Texas Parks and Wildlife Commission
Finance Committee

May 21, 2008

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

BE IT REMEMBERED, that heretofore on the 21st day of May 2008, there came to be heard matters under the regulatory authority of the Texas Parks and Wildlife Commission in the Commission Hearing Room of the Texas Parks and Wildlife Department Headquarters Complex, to wit:

APPEARANCES:

THE TEXAS PARKS AND WILDLIFE COMMISSION:

THE TEXAS PARKS AND WILDLIFE DEPARTMENT:

P R O C E E D I N G S

COMMISSIONER HOLT: We did pretty well on ole Regs, didn't we? Okay. We will move into the Finance Committee. Pass the gavel to Chairman Brown.

COMMISSIONER BROWN: The first order of business is the approval of the previous committee meeting minutes, which have already been distributed. Is there a motion for approval?

COMMISSIONER MARTIN: So move.

COMMISSIONER BROWN: Commissioner Martin. Any second?

COMMISSIONER FRIEDKIN: Second.

COMMISSIONER BROWN: Mr. Friedkin, second. All those in favor?

(A chorus of ayes.)

COMMISSIONER BROWN: Opposed?

(No response.)

COMMISSIONER BROWN: Motion carries. All right, Committee Item Number 1 is the Land and Water Plan Update. Mr. Smith?

MR. SMITH: Right. Thank you, Chairman. Just a couple of things I want to visit with you all about. You know, one, I want to remind everybody that it's our turn to go through the Sunset Review process; this will be a very important process for the agency as a whole.

The Sunset Commission this year is being chaired by Representative Carl Isett, from Lubbock, and the Vice Chair is Senator Glenn Hegar, from Katy. We have our entrance level meeting with Sunset Commission staff next week, at which point they'll kind of be laying out their timeline, expectations, site visits, as well as setting up dates to meet with all of our division directors and likely to come and speak with all of you. So just a heads-up that that process is starting and it will be a busy time for us this summer as we work with the Sunset team and all of our partners and constituent groups out there across the Texas landscape.

I want to let everybody know that about a month ago, Chairman Brown and I and staff had an opportunity to visit with the Senate Finance Committee; they asked us to come speak to the committee about the progress on our management and expenditure of funds for state parks.

Ms. Tina Beck from Legislative Budget Board, who is here today with us ‑‑ hi, Tina ‑‑ preceded us and gave the committee a really good baseline of the appropriations that had gone to state parks.

We entertained a number of questions from the committee just regarding our management of the capital projects, our plans for getting things expended in a timely and efficient manner, and also we had some questions as well about some game warden-related things on Homeland Security.

But overall, I thought it was a very, very good discussion, I think we got pretty good feedback afterwards, and Chairman, I appreciate your joining us for that as well.

I want to talk a little bit about some of the budget riders that came with our appropriations in this biennium. A number of them had fairly significant fiscal implications for the agency, and so I want to talk about three of them.

Rider 27 in the appropriations bill allows us, with approval from the Comptroller, to be able to utilize additional revenue that we generate above and beyond our biennial revenue estimate. For this fiscal year, that estimate that we have come up with for state parks is about $5.7 million above and beyond what we originally estimated; about $4.3 million of that is additional fees that our state parks team will likely generate through access to state parks. And then we're expecting to generate about $1.6 million in additional fees through our Fund 9 programs, and the Comptroller has certified those funds; we will look now to expend those this fiscal year, and we'll be working with the oversight agencies including the Legislative Budget Board to let them know how we will spend those funds.

Rider 29 was an additional budget rider that had $8.8 million in appropriations for our state parks. It was contingent upon us making satisfactory progress with the State Auditor's Office on the implementations of their recommendations. The State Auditor's Office had approved $4.4 million in being expended in the fall with the Legislative Budget Board. We've received approval from the LBB and the State Auditor's Office last month that we'd be able to access the remaining $4.4 million, so we feel good about that.

And then last but not least, very, very pleased with respect to Rider 30, which was another rider which addressed getting approval from the Legislative Budget Board to be able to sell the $44 million in bond funds to help pay for our major improvements at state parks. We received that approval yesterday from the Legislative Budget Board, and so we will now work with the Texas Public Finance Authority and the Bond Review Board to sell those bonds. We expect those to be sold in the process sometime in August, I believe, and then we'll be able to utilize those to start investing in the major repairs in the state parks, if the Legislature helps support our efforts.

We are still waiting on approval for the funds for Battleship Texas. That's contingent though upon a engineering feasibility study that we expect to complete sometime in the end of June. Scott, I think that's right, and so at that time ‑‑ end of this month? Okay. End of May, and so we'll look for hopefully approval on that front sometime in June, so anyway, all is well on that front, and I appreciate your work with the Legislative Budget Board to help us with all of these budget matters. So thank you, Tina, and your team over there.

Last but not least, I think that the Chairman wanted to have a discussion about an item that we had talked very, very, briefly about at the last Commission meeting, and that is a proposal that we are interested in bringing forward about potentially moving perhaps one Commission meeting a year somewhere out in the state, to be able to interact more with different stakeholders around the state, give folks a chance to come to the Commission meetings and visit with you all in other locations besides Austin.

We had tentatively proposed that maybe we consider moving the August Commission meeting to Houston; that is obviously the meeting in which we get or open it up for public input; and so again, the goal is, how do we maximize that, how do we give opportunities for folks around the state to do that. And so I know that we wanted to have a discussion about kind of the pros and cons of that, and so let me just open it up there, to get some feedback from you all on that front.

COMMISSIONER HOLT: Yes, and let me speak to it, and I may have gotten a little ahead of myself but it was something I've been considering for a couple years and I probably should have thrown out to everybody first.

But, you know, obviously our constituency isn't all in Austin, Texas. And particularly as I went through the legislative process last Legislature, in our major metropolitan areas, Houston, Dallas, and not to say we wouldn't eventually ‑‑ in my opinion, should go other places. But the urban legislator definitely ‑‑ how to put this right: Once the Legislative period starts which will be January '09, the pressure on them and the focus on them is obviously from their own constituents within that urban area. And there's not a lot of understanding or even connection to Texas Parks and Wildlife, for obvious reasons.

And so one of my ideas was that we take a meeting to them, more or less, and their constituents, and so Dan Friedkin and I had talked about it, and we felt Houston was a good place to start; it could have been Dallas, it could have been San Antonio for that matter, or elsewhere.

But definitely go ‑‑ where we as a Commission show those legislators, show their constituents, that, you know, we do believe in reaching out to their urban population. Because we talk about it a lot; we talk about it here in Austin. But we're not sitting in front of those constituents in their own cities. And so I felt strongly it's important to have them ‑‑ I think one way to do that, to show a commitment is to actually show up in their city and have a series of meetings, and do the normal two-day meeting just like we do here.

So that's where the thought-process came from, and I'm certainly willing to take input on it, but I do feel strongly about it, so I do want to put that out there.

COMMISSIONER PARKER: Excellent idea.

(Simultaneous discussion.)

COMMISSIONER BIVINS: Have we put a pencil to what this might cost?

MR. SMITH: That's a good question, Commissioner. We have not formally quantified that; I mean, I think we ‑‑ and we can and will do that. I mean, we certainly recognize we're going to have additional travel costs and room setup costs, and some expense there.

Our, just sort of back of the envelope perspective on that was that the benefits by being in those communities and more outwardly facing would more than compensate for those, but we can quantify that and make sure that the Commission has a realistic understanding of what those additional costs would be. We'll get that to you.

COMMISSIONER HOLT: But I think some of it can be offset, for example I think the Houston Zoo wants to help us, and so you know, there's way we can work with the local groups that we work with on an ongoing basis, to help offset some of those costs.

COMMISSIONER BIVINS: Then are we potentially setting a precedent that we're going to be committing to do this indefinitely?

COMMISSIONER HOLT: I hope so. From my point of view, yes.

COMMISSIONER BIVINS: And then if so, are we risking getting negative feedback from, say, El Paso or ‑‑ I mean, just pick a city that we haven't been to, and say we go to the major metropolitan areas first, I'm just trying to anticipate any sort of ‑‑

COMMISSIONER HOLT: Unintended consequences.

COMMISSIONER BIVINS: — exactly. And ‑‑

COMMISSIONER HOLT: No, I agree. Yes, we may get some of that kind of pressure, but I think, you know, you explain to any reasonable individual, what you're trying to do is, do this at ‑‑ to outreach to the constituency, that doesn't just live in Austin, Texas.

I mean, our public meetings are great and I love them, but the fact is, primarily we get people either from Austin or we get the young sportswriters or whatever. This will give the public an opportunity to be able to, in their own hometown, be able at least maybe once a year ‑‑ and I'm not necessarily talking about doing any more than that, to have a chance.

COMMISSIONER BIVINS: Right.

COMMISSIONER HOLT: And then you figure out a rotation, or you don't necessarily figure a rotation, you just, you know, maybe if there's a major issue in one of the urban areas, or whatever, you go to your constituency.

COMMISSIONER BIVINS: Right.

COMMISSIONER HOLT: And that was my thought-process.

COMMISSIONER BROWN: What would you evaluate when it came to, or what would we evaluate if you make ‑‑ to determine where it might be ‑‑

COMMISSIONER HOLT: That certainly may make sense, absolutely. Yes.

COMMISSIONER FRIEDKIN: One thing, you know, I hadn't considered the regulatory cycle impact of, or benefit I guess, of, in terms of when we have the meeting. But one question I had was, you know, should we make it a different meeting in our year, in our cycle, than the big meeting, the meeting where everyone ‑‑

COMMISSIONER HOLT: The public meeting in August ‑‑

COMMISSIONER FRIEDKIN: The public meeting, yes.

COMMISSIONER BIVINS: So that everyone has equal opportunity in that public meeting ‑‑

COMMISSIONER FRIEDKIN: And then possibly pick a different meeting to have an outreach ‑‑

COMMISSIONER HOLT: Yes, that may make sense in the next round; I was just looking at the timing thing, because of this year.

COMMISSIONER FRIEDKIN: And we have a legislative ‑‑

(Simultaneous discussion.)

COMMISSIONER HOLT: Yes, and we have a legislative agenda coming up, so we're ‑‑ I don't think the Commission is locked into that it has to be in August; I'm certainly not saying that.

COMMISSIONER FRIEDKIN: Right.

COMMISSIONER HOLT: You know, I just kind of wanted to get it started.

COMMISSIONER PARKER: Mr. Chairman?

COMMISSIONER HOLT: Yes, sir.

COMMISSIONER PARKER: I think this is a terrific idea.

COMMISSIONER HOLT: Good.

COMMISSIONER PARKER: So to overcome what Commissioner Bivins brought up about, when are we going to El Paso, you know, when are you coming to Lubbock ‑‑

(Simultaneous discussion.)

COMMISSIONER HOLT: Or Amarillo; he wants us to go to Amarillo ‑‑

(Simultaneous discussion.)

COMMISSIONER PARKER: — speak to that, you know. You and Carter sit down and you make a list.

COMMISSIONER HOLT: Uh-huh.

COMMISSIONER PARKER: The first one's going to be here, and the 18th is going to be there.

COMMISSIONER HOLT: Well, but I want to be, yes, but I don't want to ‑‑

(Simultaneous discussion.)

COMMISSIONER PARKER: — to string it out, but I think once you set a precedent, I think usually commissions will see the advantage of going to the people, and it will become a precedent.

COMMISSIONER HOLT: All right. Well, and I hope so. I don't think it would be, at least in my case, it's not going to be Carter because obviously I won't be around that long to lock in the Commission five years from now ‑‑

COMMISSIONER PARKER: Well, I ‑‑

COMMISSIONER HOLT: — I understand, I think I understand what your point is. I think maybe when we make a commitment as a Commission, if we do this, let's do this one time, see if it works and we think it's appropriate and worthwhile. Let's see what kind of feedback we get on it, and then maybe as a commission we just make a commitment that we're willing to do this once a year. We don't lock into any one place, and maybe rotate if there's issues going on in some part of the state, or whatever. So ‑‑

(Simultaneous discussion.)

COMMISSIONER BIVINS: Just in thinking about this, I had one other idea, which I'll just share for the purpose of sharing only. But we could have a different category of meeting in these other cities; they would not be one of our five scheduled meetings; they would be a separate meeting that would be solely for the purpose of a public forum. And those meetings may not necessarily have a quorum of Commissioners at them.

If we did not have to have a quorum, that would simplify the meeting process considerably; but it would still show our intent to reach out to the public, and still allow the public to communicate with us. It just might not necessarily be in front of all my Commissioners.

COMMISSIONER HOLT: Right. Oh, no, those are all legitimate ways to approach it, and I certainly don't doubt that. But I've just watched UT Board of Regents and others, and they're willing to move around. And I think, you know, as Texas Parks and Wildlife we do business in all counties, all cities, I mean, we're truly a statewide agency; it's a ‑‑ seems to me there is some opportunity.

COMMISSIONER BIVINS: Just the money, I mean, we're doing everything in our power to try to improve our parks and then try to improve our infrastructure within what we're governing. And I don't want to use dollars that could go to that, to, you know, create a new financial burden. But it may not be that expensive ‑‑

COMMISSIONER HOLT: No, it won't be that expensive.

MR. SMITH: I don't think it will; I ‑‑

COMMISSIONER HOLT: I don't see it being ‑‑ I don't know. I'm a little nervous about throwing out a number, but my guess is you could do it for about less than $5,000. You got to think we can get a lot of this sponsored; in other words, I don't think we'll end up having to pay a room fee and those things.

Yes, some people are going to have hotel rooms and those kind of things, but I don't think we're talking about big dollars here, personally.

MR. SMITH: I think that's right. I think it's going to be the travel and other incidental costs. For instance, in August, the Houston Zoo has offered up their meeting rooms free of charge. I mean, they're thrilled and ecstatic to have the Department there. They've been a great conservation partner.

And so I think we look for those kind of opportunities where we could leverage a partnership, and certainly try to get that space donated to us to help mitigate any increase in cost. But ‑‑

COMMISSIONER PARKER: Can we stay at Commissioner Friedkin's house ‑‑

COMMISSIONER HOLT: — yes, he's ‑‑ he offered his house. He's right over there. And on the other side, if we're going to try to do it maybe in the evening, and maybe we get some of our ‑‑

(Simultaneous discussion.)

COMMISSIONER HOLT: — but anyway, get some friends to help offset that cost, do some evening outreach or something. So we're already digging into all that. No, I understand your point. I think it's a legitimate point, because our job is to try to lessen the cost as much as possible if we're willing to go and try this.

COMMISSIONER HOLT: Well, I appreciate it. I appreciate everybody, and I think, you know, everybody can get to Houston probably as easily as they can get to Austin, I'm talking about the Commission anyway. So, but I think it would be a good outreach, and it kind of reaches out ‑‑ obviously we're not in Lufkin, but it reaches out to East Texas too. And so we go to that area, and you know, that's my thought-process anyway, is, you know, how do we do a better job of reaching out to the regions that, you know, obviously have a great interest, or certain groups have great interest in what we're doing, instead of always asking everybody to come to Austin.

COMMISSIONER BROWN: I can go to Houston.

COMMISSIONER HOLT: You can get to Houston ‑‑

(Simultaneous discussion.)

MR. SMITH: Okay. So I think we've got the feedback, then, that Chairman, you want us to go ahead and proceed with the August meeting then in Houston ‑‑

COMMISSIONER HOLT: Please.

MR. SMITH: — and we'll give that a try and see how that goes, and we will quantify those costs that we'll incur with that, and make sure we're able to talk about those, and then we'll evaluate it accordingly just to see if it's the success we hope it to be. So, okay.

COMMISSIONER HOLT: Yes, and if anything dramatic comes up, obviously, we'll back off this. We haven't publicly announced this or anything, and obviously it's a now in the public record that we're looking into it, and I'm certainly willing to talk about that openly; but, you know, let's now dig into all the detail. I appreciate everybody's input. And if something pops up that just makes it unfeasible or too expensive, whatever, I'll be glad to back off.

COMMISSIONER BIVINS: Just don't want to commit us to something we can't afford ‑‑

COMMISSIONER HOLT: Right, no absolutely, Mark. Good point.

MR. SMITH: Okay, Mr. Chairman, I'm done. Thank you. Appreciate the feedback from everybody. Thank you all.

COMMISSIONER BROWN: Committee Item Number 2 is the Financial Overview of the Department. Gene McCarty and, I believe, Julie Horsley.

MR. McCARTY: Mr. Chairman, Commissioners. For the record my name is Gene McCarty, I'm Deputy of the Executive Director for Administration. Chief Financial Officer Mary Fields couldn't be with us this morning because of personal illness, and so I make a poor substitute, but with your patience we'll make it through this and hopefully we'll be able to get to the information you need for this Commission meeting's financial overview.

Within our financial overview this morning we're going to cover three main areas, first being just a review of the revenue and budget status for FY '08 as it stands as of March 31st. Julie Horsley with me here today will give you a, kind of an update on our FY '09 to FY '13 strategic plan.

And then I'll follow up with giving you kind of an update on the FY '10-FY '11 Legislative Appropriation Request, or the LAR. To start with, we'll do the standard revenue and budget status review, and if you ‑‑ we'll start with state park receipts, and you'll notice that state park receipts as of March 31st were up $17.8 million, which is about 10.2 percent for $1.65 million over this same time in 2007. The principal areas of increase were in park entrance fees and facility use fees.

Boat registration and titling revenue was down about 0.7 percent; it represents about $8.47 million total collection to date; the ‑‑ we were down about $61,000 over prior year; and this is principally in the registration category, but registration category it's almost down 5 percent over prior year. This probably is a reflection of the current situation in the economy and fuel costs, and we will continue to watch this closely as we get into the summer.

License sales revenue, this is our hunting and fishing license sales revenue, at the end of March was up by 2.4 percent, representing about $75.8 million, or up $1.8 million total. This is ‑‑ we were up in almost all categories except for resident hunting, which was only very slightly down.

Total license sales is up, it ‑‑ up 5.2 percent representing a total of 2.35 million licenses sold. As I said, the only down area is in total hunting at about .6 percent; that represents resident hunting down at 1.5 percent. Total fishing was up 8.4 percent.

COMMISSIONER HOLT: But boat registration is off.

MR. McCARTY: Boat registration is off, but ‑‑

COMMISSIONER HOLT: It's interesting.

MR. McCARTY: — fishing is up.

COMMISSIONER HOLT: Yes (laughs). No, I mean, I understand you can fish ‑‑

(Simultaneous discussion.)

COMMISSIONER HOLT: I mean, you're down, and this is actually up quite a bit.

MR. McCARTY: There's a tremendous amount of fishing that's not directly related to boating; or there's a lot, there's a tremendous amount of boating that's not directly related ‑‑

COMMISSIONER HOLT: Well, at this point ‑‑

(Simultaneous discussion.)

MR. McCARTY: A lot of just pleasure boating that goes on, burning a lot of fuel that they're probably not going to want to burn right now. And combo sales were up about 3 percent. We believe, if you look at combo sales being up at 3 percent, we don't really think that hunting itself is down; I think we're seeing a shift in the market as we continue to have increased number of stamps and so forth; we're shifting people out, from buying just a hunting license to buying a Combo. And that's a good thing, in the overall revenue strategy.

If you look at revenue collected to date, with 58 percent of the year elapsed we've collected 75 percent of our total revenue. Or 75 percent of our total Fund 9 revenue, 58 percent of our total Fund 64 revenue, 63 percent of our local park revenue and 116 percent of other. Principally the "other" is driven by the artificial reef program; we've had a significant increase in the number of artificial reef donations over projections. They're running at about 218 percent of projections, so that's a good thing.

COMMISSIONER HOLT: Any particular ‑‑

MR. McCARTY: You really can't schedule when they're going to decommission one of those offshore rigs, so we just don't know in advance, so, you know, we make a projection but we can either run well over or well under.

COMMISSIONER HOLT: Oh, okay.

MR. McCARTY: Just because we don't really set the schedule for the de-activation of those offshore rigs.

Looking at a summary of our budget adjustments ‑‑ oh, since last January, when we last met we've made an increase in budget of $7.1 million. That's mostly associated with two categories, one being grants, which is a pass-through, mostly Section 6, pass-through grants to local communities for acquisition of endangered species habitat; and the other is in capital construction, and most of this is donation for capital construction of two specific construction initiatives that we have going on, one being the game warden academy and the other one being Kerr Wildlife Management Area.

When you look at budget versus expenditure, with 42 percent of the year elapsed we have 58 percent of our budget remaining. If you look at salaries and operating we're pretty mostly right on line, 42 percent of the year remaining, 46 percent of our salaries remaining, 44 percent of our operating. Our two principal anomalies are in grants, and this is mostly driven by local park grants. And if you remember, we do our local park grants in two ‑‑ our awards two times during the year, one in January and one in August. So we don't necessarily track with the calendar year, there. And ‑‑ in capital, and as we discussed the capital issue earlier in terms of the Rider 30 issue.

At this time I will turn it over to Julie Horsley to kind of give you an update on our current strategic planning initiatives.

MS. HORSLEY: For the record, my name is Julie Horsley, I'm the Director of Planning and Analysis in Administrative Resources Division.

At the last Commission we reviewed the strategic planning process, and highlights of our proposed structure changes, and since that time there have been a number of new developments; we just wanted to provide you an update today.

Regarding our strategic planning and budget structure, we submitted our proposed structure and measure changes to the LBB and the Governor's office on April 16th. We also met with both the LBB and the Governor's office to discuss our request.

At both meetings there was quite a bit of discussion regarding our proposed consolidation of the Inland Fisheries Management and Coastal Fisheries Management strategies. Unfortunately, neither office seemed very receptive to that proposal.

They did however seem okay with most of the other changes that we were asking for, which primarily affected performance measures and definitions.

COMMISSIONER HOLT: Can I go ahead and interrupt? Did they give you any particular issues on the Inland and Coastals?

MS. HORSLEY: I ‑‑ primarily it was an issue of reduced transparency. I think the consolidation wouldn't allow them to see expenditures at the lower level of detail between Coastal Fisheries and Inland.

COMMISSIONER PARKER: Such as?

MR. McCARTY: We specifically cannot see if dollars are being spent in Coastal or Inland when they're all rolled into a single strategy.

COMMISSIONER HOLT: Yes, so you have a constituent issue: How do I tell my inland water constituency, for example ‑‑

(Simultaneous discussion.)

COMMISSIONER HOLT: — that X dollars have been spent versus Coastal.

MR. McCARTY: Right, because when you're looking at it at that level, at the legislative level, when you look at it from an agency budget level you can see it, but you cannot see it at a legislative strategy level.

COMMISSIONER HOLT: Right.

MS. HORSLEY: We hope to get final approval of our structure changes over the next couple of weeks so we can incorporate any changes into our final strategic plan document.

In addition to negotiating the budget structure and measure changes, we've also been working on developing a draft of the strategic plan. We solicited and compiled input from each division, and met with the executive team and division directors to review this input, and identified key areas to highlight in the plan.

For example, some of the funding needs that are identified for inclusion include funding for staff compensation, information technology needs, capital repair and construction, land acquisition, and facility development, maintenance and minor repair, and then finally operational funding sufficient to keep pace with cost increases that have occurred.

The needs that are identified as part of that strategic plan will then form the basis for submission of our legislative appropriations request.

We hope to have a draft available for circulation internally by the end of May, actually next week, and once the edits resulting from this initial review are incorporated, we'll plan to have a draft ‑‑ copies ready for Commission review sometime in mid-June.

And the final plan is due to the LBB and the Governor's office by July 11th. That concludes my comments.

MR. McCARTY: And based on some of the discussions that we hear here today, I just got through talking with Julie that we'll probably talk about some public hunting opportunity also ‑‑

COMMISSIONER HOLT: Yes, please.

MR. McCARTY: — we'll probably need to be including that.

(Laughter.)

MR. McCARTY: Finally, just to give you an update on the Legislative Appropriations Request, or the LAR, where we are right now, if you remember at the last ‑‑ at the January Commission meeting, we talked about the fact that the base of our legislative appropriation request is basically a mean of our total expenditures for FY '09 and our budgeted amount for FY ‑‑ I mean, our total expenditure for FY '08 and our budgeted amount for FY '09.

So our base doesn't really get established until we finish our budget preparation process, for FY '09. We're currently in the budget preparation process right now, and so that's kind of the next step to go through in the process.

We received our LAR instructions in early May, and those instructions included a couple of things that were different than what we might have expected. We were kind of expecting to see the base be established as a percentage, say 95 percent of the prior year base, but it actually was established at 100 percent.

So we're working with 100 percent LAR submission. With the exception that they asked for us to prepare a supplemental schedule that would identify where we would cut, up to 10 percent of our budget, so ‑‑

COMMISSIONER HOLT: Specifically, though.

MR. McCARTY: Specifically.

COMMISSIONER HOLT: In certain areas; not 10 percent overall.

MR. McCARTY: It's 10 percent overall.

COMMISSIONER HOLT: Oh, so ‑‑

MR. McCARTY: And we can apply it to whatever areas that we see fit, but we would have to take a 10 percent cut.

COMMISSIONER HOLT: Versus in the past we've been instructed to just, across the board, 110 percent.

MR. McCARTY: Well, no it was the same way. It's kind of the same way, it's just this is a supplemental schedule as opposed to actually being the base, which is a good thing; it's a really better way to do it.

That 10 percent cut would represent about $7.5 million annually in GR funds, and about $16 million annually in GRD funds; that's Dedicated General Revenue, that's Fund 9, Fund 64 and a handful of others.

So we'll have to be working diligently to identify where we would strategically make those cuts to identify that level of funding in the agency, and that will become part of the ‑‑ a supplemental schedule within the LAR.

COMMISSIONER BROWN: Excuse me, one sort of question ‑‑ understanding on our baseline may not exceed the 2008 ‑‑

MR. McCARTY: Well, it's ‑‑ your baseline would be established by what you expended in FY '08, and what you budgeted in FY '09; it would be an average of those two.

COMMISSIONER BROWN: Okay.

MR. McCARTY: That becomes your FY '10, FY '11 base budget.

COMMISSIONER BROWN: And what if our ‑‑ you know, what if we needed to exceed that by 10 percent or whatever it was?

MR. McCARTY: It becomes an exceptional item.

COMMISSIONER BROWN: So then it becomes ‑‑

MR. McCARTY: An exceptional item, and as Julie indicated, we've identified a number of exceptional items that we would like to explore, such as staff compensation ‑‑

COMMISSIONER BROWN: Right.

MR. McCARTY: — you'll hear some more from Al Bingham about our, some of the surveys, organizational excellence, the data from that, which indicates that we do have a compensation issue within the agency. Land acquisition funding is another exceptional item, or a 10 percent as you said, if we wanted a 10 percent increase in overall appropriation in a given initiative, that would be considered an exceptional item.

We have, you know, we try to limit the number of exceptional items because you're only going to get so much attention over at the Capitol, and so we try not to add a whole lot; we have two ‑‑ three sessions ago we went in with 17 exceptional items and that was ‑‑

(Simultaneous discussion.)

MR. McCARTY: — the last session we went in with seven exceptional items, that was getting closer to an optimal number, I believe. So with that, I would take any other questions that you may have.

COMMISSIONER BROWN: Any questions?

(No response.)

COMMISSIONER BROWN: Thank you. Committee Item Number 3 is the Internal Audit Report. This is Carlos Contreras' first report.

COMMISSIONER HOLT: Yes.

COMMISSIONER BROWN: Welcome. Carlos is from El Paso, so he's got a lot of great ‑‑

(Laughter.)

COMMISSIONER HOLT: So we have instant credibility here.

COMMISSIONER BROWN: Absolutely. I might add, we're going to have an internal audit report, the Chairman and I discussed it, part of our record as we mentioned ‑‑

COMMISSIONER HOLT: Yes.

MR. CONTRERAS: Good morning, Chairman Holt and Commissioners ‑‑

COMMISSIONER HOLT: Good morning, welcome.

MR. CONTRERAS: — and Mr. Smith. My name is Carlos Contreras, and I'm the Director of Internal Audit. And I'd like to thank you for the opportunity to provide an update on the operations of the Office of Internal Audit.

I'm joined today by Cindy Hancock and Ed Best; these are the two individuals who manage the auditors that we have out in the field. And given that, our presentation is going to start with an update of the park audits.

In Round 2, the field request completed in eight parks; through the first two rounds we've had 17 parks that we've completed. The Round 2 report is currently in the last stages of review, and we anticipate a release date for that second report being sometime next week.

Round 3, the field work has been completed in 11 parks; we've got a total of the 28 parks completed here, and approximately 80 percent of the review process has been completed.

Round 4, we were able to visit 11 more parks, for a total of 39. The actual documentation from the field auditors has been received and we're going to ‑‑ we're initiating the review process on that round.

Through five rounds, we've completed 51 parks; of the 95 parks that we identified in the initial risk assessment, this constitutes 53 percent of the parks. But this also represents approximately 81 percent of the FY '06 state park revenues that we've already taken a look at.

In dollar figures, that's $25-1/2 million of the $31.5 million that we had identified in the risk assessment using FY '06 revenue. Forty-four parks that were identified still remain, and the FY '06 revenue is $6 million for those.

What we have left on our audit plan: We had planned to do three more rounds, one, initiating in June, July and August, the beginning of each of those months. We had originally identified 12 parks that we were going to go visit in the ‑‑ Round 6. But we're currently meeting with executive management in order to determine what the biggest bang for our buck is, given that the parks that are remaining have a lot less revenue than the parks in the first five rounds that we did.

We're going to get any concerns that management may have, and then we're going to go ahead and plan those, and our start date is still going to be, 6/2/08 for Round 6.

Additional work we have going on is a concession audit from Cedar Hill State Park; that's in the reporting phase. A concession audit of Eisenhower State Park, which is completing the field work phase and about to enter into the reporting phase. We anticipate both of these reports to be out by the end of the fiscal year '08. We're initiating an audit of the customer service center here at Park headquarters, and that's in the planning phase, but given other competing priorities, we feel that that audit may be a carry-forward into FY '09.

Now, as far as the administration of Internal Audit, I was able to meet with the entire staff on the 14th and the 15th including all of the field auditors, where we had a really good meeting where we were able to provide them some feedback and give them updated forms and schedules, templates, for them to work with.

I've revised the audit charter and provided the draft to Mr. Smith and Chairman Holt, and I'm awaiting for their comments or any input they might have, and then we're going to go ahead and seek their approval of that.

And I guess based on Chairman Holt's permission, if anybody would like a draft of the audit chart, or I can supply that to any of the Commission members.

COMMISSIONER HOLT: Sure.

MR. SMITH: Carlos, we'll make sure that Chairman Brown gets a copy of that, and I'll do that.

MR. CONTRERAS: And finally internal audit policies and procedures manual and our audit manual are in the process of being reviewed. Thank you. You can indulge me for just a second, I'd like to recognize the efforts of Cindy and Ed, throughout this process. They put together a really aggressive audit schedule and they've kept all the field auditors moving along very well. They put in and continue to put in a lot of long hours in completing this work, so I'd like to thank both of them for their effort.

And that concludes our presentation. If there are any questions that we can answer for you.

COMMISSIONER BROWN: I'd like to echo your, you guys have done a tremendous job in a short period of time. So thank you for your efforts.

MR. CONTRERAS: Thank you.

COMMISSIONER HOLT: Yes, everything from getting the 16 hired, to then overseeing, they were all new, and ‑‑ how are they doing? Have they all hung in there?

MS. HANCOCK: They keep coming back.

COMMISSIONER HOLT: They keep ‑‑ good. Well, you all did wonderful giving that direction and obviously with Carlos just coming aboard I assume you're also trying to bring him up to speed, so you've kind of had a double duty. And I'm, I agree absolutely you all have done a tremendous job, so thank you very much, because ‑‑

MS. HANCOCK: Thank you.

COMMISSIONER HOLT: — you know, we were just down at the visitor center with Senator Ogden on Monday. I mean, that was the first question. I mean, that's where this ‑‑ lots of questions are going to come, once we walk in in January '09, and that we have to have these done, and done appropriately, and be able to present that information to everything from LBB to the individuals that are specifically and directly interested in these audits. So, thank you very much. It made a lot of difference.

COMMISSIONER BROWN: Any other questions?

(No response.)

COMMISSIONER BROWN: Thank you.

COMMISSIONER HOLT: Thank you all.

COMMISSIONER BROWN: Committee Item Number 4 is the Survey of Organizational Excellence, and Mr. Al Bingham.

MR. BINGHAM: Good morning, Mr. Chairman, Commissioners. For the record, my name is Al Bingham. I'm the Human Resources Division Director, and I'm joined by my deputy division director, Jim Lopp. And he's also our resident organizational development expert.

And today we're going to present the results of the 2007 Survey of Organizational Excellence. Jim is going to present the meat and potatoes of the survey results and our game plan for moving forward. But I would like to say from the start that, from sea level so to speak, employees generally feel that the agency is moving in a positive direction in most of the areas surveyed; and the timing of the survey results were very appropriate, given the entry of Mr. Smith. The survey results became available in early February, and Carter was here in January. So he had some fresh information to work from regarding employees' perception of how the agency is doing. So, Jim?

MR. LOPP: Thank you. We'll delve into these three specific areas this morning. This is an executive summary, fairly high level. For you, in respect to your time we have provided to you the executive summary itself so you have that available.

We're going to spend most of the time in the presentation on the score analysis; that's the interpretation and then the benchmarking within the survey, and then also talk specifically in the game plan section about what specific actions we took, the last cycle, that was 2006 cycle, and the game plan that's been approved by Mr. Smith and executive staff for 2008 cycle.

These are the basic who, what, when, where and why questions we thought might be asked, and in anticipation of that we will try to answer those for you. The survey is the only document that is used across the state on a consistent basis, to survey employee attitudes.

It began in 1979, when then-Governor Clements was talking with the UT School of Social Work and just speculating about what it might be that the average state employee felt about working for the state.

It developed from that into a strategic planning document. It is used by us and by all state agencies. It's provided to the Governor's office; it's provided to the Legislative Budget Board, to the State Auditor's Office, and also, upon request, to the Sunset Review Commission. So it is a strategic document for each and every agency that participates in the process.

Secondly, for us it's an organizational development document, gives us an opportunity to, on a periodic basis, every other year, assess exactly how our employees feel about working for the agency, what issues and concerns they have and what recommendations they have.

Virtually every state agency participates in the survey; the cost for us, with the number of FTEs that we have is less than $10,000; that's about a dollar and a quarter per employee; think that's good value for the money that's out there.

And finally, what do we get? We get a comprehensive set of documents: the executive summary that you see before you; we also get a comprehensive data report, so we're able to go in, analyze each question, each one of the constructs, each one of the dimensions that we will talk about in just a minute; and also Excel files so that we can sort those and come up with the reports and analysis in a very structured way, so that we can figure out what it is that we have, what it's telling us and how we can use it.

The actual process itself is a classic total quality management continuous process improvement. The first thing we do is survey. We did that in the fall of 2007, the early part of December; and the assessment phase is where we're at now; even as we speak, we have a natural leaders focus group, going on down in Corpus Christi.

The natural leaders program is the agency's leadership development program. We have seven classes that have been through that program. Each year we have about 30 that go through year-long intensive program leadership training, strategic site visits, so that each one of our participants can go cross-divisionally to see what issues and concerns other divisions have, so they get a better appreciation for that across the agency, and then finally they have stretch projects out there as well.

So that assessment is going on as we speak, and then once we get that information back, then in the latter part of July, July 29th, that project team will bring to Mr. Smith and the executive team a set of recommendations. Some, if not all, of those will be approved, and we will implement those, and then in November-December 2009 we will once again survey and complete that process wheel.

This slide looks at participation, and as an agency we have consistently participated in the survey; we have participated in 11 of the 14 cycles; you can see that our participation rate has fairly consistently improved; anything over 50 percent is considered to be a pretty good rate; we have stabilized at that rate, we would like to see that naturally be a little bit higher than what it is.

In way of comparison, we are just a little bit worse than comparably sized agencies, that is, 1,000 to 10,000. The average there for the last cycle was 60 percent; mission category is 64 percent, and the overall average 66 percent. By way of explanation or analysis of that, one of the things that characterizes us as an agency is, we are a de-centralized agency and we are geographically dispersed across the state, so we think that plays into that, and we try to compensate for that by doing a good job of getting the information out about the survey.

So our objective is to try to get closer to that 60, 65 percent. One of the real values of the survey is the opportunity to benchmark us against comparable agencies, and we have that opportunity in two different areas.

First of all, with agencies of comparable size, there were ten other agencies in our size range, 1,000 to 10,000 that took the survey this cycle. Equally importantly, mission category, that is comparable natural resource agencies, there are nine out there; four others took the survey during this cycle.

Importantly for us, the Texas Commission on Environmental Quality, which is literally a mirror image of our agency, took that survey and we'll talk a little bit more about that as we move through the presentation this morning.

Survey response rate, on the left hand side you can see that 55 percent that we talked a little bit about; the collection period for the survey just for your information was early December to the latter part of December, so we had a 21-day survey period; it was an online-administered survey, and on the right hand side you can see the location response, and that is essentially the field headquarters split. As an agency, we're 75 percent of our FTEs in the field, 25 percent in the headquarters, and within 1 percentage point, we had that return rate, which we're very pleased to see.

And we also, just by way of information to you analyzed the return rate by gender, by race, age, and management/non-management, to see if each one of those segments within the organization are responding at about the rate of representation within the department. And this in fact was the case, and we were pleased to see that.

Moving forward, the essential organization of the survey is at the very highest level there are five dimensions. And you can see those are right across there; work group is a perception of individuals within the organization about how they feel about working in that organization. Accommodations would be essentially the organizational culture, "how do I feel about working in the organization." Fair pay is a component of that, and that whole benefits package is included in that as well.

Organizational features would be, the organizational culture of the organization, and then in the information area, very critical for us, that speaks to, do we have the communications hardware and software to communicate across our department, both vertically and horizontally.

In the personal area, we're looking at the wear and tear in the workplace of the individual, and are our employees able to balance their work life with their personal life, and our findings in that area are pretty positive.

The scores that come into play here for the five dimensions are right below that; they're organized into 20 different constructs. The scores for those constructs are determined based upon 86 standard questions which are asked within the survey. Fifty-nine of those are immediate workplace questions.

That is, as an individual positioned where I am within the agency, within the human resources division, "how do I feel about these specific areas." On a little bit higher level, 11 of those, and these are primarily in the strategic area, which would be in the organizational feature. That is, as an employee, "how do I feel like we're doing across the entire department," again, from my perspective within the organization. And then finally we have 16 specific compensation and benefit questions, three specifically on fair pay, and we'll talk a little bit more about that as we move forward.

This is a very active slide, let me set this up for you if I can. What we're seeing here is a point in time comparison of where the agency was in 1998, compared to where we are in 2008. On each one of those dimensions that I talked about, and they're arrayed on the left hand side, vertically, then horizontally right in the middle we have each of those 20 constructs that I talked about.

The scoring, for your information, each one of those 86 questions which results in a construct score is a classic Likert Scale, 1 through 5, with 1 being the lower score and 5 being the higher score. Then that 1 to 5 is multiplied by 100, to get the scale that you see. And the scale is 100 to 500, fortunately we didn't have any less than 200, so we're displaying at 200 through 500.

And we will compare on the next chart with mission agencies. And, what we will see is that ourselves and comparable mission agencies, the norm for scoring, the range typically is going to be about 250 to 350; so anything that's below 250 and fair pay is below that for us, and anything above 350 is going to be a very high-scoring construct, and we have five of those within the Department. What you see in the light blue is going to be our 1998 score; in the color-coded bars, that 19 of the 20 are higher than that, what you're seeing, if it's a blue-shaded bar, that's a strength; that is the five highest-scoring. In the red shaded, that's a weakness, those are the five lowest-scoring, and those that are the yellow are intermediate scoring constructs for us.

On average, as Al said at the outset, we're doing very well. What we see here is that, over that five- administration cycle, we have increased in 19 of the 20 constructs, an average of 14 percent, and five of those 20 we have increased by 20 or more points.

Unfortunately, we can see on fair pay that we have regressed there; we have declined by 75 points. And when we looked at that within the survey, the natural leaders team have some people that are really good with Excel spreadsheets so we asked them to peel that onion and tell us more about that fair pay. And we'll look at that on this mission comparison slide here in just a minute, so we have more information coming for you on that.

What we're seeing here is a slide which is set up comparably; this is us versus mission agencies; those are the agencies that are doing essentially the same thing that we're doing; that's TCEQ, that's Animal Health Control, Railroad Commission, primarily, and a couple of others. But those are the major agencies, and the ones that were surveyed this time around.

What we're seeing here is that compared to those mission agencies, we have a little bit higher score in 16 of those 20 constructs. The ones that we do not are fairness; availability of information down towards the bottom; job satisfaction; and time and stress.

On comparable size agencies, we exceed their scores in all 20 of the 20.

In the average, this is the average of all 61 agencies that took the survey, our scores are a little bit lower in 19 of the 20; by that I mean marginally smaller in most instances, three to four to five points; so that kind of puts all of these scores and scoring in perspective for you.

The other thing that we think is significant about this, in looking at comparable mission agencies, is that their strengths and weaknesses are virtually the same as what ours are. Nine of the ten are exactly the same, so that tells us systemically, we are wrestling the same issues that they are wrestling.

What we're seeing here, we pay a lot of attention to the field versus the headquarters comparison, so you're seeing a little bit of that here. And what strikes us here as being significant are a couple of things: None of these bars are very long on the differences, but we do see a nine-point difference on fair pay. On this slide we're showing the field as being three points higher than what the average zero point is, or the average score within the agency. On the next slide we'll see the headquarters being a little bit less than that, by about six points; so we think that's fairly significant.

The second thing down towards the bottom on availability of information, we see at three points less there, and on the next slide when we look at the headquarters staff, we're going to see a plus of eight there. And just by the way, availability of information is, the employees feel that they know where to go to get the information that they need to have, whether that's a directory of other employees, or whether it's manuals, regulations, processes, either for the entire department or for a specific division, that that information is available out there for them. So we feel pretty good about the fact that there are not significant differences there between the headquarters and the field.

This is that headquarters snapshot, the fair pay that we talked about, you can see the difference there, and then availability of information. The change orientation there is a little bit problematic for us. What that says is that, as an agency we are leaning forward, we are willing and open and available to make changes when and if they are necessary. That as an agency, we encourage, permit people to benchmark outside the agency, to be members of statewide, region-wide or national organizations, to work on projects across geographic barriers and at the national level as well. So that when our employees do that, the feeling is that they are more open to new ideas and they see different ways to do business. So a lot of that goes on; this tells us that we can probably do a little bit more of that to be even more effective than what we are today.

Another component that we have, which is valuable within the overall survey, is the ability to compare where we are with where we have been, so we're able to look back. This specific slide here we're comparing our 2008 administration to where we were on 2006; we can see that we're better in 17 of the 20.

Fairness we're concerned about, because fairness is the employee's perception that there's a level playing field, and that whatever actions are taken, whether they're disciplinary actions, promotion actions, any personnel actions that may be taken, that they're ‑‑ those decisions are made irregardless of race or gender.

Diversity is the valuing of the differences within the workplace. That is, based upon race or gender, other lifestyle choices that employees may make, so that I do not feel that I am advantaged or disadvantaged based upon that perspective.

I'd like to conclude with the final two slides here, would be the first, the actions that we took in 2006, rolling out the data pretty aggressively, we did last cycle, and we have done already this cycle, posted the executive summary, this is a PowerPoint so it's available to all employees. There also was an article that Mr. Smith wrote in "Tracks and Trails," which is the employee newsletter. Also the "This Week" which is the weekly release of what's hot or what's news that comes out of Mr. Carter's weekly staff meeting. And also HR, Al and I are out, one of the two of us presented this to most if not all of our divisions, so they had that information.

Secondly, almost to the date, two years ago we made a fairly comparable presentation to the Commission. The change team that we're talking about here is key HR division members and also representatives from each one of our divisions, what we call SOE liaisons. We conducted focus groups for every division, and since Parks and Law Enforcement are a little bit larger, we did two focus groups for them. And then based upon that, we prepared division-specific reports that looked at what we call the drivers, that is, what might be causing what issues, concerns are out there for employees, that cause those scores to be as they are in each one of those 20 constructs; and more importantly, what concrete, specific, measurable actions employees recommend divisions can take to move that dial for us as an agency.

The construct that we use is what should we start doing, stop doing, or continue doing. And we have seen that some of these actions as implemented have moved that bar for us a little bit. We tell our managers, if these 20 constructs can be like a management dashboard for you, you can come up and see if you've got a red up there, then you need to pay attention to that; if you've got a blue, honor that but get even better if you possibly can.

And then finally we have, the next slide would be, the approved game plan, which is really a three-pronged plan for 2008. The first is, we talked about that natural leaders program, and also about the focus group that we have out there working on that. We do have five focus groups scheduled, and we were in Tyler last week on the 15th, two in Austin this week, down in Corpus today, and then tomorrow we'll be in Kerrville, getting a target size of 40 optimum sized, 50, break down into three different focus groups, and the items that we're narrowing in on this cycle as approved by Mr. Smith and the executive team are three of the five lowest-scoring constructs that we have: supervisor effectiveness, team effectiveness and fair pay.

Supervisory effectiveness, you may have noted, we moved the bar on that over a ten-year period by 72 points; that's a 21 percent increase. However, it is still a low-scoring construct for us. We continue to work on that.

By the same token, we've done the same thing with team effectiveness. We've had a lot of team effectiveness training, we have a three-day team leader training, we have INTACT work group teambuilding, that we do. Supervisory effectiveness, we have a four-day successful first-line management-training program that's been in place for five years. We've done 17 different sessions on that.

Parks has, management park operations, out there as well, so there's a lot of management training that's being done.

Total compensation is not just the pocketbook items that employees have, but it's also non-monetary recompense as well. Texas Public Employees Association did a survey the latter part of 2007, and sent it out online to all state employees and asked them to rank in order 21 different benefits. Number one was, the 40-hour work week; two was paid time off; number three was casual dress.

The lowest scoring was compensation; right above that was, non-monetary compensation, that is, employees want to have more of that from their supervisors, whatever the supervisor or the agency can do to improve their life, that may not be a pocketbook issue.

And then right above that was telecommuting. And we were timely on that because we also have a natural leaders focus group on telecommuting. And that group will be reporting back to Mr. Smith and executive staff as well.

Corollary to that, Mr. Smith asked Al and I to sit down with each one of the division directors and their senior staff to review their current report, and then what corrective actions they implemented coming out of the 2006 report, what changes they have seen, and how they can use the executive summary, the data report, the focus group report that they got, and identify constructs that the divisions can work on, for this cycle. And at this point we've completed nine of those sessions; we have two remaining.

And then finally Al and Gene McCarty have worked out an arrangement with Texas Commission on Environmental Quality that we will set up a peer group review with them; again they are a mirror image of who we are; we have already exchanged reports with them for 2008. They, like the other mission agencies have exactly the same strengths and weaknesses that we have, so we will sit down side by side to talk with them, What have you tried that's worked, what have we tried that's worked, what do we need to try? So that collectively we can raise that bar for all of our state agencies.

That concludes our presentation, we'll be happy to take any questions that you may have.

COMMISSIONER BROWN: Thank you.

Any questions?

COMMISSIONER HOLT: That was pretty thorough.

(Simultaneous discussion.)

COMMISSIONER DUGGINS: Am I right that going to the slides, this ‑‑ the one with the pie chart ‑‑

MR. LOPP: Yes, sir.

COMMISSIONER DUGGINS: — is that, am I reading this right that only 26 percent of the headquarters' employees responded?

MR. LOPP: No, sir. What that says is, of those people who responded, 26 percent of those respondents were from the headquarters.

MR. SMITH: And Commissioner, that pretty much mirrors how we are, our composition, versus headquarters versus field. Follow me? So if you have 100 percent, you know, rate, a quarter of our staff are located here, and then the balance are out in the field.

So that tracks that pretty well.

MR. LOPP: Yes, we're 75-25. So just in terms of the people who responded, that's that breakout. And then the response rate was 55 percent, and as we looked across different levels within the agency and we also looked across divisions, the response rate in most areas was pretty close to that 55 percent rate.

COMMISSIONER DUGGINS: Well, but if you've only got 26 percent of the staff is headquarters, doesn't that skew the results of this? Should there be two surveys, one for field and one for headquarters, to get a more meaningful response?

MR. LOPP: Well, what happens in the identification, the demographics at the top of the survey, everybody who responds to the report identifies which division they're in, there's basic gender information in there, race information, so what we're looking to see is, everybody answers the same questions, but then we look to see what their ‑‑ if their perspective is different, based upon where they're sitting within the department, if they're a field-based or headquarters-based employee, if they're a manager, non-manager employee, how long they've been with the department, what their gender is, what their race, those kinds of things.

COMMISSIONER DUGGINS: Well, for example, you said fair pay is, was one of the concerns that was expressed ‑‑

MR. LOPP: The lowest scoring, yes, sir.

COMMISSIONER DUGGINS: But is that a concern that's equally expressed among the headquarters people as well as field? I mean, can you derive that from this?

MR. LOPP: Yes, sir. When we look at the headquarters score, on fair pay we see that that is a little bit lower than what we see for the field; so that's one of the advantages, abilities that we have within the survey. So what that tells us is that neither one of those two groups felt significantly different, but that the field staff were two points higher than what the headquarters staff were on that.

So if we put those two side by side, this is showing us on the field on fair pay that they were a little bit above, and then when we look at the headquarters on fair pay, we can see that they're, what, six points below that. So we do have that ability to come in on each one of those constructs, and look to see what that comparison is. And using the data report, we can go into fair pay, there are three questions on fair pay. "I feel like my pay, I'm adequately paid, fairly paid for the work that I do"; "I feel like compared to others doing comparable work I'm fairly paid"; and then the third question is, "My pay paces cost of living."

So when we sit down with the divisions, we can come in on fair pay and look divisions by divisions, because on some of the divisions they're a little bit above or a little bit below, because we do have Law Enforcement Division, they're on Salary Schedule C, and we have other divisions who are on Salary Schedules A and B.

So we can come in division by division to look to see where they are on fair pay, and we can also look at levels within the department to see where they're at on fair pay as well. And we could do that, and have done that with all of those constructs. And that's the value of having those Excel spreadsheets out there.

COMMISSIONER DUGGINS: Is it a fair conclusion to say that employees in the field don't have an issue with ‑‑ don't have as much of an issue with pay as the headquarters group?

MR. LOPP: That's what we're being told here. But I would caution that a two-point, a delta of eight points, two higher in the field and six less in the headquarters, with just an eight-point differential on a 500-point scale is not statistically significant. But it does tell us that there is just a little bit of difference, that ‑‑

MR. BINGHAM: And intuitively, most of the headquarters folks are in high-cost Austin versus the folks that are in the field are in lower-cost, maybe rural areas out there, where the cost is a little bit lower.

COMMISSIONER DUGGINS: What about participation? I mean, it troubles me that we only get 55 percent. And you say, 65 is a target. What can we do, what do you think can be done to improve the participation and maybe get a greater percentage of the people ‑‑

MR. LOPP: Yes, there are several things that we have done, and we have been ‑‑ going back to that just real quickly, we've been as low as 39 percent on that. Come down and we can see that we were, 2004 at 39 percent, then we went to 54, 55. The things that we have done is, to very aggressively market this, to put out through the "Tracks and Trails" which is the employee newsletter; it's actually a payroll stuffer that goes into the pay envelope, and we all pay attention to that. So we put a heads-up in there that the survey is coming, be prepared to complete it. We also put it out through Mr. Smith's weekly staff meeting, so that the divisions can then put that down for employees. We also put it out on our website, the intranet, the Wildnet, there's a section up there when you first open that up, that says, "What's New?" out there, and this is one of the things that's done as well.

Periodic emails, that we send out as a heads-up, as a reminder. We've worked with the UT School of Social Work to draft out a letter which goes out electronically to all employees, which is a heads-up that the survey is coming out there. So it's a combination of things, that we do.

We also encourage the divisions to make sure that employees know that they can take, they're encouraged to take the survey on work time. We also make sure that they understand that their reports are anonymous, that that information is not shared with anybody; it comes from the UT School of Social Work and goes back to the UT School of Social Work.

To kind of put it in context, 55 percent is considered to be a pretty good return rate. However, the average state agency is a small agency headquartered in Austin with fewer employees than what we have. So we put that out there as benchmarks to say, Yes, we would like to be at 60, 65, and we are getting a little bit better, and we think we can get to 60, 65. And we ask employees, you know, what can we do to get that information out there to make it ‑‑ to even increase the survey size.

COMMISSIONER DUGGINS: Do other agencies conduct it at the same time that you did, in early December?

MR. LOPP: There are two different cycles; it's every other year, so there were 61 in our cycle, so that would be about 61 in another cycle. We have been at fall time frame for some time, we try to look at, across the department each one of the divisions have different time frames that might work best for them. So that's a good idea, we can go back and see if there's not a better time frame for us. We try to stay away from spring break and the very ending of school, right when people are returning to school, the height of hunting or fishing, so that we can try to optimize the number of employees that are ‑‑

COMMISSIONER DUGGINS: But you're right in the heart of the hunting season and right before the holiday season. And have you ever asked people why they don't participate?

MR. LOPP: Well, we don't know specifically who didn't, but we can go out and ask, is there a better time frame; if you have not participated, what would motivate you to participate? So we could move that time frame either back or forward; that's the agency's choice as to when we would participate in that.

MR. SMITH: Commissioner, I just want to add to this; there's a lot of process-related things that could happen to probably improve participation at last marginally. I've asked that question out in the field when I'm doing town hall meetings. Ultimately the most important thing we can do to drive increased participation is to act.

We've got to demonstrate that we're hearing our colleagues out there, that we're listening and that we're taking action on all of these things. And I think that ultimately will be the biggest driver for our team wanting to participate in these surveys, knowing that their feedback is heard and it's acted on. And I really feel strongly about that. So if we're able to make demonstrable improvements with respect to our total compensation plan that we're working on throughout the state, for all staff, if we're able to make marked improvements with enhancing our supervisor effectiveness and we're improving our internal communications, I think we're going to see our participation continue to go up as people feel like they're being heard and it's being acted on.

COMMISSIONER FRIEDKIN: And at 50 percent we're getting statistical relevance, aren't we? I mean, we're getting at 40 percent.

MR. LOPP: Yes, that's definitely statistically significant when we get down to that, and then we drill down in each one of those demographics that we talked about.

Just to reinforce real quickly what Mr. Smith said, we ‑‑ the five focus groups that we've done so far, the very first focus group, folks would approach me at break and say, "Jim why don't we, what did we do about that, you know, in 2006?" So in the second focus group we said, "This is what we did with that survey result in 2006," so I think that's perhaps the most important thing we can do, is not just feed the information back to employees but tell employees specifically what did we do in those areas. And that's a reason that this year, to improve that, we sat down with the divisions to make sure that the divisions did something with the report that we provided them in 2006, and worked to assist them to identify constructs that they should be working on, and ways that they can work.

But it really comes down to two things, I think. I first got here, employees would call and say, "Jim, can you assure me that this is confidential?" So we ensure the confidentiality is the first thing. And the second thing, like Mr. Smith said, that we're going to do something. That you took your time to complete this survey, and we're going to respect that, and we're going to follow through on the recommendations and suggestions that you made.

I think those would be two things, and we'll certainly look at the time frame as well.

COMMISSIONER BROWN: Thank you.

COMMISSIONER PARKER: Jim, Al, I love these kind of folks, because it really, you know, this is a novel. And I'm not saying it's a novelty; it is a novel in the highest sense of the literary term because it tells us so much about our folks.

I'm wondering ‑‑ how can we use this downtown? Because there is a story to be told here, downtown. And I don't have the answer for that, but I believe that there is a story to be told downtown. This is a good book on us. This is what our people think about TPWD, and I think it is, I think that we should have wrapped this in some sort of a nice package, to go downtown.

MR. BINGHAM: This information is provided in the legislative summaries; it's part of that package that we forward at the beginning of the Session.

COMMISSIONER PARKER: Well, you know, unfortunately, you know, Al, a lot of those packages ‑‑

MR. BINGHAM: I understand.

COMMISSIONER PARKER: — that go down to downtown to those offices, you know, really don't ‑‑ I think this is something that we need to broadcast.

MR. BINGHAM: I think it's ‑‑

COMMISSIONER PARKER: At a timely moment.

MR. BINGHAM: I think as Gene mentioned. Again, getting back to the fair pay issue, these compensation is going to be one of the areas highlighted on our legislative appropriation request, and obviously we'll use this data to support a lot of that rationale.

COMMISSIONER PARKER: Now, you're getting there. Now you're exposing part of this great novel that we have.

MR. LOPP: Mr. Parker, I think that's an excellent observation. I think the other thing that I would say about that is that we've worked very closely with the UT School of Social Work; we're part of a four- or five-agency work group that's assisting them to take a fresh look at that.

What happens with these results is that they're made available to the Legislature prior to every Legislative Session, every agency has a snapshot which is done, and there are profiles that come in out of this.

The other thing is that, each one of these agency reports are rolled up into a state report that goes forward; that's why we mentioned that, we have the same strengths and the same weaknesses. The discussion that we've had with the UT School of Social Work is that, in organizational development work, if you see a lot of agencies that have fair pay, in fact every one of them has fair pay as dead last, that's a systemic issue that needs to be addressed. So that comes from the agency up through and across over to the Governor's office and the Legislative Budget Board. So that's why I say it is a strategic document, and that's just one example, but Al was right, that's probably the best example. That is the live issue which comes out of this survey for us as an agency.

MR. SMITH: And Commissioner, we have done a lot of work in that regard in talking with our partners and constituent groups and legislators about fair pay issue, and just to sort of augment that with a little bit of additional information, I mean, consider the fact that 100 percent of our administrative staff are paid at the lowest quartile; we have a turnover rate with our Fish and Wildlife technicians of about 40 percent every two years. And our professional staff, meaning our scientists, are paid somewhere between 10 and 15 percent below our benchmark state agencies. And that's not looking at that in comparison to the private sector.

So, we're having real recruitment and retention issues that are very demonstrable, that are affecting our hiring and our retention of very key, high-performing personnel. And so please know that it is the highest issue on our management team's radar screen, and we're talking about that with all of the constituents and stakeholders, and helping to advocate for funding opportunities to help rectify that. So.

COMMISSIONER HOLT: We like hearing the message.

COMMISSIONER BROWN: Very good. Any other questions?

(No response.)

COMMISSIONER BROWN: Thank you.

COMMISSIONER HOLT: Right, thank you guys.

COMMISSIONER BROWN: Committee Item Number 5 is Facility Use Fees at Parrie Haynes Ranch, and Mr. Ernie Gammage is going to make the presentation.

MR. GAMMAGE: Mr. Chairman, members of the Commission, for the record my name is Ernie Gammage. I am the Urban Outdoor Programs branch chief, housed in the Communications Division. I'm happy to be here with you this morning.

I'm here to present, specifically, response to public comment to amendments that were published in the Texas Register in April regarding fee structure for Parrie Haynes Ranch.

To refresh your memory, Parrie Haynes Ranch is a 4500-acre ranch in Bell County that abuts to Fort Hood. We lease it from the Texas Youth Commission, and the will that ended up bringing this ultimately to us stated that it should be used for the children of Texas.

The ranch itself is divided into two parcels. On the eastern side is the equestrian center, has about 45 miles of trails, horse pens, there's a clubhouse there, it's really a beautiful facility, and much used by our equestrian friends.

The western parcel, which we call the Hilltop Complex, provides facilities, lodging, meals and activity opportunities, and among these opportunities includes sporting plays, fishing, kayaking, archery, overnight camping, equestrian trial rides and camping there, ropes course and various day uses of the ranch including hiking and fishing and so forth.

The current fee structure, which was put together shortly after about $2 million worth of facilities were put on the ranch, does not include all facilities and activity uses. These fees were originally promulgated in February 2004, nor does it recoup the majority of our operational expenses to the department for the ranch.

The proposed fees speak to several of these things, and here's what they do. First of all, they provide a base fee for all ranch users, for overnight lodging, meals and the various activity opportunities; provide a discount of 40 percent for youth groups who may choose to use the ranch; and provide for all activities and facilities and uses a fee range; at the low end, which would be the current fee charged, up to a higher range that could ultimately be imposed for these fees as time passes.

For example, in the facilities side, the Hilltop Complex, the current fees put together in 2004 were for $1,000 to $5,000 and over time and use, it's obvious that that is a little broad, and we have changed that to a proposed range from $2,250 to $3,500 based on use, and also we're talking to other similar facilities.

In the current facility fee schedule there is no fee for renting a cabin, and that is how we are choosing to rent cabins in the future, rather than by the bunk, which has been problematic for us for a number of reasons. The proposed fee sets a cabin rental which houses 18, I believe, individuals, from $400 to $600 is the range.

And finally, meals, which were originally set in a range of $21 to $48 per day, we realized not everybody may choose to have all three meals and so we've broken that out from $5 to $25 per person depending on meal choice, per day.

Public comment, we have received six public comments, two opposed and the number for support is incorrect there, that should be four, so it's two opposed and four for. The comments opposing the fee changes, one said that it was too high already and the other one said that $40 was too much for the Cowboy Cabin, which is in the equestrian area. That $40 is at the highest end of that range; the actual fee that is charged right now and will be charged in the future is $20. That is a very, very rustic cabin.

(Laughter.)

MR. GAMMAGE: I would point out to you that since these fees were published we realized that we wanted to make a recommendation to them regarding sporting plays. In the published fees, the range was $20 to $40 per person per day; we'd like to lower that to make it yet more affordable, especially for youth groups, to $10 per day, which we would set that fee at. So the fee proposed would be $10 to $40. And we request that this item be placed on tomorrow's agenda for public comment and action, and I'll be happy to entertain any questions.

COMMISSIONER BROWN: Any questions?

COMMISSIONER DUGGINS: What do you get for the $10?

MR. GAMMAGE: For sporting plays?

COMMISSIONER DUGGINS: For the plays.

MR. GAMMAGE: You get an opportunity to shoot; we have five stands out there, and you must provide the birds and ammunition, but you get to come out, we'll be having a, for example a sporting plays fundraiser by the friends group that will be out there later on this year.

COMMISSIONER DUGGINS: Thank you.

COMMISSIONER MARTIN: If you ‑‑ pardon me.

MR. GAMMAGE: No, go ahead.

COMMISSIONER MARTIN: If you're using part of the facility and you've, you know, taken maybe 18, 20 people for one of the cabins, do you pay an extra entrance fee too?

MR. GAMMAGE: No. Parrie Haynes Ranch is not like a state park. It is not ‑‑ we don't have a kiosk at the gate where you pay to come in. It is by booking only, and that's one of the things that makes it unique; nobody just wanders in up there. We have no walk-on traffic. So you would make a reservation specific to your needs, and then we would help accommodate you when you got there.

COMMISSIONER FRIEDKIN: What's our current utilization?

MR. GAMMAGE: Oh, gosh, I don't remember, Commissioner. The actual day use but it's pretty darned incredible. We have a staff of three up there right now to manage the ranch, and they are booked up solid.

During the summer, for two and a half months the C-5 Leadership Foundation actually has a camp that has previously been called Camp Coca-Cola. And so we have no use of the western side of the facility; there continues to be equestrian riding on the eastern side.

COMMISSIONER FRIEDKIN: Thanks.

COMMISSIONER BROWN: Any other questions?

(No response.)

COMMISSIONER BROWN: No further questions or discussion, I'll place this item on the Thursday Commission meeting agenda for public comment and action.

COMMISSIONER HOLT: Thank you, Ernie.

MR. GAMMAGE: Thank you, Commissioners.

COMMISSIONER HOLT: No, thank you.

COMMISSIONER BROWN: Mr. Chairman, this committee has completed its business.

COMMISSIONER HOLT: Great. Thank you.

(Whereupon, at 11:54 a.m., the meeting was adjourned.)

C E R T I F I C A T E

MEETING OF: Texas Parks and Wildlife Commission
Finance Committee
LOCATION: Austin, Texas
DATE: May 21, 2008
I do hereby certify that the foregoing pages, numbers 1 through 67, inclusive, are the true, accurate, and complete transcript prepared from the verbal recording made by electronic recording by Penny Bynum before the Texas Parks and Wildlife Commission.
6/03/2008
(Transcriber) (Date)
On the Record Reporting
3307 Northland, Suite 315
Austin, Texas 78731


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