Final
STAFF SUMMARY OF MEETING

COMMITTEE ON JOINT AGRICULTURE AND NATURAL RESOURCES

Date:02/04/2009
ATTENDANCE
Time:07:37 AM to 08:52 AM
Brophy
X
Fischer
X
Place:HCR 0107
Gardner C.
*
Gibbs
E
This Meeting was called to order by
Harvey
E
Representative Curry
Hodge
X
Hullinghorst
E
This Report was prepared by
Kester
X
David Beaujon
Labuda
X
Looper
E
McKinley
X
McNulty
E
Pace
X
Schwartz
X
Solano
E
Sonnenberg
X
Tipton
X
Vigil
X
Curry
X
Isgar
X
X = Present, E = Excused, A = Absent, * = Present after roll call
Bills Addressed: Action Taken:
Department of Agriculture Budget Request
Department of Natural Resources Budget
Drafted lettre to Joint Budget Committee
-


07:39 AM -- Department of Agriculture Budget Request

John Stulp, Commissioner of the Colorado Department of Agriculture, explained that eight programs of the Department of Agriculture will sunset in 2009 including the Pet Animal Care Facilities Act, the Measurement Standards Act, and the Seed Act. The Senate Agriculture and Natural Resources Committee conducted the sunset hearing on these programs on January 8, 2009. He introduced department staff attending the meeting and identified the major programs for the Colorado Department of Agriculture including the divisions of Markets, Inspection and Consumer Services, Animal Industry, Brand Inspection, Plants, Conservation Services, and the State Fair Authority (Attachment A). Additional information about these programs is available on the department's website at www.colorado.gov/ag. He explained that agriculture contributes $16 billion to the state's economy and employs 108,000, making it the third largest employer in Colorado. Colorado Department of Agriculture uses 0.1 percent of the state General Fund revenue.

07:46 AM

Commissioner Stulp identified recent animal disease outbreaks in Colorado and he described programs administered by the Division of Animal Industry to address these outbreaks. The division also administer pet care, rodent control, and predatory animal control programs. He explained that the Brand Inspection Division duties include administering livestock brands, verifying ownership of livestock before sale, transportation, or slaughter, and facilitates the return strayed or stolen livestock, and it oversees alternative livestock facilities. He also explained that the State Fair Authority recently received a positive audit and that it is scheduled to pay off its debt for its Event Center in February 2009. The Conservation Services Division is responsible for conservation of soils, water, and other natural resources, controls noxious weeds, protects groundwater quality, and operates an insectary to develop biological controls for noxious weeds such as tamarisk. Commissioner Stulp described the programs administered by the Markets Division including fruit and vegetable inspection, marketing orders, Colorado wine development, and an international marketing program for livestock and other Colorado agricultural products. He also identified programs administered by the Plants Division including organic certification, pest control, and pesticide applicators regulation.

08:00 AM

Commissioner Stulp described the Department of Agriculture's FY 2009-10 budget request for an appropriation of $41.2 million and 295 FTE including a request for $8.1 million General Fund and $28.2 million from fees. He also identified decision items requested by the department including 0.9 FTE for geographic information system, $55,000 for the Brand Board to pay for increased fuel costs, and $100,000 for a new measurement standards truck. He explained that the department proposes reducing its need for General Fundy money in FY 2008-09 by $477,000, primarily through vacancy savings and fee increases. The Office of State Planning and Budgeting (OSPB) also proposes to balance the state FY 2008-09 budget, in part, by transferring $500,000 from Brand Inspection Fund to the General Fund. Commissioner Stulp responded to questions about the Joint Budget Committee (JBC) staff recommendations for the FY 2009-10 budget.

08:08 AM

John Reitan, Financial Officer for the Colorado Department of Agriculture, explained that the JBC did not act on the staff recommendation to eliminate the statutory caps on indirect costs for programs administered by the Inspection and Consumer Services. However, this recommendation may be addressed prior to figure setting for the FY 2009-10 budget.

08:11 AM

Commissioner Stulp responded to questions about the department's proposal to reduce its General Fund appropriation for FY 2008-09 using a one time refinancing of the Matching Grants to Conservation Districts line item in the Conservation Board division FY 2008-09 budget. The request would reduce the General Fund appropriation by $150,000 and then backfill this reduction with moneys from the Agriculture Management Fund. He also explained that the department's FY 2009-10 budget request for one FTE in the Commissioner's Office for geographic information system (GIS) mapping support would be paid in part with General Fund, cash fund, and federal funds. The request also includes a 0.5 FTE to help the State Veterinarian's office with emergency planning, disease testing, and disease control efforts. Funding for this FTE would come from the General Fund. He also responded to questions about the impact of the hiring freeze on the department and explained that the department has submitted waivers for the State Veterinarian and other critical positions. There are currently 12 vacancies in department that the department is not requesting a waiver from the freeze. He also explained that the department is requesting that the JBC sponsor a bill to fully cash fund programs in the Inspection and Consumer Services Division.

08:23 AM

Commissioner Stulp responded to questions about the possible use of the Colorado State University veterinarian hospital to assist the department with its animal disease testing and control program. He explained that the facilities are not duplicative and urged the General Assembly to continue funding the Department of Agriculture's Denver veterinarian laboratory.

08:31 AM

Julie Zimmerman, Director of the Inspection and Consumer Services Division, responded to questions about the potential impact to agricultural produces if the Fertilizer, Feed, Large Scales, Measurement Standards, Farm Products, and Commodity Handlers programs are fully cash funded through fee increases. This request is part of the Governor’s budget balancing plan for FY 2009-10 and would result in a General Fund Savings of $1,314,136.

08:33 AM

Senator Isgar described the provisions of draft letter to the Joint Budget Committee concerning the FY 2009-10 budget request for the Department of Agriculture (Attachment B). Committee discussion followed about the letter and whether it should be amended to oppose decreasing General Fund support for indirect costs related to programs in the Inspection and Consumer Services Division.
BILL:Department of Agriculture Budget Request
TIME: 08:34:54 AM
MOVED:Isgar
MOTION:Moved to draft a letter to the JBC expressing support for the Department of Agriculture's FY 2009-10 decision items including 1 FTE for GIS mapping support; $55,797 cash fund spending to offset increased fuel costs for brand inspectors, 0.5 FTE for State Veterinarian for emergency planning and disease control, and $100,000 to replace one of the measurement standards truck. The letter will also oppose the proposal to fully cash fund the programs in the Inspection and consumer services. If JBC drafts legislation to fully cash fund these programs, the letter will urge that the increase be repealed in 2 years. The letter will also oppose legislation to elimination of statutory indirect cost caps. The motion passed on a vote of 13-1. This letter will be drafted and circulated for the committee to sign.
SECONDED:Brophy
VOTE
Brophy
Yes
Fischer
Yes
Gardner C.
Yes
Gibbs
Excused
Harvey
Excused
Hodge
Yes
Hullinghorst
Excused
Kester
Yes
Labuda
No
Looper
Excused
McKinley
Yes
McNulty
Excused
Pace
Yes
Schwartz
Yes
Solano
Excused
Sonnenberg
Yes
Tipton
Yes
Vigil
Yes
Curry
Yes
Isgar
Yes
Not Final YES: 13 NO: 1 EXC: 6 ABS: 0 FINAL ACTION: PASS



08:44 AM

Representative Curry requested that a letter be drafted to oppose the OSPB proposal to balance the state FY 2008-09 budget, in part, by transferring $500,000 from Brand Inspection Fund to the General Fund and oppose the JBC Staff recommendation to reduce the General Fund appropriation for FY 2008-09 using a one time refinancing of the Matching Grants to Conservation Districts line item in the Conservation Board division FY 2008-09 budget. The request would reduce the General Fund appropriation by $200,000 and then backfill this reduction with moneys from the Agriculture Management Fund. There was no opposition to drafting this letter which will be circulated for committee members to sign.

08:48 AM

Commissioner Stulp responded to questions from the committee about the need for the decision item to appropriate $100,000 to replace the measurement standard truck.

08:52 AM

The meeting adjourned

10:13 AM -- Department Natural Resources Budget

Representative Curry, Chair, called the committee to order. The following committee members were present:

Representative Fischer
Representative Gardner C.
Representative Hullinghorst
Representative Labuda
Representative McKinley
Representative McNulty
Representative Solano
Representative Sonnenberg
Representative Tipton
Representative Vigil
Representative Curry

10:15 AM

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.


10:20 AM

Mr. Sherman introduced Bill Levine, DNR's budget director.

10:20 AM

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.



10:29 AM

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.


10:31 AM

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.


10:32 AM

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.

10:34 AM

Representative Curry stated that she would like to draft a letter on DNR's behalf to communicate CSP's concerns to the JBC.


10:35 AM

The committee, Mr. Cassin, and Mr. Levine discussed how state parks in metropolitan areas are fairing.


10:36 AM

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.

10:43 AM

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.


10:44 AM

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.


10:51 AM

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.

10:54 AM

The committee discussed the need for water commissioners and possible solutions given the elimination of their overtime compensation.

11:00 AM

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.

11:04 AM

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.


11:08 AM

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.


11:15 AM

The committee asked Ms. Gimbel questions about reductions to the Construction Fund and the Severance Tax Trust Fund.


11:20 AM

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.

11:28 AM

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.

11:33 AM

Mr. Remington, discussed wildlife conservation easements and DOW's Habitat Protection Program.


11:34 AM


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.


11:37 AM

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.


11:39 AM

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.


11:41 AM

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.

11:45

Representative Fischer asked about fluctuations in severance tax and the property tax credit.


11:47 AM

Mr. Levine explained the impact that a decline in oil and gas production has had in severance tax revenue.

11:48 AM

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.


11:58 AM

The committee discussed problems caused by removing LEAP funding.


12:00 PM

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.


12:08 PM

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.


12:14 PM

The meeting adjourned.