So everything is going to be annual just for FY 2008?

MS. FIELDS: That’s correct. Yes sir.

CHAIRMAN HOLT: Okay. I think that will help everybody understand that we are talking about one year.

MS. FIELDS: We are talking about one year. So in detailing this, what we did for state parks — I think this slide will help you, Commissioner Parker, with some of your questions. We added an additional $12 million to state park’s salary and operating. We added an additional $3.8 million to their capital items, which is their transportation items, their equipment. We added $3.3 million to their minor repair program; and this last area is park support costs and audit recommendations. This funding, $1.2 million of it went to Infrastructure for the additional FTEs that they need to do all this construction and that sort of thing. Then there is another $1.5 million in there to support some of the audit recommendations. You’ll recall there was a recommendation that we needed 16 additional internal auditors. We needed to create a Park Revenue and Visitation unit in Administrative Resources; and there were a couple of additional FTEs that we put into information technology for telecom, communication support and web support for the new system.

COMMISSIONER PARKER: Okay.

MS. FIELDS: That all totals $2.7 million. That’s what was applied. Let me move to the next slide because there is more information on parks. That was more the operational piece. The local parks, we did add $26.5 million to local parks. This is the $16.7 million; there was a rider with all of these various local parks for legislators and zoos and all that, so this number is that $16.7 million of designated local parks. Then you will recall they added funding, over $9 million of funding, to take us to the $15.5 million that we used to have in local parks.

CHAIRMAN HOLT: Right.

MS. FIELDS: So that is what that dollar amount is. It is an addition above their base.

CHAIRMAN HOLT: Some of it was designated and some of it we will be able to give through requests.

MS. FIELDS: That’s correct. Now, on land acquisition, we did not get — I split this between state parks type of acquisition and then the other Fund 9 related divisions acquisition. We did not receive any new money. No General Revenue or anything for land acquisition, but they did allow us to utilize land sale proceeds that we have. Anything that we have this year we can carry forward unexpended balances and that’s what that UB on the slide means. UB is unexpended balances we can move forward. So, we did sell Eagle Mountain Lake, as y’all well know, for $9.3 million and then we have $275,000 of state park related land sale proceeds that we will move into fiscal year 2008. Then if we sell any additional parks, we will be able to utilize those funds.

Okay, on the bonds, there were bonds designated for state-wide park repairs. There were two types there — $17 million was out of the Prop 8 bonds that we currently have, that are out there and available, so those were actually designated. There was another $27.1 million of bonds for state-wide park repair that is contingent on voter approval in November. That is not in the budget right now. We aren’t going to add that until those bonds are approved. The same goes for the Battleship Texas. There is another $25 million there. So, when I’m giving you the $75 million of totals, that is excluding this $52 million of bonds that will still be passed by the voter; or is still to be passed by the voters in November. Okay, so that pretty much covers the state and local park’s components of the additions to our base. Next I want to talk about the other Fund 9 related and other funds out there.

We did have the East Texas Fish Hatchery — there was $4.9 million of freshwater fishing stamp funds that were designated again in this year. Y’all have heard $12.3 million. That is a biennial total of which $4.9 million went into ’08. On border security and for game warden operations, law enforcement received, as you can see there, another $2.27 million. There is 15 FTEs associated with border security and then the additional funding for operations.

Finally, with the data center consolidation, you will recall in the last few meetings we have had some presentations from George Rios, our information technology person. Basically, the Department of Information Resources is contracting with IBM to provide our data center services. We were one of those agencies that were very efficient in how we utilized that. This is the additional funding that was added to our budget to cover the payment, basically, to DIR to pay IBM. We were sweating it for a little while, as y’all will recall that we wouldn’t get all of it. We did get fully funded except for like $60,000 so we were pretty happy with that actually.

CHAIRMAN HOLT: Before you go on, Mary, can you go back?

MS. FIELDS: Yes sir.

CHAIRMAN HOLT: Walk me through these Texas hatcheries again — $4.9 million freshwater fishing stamp funds added to the base budget we had this year for the hatchery.

MS. FIELDS: There was $15 million of bonds that were established for the hatchery. We are carrying those bonds forward. We got another $12.3 million over the biennium that we can apply to the hatchery and other hatchery operations.

CHAIRMAN HOLT: Right. I remember battling through that. Okay.

MS. FIELDS: So right now we’ve got the $15 million moving forward and this $4.9 in this year, so we have a total of $19.9 million.

MR. COOK: All of the $12 million was not appropriated for ’08 in the first year.

MS. FIELDS: That’s right.

COMMISSIONER PARKER: Okay, $19.9 for the two years.

MS. FIELDS: No, just for this year.

COMMISSIONER PARKER: I said for a total of two years.

CHAIRMAN HOLT: No.

MS. FIELDS: No, that’s not correct, Mr. Parker, because we got the $15 million and then we got another $12.3 coming in, so that would take us to $27.3 million over the biennium.

COMMISSIONER PARKER: Over the two years.

MS. FIELDS: Over the two years, but they only allowed us to bring in $4.9 million in the first year, so that $19.9 is what we have in the first year and then we will add the additional funds to take us up to $27.3 for the entire biennium.

COMMISSIONER BIVINS: How did they set the split?

MS. FIELDS: I’m not sure. Do you know, Gene?

CHAIRMAN HOLT: I can’t remember because we negotiated a lot on that. Other than that — the Legislature was very good to us on this.

MR. COOK: Absolutely.

CHAIRMAN HOLT: They were very fair on this. This was a great deal for us.

(simultaneous discussion)

MR. COOK: It’s going to work for us just fine. The construction timing.

CHAIRMAN HOLT: The timing.

COMMISSIONER MONTGOMERY: I just want to make a point to be sure that all that money comes from the fishing stamp that was put on. So it’s a user fee.

CHAIRMAN HOLT: Yes.

MS. FIELDS: That’s correct.

CHAIRMAN HOLT: As it was originally intended.

COMMISSIONER MONTGOMERY: Did the two-year appropriation allow — and all the cash was in the bank, it just wasn’t appropriated. Are we now able to invest all the money that has been collected from users going forward? Will we still end up with a positive balance in the bank account?

MS. FIELDS: We will still have a positive balance in the bank account. We asked for $18.3 million that we would have had available; they appropriated $12.3. So there is still $6 million.

COMMISSIONER MONTGOMERY: And I am digressing a little bit. I bet Phil, what percentage now of the program we laid out four or five years ago, when we initiated all of this, will we be able to complete with the appropriations we have now versus what’s left to do? What ball park? I’m just trying to get a sense of where we are.

MR. DUROCHER: We are talking that we will be able to get most of what we projected done. What they appropriated this year was the balances that was projected that we would have in the bank at the end of this biennium.

COMMISSIONER MONTGOMERY: Right.

MR. DUROCHER: That’s that $12.3 million.

COMMISSIONER MONTGOMERY: Okay.

MR. DUROCHER: The revenue we build up over the next two years, ’08 — ’09, we can’t spend that. We got to go back and get the authority.

COMMISSIONER MONTGOMERY: Right, I understand that. You have to go back on the legislative agenda, but again, it’s all user fees, no GR, we are now able to spend and execute the program that we promised the constituents we would execute when we put this stamp out.

MS. FIELDS: That’s correct.

MR. DUROCHER: We are speeding as fast as we can to get a contract signed because costs are going up as I speak.

CHAIRMAN HOLT: Right.

COMMISSIONER MONTGOMERY: When do you estimate opening the facility?

MR. DUROCHER: What we are looking at now — when we went into the session — in the middle of the session we projected that we — it didn’t look like we were going to get any balances and that we were going to have the $15 million dollars to spend. So we changed our plans and we were going to try to phase the hatchery in. We wanted to spend the $15 million as quick as we could. But right at the end of the session is when we found out that we had the $12.3 to add to the $15, so we decided that we could save about $2.8 to $3 million by starting over and bidding this as one project instead of phasing. So, that has delayed our process somewhat. The design team — because of all the changes we’ve made, we have delayed the thing. We have made changes so they are coming back to us saying we are going to need a little more money. We are in the process of negotiating that now and hopefully by October we will have a 95 percent completion on a new design for the whole project and then we can go out to bid and get a contract. We are hoping early next year to have a contract on the job.

CHAIRMAN HOLT: To have a contract. Gotcha.

MR. DUROCHER: To have a contract for construction and then we estimate two to two-and-a-half years of construction time to get it built, so we are looking at three years down the road.

COMMISSIONER MONTGOMERY: So we will be in the next biennium when it opens?

MR. DUROCHER: Absolutely.

CHAIRMAN HOLT: Yes.

COMMISSIONER MONTGOMERY: Our next legislative agenda will need to include the appropriation of the money that has been collected off this stamp which is again, I don’t —

CHAIRMAN HOLT: That will be ongoing.

COMMISSIONER MONTGOMERY: Yea.

CHAIRMAN HOLT: But this set a good tone and I think it helped. Obviously the Legislature helped us a lot, but I think as we went through it there was more understanding of what we were trying to accomplish.

COMMISSIONER MONTGOMERY: Yes. It’s a user fee.

CHAIRMAN HOLT: Yes. Very much it’s a user fee. That is what it is and when we put it in place that is what we promised our constituents that we would do with the money.

COMMISSIONER MONTGOMERY: I just don’t want the entire bass fisherman in Texas mad at me.

CHAIRMAN HOLT: No, I don’t want them mad at us and the legislators don’t either.

COMMISSIONER PARKER: And let me tell you, bass fishermen are not mad at us.

CHAIRMAN HOLT: Good.

COMMISSIONER PARKER: In fact, the bass fishermen know of the leadership that has come out of the Governor’s Office, Lt. Governor’s Office and the Speaker’s Office relating to this. Without the leadership of those two — those three offices I don’t believe this would have happened.

CHAIRMAN HOLT: Well, like anything else, it could have easily gotten lost in the shuffle and it didn’t, so people stayed focused on it. You’re right. Good point.

COMMISSIONER PARKER: As long as our constituents know that — especially in East Texas.

CHAIRMAN HOLT: That’s where they all are anyway aren’t they?

(simultaneous discussion)

MS. FIELDS: The other thing I want to mention here, just to keep myself honest, is we are also using some of these freshwater fish stamp funds to pay for debt service on that $15 million.

CHAIRMAN HOLT: Well yea, we have to.

MS. FIELDS: Obviously, so that would be $2.65 million in fiscal year 2008 that we are utilizing to pay for the debt service on the bonds. I think I covered all the other additions on that page. Were there any other questions there?

CHAIRMAN HOLT: Mary, you said $2.65 million in interest on a $15 million dollar bond? It can’t be that high, can it?

MR. MCCARTY: It’s a seven year bond.

CHAIRMAN HOLT: So we are holding a short bond. It’s short.

MR. DUROCHER: We will pay it off over the life of the —

CHAIRMAN HOLT: Okay.

MR. DUROCHER: But that money is in the bank.

COMMISSIONER MONTGOMERY: That’s part of the amortization.

MR. DUROCHER: It’s not included in this $12.3.

CHAIRMAN HOLT: Oh, that’s right. Okay. Gotcha.

MS. FIELDS: But when I was talking earlier, I said the funds — I just wanted to mention that those funds are utilized for debt service. Just keep me honest here.

CHAIRMAN HOLT: A certain amount is going to debt service. Yes.

MS. FIELDS: Then moving on here there were also additions to the base, as I mentioned, for the employee pay raise and that was actually $3.4 million. There were raises for the Schedule C employees which are actually our law enforcement employees, so their raise is also included in there.

COMMISSIONER MONTGOMERY: I had a question I wanted to ask there. Since I have been on the commission we have had four wardens killed or die in the line of duty. Is our death benefit package, in total, competitive with other law enforcement agencies?

MS. FIELDS: I can’t speak to that.

MR. FLORES: Yes they are. Our death benefits have been set by state law.

MR. COOK: You need to identify yourself when you speak please.

MR. FLORES: Pete Flores, Director of Law Enforcement. All of our benefits are coordinated through HR and are pretty much consistent throughout state government and with us, DPS, and TABC. The Legislature has taken great pains to take care of our officers that have been killed in the line of duty, and yes sir they are in line with others.

COMMISSIONER MONTGOMERY: I just wanted to ensure they were in line with the others.

MR. FLORES: Thank you.

MS. FIELDS: You will also recall I told you that the land sale proceeds — I was going to split them between parks and the other divisions, the other Fund 9 related divisions. So we’ve got $445,000 of unexpended balances this year for hatcheries or wildlife management areas, those sorts of things that we will be carrying forward. Of course there will be the sale of the game warden academy. If that is sold in this year we do have the ability to move those unexpended balances, whatever the proceeds are from that sale, forward into fiscal year 2008. We also have it covered for if we sell it in 2008; we will have the proceeds then. So either way, those proceeds will be available and they will be designated for the new game warden academy.

COMMISSIONER BIVINS: And that falls under Fund 9?

MS. FIELDS: That’s correct. Yes. Law enforcement is thought to support boating, hunting, and fishing, so it’s thought of as a Fund 9 activity. Yes.

Then there was $12.5 million that was actually added to our budget to be transferred to the General Land Office via contract on the coastal erosion project, so that was an addition to our base, but we will be transferring that to GLO.

Then, just talking a little bit about the reductions, there were a few of them, and y’all are very familiar with them. We are transferring the 18 historic sites to the Historical Commission and that results in a $2.8 million reduction to our base since we will no longer operate those sites. The other transfer is for the operation of the Texas State Railroad. There will be roughly a $600,000 reduction there to the base budget for the operations of the railroad.

COMMISSIONER PARKER: You have millions up there, but you mean thousands.

MS. FIELDS: It’s point six million which would be about $600,000. That is correct. Then I am going to jump to the bottom bullet there. Y’all will recall there was an administrative reduction, but they actually added a separate strategy for us for a little while and it was also done for several state agencies. This was an initiative, I think out of Senate Finance, so we did have a $484,000 reduction that we took in this fiscal year. They did eliminate that extra strategy and the reduction was basically spread within our other strategies, but there was a reduction there in the appropriation bill. Then finally, there’s $7.9 million of funds that are included in the bill that are revenues that we have not collected yet. Most of those relate to Fund 64, but there was $500,000 of Fund 9 out of this total. So basically we didn’t put those in our budget. They are in the appropriation bill, but we won’t add them to the budget until we collect the revenue. This relates to Rider 27. In the past, we earned that revenue and we added it to the appropriation number. This year they included it in the appropriation number, so we’ve got to earn it to get to the appropriation limit.

CHAIRMAN HOLT: Right. Walk us through Rider 27 funding. What is Rider 27 funds?

MS. FIELDS: Rider 27 is actually split out between Fund 9 and Fund 64, and it’s $500,000 per year for Fund 9 and —

CHAIRMAN HOLT: Why, I guess, explain in general — back up one — why is it coming through Rider 27? This is just to jog my memory. That’s what I can’t remember. I remember the –

MR. COOK: Correct me if I’m wrong, Mary. If we keep — for parks for instance there are some questions about the revenue generation ability by keeping parks open longer —

MS. FIELDS: That’s correct.

MR. COOK: — or on additional days where we may only be open only Thursday, Friday, Saturday and Sunday, you know. If we raise additional revenue in parks as a result of that kind of activity, this appropriations would cover that additional revenue.

MS. FIELDS: That’s correct, and actually the number is included in the total. So we are basically taking it out because we haven’t earned it yet.

MR. COOK: Right.

CHAIRMAN HOLT: Okay.

MS. FIELDS: There was $8 million.

MR. COOK: We didn’t budget it.

CHAIRMAN HOLT: Okay, it’s our job to collect it; and if we collect it we can use it?

MS. FIELDS: Yes.

CHAIRMAN HOLT: Okay. Gotcha.

MS. FIELDS: And the number for, Fund 64, there was $8 million and that related primarily to the state audit. Then in Fund 64, $2 million is what we had originally estimated. A million in each year of the biennium. Okay, let me get back to my —

CHAIRMAN HOLT: A portion has been essentially taken out of the budget, but we have an opportunity to use them as we collect them in this year.

MS. FIELDS: There is an expectation, I think, that we will earn additional revenue, yes.

MR. COOK: We are going to try to get there.

CHAIRMAN HOLT: I think we have figured out some ways to get there.

MS. FIELDS: Yes, that’s correct.

CHAIRMAN HOLT: It’s an incentive, isn’t it Walt?

MR. DABNEY: Our big problem is that if it rains spring break —

CHAIRMAN HOLT: Now I know. Those are acts of God. There isn’t anything we can do about that. I understand.

CHAIRMAN HOLT: So noted.

MS. FIELDS: Those royalties on the parks though.

MR. DABNEY: We need some more gas —

CHAIRMAN HOLT: Yea, that’s what we need. That’s right.

MS. FIELDS: Okay, so that basically, I just highlighted for you the additions and the reductions to the base. Let me just give you a quick crosswalk here from the General Appropriations Act which is the bill we were looking at earlier in the binder here. It had a total of $291.1 million for fiscal year 2008. When we consider the additions that were in House Bill 12, House Bill 15, Senate Bill 3, and all of those, we basically ended up adding $24.6 million to this year’s budget. The salary increases totaled $3.4 million, we brought in additional federal funds of $15.5 million, and y’all will continue to hear me talk about that throughout the year as we sign more federal agreements, we’ll bring additional federal funds in. These are the ones that we know are rock solid right now, so we have added those into the base. We do have construction unexpended balances of $34.8 million and land acquisition — Eagle Mountain Lake and the other money I was talking about totals $10 million, and we will talk about that in a little more detail, but it’s $44.8 million in unexpended balances that we are bringing into the budget. And then, you know, we have our benefits and our Benefits Replacement Pay. I rolled that together into one number. The benefits really are paid through the Employees Retirement System, our fringe benefits, but we do have to set aside those funds in the operating budget. Then there were several other adjustments. This was pretty complicated this time, so I tried to just summarize the highlights for you gentlemen today, so that takes our fiscal year 2008 budget to $405.8 million.

Let’s talk a little bit about the types of, or colors of, money here that support our method of finance. I just want to point out from our Account 64 and Account 9 activity; we do earn roughly 40 percent of our revenue or financing for the agency. Thirty percent of it, as you can see, is in Account 9 which is our license and boat revenues, and then Fund 64, state park revenues is there at 10 percent. The remaining funding there in the chart, we’ve got 22 percent of our budget, or $90 million is General Revenue coming in. The other GR dedicated accounts there at 8 percent, the biggest one there is our Local Parks Account, Fund 467, is included in there along with some other designated funds or accounts that you will see in the appropriation bill for us. The other category, those are our bonds and land sale proceeds, and that sort of thing at 14 percent and then our federal funds are at 16 percent of the budget.

CHAIRMAN HOLT: So the other is land sale proceeds and bonds.

MS. FIELDS: Bonds primarily.

CHAIRMAN HOLT: Okay.

MS. FIELDS: Yes.

COMMISSIONER MONTGOMERY: Just for the record, are we fully appropriated for all the grants, gifts we expect to get over the biennium? Over the next few years. All the federal grants and private gifts we expect to get, grant programs and otherwise, are we appropriated to accept those and use those?

MS. FIELDS: Yes and the beauty of those types of funds is anything we earn or that’s awarded to us, it comes with funds and the authority comes with it, so we can add those funds as they come to us.

COMMISSIONER PARKER: Like Foundation money?

MS. FIELDS: That’s correct. So right now this is representing what we have currently, agreements that we know we have, donations we know we have, those sorts of things, but we can add as the year progresses.

MR. COOK: For example, John, it might be like the farm bill. Sometimes we get a shot at some farm bill money later in the year that we don’t know about right now, but—

COMMISSIONER MONTGOMERY: I asked that because there have been times, since I have been a commissioner, that we couldn’t use those because we didn’t have the authority so if the Legislature fixed that, that’s wonderful and something to keep in mind for future agendas; keep that latitude so we can get free money for the State.

MS. FIELDS: Yes.

CHAIRMAN HOLT: Phil, one of the issues is, and you are bringing it up, is that there were times that we were getting it but we weren’t appropriated to use it.

COMMISSIONER MONTGOMERY: Right. That’s what I mean.

CHAIRMAN HOLT: That became an issue.

COMMISSIONER MONTGOMERY: We didn’t have the authority to spend it.

CHAIRMAN HOLT: Exactly.

(simultaneous discussion)

CHIARMAN HOLT: And again I give Joe, my predecessor, credit. I mean that is part of what we tried to do was help the Legislators understand that issue and some of the problems it created for us, particularly on the park side.

COMMISSIONER MONTGOMERY: We have so many funding sources and you can’t anticipate where they are coming.

CHAIRMAN HOLT: That’s right.

MS. FIELDS: Okay, that pretty much concludes the financing part of the budget. I’ll move into just several different ways of how we summarize the budget. This first one basically gives a broad overview of our budget by object of expense, and I have included comparable totals to fiscal year 2007. Salaries are up as expected due to our increased employees in the State Parks, Law Enforcement and some of the other divisions along with those employee pay increases. And down below you can see a corresponding increase in the benefits that relate to that. When you consider the salaries and other, and the benefits together, that is 42 percent of our budget which is contributing to our employees here at the agency. The operating budget has also increased over fiscal year 2007 and this is primarily in state parks for state parks operating. With the grants, you are seeing the impact of those additional funds for the local parks, and the capital expenditures include all the capital budget items. So you are seeing the impact of those additional bonds and unexpended balances being carried forward and we will talk about that again in just a little bit.

Debt service is showing up there as, again for the Prop 8 bonds and the revenue bonds for the hatchery and some of those are actually lease payments to the Texas Public Finance Authority that actually pays for the debt service, but are kind of highlighted as debt service.

CHAIRMAN HOLT: Let’s stop here. I think this is part of what is going to be our job on the Commission, and of course the agency itself, and so I need to be honest, and I think all of you have heard this. There is some doubt in the Legislature whether we can really spend this money. Okay. Whether it be capital expenditures, whether it be hiring. Some of the issues are the way the regs work in just getting things done. Letting contracts, I think Phil’s already addressed it for the fish hatchery, Walt is certainly going to be running into this and I think, again, it is going to be part of our job to kind of continue the education of legislators and others that are interested, and our constituents, about how these dollars are being spent and why some of it may flow into ’09. There is no doubt about it. Sometimes you can’t get these contracts let. If you get them let, you know the work doesn’t always get started, and now we have the rain situation. We get affected by a lot of things. So, this is something that I think is going to be a big part of the Commission’s job is to help our agency really try to get these dollars spent, particularly in the parks. I think, as Walt knows that is definitely where a lot of this focus is and a lot of focus in this last session was. Okay, we’ll get you the dollars, but do you have the infrastructure in place, the people in place to really be able to spend that and show our constituency, this is the legislators talking to me — both Senate and House — to be able to show our constituency that okay we have let you have that money, now let’s see the results. So I think we are going to have to be real cognizant of that need as we go through the next two years. Thanks, Mary.

COMMISSIONER BIVINS: Is there anyway as a Commission we can help facilitate that process?

CHAIRMAN HOLT: I think that’s what we’ll do. We will have to sit down with Walt and see how it is moving along, but yea, I think there probably are going to be ways. Maybe we can’t actually facilitate the actual contracts and building a building, but we can do whatever is necessary by keeping people in our area, our legislators, the people we need to work with as the next two years go along and then heading into the next legislative session two years from now; keeping them informed. If need be, taking some key legislators and showing them what work has been done. I think these are things we all have — people we know well in the Senate and the House and you know, hey, you helped us, let us show you what we are doing with your money. So they can go back to their constituents and tell them.

COMMISSIONER BIVINS: Keep them involved.

CHAIRMAN HOLT: Keep them involved.

MS. FIELDS: I’ll move on to the next slide here which just basically highlights our budget by the various divisions here in our agency and you can see the divisions’ budgets in millions and the percent of the total agency budget; just to give you a sense of the size of each of our divisions. This is how the agency really operates with our budget. Each division has a detailed budget that they are responsible for managing. I’m really not going to cover all of the numbers on these slides, but I do want to point out that we do continue to run a pretty tight shop in our administration. All of our administrative divisions on these two slides here are less than 10 percent of our total budget, so that means that a lot of our money really is going, as it should be, to support the mission. I do also want to mention that in your binder, behind the budget summaries tab, you have a one page summary, it’s Exhibit B, and that basically summarizes the divisions’ budgets within your handout. But, also, I like that summary because it also includes the details by the object of expenses that we talked about, so it kind of combines for each division by their object of expense and it also includes FTE counts, so it’s just kind of a good one- page look of how our agency is budgeted and how it has been distributed within the agency. Also behind that budget summaries tab is a summary of our agency’s budget by strategy and that is Exhibit A there. This is really how the Legislature views our agency’s budget, and I didn’t attempt to put the budgets for all of those 28 strategies on slides, but I did put that detail in the binder for you for reference, because sometimes if you are talking to a legislator, that is how they relate to our budget. Also included on that is our method of finance, down at the bottom of that exhibit. That just relates back to the pie chart that we were talking about earlier. The amount of funds, the different types of funds for our agency.

And then as we are looking here at the divisions’ budgets you see that $34.9 million. Excuse me, there on Department-wide, and that is a pretty good chunk of money. I usually get a question on that; on what is in the Department-wide budget, so I have provided the detail for you on this slide. The reason — there is $20 million there for construction, $17 million of it is the GO bonds, those Prop 8 bonds, and then we have got the $3 million plus there for Fund 9. We haven’t allocated all of that among the divisions yet so we are just holding it there until we get that part of the budget finished, and then you will see that move out of Department-wide and into the appropriate division budgets. The rest of those categories I’m not going to detail, but you know, lease payments, our payments to license agents and the funding to support our license system, those sorts of things are agency initiatives, so we put them in the Department-wide category. If you have any questions about any of that — that State Office of Risk Management, that is our worker’s compensation. So, anyway, that’s the detail there.

COMMISSIONER PARKER: Do you charge interest? You don’t have an item for interest in there, so do you charge each interest related project its own interest?

MS. FIELDS: Are you speaking in terms of the construction? When we determine how those funds will get designated among the divisions we’ll move those related funds to that division’s budget. Right now we are just holding them because we are still making that determination. The interest, are you talking about the actual interest earned on money that is sitting there?

COMMISSIONER PARKER: Earned on money — interest we get charged like building the fish hatchery.

MS. FIELDS: That’s the lease payments or the debt service amount for the $7.8 million.

COMMISSIONER PARKER: Okay, that’s what that is.

MS. FIELDS: Yes sir. I’m sorry; I didn’t understand your question. Yes, that’s what that is and that is for both the Prop 8 bonds and the hatchery, of which I think I just mentioned — $2.6 million of that is for the hatchery related bonds, the revenue bonds.

COMMISSIONER PARKER: Lease payments are debt service which covers what I was talking about.

MS. FIELDS: Yes, and the reason I say lease payments is because we do, again, we pay Texas Public Finance Authority and they are actually paying the debt service on the bonds. It’s just a distinction, a state distinction. They are both basically for the same type of thing. Any other questions on Department-wide? If not, then we will move on to the capital budget.

Here I just provided an overview by category. Looking at this slide, the first column is our base amounts that we have for capital, and then we are adding amounts that allow us to basically grow the base; so that Rider 20 is basically the federal funds and other funds we are allowed. If they are designated for capital purposes, we can add to the capital authority. So, the $2.8 million there for construction, that’s Sport Fish Restoration funds that have been designated for construction and repairs in the Inland and Coastal Divisions, for example. So, we’ve added there, and then you see in that other column, the unexpended balances, which we have discussed, and then the total for each of the categories for the capital budget. And again, if you look at that budget summary, there is a column for capital budget so you can see how that got spread among the divisions if you have questions on that.

Moving into our full-time, or recapping our full-time equivalents or FTEs, again, it’s a little more complicated than usual because of those contingent bills and that sort of thing, so I am going to kind of walk you through the various additions and reductions to get us to our cap amount. Those first two lines there, those total the 2,901.8 which is our current fiscal year 2007 FTE cap count. Then we did get a certain amount of FTEs designated with our exceptional items. So you see the state park exceptional item for operations there was 229.3. The support divisions, those are Infrastructure FTEs that were designated there, and border security and Senate Bill 3. You can see the reduction for the FTEs related to those historic sites that are going to transfer and when the services in IT moved to IBM there was a 9 FTE reduction in Information Technology. So that takes us to the 3,100. That is a 198.3 increase from our ’07 cap.

The next slide here gives you just a different look at this. Basically, the gold shows you the difference in our caps from last year and this year, and then you see how we budgeted our FTEs between the two years. Now, we do budget more than the cap, again, because all those positions aren’t filled every day of the year. So we do go ahead and have more positions out there to allow for those times when we have positions not filled. We did increase it this year a little bit more than we did in the prior year, so we are going to have to watch that pretty closely to ensure that we don’t exceed our cap.

COMMISSIONER PARKER: What? Go back to that.

MS. FIELDS: This one? Or the one before?

COMMISSIONER PARKER: In state parks, do you know how many FTEs we have?

MS. FIELDS: I can tell you in this next slide here. I am showing for state parks — the FTEs funded by division. In ’07 in state parks we had 1,068.7. That is what they started fiscal year ’07 with and we’ve got a 202.4 increase of FTEs for fiscal year 2008. Now those are full-time equivalents. There will be several more positions because they really stack up in the summer with their seasonal help.

MR. DABNEY: 1526.

CHAIRMAN HOLT: That is where you are probably right now with all of your part-time?

MR. DABNEY: It would be where we would be — Walt Dabney, State Parks Director. Where we would be in ’08. About 1,500 plus positions, but that is seasonals and permanent.

CHAIRMAN HOLT: That is seasonal and regular positions?

MR. DABNEY: Yes.

CHAIRMAN HOLT: As soon as it started raining you haven’t needed any of those seasonals?

MR. DABNEY: They are shoveling the mud.

MR. COOK: Commissioner Parker, I think it is worth pointing out here too that when the Legislature appropriates the funding, and in this case as they did in previous years, they also designated where those FTEs are to go.

CHAIRMAN HOLT: Yes.

MR. COOK: It’s not a matter that we can take the 229 FTEs that are approved with the state park funding and use them in fisheries.

COMMISSIONER PARKER: Right.

MR. COOK: We use them exactly where they are appropriated to, and some of the riders, for example —

MS. FIELDS: Sixteen go to the auditors.

CHAIRMAN HOLT: To the audits.

MS. FIELDS: The park revenue unit.

MR. COOK: The auditors, requirements for auditors, those kinds of things we had to use some of them for that, but they are directly related to state parks.

CHAIRMAN HOLT: A lot of that is based on our request.

MR. COOK: Yes, absolutely.

MS. FIELDS: Absolutely.

CHAIRMAN HOLT: I mean, the auditors definitely was something we were specifically told to add. And speaking of that, where are we at and how are we doing on that?

MS. FIELDS: I know our Director of Internal Audit has jobs posted, and he is currently interviewing positions. We did transfer a position out of the Internal Affairs unit, I believe, into Internal Audit, and I know the jobs are posted and he is currently conducting interviews.

CHAIRMAN HOLT: And they allotted us dollars if I remember too.

MR. COOK: Yes.

MS. FIELDS: Yes sir.

CHAIRMAN HOLT: Okay.

COMMISSIONER BIVINS: One question. Not related, but on your FTEs that were transferred out of the Department to THC. Are those people employed now by the THC or do we necessarily know that?

MS. FIELDS: They haven’t transferred yet. They’ll transfer effective September 1st.

COMMISSIONER BIVINS: When they do —

MS. FIELDS: I may let Walt —

CHAIRMAN HOLT: We better speak to that because there is the issue of timing.

MS. FIELDS: Yes.

CHAIRMAN HOLT: Good point, Mark. There is an issue of timing on this transfer.

MR. DABNEY: Walt Dabney, State Parks Director. We won’t actually transfer the sites until January 1. The FTE and budget –

MR. COOK: Which is as per the Legislature.

MR. DABNEY: Correct. As of September 1, the budget and the FTEs go to THC and then we will have an agreement with them to continue operating those sites. Of that total FTE number, 65, I think — Mary how many of them?

MS. FIELDS: There are fifty-seven.

MR. DABNEY: Fifty-seven of them are current positions that we have. The other positions will be new positions at THC that we will not actually select and have work for us. They are taking those FTEs and they will fill them as they see appropriate. But the staff at the existing parks will transfer with those sites.

MR. COOK: We have already met, Commissioner Bivins. We have already met with the THC folks and, you know, basically anything that happens now or until January 1 at any of those sites we are going to coordinate with them very closely. If we were to have everybody quit, or walk away, or transfer to other parks, or something like that, we will work with them as to — in fact what we will do is we will basically let them select the people because they are the ones, that’s who they are going to be working for. So we are working with them very closely. If there are any major repairs that have to happen between now and then, we will coordinate with them very closely.

COMMISSIONER BIVINS: Thank you.

MS. FIELDS: Okay, let’s move ahead. Again, I kind of covered these quickly. On the divisions, just a comparable total and again most of those you can see they relate to exceptional items. I mean, there is an increase in Administrative Resources for that Park Revenue unit that we talked about, so most of those increases are explained due to the exceptional items.

CHAIRMAN HOLT: What was the jump in the Executive Office? Did you hire a bunch of new people?

MS. FIELDS: That’s where the internal auditors —

CHAIRMAN HOLT: I was going to ask where those 16 were going.

MS. FIELDS: Yes.

MR. COOK: When I leave they are going to have to hire 14 people to do my job.

CHAIRMAN HOLT: This is preparing for that?

MR. COOK: Right.

(laughter)

MS. FIELDS: While Internal Audit is required to report directly to the Commission, we do show it in the Executive Office for the agency’s budget.

CHAIRMAN HOLT: Well, certainly.

MR. COOK: Some of my guys are looking at that a little skeptical.

CHAIRMAN HOLT: Yea, I bet, add to the Executive Office.

MS. FIELDS: Next I am going to cover a few of our key riders and we’ve got several of them.

MR. COOK: I just want to point out, pardon me, under the Law Enforcement Division specifically there were 15, you saw it kind of going through there, but I wanted to make sure that you know. The Legislature provided an additional 15 FTEs and funding primarily, Pete, correct me if I am wrong, but related to border issues. When game wardens come out of our cadet school through the same process as all of the wardens do and function along that area just like our current wardens do.

MR. FLORES: Yes sir, Pete Flores, Director of Law Enforcement. These 15 extra positions are fully-funded GR, completely — trucks, equipment. Let’s not have the misunderstanding that we are in the immigration business or anything like that because we’re not. What this does is provides 15 more boots on the ground for conservation law enforcement and basically paying for what we have been providing for free for decades, and because it is a good deal for conservation, it’s a good deal for Texas security.

MR. COOK: We are very, very appreciative of that and that is one of the things I have looked for and have asked for, for a long time and it’s needed in the field conservation, it’s needed in our law enforcement area across the state, so that’s really good and I appreciate it.

CHAIRMAN HOLT: Yes. Congratulations on getting that. It is designated border though?

MR. FLORES: Designated border and there are few of those positions. When we were ongoing with our discussions with the Legislature, we will be in some of the ports and that is for our marine capabilities that basically Texas Parks and Wildlife is, as the Governor says, the Texas Navy. And so —

CHAIRMAN HOLT: The Texas Navy isn’t getting any money I don’t think. Okay.

(simultaneous discussion)

MR. FLORES: Thank you.

MS. FIELDS: I will move again here to the key riders, and again we do have several of them, and I’ll start off here by just a list of the state audit related riders. We received several directives here how the money could be spent and there are expectations that audit recommendations will be implemented, studies will be performed, and reports will be submitted to the oversight agencies. In several instances the Legislative Budget Board and the Governor’s Office have to approve our plans prior to the release of funds for a specific purpose. All of these five riders highlighted on this slide are pretty lengthy and they have several requirements to each of them so I am not going to attempt to cover all of the details in this discussion, but I do want to remind you again that the actual text of these riders is behind that Appropriations Tab and to just give you an idea of the types of requirements I am talking about, I thought I would just walk through one rider with you off of this slide and that would be Rider 29, regarding the implementation of State Auditor recommendations. That rider, if you want to flip to that, it’s Rider 29.

COMMISSIONER PARKER: Gotcha.

MS. FIELDS: In the back there.

COMMISSIONER PARKER: I wish you could have printed it in smaller type.

MS. FIELDS: I apologize, Commissioner Parker, but that is how we received it from the Legislature, but I will make note of that and we will see if we can’t print bigger next time.

COMMISSIONER PARKER: Would you folks please take that message back to them?

MS. FIELDS: Sir, just to highlight a few of the key points out of that rider, to give you a sense of the types of things we are talking about, there is a comprehensive implementation plan on SAO recommendations due to the LBB and the Governor’s Office of Budget and Planning, no later than August 31, 2007. Quarterly reports will be due 30 days after the end of each quarter and a biennial report will be due November 30, 2008, and that must be submitted to the Legislative Budget Board, the Governor’s Office and the State Auditor’s Office indicating the extent to which each recommendation has been implemented, significant costs, etc. An annual report is due to the State Auditor’s Office on the status on the implementation of recommendations. We must notify the Legislative Budget Board, the Governor’s Office and the State Auditor’s at least six months before closing or transferring any state park. It requires us to redirect resources to add those 16 auditor positions in Internal Audit that we have been talking about. The Comptroller is directed to withhold $8.9 million in 2008 and $8.4 million in 2009 unless the LBB and the Governor’s Office provides written notification that Texas Parks and Wildlife has adhered to the implementation plan required above. We must report progress in implementing recommendations to the LBB, Governor’s Office and the State Auditor no later than July 1, 2007, and July 1, 2008, before appropriations may be released. We did submit that July 1, 2007 report actually a couple of days early, I believe. So, that is just an example of the types of directives that we will be working with and it is going to be a very busy session or biennium for all of us as we address all of these requirements.

Moving to the next slide. It just highlights some other key riders for our agency that I wanted to just mention. Rider 19, there again, allows us to carry forward any of the unexpended balances if we sell the game warden academy. It directs us to use all proceeds on the new academy. Rider 20, I mentioned during the capital budget discussion, that exempts us from the capital provisions for gifts, grants, interlocal and federal funds that are specified for capital purposes, excluding land acquisition on that one. Rider 22 appropriates all balances and revenue from sales of TPWD lands to TPWD. Again, it specifies that academy proceeds be used for the Academy. The estimated $2.1 million of proceeds from other land sales has to be used to acquire adjacent tracks, in-holdings, or for improvements or repairs at state parks. Rider 23 requires us to implement recommendations that were provided to us last year from the Legislative Budget Board during their review and within that there were several bullets included in that rider. One of them was that we would redirect three FTEs and $107,000 from central administration to park support, and we will do that. The Administrative Resources FTE number that you see includes those three FTEs and right after the first of the fiscal year we will transfer those to state parks in accordance to this rider. Rider 24 is a new rider for us. It requires us to collect usage statistics such as the number of hours of operation for all of our major equipment — lawn mowers, tractors, all of that sort of thing, and report that to the LBB and the Governor’s Office no later than October 1st for the preceding fiscal year. So in ’08 we will be recording this usage and it will be due October 1st of fiscal year ’09. Let’s see, Rider 25.

COMMISSIONER BIVINS: Excuse me, on 24, is that usage during that year or are we going to be required to basically age all of the machinery?

MS. FIELDS: I believe it is for the year of operation.

COMMISSIONER BIVINS: The year?

MS. FIELDS: Yes.

COMMISSIONER BIVINS: So we don’t have to put down like the date of purchase and the entire history of the motor or equipment?

MS. FIELDS: Let’s see, I am looking at it right now.

MR. DABNEY: If I could real quickly, sir, Walt Dabney. We are going to have a system set up that shows when we bought something, how old it is, purchase price. We will keep the hours of operation or the mileage on everything. We’ve got most of that now but a lot of our equipment doesn’t have, for example, a hobs meter on it or something like that that we can keep that, but we will have a much more streamlined system.

COMMISSIONER BIVINS: Okay.

MR. COOK: Basically, the property inventory system that we have has when it was purchased, dates and that kind of thing. We have all of that information, what specific model it was and all of that, but like Walt says, it may have never had a meter on it.

COMMISSIONER BIVINS: So we are going to document the usage during that time?

MR. DABNEY: You wouldn’t have a big enough clock to keep —

CHAIRMAN HOLT: Mary, are you going to go to 25?

MS. FIELDS: Yes sir.

CHAIRMAN HOLT: Why don’t you go ahead. I assume we will — I know I will have a question or two.

MS. FIELDS: That’s fine. All I was going to say about that rider is that it really addresses the transfer of the Texas State Railroad. It discusses the federal funds and the $2 million of matching funds and all of that related to the railroad.

CHAIRMAN HOLT: That’s where I had my question because I can’t remember. Is the $10 million real or not? That’s what I can’t remember.

MR. DABNEY: Which $10 million?

CHAIRMAN HOLT: Is the intent of the Legislature — is the $10 million in federal transportation enhancement program funds administered by the Texas Department of Transportation made available for the Texas State Railroad?

MR. COOK: It is real dollars, real transportation dollars. The transportation folks will be the ones to decide if it is appropriated.

CHAIRMAN HOLT: Well I guess that is what I am asking.

MR. COOK: It’s not ours.

CHAIRMAN HOLT: No, it’s not our choice. How is that going to be presented though? That is what I am trying to understand. Either I knew and I had forgotten or I never knew. How was that going to be —

MR. COOK: Scott?

CHAIRMAN HOLT: Go ahead.

MR. COOK: Somebody.

CHAIRMAN HOLT: This is a major issue, obviously, relative to John Parker’s favorite property.

MR. BORUFF: Scott Boruff, Deputy Executive Director of Operations. I believe there is $2 million in General Revenue that has been appropriated by the Leg and then they directed us to seek the T-21 $10 million. What we have heard from TxDOT this year is that that program is no longer viable.

CHAIRMAN HOLT: That’s what I remember.

MR. BORUFF: However, I have heard from other sources that there has been a movement to try to get TxDOT to re-up that program. TxDOT does that in cooperation with the Federal Highway Administration. Those grants are pass throughs from the feds, so it is a collaborative decision between the Texas Department of Transportation and the Federal Highway Department as to whether or not that program will survive. So our intent is to make that information available to the new railroad authority that had been created to support them in everyway we can, to apply for that grant, and we’ll see if that grant comes through or not.

CHAIRMAN HOLT: What is the plan if that grant does not come through? I assume that contingency has been discussed. What then happens relative to what they want to do with the railroad?

MR. BORUFF: It may have been discussed, Chairman, but from our perspective the law is pretty clear, the railroad transfers as of September 1st. We are directed to do everything we can to support them, to get those funds. If those funds are not forthcoming it will be, in my opinion, their responsibility to seek funding elsewhere.

CHAIRMAN HOLT: Now we deliver that on September 1, but the railroad has to be delivered in tact. It has to be in good condition; running condition.

MR. BORUFF: Well it will be in as good as running condition as we have given the fact that it just washed out the tracks in the last two or three weeks. I believe that Mr. Parker was there, he may correct me, but I believe we are looking at probably a repair bill of approximately ¾ of a million dollars. So we are currently trying to figure out where we would find that funding. It is our intention to do the best we can to get it done. However, I don’t think there is any realistic expectation that repair will be effectuated before September 1st. Hopefully we can have a vendor on board. Hopefully, we can find someone that can do the repairs, but what I am hearing is that even if we had the money today, the repair would not be completed by September 1st.

CHAIRMAN HOLT: No, I understand the repair issue that it’s going to take whatever amount of time it’s going to take. We’ll end up funding it?

MR. BORUFF: That’s our intent.

CHAIRMAN HOLT: Okay.

MR. BORUFF: We are seeking funding sources right now. Mr. Parker has been engaged in trying to help us.

CHAIRMAN HOLT: I know he has.

MR. COOK: It’s a real issue that we have to watch closely.

CHAIRMAN HOLT: Yes.

MR. COOK: Because the transfer occurs September 1.

CHAIRMAN HOLT: Right.

MR. COOK: So we are going to take it with the approach that we are going to repair the railroad and put the track back in operating condition.

CHAIRMAN HOLT: Yes.

MR. COOK: The transfer will happen. We’ve got staff over there and we are doing everything we can to take care of them and keep them there so that they will have staff when that transfer occurs, that know how to operate that railroad. We are working very closely with the local communities over there. We have had this discussion just basically because we have worked with those folks for almost two years. We have had that discussion about this $10 million and we are going to try to help them.

CHAIRMAN HOLT: Anyway we can.

MR. COOK: Every way we can.

CHAIRMAN HOLT: I just wanted to make sure there was clarity on their part and our part on both the issues.

MR. COOK: Yep.

COMMISSIONER PARKER: Chairman?

CHAIRMAN HOLT: Yes, sir?

COMMISSIONER PARKER: This is a horrible event that happened to the Texas State Railroad. Right when we had everything lined up we thought all the stars were in line to affect this transfer and it would behoove us, in my opinion, to do everything possible to facilitate the steady repair that needs to be done to that track just for the simple benefit for those two communities that depend so much on that business coming through their communities. If there is anyway that this message could be sent downtown for any emergency funding that could help us out with this item, it would be appreciated by literally hundreds of thousands of people in East Texas. If that is at all possible to get that message sent downtown for any emergency funds that might be available by any of those executive staff downtown.

CHAIRMAN HOLT: If I can ask a question, John, have those counties been declared disaster areas by the Governor? He has declared a whole swath, but I can’t remember which counties.

MR. COOK: I don’t think so.

COMMISSIONER BIVINS: Is that a requirement for like FEMA or anything?

MR. COOK: It is from a federal realm, yes sir. And to address Mr. Parker’s issue, it is certainly — we have made, as well as the local communities have made everyone aware of the issues there and you know, we are going to keep working it and we appreciate everyone’s help on it. So we are on it and we will do all we can.

MR. BORUFF: For example, there is about $2 million remaining in an old T-21 grant for the railroad which we have basically frozen, given the discussions about the transfer. It is our intent to transfer that $2.1 million T-21 grant to the new authority. We have got the Infrastructure Division chasing down the potential for using part of that money, but it doesn’t look hopeful. Their initial response is that they are not going to let us use that money; that we would have to reapply which is a multi-month process, which is probably not feasible. So we are trying to chase everyone of those leads we can right now to find out what our options are.

CHAIRMAN HOLT: Okay.

COMMISSIONER BIVINS: Thank you.

CHAIRMAN HOLT: Thanks.

MS. FIELDS: Okay, and just moving on here, the last rider there again is relating to those local park grants and that basically lists the various grants for specific local parks and funding to be addressed there.

MR. COOK: It might be worth mentioning, Mary, and I will try not to drag this out too long, but on that list of those 17 or 16 specific parks, we are working — Tim Hogsett in our grants shop went to work with those communities and those sites immediately. The last I heard, he had about — Walt, you may be able to update me, but he had 12 or 13 of those sites pretty well lined out and headed towards getting their money. There was two or three of them though that they had some problems with because, again, the wording if you look there closely, the wording speaks to a match and so we are doing everything we can, again within the legal limits, and you know I think clearly the intent from everyone was that those grants would be made to those sites. I mean, start there. That’s where we start. But there is some wording there about match that is causing some problems, but Mr. Hogsett is working with those folks, our grants shop is working with those folks looking at every possibility and we will have a full report for you on that at the August commission meeting.

COMMISSIONER PARKER: Yea, every one of them there says matching funds.

MR. COOK: Yes they do.

COMMISSIONER PARKER: A through R.

MR. COOK: Yes they do.

MS. FIELDS: It looks like there’s 17 site specific and then there is one that is a little broader for nonprofit organizations and municipalities that operate —

MR. COOK: But it sounded like, when we talked to Hogsett two or three weeks ago, now, that he had 12 or 13 of them pretty well lined out and it was looking very positive.

CHAIRMAN HOLT: Good.

MR. COOK: But there were three or four of them that were creating some issues.

COMMISSIONER PARKER: So our responsibility in this is exactly one half of what is listed here?

CHAIRMAN HOLT: No.

MR. COOK: Not necessarily. The match percentage is not necessarily, is not specified in that.

MR. DABNEY: But the match percentage is 50 percent.

MS. FIELDS: Typically, yes.

MR. COOK: Typically, but not specified in this.

CHAIRMAN HOLT: Not the way this rider is written, No. We are just supposed to come up with a certain amount of money in matching funds, so it doesn’t give you the percentage.

MR. COOK: So we are working on it, like I said, we will have a full report for you.

COMMISSIONER PARKER: Well, I think the out is in the language there in the second line where it says Parks and Wildlife to allocate up to $16.85. That’s the out.

MR. COOK: The intent was clear.

COMMISSIONER PARKER: You add that up and that is it.

MR. COOK: But we would like to try to keep it, you know, legal.

CHAIRMAN HOLT: Yea, no kidding. I appreciate it.

MR. COOK: We are working on it.

CHAIRMAN HOLT: I know you are.

MR. COOK: And like I said, we will have a full report for you at the August meeting.

MS. FIELDS: While we are looking at the bill pattern there, I should mention that this is under the State Audit riders, but the proceeds from the sale of Eagle Mountain Lake, I do just want to mention there that there is a requirement, you know, that we cannot use those receipts unless the Legislative Budget Board has approved it as a proposed purchase which needs to be for a like purpose of real property and that we have carried out that implementation plan to address the State Audit recommendations.

COMMISSIONER BIVINS: Are those dollars geographically restricted? In as much as does the property have to be —

MR. COOK: Not as specific, Commissioner Bivins, there is not a specific geographic area designated as I recall. Not in this county, this county —

MS. FIELDS: Not in the rider.

MR. COOK: But the intent and the discussion was definitely in the 90 mile or hour and a half area there. So to answer your question, yes, but not really tight.

CHAIRMAN HOLT: But I think to keep good faith in the group, it needs to be in that area.

(simultaneous discussion)

MR. COOK: We have had some interest in those dollars.

CHAIRMAN HOLT: Yea.

COMMISSIONER BIVINS: That is why I asked the question, because that amount of money is going to raise —

CHAIRMAN HOLT: It’s going to get people’s attention.

COMMISSIONER MONTGOMERY: The intent was to serve that same population.

MR. COOK: That is correct.

MS. FIELDS: Okay, moving on now to the last set of riders. I want to mention to you gentlemen the Article IX riders and these are just a few key ones. We have discussed these throughout the presentation, but I wanted you to know what section out of Article IX related to each one of those. The data center consolidation actually appropriated $2.7 million for data center consolidation for fiscal year 2008 and that was moved to the capital budget line item for information technology. Then section 1970 lays out the $17 million for Prop 8 bonds for state park repairs. The next section there is the voter approved bonds, the $52.12 million and then finally the appropriation for House Bill 12 is detailed out in section 1981 of Article IX.

That concludes my presentation and I’d be happy to answer any other questions.

I guess the only other thing I should mention in my closing comments is this is a draft budget still. We will be bringing this to the Commission in August for approval in the August meeting. I am not anticipating any large changes to the numbers that you have seen, but there could be some slight changes between now and the end of August when I will be presenting this to you again for your approval. Are there any questions?

COMMISSIONER BIVINS: Will we be submitted a final draft prior to the August meeting?

MS. FIELDS: I normally present it at the August meeting. We’ll have a workshop that Wednesday. I’ll review the budget numbers with you and then we will formally approve them in the Thursday meeting. That is how we typically do that.

COMMISSIONER BIVINS: Thank you.

MS. FIELDS: Yes.

MR. COOK: Any questions, any detail you want to get into, don’t hesitate to call us, Mary, any of the division directors. You know, if you are wondering are we still going to do that, are we going to do more or less of this. You know, the things that we have been doing, you know, any questions you got like that, don’t hesitate.

CHAIRMAN HOLT: And Mary, we have two issues, of course we have existing commissioners, are we going to inform them through the regular process or are you going to send this out to them now?

MS. FIELDS: I am going to draft a memo to the commissioners that were not able to attend today.

CHAIRMAN HOLT: Right.

MS. FIELDS: And we will mail them one of these binders.

CHAIRMAN HOLT: Yes, please do.

MS. FIELDS: With a cover memo and I always tell them that if they’d like to give me a phone call that I would be happy to just walk them through the presentation.

CHAIRMAN HOLT: Yes, Mary, the sooner the better. Then I assume we will have new commissioners, potentially coming aboard even before the next meeting, so we will just have to get them in and get them up to speed as quickly as we can before the August meeting.

MS. FIELDS: I think we typically, when we get the new commissioners, we do a briefing and we can certainly cover this information at that time.

CHAIRMAN HOLT: Any questions. Yes, Montgomery, fire ahead.

COMMISSIONER MONTGOMERY: I asked Bob this question, but when it comes back, I would like to know as part of the budget whether we have adequately funded efforts to deal with some of the major habitat environmental issues we’ve got facing us. A lot of them are in Phil’s area, but with salvinia, hydrilla, the spread of the dead zone in the Gulf of Mexico, and the algae blooms, you know, when you step back and think about it coming down here, we have a hand full of things that are at varying degrees of being managed or not managed. We are not capable of really being part of the solution, but the Department ought to provide leadership for either regional efforts or state-wide efforts to deal with those. I just want to make sure those things are being taken care of and staffed properly to allow us the leadership position. It may be study money; it may be staffing allocations; I don’t know, but I think from a policy standpoint we ought to assume we are going to be the leader and put some resources behind the leadership effort.

COMMISSIONER PARKER: I really appreciate you bringing that up.

COMMISSIONER MONTGOMERY: Thank you.

COMMISSIONER PARKER: I really do.

MR. COOK: Well, I think –

COMMISSIONER PARKER: It’s a very important issue.

COMMISSIONER MONTGOMERY: Well long term —

MR. COOK: Sure. There is no, for instance lets take the aquatic vegetation issue because it is an issue. It’s a huge issue. It’s an issue that we could spend our entire budget on and not solve, but within Inland Fisheries, for example, there is staffing and the resources directed towards working with the river authorities, working with the lake people, the communities around the lakes, providing guidance, providing recommendations regarding whether to use carp, or mechanical controls, or chemical controls, or a combination of all of the above. Phil, do you want to add any to that please? But some of the issues you bring up, I think, there has been some take back and forth through the years and through the Legislature of putting a lot more resources for example towards, particularly something like Giant Salvinia. We haven’t allocated additional resources to it and it is going to take from somewhere, I believe, a significant effort.

COMMISSIONER MONTGOMERY: To clarify what I am asking, I think we should be the ones to write the plan and lead the effort. I realize we probably aren’t the ones to fund 100 percent of whatever it takes to correct the problem; if it’s possible to correct the problem, but we should be in a position being the leader, the thought leader and the policy leader, and we should put enough resources to do I think what you are describing. I think each of those should have its own strategic plan and goals.

MR. COOK: And I think, and I’ll let Phil fill in here, but there has been legislation, for example, that establishes that responsibility within the Department.

MR. DUROCHER: Yes, sir. For the record, I’m Phil Durocher, Director of Inland Fisheries. With regards to the aquatic vegetation issue, several sessions ago there was some legislation passed that required us to develop a state-wide aquatic vegetation management plan with guidelines of how these efforts were going to be attacked and we have done that. That is our primary role now as an agency, is to provide consultation and guidance in the development of these plans. We have a plan for Giant Salvinia on all the reservoirs that we have Giant Salvinia. We have plans for hydrilla. You know, we do it on a lake-by-lake basis because primarily that’s how you deal with these issues. I feel right now that we have a pretty good handle on what’s going on, you know, it’s not the sky is falling thing yet. We put a lot of effort, we have staff; we probably spend nearly a million dollars a year of our Inland Fisheries budget on this activity. We do provide man power. We do provide equipment. We do quite a bit of spraying ourselves, particularly on land that we own. For instance, all the treatment that takes place on Caddo Lake in the Wildlife Management Area on Caddo Lake is done by this agency. So, sure we would always like to have more and we are looking for that. We are looking to get the feds more involved in this activity to provide help for the controlling authorities and river authorities.

COMMISSIONER MONTGOMERY: I wasn’t trying to get into a review of each plan. I remember, I think it was Salvinia on the last chart we saw was still going like that. The question was how do we turn it? I am only asking if we budget enough people to adequately fund a staffing plan. I am not just picking on Inland Fisheries with the question, but there is the Coastal Fisheries issue with the dead zone, the algae blooms is something you have really been fighting hard. It’s just a strategic question.

MR. DUROCHER: We were required by the Legislature to designate some monies to spend on research on Golden Algae several sessions ago also and we have been doing that. Unfortunately, we have not found a magic bullet to deal with Golden Algae, but we have a lot of contracts with universities that are studying this, and I feel like we are making some progress. We have made a lot of progress on how to deal with the management of algae, particularly on our facilities; fish production facilities because they affect us as well as everyone else and we have made a lot of progress. We are not to the point yet where we know what the solution is going to be, but we are making progress in terms of basic biology and learning the basic research to learn more about this animal.

COMMISSIONER PARKER: Phil, do you think if you had the assets to expand and accelerate your work with these terrible things that affect the lakes, which is the plants themselves, do you think with that help that you could expand and accelerate your program?

MR. DUROCHER: If the question is whether or not —

COMMISSIONER PARKER: Maybe with research teams out of A&M and assorted other, you know, Texas A&M Corpus, Texas A&M, you know, all over the state.

MR. DUROCHER: If the question is whether or not I think we could exterminate or get rid of these vegetation, that’s not going to happen.

COMMISSIONER PARKER: Control it.

MR. DUROCHER: Yea. We are in the control business. You’ve got to understand, we’ve got this vegetation that appears on reservoirs, rivers, and streams all over the state. It’s not a problem everywhere. For some reason in some areas, for whatever reason, it just gets out of control. Those are the areas that we get control of. We are real pleased with the results we are seeing at Lake Conroe now. I mean, that’s a big issue for us. We have a real good handle on what is happening on Lake Austin. We are learning things and we are moving forward. Giant Salvinia, we don’t have any Giant Salvinia that is causing tremendous problems anywhere. We have it, it’s got us scared, but I think we are getting a pretty good handle on it.

COMMISSIONER PARKER: Okay.

MR. DUROCHER: Giant Salvinia is something you can eliminate with herbicides.

COMMISSIONER MONTGOMERY: If I may, then let me just leave with a question. In the August meeting with the final budget, I would appreciate hearing back as to whether any major environmental habitat issues, challenges, that we are not adequately funded, for us to provide leadership with how we deal with it. So, if you feel like we are adequately funded, we’re doing all we can do, and we have the right plan, I assume those plans will come before the Commission and we will review them from time-to-time. But the question is, do we have anything else out there?

MR. DUROCHER: If I understand your question, we need more funding for every one of them.

(simultaneous discussion)

CHAIRMAN HOLT: There’s no doubt about that, right?

COMMISSIONER MONTGOMERY: I knew that. I mean be careful with what I am saying which is to provide the strategic planning and leadership. I know we don’t have the funding to go cleanup the basic plants, for example, or algae booms, but we should be providing the leadership.

MR. COOK: Let me bring this to the discussion situation here and I think it is a very good question. But let me switch fields on you a little bit.

COMMISSIONER MONTGOMERY: Yea.

MR. COOK: Non-game fish and wildlife.

COMMISSIONER MONTGOMERY: Right.

CHAIRMAN HOLT: Non-game.

MR. COOK: Non-game

CHAIRMAN HOLT: Gotcha.

MR. COOK: I mean we talked about it at our last meeting; you passed some regulations, some very, very good initial, I’ll call them regulations on turtles and some of the herp species and such. But it is an area that funding, I mean nation-wide it’s not just Texas not just a Texas issue. Song birds, I mean clearly if you watch the Audubon dataset that is brought forward annually from the bird counts there, there are multiple species in decline. Herps, amphibians, song birds, etc. It is world-wide probably, but we know it is a nation-wide issue. Our funding streams, our revenue streams from hunting and fishing license sales, of course they are based on people who use those game species who fish for, who hunt for those game species and the whole Pittman Robertson federal funding based on taxes on fire arms and ammunition and fishing equipment are all directed toward those species that are hunted and fished. Now they allow us to utilize some of those resources on non-game, but to deal with what the buyer is looking for, you can only do so much of that. I think, as I have been in this a long time, as many of you have, that’s an area that’s kind of the canary in the coal mine. There are problems out there. There are issues out there. We don’t know what’s causing some of those to decline. We have no idea. To this day, nobody has any idea why Horned Lizards in Texas took the dramatic — I mean there are areas now that have no Horned Lizards when there used to be lots of Horned Lizards. They have no idea why; nobody does. Nobody. And yet there are areas, you go 50 to 75 miles this way or that way and there are areas that have populations of Horned Lizards that you wouldn’t believe. It’s just incredible. Lot’s of Horned Lizards.

So, from my perspective, you know, we don’t think that many of those issues are issues of habitat, fragmentation, land fragmentation, but also go back to the DDT days and look at the result. There are probably some other causes out there where — well I better not get into whether it might be or not, but some other — things that we are doing today that are causing — some people are causing some of those problems and we don’t have the answers to those. We continue to have mercury in our lakes in East Texas. Is it naturally occurring, or is it as a result of something we are doing as a nation? We don’t have a lot of those answers. None of the conservation organizations, state agencies, or federal agencies, we are all trying to work on a bit at a time. We coordinate very closely. For instance, our aquatic vegetation staff works very closely with the folks that are doing those same things throughout the nation. Our non-game and threatened and endangered group is working very closely. But there are issues like that that when you sit around with the fisheries biologists, wildlife biologists, or our game wardens; those are issues that they are talking about. We are not funded to do the work that we would like to do. We do some work, we cooperate very, very closely with universities, we coordinate with them, as Phil said, we sponsor and co-sponsor research studies with them, in conjunction with them, but that is an area in general across the nation and across the state that there is really not a funding stream, a funding source for.

COMMISSIONER MONTGOMERY: Well, I would like to challenge this. I mean, five years after a strategic plan we just came through a big legislative session where we have really changed our funding picture in a lot of our activities — to think and strategically step back. Whether the funding or not — what should we be doing if we had the money? What should we ask the money for? Or how would we fund it to deal with major environmental strategic issues that affect conservation? Because, you know, five years ago we set there without a plan to buy land and we came up with a little bit of money, we got a funding policy in place with mitigation. The fact that we had the goal, created a funding mechanism. The same thing may happen here if we set our sites in the right department. So that was the purpose of the question.

COMMISSIONER PARKER: Phil, I’m really glad you asked that question and I’m personally going to miss you.

COMMISSIONER MONTGOMERY: Well, I haven’t left yet.

COMMISSIONER PARKER: But the stars are coming into alignment and the time is too. But you know, you mentioned the dead zone out in the Gulf and, of course, Dr. McKinney isn’t here today, but that is an issue. The Gulf of Mexico has got to be a big issue that we put on our plate. We need to develop some strategies.

COMMISSIONER MONTGOMERY: Thank you for your kind words. I intend to play hard until the whistle blows. I have another question.

CHAIRMAN HOLT: He is trying to protect those catfish.

COMMISSIONER MONTGOMERY: I have another question. I am going to trade you train wreck for —

CHAIRMAN HOLT: Yea, right. You’re tired of catfish aren’t you?

COMMISSIONER MONTGOMERY: I didn’t bring it up. I have another question since we are having a discussion.

CHAIRMAN HOLT: We are in discussion mode.

COMMISSIONER MONTGOMERY: One of the big challenges since I have been on the Commission is how to get the urban population interested and get them outdoors. We have been working on a program to consolidate a series of branded activities on a website with nature tourism, building a community, and bite size products that can be accessed. I’ve talked to Scott about this, and he has really taken a lot of leadership. I just wanted to see, again, I would love a presentation to the Commission. What we have had is a subterranean pilot project that is out there lurking. If we can in August, but also I wanted to be sure that we adequately fund it. It’s been kind of coupled together by a working team. The paddle trails program is off and running, and even though it’s part-time, they’ve got a great little program going; although the floods probably set it back. We are working, as I understand it, on biking and particularly equestrian. Nature tourism is the other place where after the recreational sports, the non-consumptive uses, they are the population that has been nobly led by Shelly Plante, but she has got way more prospects than she has time to do, and I think those are things a little reallocation responsibility in staffing, and a little project management allocation, with not a lot of money could have a big impact on usage and what I keep calling the permanent endowment for conservation. Those areas where you can get a user group invested in using the resource so they become your constituency. So, I would appreciate in the briefing whether or not we have the staff to execute those projects in a timely manner, and in a way which fully exploits the opportunity we are seeing with the paddle trails; I think we will be there with biking; I think we will be there with equestrian; and I know by evidence, evidently, we are already there in nature tourism. So, again when the budget comes back I’d appreciate hearing about it. It’s a strategic matter for the Commission. Not a lot of dollars, but an important piece of strategy.

MR. COOK: Very good.

COMMISSIONER PARKER: Phil, don’t you think —

COMMISSIONER MONTGOMERY: That may, excuse me, that may also be our outreach programs and how they are oriented, so that we may need to allocate assignments among staff, leadership, programmatic assignments — I don’t know how we package those or where they go, but I would appreciate focus on that as another strategy.

COMMISSIONER PARKER: You know, Phil, I’m glad you brought that up. Because it triggered something.

COMMISSIONER MONTGOMERY: We didn’t rehearse this by the way.

COMMISSIONER PARKER: I am very glad you brought it up, especially what you said about our urbanites. You know it is an undisputable fact that states that have provided space for their constituents, their urban constituents, those spaces are used and used in a great way. You could walk right up the Mississippi tributary and you could see the states that have aggressively, in the past 20 years, out stripped Texas in offering more space for the urban people — Arkansas, Missouri, Kentucky, Tennessee, Minnesota, Iowa, Kansas — they are all on a crash course, but we don’t seem to be on that same course. We are still at lands and posted sites. Our public lands are not keeping up with our urban relation.

CHAIRMAN HOLT: I know. We are a private lands state. Private property state.

COMMISSIONER PARKER: But then it is someone’s responsibility, if not us, then who?

COMMISSIONER MONTGOMERY: What we have been doing with the brand of products is finding ways for TPFE to brand experience, but not require the weight on the resource. We don’t have to own the river, we have just got to come up with a way for a family to go out there half a day and know where to go, where to park, where the shuttle is, and match it with a state park. You can do the same thing with equestrian; same thing with biking. We don’t have to own all those resources. We just have to create the opportunity and brand it so that people know what they are getting. Because urban goers go to the Internet for information and find something they can do in a day and a half, a day, and get back home with their kids.

CHAIRMAN HOLT: All of this needs to tie in with working with the local communities, local parks –

COMMISSIONER MONTGOMERY: It’s a great revenue booster for the communities. We have people chomping at the bit to do paddle trails and other things, and they will do the same with biking and equestrian trails once we create the opportunity.

(simultaneous discussion)

COMMISSIONER PARKER: On the hunting side, you know, basically we know that our license sales numbers and dollars, except in spike years, are beginning to be flat, yet costs of supervising that activity is going up. We not only have to provide the kayaking, boating experience, but we have got to find a way to get more people out into the hunting.

COMMISSIONER MONTGOMERY: Here are a couple of quick thoughts to summarize it. There are 60,000 applications for public hunting on public lands permits at $100 bucks a pop.

COMMISSIONER PARKER: Yes sir.

COMMISSIONER MONTGOMERY: Giant dislocation in supply and demand. We have a program working in pilot to create public hunting opportunities on private land. Same concept, but we don’t have to own the land. The public creates the interface, brands it, and makes it available through this same website. It’s very complicated and I don’t know how much we can open up there, but we have a team under Linda Campbell working on that exact same issue. It’s part of what I hoped the Commission could be briefed on and it becomes part of a larger interface of community interest that is quickly accessible on the web. Make it fully accessible to experiences to hunting, fishing, and outdoors, it’s in the works.

COMMISSIONER PARKER: That’s terrific.

COMMISSIONER MONTGOMERY: You’re right. It’s a big gap and people have been priced out dramatically, particularly the last couple of years with land prices and lease rates.

COMMISSIONER PARKER: I’d like to hear more about —

COMMISSIONER MONTGOMERY: I’m not the expert, I’m just the cheerleader.

COMMISSIONER PARKER: Okay.

COMMISSIONER MONTGOMERY: Scott can answer that. He has some smart people working on the problem.

COMMISSIONER PARKER: Good.

CHAIRMAN HOLT: Let’s see how our agenda looks. I’d like to do it in August if we can, Scott, but we’ll see.

MR. BORUFF: I haven’t had a chance to talk to Ms. Bright yet about our legal parameters there.

CHAIRMAN HOLT: Yea, you may have an issue with that. August is the public —

MS. BRIGHT: The August agenda —

CHAIRMAN HOLT: Have you already posted it?

MS. BRIGHT: The August agenda is packed.

CHAIRMAN HOLT: Yes, I assumed since that is usually our busiest one.

MS. BRIGHT: You also have the annual public hearing that Wednesday afternoon, so it is really just y’alls call as to how we —

MR. BORUFF: We can still meet the deadline?

MS. BRIGHT: We can still meet the deadline to get it posted if you want to have it.

COMMISSIONER PARKER: I’d like to hear about it.

MS. BRIGHT: Okay.

COMMISSIONER MONTGOMERY: We could start the meeting an hour ahead at 8:00 and it could be a non-decision meeting if you want.

MR. BORUFF: Whatever you want, it’s your call.

MS. BRIGHT: Whatever y’all want. We can do it.

CHAIRMAN HOLT: Maybe let’s do it there because August is probably our busiest.

MR. BORUFF: If we did it early in the morning then we could also show you some of the screen and those sorts of things.

CHAIRMAN HOLT: Yea and there may be a place too where we should have some new Commissioners at that point and that would be a good place to get them briefed too. They are just going to be in shock if —

COMMISSIONER MONTGOMERY: What about 7:45 Thursday for one hour?

MS. BRIGHT: We could do any of those things.

COMMISSIONER MONTGOMERY: We could just make it a committee meeting without any decisions.

MS. BRIGHT: You know, we’ve got all of the implementation from the Legislative session, so far there is only — we’ve got 25 or 26 items on the Thursday agenda and almost all of them are action items.

CHAIRMAN HOLT: Yes.

MS. BRIGHT: So we could do an early meeting if you want.

CHAIRMAN HOLT: We may have all new Commissioners or we could have up to four new Commissioners; certainly probably three.

MS. BRIGHT: Our hope is to get them briefed up before that meeting.

CHAIRMAN HOLT: Yea, but it’s holiday times between now and then. That’s what is holding up a couple of them already.

MS. BRIGHT: Okay.

CHAIRMAN HOLT: Just trying to get people off of vacation.

MR. COOK: I think what I am hearing is, is let’s start early in Committee.

COMMISSIONER MONTGOMERY: Let’s just do it in here.

COMMISSIONER HOLT: Yes.

MS. BRIGHT: Especially if we are going to have a quorum, we are going to have to post it and do it in here.

MR. COOK: Right. We can do it in here, no problem.

MS. BRIGHT: It has to be a public meeting which means — I don’t think —

MR. COOK: We will do it right here.

CHAIRMAN HOLT: Fair enough. Let’s set it up and see what the interest is and hopefully we can get the other Commissioners in.

MR. COOK: Okay.

COMMISSIONER MONTGOMERY: Good briefing, Mary. Thank you.

CHAIRMAN HOLT: Mary, thank you very much. It actually moved along very quickly. I appreciate that.

MS. FIELDS: I appreciate y’alls attention.

COMMISSIONER MONTGOMERY: Now, what question were you worried we would ask?

CHAIRMAN HOLT: Maybe that’s the real question.

COMMISSIONER MONTGOMERY: What were you worried about?

MS. FIELDS: I don’t know. I have a binder full of numbers, you know, what can I say? I never know where you guys may head off to.

COMMISSIONER MONTGOMERY: We are very predictable.

CHAIRMAN HOLT: Well, please get the information out to the other Commissioners that were unable to make today. Then as any new ones come aboard we will figure out how to get them in front of you.

MS. FIELDS: I believe we can get something packaged up tomorrow and mail it early next week.

CHAIRMAN HOLT: Good. It says right here “is there any other discussion by the Commission”?

COMMISSIONER MONTGOMERY: I would like to compliment our chairman on the first successful meeting on the Holt administration.

CHAIRMAN HOLT: Thank Mary; she moved it along quickly. Thanks, Mary.

COMMISSIONER MONTGOMERY: This was not a train wreck.

CHAIRMAN HOLT: No. No. No. I have already had my train wreck. I only plan on having one. That’s one thing about it, you get it out of the way early.

COMMISSIONER MONTGOMERY: Exactly. It’s only up from here.

CHAIRMAN HOLT: Exactly. Any other discussion for anybody? Okay. Thank you for everybody’s presentation. Any other business to be brought before this Committee, Mr. Cook?

MR. COOK: No sir.

CHAIRMAN HOLT: Okay, I like this, we are adjourned. Thank you everybody. (The meeting adjourned at 2:59 p.m.)


Transcribed by: Cidney Sunvison, Program Specialist, Administrative Resources, TPWD


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