Department of Natural Resources Budget
COMMITTEE ON JOINT AGRICULTURE AND NATURAL RESOURCES
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10:13 AM -- Department Natural Resources Budget
Representative Curry, Chair, called the committee to order. The following committee members were present:
Representative Gardner C.
Harris Sherman, Director of the Department of Natural Resources (DNR), provided an overview of DNR's budget. Mr. Sherman explained that DNR's budget constitutes 0.4% of the General Fund budget and so gains from the DNR budget will not have significant impact on the overall General Fund. He stated that 76-80 percent of the DNR is cash funded and that 7.5% comes from federal government. The department has a total of 1500 full time employees and a $230 million operational budget. Handouts were provided that describe DNR's budget (Attachments A and B). He indicated that DNR would be addressing challenges relating to the General Fund, cash funding, and severance tax issues in their presentation.
Mr. Sherman introduced Bill Levine, DNR's budget director.
Steve Cassin, DNR Chief Financial Officer, provided an overview of budget issues for Colorado State Parks (CSP). He stated that the state operates 44 parks and he described the economic impact park visitors have in the state. Mr. Cassin stated that CSP has $70 million capital and operating budget combined. He explained that 90 percent of the total budget is covered by non-general fund sources, including fees and severance tax funds and that one tenth of the budget comes from the General Fund. Mr. Cassin discussed the services provided by CSP and the revenue generated per year. He discussed issues relating to declining cash reserves, park visitation trends, a new aquatic nuisance species program, and Great Outdoors Colorado (GOCO) funds. He also said that CSP will be developing a comprehensive financial plan for a sustainable park system.
Representative Curry asked Mr. Cassin and Mr. Levine about the Governor's FY 08-09 recommended budget reductions and how CSP is absorbing the proposed cuts. Mr. Levine explained the measures CSP is taking to deal with the cuts.
Representative Sonnenberg asked Mr. Cassin about CSP's assets. Mr. Cassin estimated that it was hundreds of millions of dollars, but that he would provide the committee with the exact figure.
Representative Curry asked what the joint committees could communicate to the Joint Budget Committee (JBC) on behalf of CSP's financial situation. Mr. Levine discussed constitutional issues surrounding a JBC recommendation to use GOCO funding for CSP.
Representative Curry stated that she would like to draft a letter on DNR's behalf to communicate CSP's concerns to the JBC.
The committee, Mr. Cassin, and Mr. Levine discussed how state parks in metropolitan areas are fairing.
Dick Wolfe, State Engineer and Mike Sullivan, Deputy State Engineer, both from Division of Water Resources (DWR), provided an overview of DWR's budget. DWR is almost 100 percent General Funded. They stated that DWR's total budget is $27 million, 85 percent of which is spent on personnel services and 15 percent is spent on operating expenses. Mr. Wolfe explained reductions in the current 08-09 fiscal year. He also discussed the impact of the state hiring freeze on DWR, especially how the budget reductions have impacted water administrators.
Representative Curry asked Mr. Wolfe to summarize the impacts of the state's hiring freeze on DWR in writing. Mr. Levine added that the JBC recently voted on DWR's overtime.
Representative Curry asked whether cash funds could be used for the DWR so that they can continue to provide services to water users. Mr. Wolfe described one approach that DWR is considering. He explained that DWR has proposed to the JBC to increase a variety of fees including well permit application fees, well inspection fees, substitute water supply plan reviews fees, and restructuring fees for dam design reviews for the upcoming fiscal years. Mr. Wolfe answered questions from the committee.
The committee expressed frustration with the state's budget process and not having had an opportunity to have input in the budget recommendations for the DNR.
The committee discussed the need for water commissioners and possible solutions given the elimination of their overtime compensation.
Representative Curry indicated that she would like the committee to talk further about the DWR's budget concerns and that the committee may want to visit some of the current funding priorities to ensure that water users get the water the are allocated.
Representative Curry indicated that she will write a letter to the Speaker of the House requesting that the supplemental bills for the DNR and the Department of Agriculture come through the committees. Senator Isgar indicated his support for this request.
Jennifer Gimbel, Colorado Water Conservation Board (CWCB), provided an overview of the CWCB Construction Fund and the Severance Tax Trust Fund (Attachment B). She discussed the financial projections for the Construction Fund and she described the loan forecast for the Water Project Loan Program.
The committee asked Ms. Gimbel questions about reductions to the Construction Fund and the Severance Tax Trust Fund.
Tom Remington, Division of Wildlife (DOW), provided an overview of the DOW budget. He explained that DOW is funded largely through license revenue rather than through the General Fund. He also explained that federal aid is a significant source but that a condition of federal aid is that the state must the funds for wildlife management purposes. He stated that the DOW anticipates and increase in hunting and fishing activities from Colorado residents and decrease from nonresidents, which he explained would means that there will be a continued need for the services provided by DOW, but a decrease in revenue.
The committee asked Mr. Remington, about the sources of DOW advertizing funding. Mr. Remington, explained that advertizing was paid for by a sportsmen's educational council.
Mr. Remington, discussed wildlife conservation easements and DOW's Habitat Protection Program.
Representative Curry asked DOW to consider ways that the division might contribute to the budget shortfall even though DOW is heavily funded by federal aid and licenses.
The committee discussed trends that show a declining interest in hunting and fishing among kids. Mr. Remington, stated that DOW is aware of this issue and has several measures already in place to address the problem such as reduced license fees for youth.
The committee asked questions relating to the number of full time employees in DOW and the percentage of the budget that is devoted to personnel.
Mr. Levine provided an overview of the DNR operational account (Attachment A). He emphasized the discrepancy in DNR spending and revenue and that DNR is funding more than the department has revenue to fund.
Representative Fischer asked about fluctuations in severance tax and the property tax credit.
Mr. Levine explained the impact that a decline in oil and gas production has had in severance tax revenue.
Mr. Levine discussed a proportional reductions in the DNR's budget (Attachment A) and priorities for Tier 2 funding. He also discussed base authorizations, required proportional reductions and adjusted or reduced authorizations. He emphasized that if the legislature does not act, proportional reductions will take place. He also discussed the "Proportional Reductions and Backfill from Reserves" chart in Attachment A.
The committee discussed problems caused by removing LEAP funding.
Director Sherman responded to questions from the committee regarding alternatives being discussed by DNR to address severance tax revenue declines. He also responded to questions about disclosing information for a fiscal note for HB 07-1223 and whether additional revenues sources have been identified by the department.
The committee discussed the appropriation for tamarisk control and recommendations on funding for the Species Conservation Trust Fund and the Interbasin Compact Committee. The committee decided to continue this joint meeting with the DNR a 7:30 AM, Wednesday, February 11, in place of the currently scheduled Climate Change briefing.
The meeting adjourned.