T H E C A B I N E T
S T A T E O F F L O R I D A
Representing:
STATE BOARD OF ADMINISTRATION
DIVISION OF BOND FINANCE
FLORIDA FINANCIAL MANAGEMENT INFORMATION BOARD
STATE BOARD OF EDUCATION
BOARD OF TRUSTEES OF THE
INTERNAL IMPROVEMENT TRUST FUND
The above agencies came to be heard before
THE FLORIDA CABINET, Honorable Governor Bush
presiding, in the Cabinet Meeting Room, LL-03,
The Capitol, Tallahassee, Florida, on Tuesday,
March 14, 2000, commencing at approximately 9:13 a.m.
Reported by:
LAURIE L. GILBERT
Registered Professional Reporter
Certified Court Reporter
Certified Realtime Reporter
Registered Merit Reporter
Notary Public in and for
the State of Florida at Large
ACCURATE STENOTYPE REPORTERS, INC.
100 SALEM COURT
TALLAHASSEE, FLORIDA 32301
850/878-2221
2
APPEARANCES:
Representing the Florida Cabinet:
JEB BUSH
Governor
BOB CRAWFORD
Commissioner of Agriculture
BOB MILLIGAN
Comptroller
KATHERINE HARRIS
Secretary of State
BOB BUTTERWORTH
Attorney General
BILL NELSON
Treasurer
TOM GALLAGHER
Commissioner of Education
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March 14, 2000
I N D E X
ITEM ACTION PAGE
STATE BOARD OF ADMINISTRATION:
(Presented by Tom Herndon,
Executive Director)
1 Approved 5
2 Approved 6
3 Approved 6
4 Approved 6
5 Approved 7, 13
DIVISION OF BOND FINANCE:
(Presented by J. Timothy Tinsley,
Manager of Bond Programs)
1 Approved 8
2 Approved 8
3 Approved 9
4 Approved 9
FLORIDA FINANCIAL MANAGEMENT INFORMATION BOARD:
(Presented by Martin L. Young,
Secretary)
1 Approved 11
2 Deferred 11
3 Approved 12
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March 14, 2000
I N D E X
(Continued)
ITEM ACTION PAGE
STATE BOARD OF EDUCATION:
(Presented by Wayne V. Pierson,
Deputy Commissioner)
1 Approved 17
2 Approved 27
3 Approved 28
4 Approved 28
BOARD OF TRUSTEES OF THE
INTERNAL IMPROVEMENT
TRUST FUND:
(Presented David B. Struhs,
Secretary)
1 Approved 29
Substitute 2 Approved 29
Substitute 3 Approved 30
4 Approved 30
5 Approved 31
6 Approved 31
7 Approved 31
Substitute 8 Approved 91
CERTIFICATE OF REPORTER 92
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ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION 5
March 14, 2000
1 P R O C E E D I N G S
2 (The agenda items commenced at 10:35 a.m.)
3 GOVERNOR BUSH: State Board of
4 Administration.
5 Tom, how are you doing?
6 MR. HERNDON: Fine, Governor. Thank you.
7 ATTORNEY GENERAL BUTTERWORTH: Does Tom
8 want a picture do you think, Governor?
9 GOVERNOR BUSH: Want a picture, Tom?
10 MR. HERNDON: I did manage to get a little
11 bit of work done while I was waiting for you
12 this morning.
13 Item Number 1 is approval of the minutes of
14 the meeting held February 22nd.
15 COMPTROLLER MILLIGAN: Move approval.
16 TREASURER NELSON: Second.
17 GOVERNOR BUSH: Moved and seconded.
18 Without objection, it's approved.
19 MR. HERNDON: Item Number 2 is approval of
20 a fiscal sufficiency of an amount not exceeding
21 300 million dollars State of Florida,
22 Department of Environmental Protection,
23 Preservation 2000 revenue bonds.
24 COMPTROLLER MILLIGAN: Move approval.
25 TREASURER NELSON: Second.
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION 6
March 14, 2000
1 GOVERNOR BUSH: Moved and seconded.
2 Without objection, it's approved.
3 MR. HERNDON: Item Number 3 is approval of
4 a fiscal determination of an amount not
5 exceeding seventeen million one hundred and
6 fifty-five thousand dollar Florida Housing
7 Finance Corporation multifamily revenue
8 refunding bonds for Iona Lakes Apartment
9 Project.
10 COMPTROLLER MILLIGAN: Move it.
11 TREASURER NELSON: Second.
12 GOVERNOR BUSH: Moved and seconded.
13 Without objection, it's approved.
14 MR. HERNDON: Item Number 4 is approval of
15 a fiscal determination of an amount not
16 exceeding forty million five hundred and
17 thirty thousand dollar Florida Housing Finance
18 Corporation housing revenue bonds, 2000 series,
19 for the Augustine Club, Plantations at
20 Killearn, and Woodlake at Killearn Apartment
21 Projects.
22 COMPTROLLER MILLIGAN: Move approval.
23 TREASURER NELSON: Second.
24 GOVERNOR BUSH: Moved and seconded.
25 Without objection, it's approved.
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STATE BOARD OF ADMINISTRATION 7
March 14, 2000
1 MR. HERNDON: Item Number 5 is to request
2 approval to file the following two rules for
3 notice: An amendment to Rule 19-8.010 for the
4 reimbursement contract for the Cat Fund for the
5 2000-2001 contract year; and Rule 19-8.029 to
6 adopt the 2000 insurer reporting requirements.
7 COMPTROLLER MILLIGAN: Move approval of
8 notice.
9 TREASURER NELSON: Second.
10 GOVERNOR BUSH: Moved and seconded.
11 Without objection, it's approved.
12 Just for our friends from Wakulla
13 High School, we just approved, oh,
14 three hundred and sixty million dollars of debt
15 that you'll get to pay off a little later on.
16 Wanted you to know.
17 COMMISSIONER CRAWFORD: Don't worry about
18 it.
19 MEMBER OF THE AUDIENCE: Thank you.
20 GOVERNOR BUSH: It's -- it's amazing. I --
21 this is the one part of my job I can't get used
22 to, to approve these things with all these
23 zeros on it.
24 (The State Board of Administration Agenda
25 was continued.)
ACCURATE STENOTYPE REPORTERS, INC.
DIVISION OF BOND FINANCE 8
March 14, 2000
1 GOVERNOR BUSH: Division of Bond Finance.
2 Speaking of debt.
3 COMMISSIONER GALLAGHER: Motion on the
4 minutes.
5 COMMISSIONER CRAWFORD: Second.
6 GOVERNOR BUSH: Moved and seconded.
7 Without objection, it's approved.
8 Item 2.
9 MR. TINSLEY: Adoption of a resolution
10 authorizing competitive sale not exceeding
11 three hundred million dollars of
12 Preservation 2000 bonds.
13 (Treasurer Nelson exited the room.)
14 COMMISSIONER GALLAGHER: Motion.
15 COMMISSIONER CRAWFORD: Second.
16 GOVERNOR BUSH: Moved and seconded.
17 Without objection, it's approved.
18 COMMISSIONER GALLAGHER: There's a quick
19 three hundred million. No problem. See, just
20 run right through it.
21 GOVERNOR BUSH: It's -- it's hard to get
22 used to though.
23 COMMISSIONER GALLAGHER: Thank you.
24 ATTORNEY GENERAL BUTTERWORTH: A billion
25 dollars.
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DIVISION OF BOND FINANCE 9
March 14, 2000
1 COMMISSIONER GALLAGHER: Three?
2 GOVERNOR BUSH: Item 3.
3 MR. TINSLEY: Item 3, report of award of a
4 hundred and twelve million three hundred and
5 fifty-five thousand dollars, Turnpike Revenue
6 Bonds.
7 COMMISSIONER CRAWFORD: Motion.
8 COMMISSIONER GALLAGHER: Motion.
9 GOVERNOR BUSH: Is there a second?
10 ATTORNEY GENERAL BUTTERWORTH: Second.
11 COMMISSIONER CRAWFORD: Second.
12 GOVERNOR BUSH: Moved and seconded.
13 Without objection, it's approved.
14 MR. TINSLEY: Item Number 4, report of
15 award of seventy-five million three hundred
16 thousand, Capital Outlay Bonds.
17 COMMISSIONER GALLAGHER: Motion.
18 ATTORNEY GENERAL BUTTERWORTH: Second.
19 COMMISSIONER CRAWFORD: Second.
20 GOVERNOR BUSH: Moved and seconded.
21 Without objection, it's approved.
22 MR. TINSLEY: Thank you.
23 GOVERNOR BUSH: That totals
24 five hundred million dollars. Some of it's the
25 same though.
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DIVISION OF BOND FINANCE 10
March 14, 2000
1 (The Division of Bond Finance Agenda was
2 concluded.)
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FLORIDA FINANCIAL MANAGEMENT INFORMATION BOARD 11
March 14, 2000
1 GOVERNOR BUSH: Florida Financial
2 Management Information Board.
3 MR. YOUNG: Good morning.
4 Martin Young, Secretary of the Financial
5 Management Information Board.
6 Item 1 is to request approval of the
7 minutes of the Financial Management Information
8 Board meeting, September 28th, 1999.
9 COMMISSIONER GALLAGHER: Motion.
10 SECRETARY HARRIS: Second.
11 GOVERNOR BUSH: Moved and seconded.
12 Without objection, it's approved.
13 MR. YOUNG: Item 2 we want to defer.
14 COMMISSIONER GALLAGHER: Motion to defer.
15 COMMISSIONER CRAWFORD: Second.
16 GOVERNOR BUSH: There's a motion and a
17 second to defer.
18 MR. YOUNG: Item 3 --
19 GOVERNOR BUSH: Without objection, it's
20 approved.
21 MR. YOUNG: Item 3, request approval of the
22 Office of Capital Collateral Counsels exemption
23 from utilizing the FLAIR Property System.
24 COMMISSIONER GALLAGHER: Motion.
25 COMMISSIONER CRAWFORD: Second.
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FLORIDA FINANCIAL MANAGEMENT INFORMATION BOARD 12
March 14, 2000
1 GOVERNOR BUSH: Moved and seconded.
2 Without objection, it's approved.
3 MR. YOUNG: Thank you. That completes our
4 agenda for today.
5 GOVERNOR BUSH: Thank you very much.
6 (The Florida Financial Management
7 Information Board Agenda was concluded.)
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STATE BOARD OF ADMINISTRATION 13
March 14, 2000
1 GOVERNOR BUSH: Can we -- can I ask
2 Tom Herndon to come up? He -- we did
3 something -- we need to go back to something
4 that was already approved, and --
5 MR. HERNDON: I beg your pardon, Governor.
6 When I read through the last item, I failed
7 to read the very last item, which is to request
8 your approval to file for notice to repeal
9 Rule 19-8.011. And --
10 GOVERNOR BUSH: Can I --
11 MR. HERNDON: The two of you can --
12 COMPTROLLER MILLIGAN: Add it to the list
13 of approval?
14 MR. HERNDON: Yes, sir. Ask -- just ask
15 for your approval to file that notice to repeal
16 that item.
17 GOVERNOR BUSH: I second it.
18 Moved and seconded.
19 Without objection, it's approved.
20 MR. HERNDON: Thank you. I apologize.
21 GOVERNOR BUSH: Thank you.
22 COMMISSIONER GALLAGHER: And now you need
23 to redo the one that I made the motions on,
24 because I don't sit on it. Except Nelson's not
25 here --
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STATE BOARD OF ADMINISTRATION 14
March 14, 2000
1 GOVERNOR BUSH: Well, he --
2 COMMISSIONER GALLAGHER: -- to do it
3 either.
4 GOVERNOR BUSH: -- but we did all those
5 properly I think.
6 COMPTROLLER MILLIGAN: Yeah. Sure did.
7 MS. CASTILLE: On the Florida Management
8 Information Board?
9 SECRETARY HARRIS: But -- but Gallagher --
10 GOVERNOR BUSH: Oh.
11 COMMISSIONER GALLAGHER: I think I made a
12 motion that I shouldn't have.
13 GOVERNOR BUSH: We can go back and do it
14 again if you like. Got lots of time.
15 Who's on this thing?
16 COMMISSIONER GALLAGHER: You three.
17 COMPTROLLER MILLIGAN: The SBA.
18 GOVERNOR BUSH: All right.
19 ATTORNEY GENERAL BUTTERWORTH: You all
20 voted in the affirmative, so it should be
21 all right.
22 COMMISSIONER CRAWFORD: Yeah, it's
23 all right.
24 GOVERNOR BUSH: We got a legal ruling.
25 COMMISSIONER CRAWFORD: Yeah.
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March 14, 2000
1 ATTORNEY GENERAL BUTTERWORTH: You all
2 voted in the affirmative.
3 COMMISSIONER CRAWFORD: It's done.
4 GOVERNOR BUSH: Okay.
5 COMMISSIONER GALLAGHER: I'd like to
6 withdraw all my motions on that Board.
7 ATTORNEY GENERAL BUTTERWORTH: Campaign
8 issue on the --
9 COMMISSIONER CRAWFORD: You're trying to
10 get a pay raise.
11 ATTORNEY GENERAL BUTTERWORTH: --
12 Gallagher spends 500 million dollars --
13 COMMISSIONER GALLAGHER: No, that wasn't
14 the one.
15 ATTORNEY GENERAL BUTTERWORTH: --
16 without -- without authority.
17 COMMISSIONER CRAWFORD: -- was illegal.
18 GOVERNOR BUSH: Illegal.
19 COMPTROLLER MILLIGAN: We deferred the big
20 one.
21 COMMISSIONER GALLAGHER: I think that's the
22 motion I made to defer. So --
23 GOVERNOR BUSH: Well done.
24 COMMISSIONER GALLAGHER: -- it doesn't
25 matter.
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STATE BOARD OF ADMINISTRATION 16
March 14, 2000
1 GOVERNOR BUSH: Well done.
2 (The State Board of Administration Agenda
3 was concluded.)
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STATE BOARD OF EDUCATION 17
March 14, 2000
1 GOVERNOR BUSH: State Board of Education.
2 COMMISSIONER GALLAGHER: Okay.
3 (Treasurer Nelson entered the room.)
4 MR. PIERSON: Item 1 is the minutes of
5 January --
6 COMMISSIONER GALLAGHER: Motion on --
7 MR. PIERSON: -- 25th and --
8 COMMISSIONER GALLAGHER: -- minutes.
9 MR. PIERSON: -- February 7th, 2000.
10 GOVERNOR BUSH: Second?
11 COMMISSIONER CRAWFORD: Second.
12 GOVERNOR BUSH: Moved and seconded.
13 Without objection, it's approved.
14 Item 2.
15 MR. PIERSON: Item 2 is 2000 Statewide
16 Emergency Shelter Plan.
17 DCA's Secretary Seibert would like to make
18 some comments.
19 GOVERNOR BUSH: Secretary Seibert, are you
20 here?
21 MR. SEIBERT: Good morning, Governor,
22 members of the Cabinet.
23 GOVERNOR BUSH: Good morning.
24 MR. SEIBERT: Good morning.
25 We'd like to take just a moment on this
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STATE BOARD OF EDUCATION 18
March 14, 2000
1 particular item. It is extremely important, as
2 you all know.
3 The statutes require an ongoing assessment
4 of the adequacy of hurricane shelter space.
5 This is a -- a program that you heard reports
6 from in 1996 and 1998, and then again today.
7 This is an inventory essentially of safe
8 shelters. It requires -- the statute requires
9 us to identify the location and the square
10 footage of existing shelter space; to look at
11 the safety, the adequacy of that shelter space;
12 and then to identify needs for the next
13 five years.
14 (Secretary Harris exited the room.)
15 MR. SEIBERT: If there is a deficit -- and
16 here is where this plan is so important. The
17 plan requires that we at the community level
18 build what are called Enhanced Hurricane
19 Protection Areas, EHPAs.
20 And because there are deficits in 61 of the
21 67 counties, that process is going forward.
22 And in concert with the Department of
23 Education, the -- the core of that is -- is
24 enhanced protection areas being built in new
25 school construction. And it's a great
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STATE BOARD OF EDUCATION 19
March 14, 2000
1 partnership of the Department of Education, and
2 we're grateful for it.
3 I want to take just a second on hurricane
4 shelters, if it's all right with you.
5 The -- the number that your report shows
6 about the deficit of hurricane shelter space is
7 an, oh, wow number. It's a -- it's 1.5 million
8 spaces.
9 Understand the statute requires us to look
10 at the worst case scenario. And the worst case
11 scenario is a Category 5 hurricane striking the
12 entire state all at one time, so that everybody
13 that has to evacuate across the entire state,
14 evacuates.
15 The --
16 COMMISSIONER GALLAGHER: Hope we don't have
17 one of those.
18 MR. SEIBERT: Yeah. It's -- it's not --
19 it's -- it's sort of a --
20 GOVERNOR BUSH: Pity the person who's
21 Governor when that happens.
22 MR. SEIBERT: Or Secretary, sir.
23 GOVERNOR BUSH: Or Insurance Commissioner.
24 MR. SEIBERT: Exactly.
25 It's -- so it -- it's not really a fair
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STATE BOARD OF EDUCATION 20
March 14, 2000
1 number.
2 But what I -- what I want to say today
3 is -- particularly is to note the -- the plan
4 of action that we're undergoing right now as an
5 entire state.
6 Hurricane Floyd at least focused this
7 Secretary on the fact that evacuation and
8 sheltering is a regional, if not statewide
9 issue.
10 The Governor's budget this year for the
11 first time ever actually puts 13.5 million
12 dollars for shelter retrofits.
13 And then we have -- along with local
14 matches of 4.5 million, we're talking about
15 18 million dollars in this upcoming budget
16 for -- for retrofits, which would give us an
17 additional 80,000 spaces for hurricane
18 evacuation.
19 This shelter plan, as I just mentioned,
20 triggers new school construction for those
21 schools that are outside of the flood zone to
22 be built to hurricane proof standards.
23 And I guess my point I'd really like to
24 make is this is a very comprehensive approach
25 in hurricane preparedness. The Department this
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STATE BOARD OF EDUCATION 21
March 14, 2000
1 year has proposed legislation which increases
2 the number of potential spaces by utilizing
3 universities, community colleges, and the
4 private sector.
5 Private sector's got a -- is a great
6 resource out there of places that -- that we
7 don't need to have public buildings, we
8 actually can contract with private sector
9 buildings if they meet the standards.
10 This year we had our first ever hurricane
11 shelter summit. We've got the Governor's
12 Hurricane Conference, which is intended (sic)
13 by 2,000 people --
14 (Secretary Harris entered the room.)
15 MR. SEIBERT: -- in this state.
16 We've got some initiatives on the use of
17 technology so that people who -- who are
18 watching a -- a storm event come their way,
19 they can actually get on their personal
20 computer and have updated information about
21 where they can go; which routes are
22 appropriate; where there may be not just
23 shelter space, but hotel space, because a
24 majority of people don't go to shelters. A
25 majority of people go to family members,
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STATE BOARD OF EDUCATION 22
March 14, 2000
1 friends, or to hotels or motels.
2 And I'll just close with this, Governor,
3 and members of the Cabinet.
4 When I first came to DCA, and I -- I was
5 meeting with Joe Myers, and I -- I asked the
6 Division Director, what is the single most
7 important issue in disaster preparedness, and
8 he was reticent to give me the answer. He
9 ultimately said shelters. And the reason he
10 was reticent, he said, this is not just one
11 issue. You can't just solve it by building
12 more shelters.
13 It's a function of evacuation methods.
14 It's a function of building -- you may be much
15 safer in your own home. So how do you build
16 your own home more safely, how do you retrofit
17 your house to have a safe area in that home.
18 Family disaster plans, better comprehensive
19 planning. Just better comprehensive planning,
20 to take your densities and try to get them out
21 of the flood zone areas.
22 Local mitigation strategies. It's a lot of
23 things. This is one piece of it. The shelter
24 strategy is one piece, but it's an important
25 one.
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March 14, 2000
1 And -- and I appreciate your attention.
2 Last issue is that this is not done by the
3 Department alone. We have many partners. The
4 local governments are huge partners in this
5 effort, private sector, Department of
6 Education, Board of Regents. This is a
7 multijurisdictional approach to a very
8 important issue.
9 Governor, thank you very much.
10 GOVERNOR BUSH: Thank you, Steve.
11 Any questions?
12 COMPTROLLER MILLIGAN: I have a quick
13 question on -- you didn't mention Federal
14 facilities.
15 Do you do anything with Federal?
16 MR. SEIBERT: Absolutely.
17 COMPTROLLER MILLIGAN: Yeah.
18 MR. SEIBERT: We absolutely use them.
19 And -- and I think our relationship with the
20 Federal Emergency Management Agency is just
21 getting better and better. And they sit in the
22 Emergency Operation Center with us, and make
23 sure that effort is coordinated.
24 So, yes, sir, we do.
25 COMMISSIONER GALLAGHER: I'd like to -- oh,
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STATE BOARD OF EDUCATION 24
March 14, 2000
1 I'm sorry.
2 COMMISSIONER CRAWFORD: Just a quick --
3 Steve, on the problem of pets in these
4 centers, any hope of accommodating that in the
5 future?
6 MR. SEIBERT: Absolutely.
7 We -- we -- that is such a big issue, and
8 it's been underemphasized in the past. You --
9 as -- as you know, because your staff actually
10 helps put people there.
11 At the -- at the Emergency Operation
12 Center, we actually have a section for animals,
13 particularly for large animals. When Floyd hit
14 us, we had to find space essentially for
15 horses --
16 COMMISSIONER CRAWFORD: Right.
17 MR. SEIBERT: -- and to move them out.
18 So --
19 GOVERNOR BUSH: The Commissioner's talking
20 about, you know --
21 COMMISSIONER GALLAGHER: Dogs --
22 GOVERNOR BUSH: -- Fido --
23 MR. SEIBERT: Fido?
24 GOVERNOR BUSH: -- and the kitty cat.
25 People do not -- will not leave their homes
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March 14, 2000
1 if -- if they can't take their pets with them.
2 MR. SEIBERT: That -- there's no question
3 about that.
4 GOVERNOR BUSH: So how -- what are we doing
5 in terms of -- the Red Cross will not accept
6 pets -- has not accepted pets.
7 MR. SEIBERT: I'm going to ask Eve if she
8 can help respond to this. But as she's walking
9 up, my experience, at least in Pinellas County,
10 is that became a local function, and it was
11 handled more effectively by the local
12 government --
13 GOVERNOR BUSH: Eve's walking very slowly
14 to --
15 MR. SEIBERT: -- that are --
16 GOVERNOR BUSH: -- put you on the spot, I
17 can tell.
18 MS. RAINEY: Because that was the right
19 answer.
20 MR. SEIBERT: Well, there you go. She's a
21 good employee.
22 COMMISSIONER CRAWFORD: Yeah.
23 MR. SEIBERT: That is a local -- is a local
24 issue, and -- and -- but I don't think we've
25 addressed it at the small animal level.
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March 14, 2000
1 GOVERNOR BUSH: What I would suggest is we
2 expand the shelter -- our State involvement in
3 this, that we be sensitive to the fact that
4 children and pets are about the same level of
5 priority for a lot of people. And we should
6 be -- people aren't going to leave.
7 I mean, I've met a lot of them that just
8 won't leave, or won't go to a shelter if they
9 can't bring their -- their loved --
10 COMMISSIONER GALLAGHER: Governor, we'll
11 take that into consideration. And we will have
12 a kennel added to all the school construction
13 from now on. And we'll be ready to roll.
14 Suzanne, you got that?
15 GOVERNOR BUSH: It can be done temporarily.
16 And there are places where it exists.
17 COMMISSIONER GALLAGHER: We could do --
18 GOVERNOR BUSH: And it's --
19 COMMISSIONER GALLAGHER: -- put some
20 kennels in there.
21 GOVERNOR BUSH: And the fires in --
22 COMMISSIONER GALLAGHER: It's very real.
23 GOVERNOR BUSH: -- Volusia County, I saw
24 places where pets were safe, and the places
25 were packed. We went to other shelters where
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March 14, 2000
1 there weren't pets, and they were empty. Just
2 a --
3 COMMISSIONER GALLAGHER: What -- there are
4 62 counties that have a shortage of required
5 safe shelters. So -- that's -- give you an
6 idea of what this is.
7 And there are some counties: Brevard,
8 Gadsden, Escambia, Flagler, Madison, Santa Rosa
9 that have a surplus. So -- for their county
10 residents at least.
11 And this -- I do want you to know that the
12 Smart Schools Clearinghouse in their 98-99
13 SIT awards, did help put some money in to
14 upgrade some schools. So --
15 GOVERNOR BUSH: Excellent.
16 Thank you, Steve.
17 MR. SEIBERT: Thank you, Governor;
18 thank you, Cabinet members.
19 GOVERNOR BUSH: Is there a motion?
20 COMMISSIONER CRAWFORD: Motion.
21 COMMISSIONER GALLAGHER: Motion to approve.
22 COMMISSIONER CRAWFORD: Second.
23 GOVERNOR BUSH: Moved and seconded.
24 Without objection, it's approved.
25 Item 3.
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March 14, 2000
1 MR. PIERSON: Item 3 is an appointment to
2 the Education Practices Commission:
3 Lynn Demetriades, Theresa Smouse, and
4 Wayne Ansley.
5 COMMISSIONER GALLAGHER: Motion.
6 COMMISSIONER CRAWFORD: Second.
7 GOVERNOR BUSH: Moved and seconded.
8 Without objection, it's approved.
9 MR. PIERSON: Item 4, appointments to the
10 Education Standards Commission:
11 Carolyn C. Follman. And Carol Copenhaver has
12 withdrawn her name due to family illness.
13 COMMISSIONER GALLAGHER: Motion.
14 ATTORNEY GENERAL BUTTERWORTH: Second.
15 GOVERNOR BUSH: Moved and seconded.
16 Without objection, it's approved.
17 MR. PIERSON: Thank you.
18 (The State Board of Education Agenda was
19 concluded.)
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1 GOVERNOR BUSH: Board of Trustees of the
2 Internal Improvement Trust Fund.
3 Secretary Struhs.
4 Is there a motion on the minutes.
5 COMMISSIONER GALLAGHER: Motion on the
6 minutes, January 25th.
7 COMMISSIONER CRAWFORD: Second.
8 GOVERNOR BUSH: Moved and seconded.
9 Without objection, it's approved.
10 Item 2.
11 MR. STRUHS: Item 2 regards the Florida Gas
12 Transmission Company's recommended consolidated
13 intent. We're recommending approval of a
14 30-year public easement subject to special
15 approval conditions and special easement
16 conditions, and the survey waiver.
17 COMMISSIONER GALLAGHER: Motion with
18 conditions.
19 GOVERNOR BUSH: Second?
20 ATTORNEY GENERAL BUTTERWORTH: Second.
21 GOVERNOR BUSH: Moved and seconded.
22 Without objection, it's approved.
23 MR. STRUHS: Substitute Item 3, staff's
24 recommending approval of the settlement
25 agreement and approval of the initiation of
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1 rule development to amend the forms of
2 authorization under Chapter 18-21.
3 And I'd like to note that the applicant and
4 the Save the Manatee Club have together agreed
5 to include the standard manatee construction
6 conditions as a condition of this consent of
7 use.
8 COMMISSIONER GALLAGHER: Motion on 3.
9 ATTORNEY GENERAL BUTTERWORTH: Second.
10 COMPTROLLER MILLIGAN: Second.
11 GOVERNOR BUSH: Moved and seconded.
12 Without objection, it's approved.
13 MR. STRUHS: Item 4, recommending approval.
14 It's an assignment of an option agreement to
15 acquire 238 acres in the Perdido Pitcher Plant
16 Prairie CARL project from the
17 Nature Conservancy.
18 ATTORNEY GENERAL BUTTERWORTH: Motion.
19 COMMISSIONER GALLAGHER: Second.
20 GOVERNOR BUSH: Moved and seconded.
21 Without objection, it's approved.
22 MR. STRUHS: Item 5 is the same parcel,
23 97 acres, Perdido Pitcher Plant
24 Prairie/Nature Conservancy.
25 COMMISSIONER GALLAGHER: Motion on 5.
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1 SECRETARY HARRIS: Second.
2 GOVERNOR BUSH: Moved and seconded.
3 Without objection, it's approved.
4 MR. STRUHS: Item 6, recommending approval
5 for an option agreement to acquire 640 acres
6 within the Brevard Coastal Scrub Ecosystem CARL
7 project.
8 COMMISSIONER GALLAGHER: Motion on 6.
9 ATTORNEY GENERAL BUTTERWORTH: Second.
10 SECRETARY HARRIS: Second.
11 GOVERNOR BUSH: Moved and seconded.
12 Without objection, it's approved.
13 MR. STRUHS: Item 7 is development of a
14 trail head. It's an option agreement for
15 2.41 acres within the Maclay -- I'm sorry, the
16 McKay Bay Greenway Project. This is part of
17 the Preservation 2000 Florida Greenways and
18 Trails Program.
19 COMMISSIONER GALLAGHER: Motion on 7.
20 SECRETARY HARRIS: Second.
21 GOVERNOR BUSH: Moved and seconded.
22 Without objection, it's approved.
23 MR. STRUHS: Item 8, we're recommending
24 approval to acquire an undivided 50 percent
25 interest with the St. Johns River Water
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1 Management District for nearly 22,000 acres of
2 land in the Twelve Mile Swamp CARL Project.
3 This one probably deserves more discussion.
4 And what I'd like to do is -- is just tee it up
5 a little bit, and introduce a number of the
6 folks who are going to want to speak to it.
7 This is a very high priority local growth
8 management strategy. We have with us today the
9 County Commissioner from St. Johns County,
10 Mr. James Bryant, who will speak to you
11 shortly.
12 That County unanimously passed a resolution
13 supporting this as part of their local growth
14 management approach.
15 The land, 22,000 acres, serves as a
16 critical water recharge area for the City of
17 St. Augustine, and is a very important wildlife
18 habitat, particularly for a black bear.
19 The premise of this acquisition is that the
20 land clearly has value today, it will have
21 value in 25 years. And that's important
22 because this acquisition is not typical.
23 If you were to look simply at the purchase
24 price -- if we were as a State to buy it in
25 clear, fee simple today as it's -- as it's
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1 currently zoned, it's zoned as rural
2 silviculture. We did that appraisal.
3 If we were to purchase it in those terms,
4 it would be 66 million dollars.
5 I want to point out, it was not appraised
6 as its development potential, it was appraised
7 as its -- as its current zoned use for
8 silviculture.
9 However, we cannot purchase the land today
10 clear, fee simple as we might like. In fact,
11 that's because attached to the land is an
12 existing 25-year lease. Or it's actually a
13 longer lease, but there's 25 years remaining on
14 the lease.
15 That land is unseverable from -- from that
16 lease.
17 GOVERNOR BUSH: Why don't you describe the
18 lease for us?
19 MR. STRUHS: Yes, sir.
20 The lease obviously changes the value of
21 the property. It changes it negatively from
22 the State's perspective because the State --
23 because of the lease conditions doesn't have a
24 full interest in the property, the typical fee
25 simple interest for those 25 years.
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1 For example, public access.
2 On the other hand, there is a positive
3 benefit to the State because, in fact, the
4 revenue stream that comes from the lease will
5 come to the State for the remaining period of
6 the lease, the 25 years. And -- and just
7 quickly, that's roughly $320,000 per year over
8 25 years. Present value of that is 5.9 million
9 dollars.
10 The -- the challenge then, of course, is to
11 determine how to determine the actual value of
12 the land today given this encumbrance of the
13 lease.
14 We're going to call up some folks here
15 shortly who better than I can explain the
16 methodology in terms of how they actually did
17 that.
18 But what I ask you to keep in mind is that
19 if you were to buy it today fee simple, it'd be
20 about 66 million dollars. Because of this
21 encumbrance, because of the lease, today's
22 value is about 24 million dollars.
23 The purchase price proposed for you today
24 is 20 million dollars, which is approximately
25 17 percent less than that.
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1 The other thing I just wanted to point out,
2 and I think, Governor, this may get to your
3 point, is how do you recognize -- how do you
4 step back from this because it's a little bit
5 unusual, and identify whether or not this is a
6 fair deal for Florida; indeed, whether it's a
7 good deal for Florida.
8 What I'd suggest is it'd -- it'd be useful
9 to compare what the State or what the
10 Water Management District pays on average for
11 conservation easements, what -- what some folks
12 would call development rights. Not buying
13 fee simple, but just buying the development
14 rights. Typically, that averages about
15 50 percent of the full fee value.
16 In this instance, the State acquires the
17 full fee interests, although, that is delayed
18 for 25 years. But we're getting it at
19 28 percent of today's fair market value.
20 With that, we can call some folks who will
21 describe to you in a bit more detail the
22 precise --
23 GOVERNOR BUSH: Can you describe a little
24 more about the lease, the lease in terms of
25 access, and is it a net lease, and what the
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1 value of the lease is, and --
2 MR. STRUHS: I -- and again --
3 GOVERNOR BUSH: Is that part of the -- the
4 next presenter's --
5 MR. STRUHS: Yes.
6 Well, I think -- I think -- Henry Dean is
7 the Director of the Water Management District,
8 can address that. It is a timbering lease.
9 It's an active timbering lease. And the land
10 will be -- we'll use for that purpose for
11 25 years.
12 GOVERNOR BUSH: People access?
13 MR. STRUHS: Pardon me?
14 GOVERNOR BUSH: No access.
15 MR. DEAN: No.
16 MR. STRUHS: No, no public access for
17 25 years.
18 GOVERNOR BUSH: Okay.
19 MR. STRUHS: If you -- just -- just in a
20 matter of protocol, would you like to hear from
21 the County Commissioner first, and then turn it
22 over to Henry?
23 GOVERNOR BUSH: Sure.
24 Commissioner, where are you?
25 MR. DEAN: Let me introduce, if I may.
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1 This is the Chairman of the St. Johns County
2 Commission, Jim Bryant, who is here to speak on
3 behalf of the Commission.
4 And he -- he's my Commissioner since I live
5 in St. Johns County, so I wanted to take the
6 privilege of introducing him.
7 GOVERNOR BUSH: Welcome, Mr. Chairman.
8 MR. BRYANT: Good morning, Governor Bush,
9 and fellow Cabinet members. It's a pleasure
10 for me to be here this morning to talk to you
11 about this transaction.
12 As you noticed, our Board of County
13 Commissioners unanimously passed
14 Resolution 20-14 supporting this transaction.
15 And I think the most important aspect of this
16 transaction as far as the County's concerned
17 that we're going to use -- utilize this as a
18 growth management tool.
19 If you're familiar with the geography of
20 St. Johns County and where this land is
21 located, it's I-95 to the west, U.S. 1 to the
22 east, and State Road 16 to the south.
23 Now, if you look at it in a -- a horseshoe
24 manner around this property is a -- a great
25 development pressure. We have the Nocatee
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1 proposed DRI to the -- to the east, then you've
2 got Eastborne and Westborne and Rivertown to
3 the west.
4 And then you've got the Bartram DRI in
5 Duval County, which extends about 100 acres
6 down into St. Johns County.
7 So we see this as an opportunity to help us
8 take out some growth property out of our county
9 and help us manage our infrastructure a lot
10 better.
11 If we can take this out, then we don't have
12 to build the roads down in the central part of
13 the county.
14 So we see this as a -- a win-win situation.
15 Mr. Struhs, you know, pointed out some of the
16 aspects of the resolution. And -- but we see
17 this as a -- a -- very important to St. Johns
18 County in helping us manage our -- our growth.
19 If there's any questions, I'll try to
20 answer them for you.
21 GOVERNOR BUSH: All this property that you
22 all are -- the DRI is around it, and this
23 property, don't you have control on determining
24 whether or not those developments will be
25 approved or not?
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1 MR. BRYANT: Yes, sir. But I think --
2 GOVERNOR BUSH: Are they already zoned, or
3 are they already --
4 MR. BRYANT: Well, right now, our comp plan
5 is getting close to zoned out. And then,
6 of course, you're going to get the pressure
7 years down the road -- we're looking down the
8 road 25 years, and I think this lease is a
9 25-year lease.
10 So if you -- if you looked long-term,
11 I think that these lands will probably become
12 developable in the future. So we're just
13 trying to take a real long-range look at the
14 problem and trying to solve them now.
15 So I think that as the migration from
16 Duval County comes down, I think that
17 eventually you're going to have a domino
18 effect, and I think these lands are going to
19 fall into development.
20 GOVERNOR BUSH: Okay. But it's up to you.
21 MR. BRYANT: True.
22 GOVERNOR BUSH: The laws of -- this isn't
23 some kind of -- it's not gravity that forces
24 that to happen, that would be a political
25 decision by --
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1 MR. BRYANT: That's true.
2 GOVERNOR BUSH: -- St. Johns County in the
3 future.
4 MR. BRYANT: Okay.
5 GOVERNOR BUSH: Yeah.
6 MR. BRYANT: Thank you, sir.
7 GOVERNOR BUSH: You bet. Thank you for
8 coming.
9 Mr. Dean, welcome.
10 MR. DEAN: Governor, members of the
11 Cabinet, good morning. It's a pleasure to be
12 here again with you.
13 With respect to the terms of the timber
14 lease, Governor, let me cover a couple quick
15 points, and then answer any questions.
16 This is a lease that was entered into in
17 1960. It is a lease that has 25 years
18 remaining. It is basically a lease that grants
19 virtually all surface rights to the lessee,
20 including timber cutting, including any type of
21 other farming activity.
22 It's -- it's a -- it's a very substantial
23 encumbrance on the property, make no mistake.
24 We recognize that, but that's why that the
25 appraisers, and we reduced the value from
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1 66 million, which was based on comparable sales
2 of like timber lands zoned agricultural in the
3 area. That was the -- the appraised value.
4 We reduced that to -- the appraised value
5 was reduced to 24 million for the very reason
6 that this has this major encumbrance of the
7 timber lease on it remaining. We then
8 negotiated with the sellers, and -- and reached
9 a purchase agreement price of 20.1 million.
10 So we think that paying 28 percent of the
11 fair market value for the full fee, and getting
12 the property in full fee at the end of the
13 25-year lease, we think is good public policy
14 for the State.
15 Recognizing the County has growth controls,
16 Governor, I'll tell you as a citizen for the
17 last 16 years of St. Johns County, and most of
18 you are familiar with that area, it is -- it is
19 rapidly -- rapidly developing -- the County
20 faces serious transportation and infrastructure
21 issues.
22 It's an -- it's a water use caution area
23 within our Water Management District because of
24 the rapid growth and the need to develop
25 alternative water supplies.
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1 It'll tremendously benefit the wildlife
2 also.
3 So, yes, this is a difficult issue in the
4 sense that it has -- I wish the lease were not
5 there. I mean, obviously this would be
6 wonderful if it weren't. But it is.
7 And we've tried to do our best to recognize
8 the -- the -- the impact of the lease and ask
9 ourselves at the end of the day, is this still
10 a good public policy to purchase this property
11 under these conditions for the people of
12 Florida, and our Board felt certainly that it
13 was.
14 And -- and that's why we're here today
15 asking you to do the same, recognizing that it
16 is not your normal, typical acquisition of fee
17 simple that -- that we had to take these
18 considerations of the lease encumbrance into
19 effect.
20 GOVERNOR BUSH: Any comments?
21 ATTORNEY GENERAL BUTTERWORTH: Any more
22 speakers, Governor, or is that?
23 GOVERNOR BUSH: Secretary, any more --
24 anybody else speaking?
25 MR. STRUHS: Yes, sir. We have -- we have
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1 several.
2 And I'll just call them up so they can que
3 up and be ready: Sarah Bailey from the
4 St. Johns County Land Acquisition and
5 Management Program; Charles Lee from the
6 Audubon Society; Marianne Gengenbach from the
7 Nature Conservancy; and then David White from
8 the Florida Wildlife Federation; and, finally,
9 Lynn Pappas, who represents -- is counsel for
10 the Cummer Trust, the seller.
11 MS. BAILEY: Sarah Bailey.
12 I'm happy to be here, probably the first
13 time when all of you have been together.
14 But I have been here for all of the other
15 acquisitions in St. Johns County. And I
16 guarantee you, I will be around at ninety-nine
17 for this payoff.
18 How many of you are buying into a college
19 degree at this time for your children?
20 That is -- here's one -- one of you -- two,
21 three, four of you.
22 And I look at this as the same proj-- kind
23 of project. We're buying for our grandchildren
24 at this point. And this is the best way to
25 look at this.
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1 I am so proud of this group of people
2 working this out. This is a family that have
3 been members of our church for a long time in
4 Mandarin. And I am very proud that this has
5 been worked out, and I don't think you should
6 think again about what you're doing.
7 Trees are replaceable. And this is one
8 spot in St. Johns County that is in the
9 backyard of all the St. Johns County citizens.
10 It will be appreciated for generations to
11 come.
12 I have been taught to think -- by my Indian
13 friends to think for seven years of generations
14 to come. And that is what you are doing today
15 if you will support this project.
16 Thank you.
17 GOVERNOR BUSH: Thank you very much.
18 MS. BAILEY: Uh-hum.
19 GOVERNOR BUSH: Charles, how you doing?
20 MR. LEE: Governor, thank you.
21 Members of the Cabinet, Charles Lee
22 representing Audubon in Florida.
23 We strongly support the purchase of this
24 project as it is presented to you under the
25 terms that have been recommended by the
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1 Department of Environmental Protection, and the
2 St. Johns River Water Management District.
3 We believe that the hallmark of this --
4 (Commissioner Gallagher exited the room.)
5 MR. LEE: -- project is an investment for
6 the future.
7 We're paying $919 per acre for land, which,
8 in the final analysis, is either going to be
9 developed, or it is going to be protected. And
10 we have the ability to plan that horizon in the
11 year 2000 to assure that these 22,000 acres
12 will be part of the recreational resource, part
13 of the natural resource, and part of the water
14 resource in the future.
15 I think it's important to recognize,
16 Governor, and members of the Board, this is the
17 water supply for St. Johns County. This is the
18 place that feeds the well fields that are
19 basically supporting this rapidly growing urban
20 area.
21 We, too, would prefer that the timber lease
22 not be there. It would be nice if we had a
23 perfect world. The reality is, however, it is
24 a property right that is there, that has to be
25 dealt with.
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1 And in terms of sorting out what is best
2 for the environment of this region, we believe
3 that the reality is that acquiring this land in
4 the state it is offered marks what needs to be
5 done for the future of this reason (sic).
6 Now, what I'd like to do is to simply pass
7 forward, if I could, a map. And -- and I'll --
8 I'll hold it up and point to the big green
9 thing on the bottom of this map before I pass
10 it around.
11 This -- the green designation is the
12 Twelve Mile Swamp property you are proposing to
13 purchase. What really needs to be seen, to
14 understand why paying the money for this land
15 as it is proposed to you is a value is that all
16 around this are either approved or in -- close
17 to the approval stage, major DRI developments.
18 If you go just to the west of this project,
19 I'm sure many of you have been up and down
20 Interstate 95. You have --
21 (Commissioner Gallagher entered the room.)
22 MR. LEE: -- the huge corner with the
23 outlet malls right on the western edge of this
24 property. You have the huge international golf
25 resort just on the west side of this property.
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1 Governor and members of the Cabinet, this
2 is in effect a high development intensity area
3 in the southern end of Duval, and the northern
4 end of St. Johns. If it's not bought, it's
5 going to be developed. And I'll bring this up,
6 and -- and ask --
7 GOVERNOR BUSH: Why do you say that?
8 I mean, why do we have to assume that things
9 will be developed when they're not -- don't
10 have the development rights attached to it?
11 This gets kind of to the -- the issue of
12 how we buy land. And -- I mean, this --
13 clearly, this property is a jewel for
14 protection. But why do we assume that things
15 have to be developed when they don't have
16 development rights attached to them?
17 MR. LEE: Governor, I -- I believe they do
18 have -- that this property clearly has
19 development rights in the form of property
20 rights attached to it. And what we are -- what
21 we are finding --
22 GOVERNOR BUSH: The magnitude of the
23 properties around it that you were describing?
24 MR. LEE: Yes. Yeah, I -- I don't think
25 the difference -- I don't think --
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1 GOVERNOR BUSH: I don't think so.
2 MR. LEE: -- there is a significant
3 difference in the developability of this
4 project -- this property, versus the others
5 that have already been approved.
6 I mean, the -- the reality is, we -- over
7 the last -- over the last five or eight years,
8 what we have found universally in Florida is
9 the case is that unless property is owned by
10 the State in some form, whether that's our
11 sovereign lands under our lakes and our rivers
12 which were given to the State by the Federal
13 government at the time of sovereignty, or the
14 land that we're buying under the
15 Preservation 2000 and Forever Florida Program,
16 the reality is that the property rights
17 attached to land have become predominant, and
18 the ability of local governments to say no to
19 developments since the passage of the
20 Bert Harris Property Rights Act and the
21 evolution of stronger property rights has --
22 has -- has become -- it's much -- we're not in
23 a position where government can anymore simply
24 say no to development.
25 Government always has to give pretty much a
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1 qualified yes. And -- and -- and that's --
2 that is, in fact, the dilemma that we face is
3 that recognizing, as we have, where we are in
4 terms of the evolution of the balance between
5 the Governor -- government's right to regulate
6 and the private --
7 GOVERNOR BUSH: No --
8 MR. LEE: -- property rights to develop
9 acquisition -- if you're going to totally
10 preserve something, you'd better acquire it;
11 otherwise, development is -- is going to be
12 near certain.
13 GOVERNOR BUSH: We'll have this
14 conversation with --
15 MR. LEE: Okay.
16 GOVERNOR BUSH: -- a cup of coffee about
17 Bert Harris and whether it's prospective values
18 that it protects, or values already established
19 when the property's purchased.
20 But move on.
21 I'm -- I'm -- I'm going to argue with David
22 when he's finished more I think.
23 Go ahead.
24 MR. LEE: The -- the -- Governor, just one
25 more thing on that.
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1 The effect -- the effect of -- of
2 everything that has been done and said
3 legislatively about property rights is both
4 a -- is both an overarching sort of emotional
5 climatic climate type effect on what local --
6 local governments do, as well as --
7 GOVERNOR BUSH: -- the law.
8 MR. LEE: -- as well as the legal effect.
9 And -- and overall, what we have seen
10 working with the growth management issues in
11 67 counties is that the ability of the
12 government to say no to development has been
13 lessened significantly, and -- and if we don't
14 buy it, the likelihood is going to be high it's
15 going to be developed.
16 In the final analysis, we believe that
17 paying the $919 under the conditions offered on
18 this property is a good thing to do. I would
19 like to simply say something about the timber
20 lease.
21 When I first came to work for Audubon in
22 1972, one of the first things that happened to
23 me is I was sent out to look at a piece of
24 property in the Wekiva River area where a land
25 owner had purchased the property, and was
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1 chagrined to find that they had a timber lease
2 very similar to this on the piece of property.
3 That timber lease ran its course, the
4 timber was harvested, the property was affected
5 by that harvest, and at the time, it was a --
6 it was a heartbreak for me to watch.
7 Today, some 27 years later, after that
8 timber harvesting has gone away, I can go on
9 that property, and I can still find the effects
10 of that timber harvest, but I have to look
11 pretty hard.
12 The reality is, over time, nature brought
13 that property back. And nature will bring this
14 property back, too.
15 And in the final picture, think of --
16 think -- think -- think of this as a
17 centerpiece to the preservation within the
18 future community of southern Duval and northern
19 St. Johns County that at the same time
20 preserves the water resource.
21 And I'd just like to pass this map around
22 for people to look at.
23 We strongly support this. We hope you'll
24 go ahead today.
25 Thank you.
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1 GOVERNOR BUSH: Thank you.
2 Welcome.
3 MS. GENGENBACH: Good morning, Governor,
4 members of the Cabinet.
5 I'm Marianne Gengenbach with the
6 Nature Conservancy.
7 I don't think I have to speak again to the
8 resource values on this land. I think we know
9 it's there.
10 I do want to take a minute to point
11 something else out though.
12 About a year ago, we all engaged in a very
13 important policy debate about what kind of
14 acquisition program we were going to have under
15 Florida Forever.
16 And in answering those questions, we
17 realized that the kinds of projects we needed
18 to acquire in the future needed to answer more
19 than one need.
20 Obviously the Nature Conservancy very much
21 supports the acquisition of this project,
22 despite the unusual circumstances. We, too,
23 understand the concerns involved in the
24 encumbrance by the lease.
25 However, in this project, you have
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1 virtually the epitome of what was visualized
2 under Florida Forever as a project. You have a
3 project that combines the protection of habitat
4 with the protection of water resources, and the
5 potential for -- actually, already the
6 existence of very vital water supply.
7 Plus, if this land is acquired, it will
8 help to work on the creation of those corridors
9 that are so important when we deal with
10 protection of habitat.
11 So in our mind, not only is this important
12 in and of itself, but it's also important
13 because it is exactly the kind of thing that
14 the creators of Florida Forever were talking
15 about when they created those various criteria,
16 and said we really needed to look at the
17 protection of all those different kinds of
18 resources when we made decisions to purchase
19 land.
20 So we urge you to go forward with approval
21 of this project.
22 Thank you.
23 GOVERNOR BUSH: Thank you very much.
24 MR. WHITE: Good morning, Governor, members
25 of the Cabinet.
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1 My name is David White. I'm representing
2 the Florida Wildlife Federation. The Florida
3 Wildlife Federation strongly supports the
4 acquisition of this property.
5 It's an incredibly important wildlife
6 habitat. In addition to being an important
7 wildlife habitat in and of itself, it serves as
8 a wildlife movement corridor for other wildlife
9 to move around in this region that as you've
10 already heard, is being rapidly surrounded by
11 large DRIs, large developments.
12 I've been through this area. There's lots
13 of wood storks and other endangered species,
14 and lots of species of special concern that if
15 we don't provide important habitat for these
16 species, they could eventually become listed
17 and inhibit development in other places.
18 So we ought to protect the habitat for
19 these species before they're listed. And --
20 and we urge you to strongly support this
21 acquisition.
22 GOVERNOR BUSH: Thank you.
23 MR. WHITE: Thank you.
24 GOVERNOR BUSH: Welcome, Lynn.
25 MS. PAPPAS: Thank you.
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1 Good morning, Governor, members of the
2 Cabinet.
3 A lot has been said about the resource
4 values of the property, and I -- I will leave
5 those comments with you.
6 I represent the Cummer Land Trust. And
7 this has been a long discussion with the
8 Water Management District that began probably
9 as early as 1990, actually before my
10 involvement. And it was the result of the
11 property being placed on the CARL list in 1991.
12 Governor, you're correct, there are many
13 ways to deal with the protection of property
14 and the protection of the resource values of
15 the property. And the Growth Management Act
16 certainly has afforded local governments a
17 great deal of control in that regard.
18 North Florida has an interesting approach,
19 however, to that question. And that is, they
20 sort of do things the old-fashioned way. And
21 that is, if they want to control the land, they
22 believe it should be purchased.
23 That is something that we have strongly
24 encouraged in our community. We have in
25 Duval County the Mayor's Preservation Project,
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1 and we have in St. Johns County the efforts
2 that are culminating, in this case, in the
3 Cummer Land Trust acquisition.
4 And we believe we have a very, very unique
5 opportunity in north Florida to avoid some of
6 the danger zones that have occurred in our
7 neighboring counties to the south, with all due
8 respect.
9 But we have a lot of vacant land, and we
10 have a chance to do something to set it aside
11 in perpetuity, and we have a chance to make
12 sure that the -- the items that we wish to
13 protect and the benefits that we would like to
14 afford the public can be afforded.
15 And it goes deeper than just a question of
16 setting it aside by some form of regulation.
17 This property is the last -- actually the
18 last holding of significance of the old
19 Cummer Lumber Company. It has a deep emotional
20 value to the family members that own it.
21 The real question of the value of the land
22 over time and how it should be approached,
23 I guess we'll all live long enough to find out
24 what happens 25 years from now to see.
25 But in the end, the real question for the
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1 family members themselves was: How would that
2 value be addressed, and if, in fact, it wasn't
3 addressed correctly today, they would prefer to
4 hold the land for its term. They are a Trust,
5 they take a very long view.
6 And so this was not an easy decision for
7 them to make.
8 But in the end, they strongly believe that
9 this effort will place the property in the
10 proper hands, and will ensure a long-term
11 benefit beyond their lifetimes, which I think
12 is also visionary on their part.
13 So we strongly encourage you to support
14 this. We believe it's a good thing. Not only
15 are my clients obviously supportive of it, it's
16 been a long road, and we believe it's of great
17 benefit to the region.
18 Thank you.
19 GOVERNOR BUSH: Thank you, Lynn.
20 ATTORNEY GENERAL BUTTERWORTH: Governor --
21 GOVERNOR BUSH: General Butterworth.
22 ATTORNEY GENERAL BUTTERWORTH: -- before
23 you take off David's head, may I say something?
24 GOVERNOR BUSH: No, I'm not going to take
25 his head off.
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1 ATTORNEY GENERAL BUTTERWORTH: Okay. Good.
2 I'll say something -- I'll say something
3 anyway.
4 I -- about 50 years ago, I came from a
5 northern state to the state of Florida. I came
6 here unwillingly, because I did not want to be
7 an orphan. My -- my parents moved to Florida.
8 And I -- and I was -- and I was relatively
9 young. And we moved to a -- we grew up in -- I
10 grew up, my brother and I, in -- those first
11 few years in a -- in an urban area of
12 New Jersey, Bergen County.
13 MS. PAPPAS: So did I.
14 ATTORNEY GENERAL BUTTERWORTH: And --
15 Really? That's why you moved down here,
16 too?
17 Did you go to Wood Ridge High School, by
18 any chance, kindergarten, or to -- or to
19 Euclid Elementary?
20 MS. PAPPAS: Scotch Plains --
21 ATTORNEY GENERAL BUTTERWORTH: Oh, okay.
22 MS. PAPPAS: -- Fanwood.
23 ATTORNEY GENERAL BUTTERWORTH: We couldn't
24 afford that. We --
25 But the -- we were so pleased we -- we
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1 moved to a rural county. We really -- it was
2 fantastic. It was -- a large land, vast
3 county, less than 100,000 people. And things
4 were going great.
5 That county now has about 1.7 million
6 people. And in the next few years, there's a
7 big article in the paper the other day, the
8 last 400 developable acres will be developed
9 pretty soon. And it's pretty much all
10 finished.
11 I -- I have to say that I -- I'm proud of
12 what the -- the County Commission is doing in
13 St. Johns County, and -- and also the
14 Water Management District is doing so far as
15 foward thinking.
16 As much as I would like to have thought
17 even 20, 25 years ago when I first got to --
18 got involved in -- in politics in
19 Broward County as we were doing land use plans,
20 when we had, like, six hundred, seven hundred
21 thousand people, and we started set asiding
22 (sic) one unit for every 5 or every 10 acres,
23 somehow things happened with future
24 County Commissions and -- and land use whereby
25 things called lobbyists and things called
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1 campaign dollars and things called influence
2 and things called trying to -- the tax base
3 and -- and to get more -- more tax revenues,
4 that -- that -- that sometimes future
5 governments are forced to do things that they
6 wish that they would not have done, and -- and
7 the forefathers wish they had not done either.
8 Right now in the Legislature, we have a --
9 some legislation that's floating around.
10 It's -- it's -- it's difficult to comprehend
11 legislation. It has to deal with -- with the
12 state sovereignty lands, and -- and which lands
13 were owned by the State of Florida in 1845 when
14 we came a state.
15 We -- well, we won all that stuff in the
16 court system, and we -- we brought into
17 ownership the Peace River and Fisheating Creek,
18 and -- and St. George Island, a lot of other
19 things that -- that we're able to -- to bring
20 into ownership of the state. It really wasn't
21 the people's land.
22 Now we find out the Legislature, through a
23 piece of legislation, with a lot of cosponsors,
24 both in the House and the Senate, I think a lot
25 of good people don't know what they're -- what
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1 they signed on to.
2 We're very well -- and maybe because
3 it's -- the Legislature thinks we have too much
4 to do up here, that they're going to give away
5 approximately 500,000 acres of the State's land
6 back to large land owners.
7 This is probably the biggest land giveaway
8 since the Federal government gave away 40 acres
9 and a mule. It is absolutely -- and I think
10 what's happening here is that even though we
11 can say -- and I'm not sure about pricing on
12 it. I mean, I would -- it sounds realistic,
13 but I mean I think you -- you would --
14 David, I'll say, you and your staff I think
15 did a lot of work on this.
16 But the -- I think the pricing's fine.
17 But -- but how I look at it, as -- as some of
18 the people have stated, is that I really, as
19 much as you can say 25 years from now, the --
20 the future County Commission may very well
21 preserve it the same way that it is right now,
22 and they may not give it the type of land use
23 that would give all of us up here heartburn.
24 But I really -- from my experiences,
25 Governor, and -- and fellow Cabinet members,
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1 I -- I believe this is an opportunity to -- to
2 actually follow the lead of -- of the
3 progressive thinking County Commission and
4 Water Management District, and -- and buy into
5 this program.
6 I think it would it be a fantastic -- a
7 fantastic experiment, I think one that -- that
8 actually is going to work. Because I do not
9 want that county, a very beautiful county, to
10 be like the county, as you refer to, ma'am, as
11 a -- one of the other counties down south.
12 Because I'm from one of the other counties down
13 south, and I -- and I love --
14 GOVERNOR BUSH: Yeah.
15 ATTORNEY GENERAL BUTTERWORTH: --
16 Leon County.
17 GOVERNOR BUSH: We take offense to that.
18 ATTORNEY GENERAL BUTTERWORTH: I -- I take
19 offense to it, but it's true, you know.
20 GOVERNOR BUSH: That's true.
21 I can't argue that.
22 ATTORNEY GENERAL BUTTERWORTH: Thank you.
23 GOVERNOR BUSH: Any other comments?
24 COMMISSIONER GALLAGHER: I don't hear
25 anybody talking about linkage. You've got one
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1 here, too, nobody's mentioned. They're not
2 going to sell the property until they get their
3 development rights on the adjoining property.
4 ATTORNEY GENERAL BUTTERWORTH: Governor, I
5 agree with that. My staff advised me that's
6 already been -- I was ready to vote no on this
7 project, but that -- I'm advised that's already
8 been done.
9 GOVERNOR BUSH: Henry, do you want to talk
10 about that?
11 I'm not aware of it.
12 MR. DEAN: Commissioner, and General, I --
13 the issue of linkage is that this was sort of a
14 chicken and an egg.
15 The -- the Cummer Trust property does have,
16 Governor, by the way, some limited development
17 rights in pockets near the interstate exchanges
18 and U.S. 1. They're very small, but they
19 are -- they are some mixed uses that could
20 provide light industrial and commercial uses.
21 And they came to the County and to the
22 Water Management District and said, what we
23 would like to do if -- if the County would like
24 to, is transfer those -- those mixed use
25 rights, bundle them up, if you will, because
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1 they're scattered throughout the 22,000 acres,
2 and transfer them into one functional unit on
3 the north end of the property where you have
4 infrastructure that you can place, and it won't
5 be urban sprawl.
6 And then we would appraise the property in
7 its agricultural state, and -- and negotiate on
8 the property in its agricultural state.
9 So that's the comp plan amendment that the
10 County must approve.
11 All -- the County actually -- I mean --
12 GOVERNOR BUSH: How much -- how many acres
13 is that, Henry?
14 MR. DEAN: I'm sorry?
15 GOVERNOR BUSH: How many acres is that?
16 MR. DEAN: Do we --
17 MEMBER OF THE AUDIENCE: Forty-five
18 hundred.
19 GOVERNOR BUSH: Forty-five hundred?
20 MR. DEAN: The -- the development will be
21 on the north end of the property, 4500 acres.
22 The -- there's a smaller number, Commissioner,
23 of -- of what -- what property --
24 Or, Lynn, you may want to speak to that.
25 The -- what -- the -- the small parcels
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1 that are scattered, what's the total acreage of
2 those that would be -- the rights would be
3 transferred to the north end of the property.
4 MS. PAPPAS: It's about 2500, 3,000.
5 MR. DEAN: Twenty-five hundred to -- to
6 three thousand acres.
7 GOVERNOR BUSH: And what -- and, Lynn, what
8 are you proposing, and the County, what -- what
9 are you -- what development?
10 MS. PAPPAS: What we're proposing is
11 actually at the request of the County is a
12 mixed use with some -- because of the corridor
13 network, this property sits at that north end
14 at County Road 210, and bordered on the east
15 and west by I-95 and U.S. 1.
16 The County has been trying to develop
17 commercial uses, actually office, to bring
18 jobs. And so they have actually chosen the
19 land uses they want in that location.
20 GOVERNOR BUSH: How many feet of
21 development?
22 MS. PAPPAS: Oh. I -- I couldn't say.
23 I mean, we -- we are proposing it strictly as a
24 comp plan change. We haven't done any
25 planning, no zoning.
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1 I mean, it's subject to the timber lease as
2 well. So we're not currently planning to do
3 anything, other than wait the 25 years and see
4 what happens to the land.
5 GOVERNOR BUSH: Okay.
6 MR. STRUHS: Let me --
7 GOVERNOR BUSH: So what's the linkage,
8 Commissioner?
9 MR. STRUHS: Let me just add -- add -- add
10 to this, if -- if I -- if I might. Sort of a
11 laymen's perspective.
12 You look at 22,000 acres, I presented it to
13 you as it -- in terms of the appraisal process
14 looking at it as if it were all zoned as rural
15 silviculture. And the reason I could make that
16 statement, and make it accurately, is because,
17 in fact, there were some very small parcels
18 within that larger tract of land that were
19 slated for some development.
20 Clearly the -- the County did not want to
21 have the burden or the expense or the -- the
22 growth management problems of extending
23 services to the small pockets in a larger tract
24 that was going to be kept for -- for
25 conservation.
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1 And what we were able to do, and what the
2 District actually was able to do, is be able
3 to, in the appraisal process, keep the costs
4 lower to the State -- the costs lower to the
5 District by taking those development rights out
6 and moving them out of the parcel.
7 So -- so that way it's appraised all for --
8 for the rural silviculture use.
9 COMMISSIONER GALLAGHER: To answer your
10 question, is -- it quotes in the backup: It is
11 a condition of the sale -- of this sale that
12 the seller be approved for an amendment to the
13 St. Johns County Comprehensive Plan to increase
14 the allowable development rights on the -- on
15 that portion of the seller's adjoining property
16 in accordance with the land use allocation map
17 attached as Exhibit E.
18 So that's the linkage, that before they're
19 going to sell the land, they want to get this
20 comp plan changed.
21 I mean, I didn't have any problem with
22 that. If other people did, I just wanted to
23 see if --
24 GOVERNOR BUSH: If they still have the
25 problem.
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1 COMMISSIONER GALLAGHER: -- consistent, or
2 where we're not consistent.
3 ATTORNEY GENERAL BUTTERWORTH: I -- I'd
4 heard that it -- that it -- it had been
5 resolved, Governor, and that that's what I --
6 that's what I was advised.
7 But it has not been involved, or not
8 permanently resolved, I think we should wait
9 till it's resolved. I -- I think linkage is
10 the worst thing we can do for any -- for any
11 entity of government.
12 COMMISSIONER CRAWFORD: We -- we approve
13 linkage.
14 GOVERNOR BUSH: He didn't.
15 MR. DEAN: Let me -- let me say, if I may,
16 Governor, that this particular comp plan
17 amendment was initiated by, and proposed by the
18 County to address urban sprawl and their
19 infrastructure problems.
20 It's a value neutral issue, we think, to
21 the commerce, and to the District and the
22 State. We think it makes good sense. We think
23 that the sellers need to have the knowledge and
24 the commitment of the State to buy this
25 property before they concur in giving up their
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1 rights that they currently have to these
2 smaller areas. And it is -- it is what I would
3 call smart growth management. The --
4 GOVERNOR BUSH: Henry, are -- is there --
5 there will be no development on this property,
6 or, Ms. Pappas, in the next 25 years?
7 Or if the lease -- can the lessee release
8 the -- these out parcels that you're describing
9 with some compensation where we would still be
10 encumbered by the lease, but the -- the other
11 properties that are consolidated on the
12 northern side of the property, wherever,
13 wouldn't be?
14 Is this property not going to be developed?
15 MS. PAPPAS: We have had no discussions
16 that would indicate that we would be releasing
17 anything from the lease. I mean, I -- I
18 suspect the two parties could agree to any
19 aspect of the transaction if they so chose.
20 But we have no current plan to --
21 GOVERNOR BUSH: Will it be a separate
22 lease? In other --
23 MS. PAPPAS: No, no, no. It'll be under
24 the same lease. That lease continues --
25 GOVERNOR BUSH: Well, I'm a little confused
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1 about that since how could it be if the lease
2 is -- is for the 22,000 acres, and there's a
3 portion of this property that --
4 COMMISSIONER GALLAGHER: Be developed.
5 GOVERNOR BUSH: -- that will be separate,
6 that the -- the Trust will still own, and it's
7 encumbered by that lease still, could you have
8 a separate arrangement where Rayonier would
9 not -- you know, would negotiate with the --
10 the dev-- you know, the developer, the owner of
11 the property to -- to develop the property?
12 MS. PAPPAS: Well, I'm not sure I'm
13 understanding your question.
14 The lease is --
15 GOVERNOR BUSH: Someone want to describe --
16 MS. PAPPAS: -- for far more --
17 GOVERNOR BUSH: -- it for me differently?
18 MS. PAPPAS: -- the lease is 27,000 acres.
19 GOVERNOR BUSH: Excuse me?
20 MS. PAPPAS: The lease -- the lease is
21 approximately 27,000 acres.
22 MR. STRUHS: I have the answer.
23 MS. PAPPAS: It is a lease of both the
24 lands that the Trust would retain, as well as a
25 lease of the lands that would be conveyed. So
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1 it is a single lease that covers both tracts.
2 GOVERNOR BUSH: But after you convey the
3 land and you maintain part, you have to divide
4 the lease up, don't you?
5 MS. PAPPAS: No.
6 COMMISSIONER GALLAGHER: No. We just -- we
7 get stuck with the --
8 GOVERNOR BUSH: I know. We'll --
9 COMMISSIONER GALLAGHER: -- lease --
10 GOVERNOR BUSH: -- get the --
11 COMMISSIONER GALLAGHER: -- on that --
12 GOVERNOR BUSH: -- 22,000. But what about
13 the -- you have to separate --
14 COMMISSIONER GALLAGHER: No.
15 MS. PAPPAS: No. They will take -- you --
16 both parties will take their property subject
17 to --
18 GOVERNOR BUSH: So Rayonier could --
19 MS. PAPPAS: -- the --
20 GOVERNOR BUSH: -- not negotiate just with
21 the -- the property that remains in the hands
22 of the Trust, and not negotiate with us if they
23 wanted -- or if we wanted to --
24 COMMISSIONER GALLAGHER: They could
25 negotiate with either side on -- on their
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1 portion of the lease they -- they end up
2 having.
3 COMMISSIONER CRAWFORD: Well, clearly --
4 clearly they could negotiate with Rayonier to
5 buy out that portion of the lease. That --
6 COMMISSIONER GALLAGHER: Sure.
7 COMMISSIONER CRAWFORD: -- that's,
8 you know, not prohibited.
9 COMMISSIONER GALLAGHER: The State --
10 COMMISSIONER CRAWFORD: But -- not
11 necessarily bad.
12 MS. PAPPAS: They've indici-- I mean, we've
13 had no discussions in that regard, and I
14 don't -- I mean, it's a very good lease for
15 Rayonier. I don't think there's much reason
16 for them to be interested in being purchased --
17 GOVERNOR BUSH: No. It's a --
18 MS. PAPPAS: -- out of --
19 GOVERNOR BUSH: -- great lease. This is --
20 COMMISSIONER GALLAGHER: What is the --
21 GOVERNOR BUSH: I'm concerned about the
22 value of the property.
23 COMMISSIONER GALLAGHER: Can I -- I have a
24 question.
25 Have -- has anybody given us an appraisal
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1 of the value of the lease on the property that
2 we're buying?
3 MR. DEAN: Yes.
4 MS. PAPPAS: Yes.
5 COMMISSIONER GALLAGHER: And that is?
6 MS. PAPPAS: It's in --
7 COMMISSIONER GALLAGHER: Is that amount --
8 MS. PAPPAS: -- that present value of the
9 income stream --
10 COMMISSIONER GALLAGHER: Okay.
11 MS. PAPPAS: -- of the --
12 COMMISSIONER GALLAGHER: And is that amount
13 on the income stream that we're getting?
14 MR. DEAN: Yes.
15 COMMISSIONER GALLAGHER: Well, that --
16 that's not the --
17 GOVERNOR BUSH: No, the value of the
18 lease --
19 COMMISSIONER GALLAGHER: The value --
20 GOVERNOR BUSH: -- would be the net amount
21 between what --
22 COMMISSIONER GALLAGHER: Yeah. Hey, guys,
23 the value we're getting, do me a break. Do me
24 better than that.
25 What is the value to the leaseholder?
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1 MR. STRUHS: Well, it depends on the
2 commodity. Depends on the value of the
3 commodity.
4 What -- what they -- what you have here is
5 a lease that was negotiated in I believe 1959
6 that continues through the year 2025.
7 COMMISSIONER GALLAGHER: Right. There's --
8 MR. STRUHS: And --
9 COMMISSIONER GALLAGHER: -- there's a value
10 to what that leaseholder can take off the
11 property --
12 MR. STRUHS: But the -- but the lease is
13 what it is.
14 COMMISSIONER GALLAGHER: I understand that.
15 MR. STRUHS: And it --
16 COMMISSIONER GALLAGHER: But it has value.
17 MR. STRUHS: And it has a value of a net --
18 a net present value of 5.5 --
19 COMMISSIONER GALLAGHER: No.
20 MR. STRUHS: -- million dollars.
21 COMMISSIONER GALLAGHER: No. You're --
22 you're doing present value of how much money
23 we're going to get from them.
24 MR. STRUHS: Right.
25 COMMISSIONER GALLAGHER: I don't want to --
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1 GOVERNOR BUSH: David, here's --
2 COMMISSIONER GALLAGHER: -- hear that.
3 GOVERNOR BUSH: -- the deal. It's $13 per
4 acre per year is the net lease. If you put a
5 normal cap rate on that, it would be $130,
6 $150. But we're buying it for $900.
7 So, in essence, what they're saying is the
8 value of that lease is the difference between
9 what we're paying and the -- what it would have
10 been had we had -- had the lease -- if it had
11 been bought just as an income property.
12 COMMISSIONER GALLAGHER: Right.
13 GOVERNOR BUSH: That's about --
14 COMMISSIONER GALLAGHER: Right.
15 GOVERNOR BUSH: -- 700 bucks --
16 COMMISSIONER GALLAGHER: I understand --
17 GOVERNOR BUSH: -- an acre.
18 COMMISSIONER GALLAGHER: -- that part.
19 But the -- the -- there's something else
20 added here. There is a value difference
21 between what we get paid on the lease, and what
22 the person that pays us makes. That's what the
23 lease is worth.
24 The lease is worth -- why they want to
25 lease it is because it's --
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1 COMMISSIONER CRAWFORD: And it's --
2 COMMISSIONER GALLAGHER: -- got a value.
3 COMMISSIONER CRAWFORD: It's the timber.
4 COMMISSIONER GALLAGHER: Right. Well,
5 does -- but nobody's telling me what that is.
6 MR. STRUHS: Well, I -- I --
7 COMMISSIONER GALLAGHER: In other words, if
8 I was going to try to buy this lease out from
9 them, they're not going to say, oh, we'll take
10 it on present value, the money we have to pay
11 you.
12 They're going to say, forget that.
13 They're want -- they want to sell us
14 the val-- the only way you could buy it from
15 them -- and that's the number I want to know
16 is -- how much is the timber worth over the
17 next 25 years? I mean, maybe that's the easy
18 way to say it.
19 What's the timber worth over the next
20 25 years?
21 MR. STRUHS: And I -- my answer,
22 Commissioner, is is it's not for sale.
23 COMMISSIONER GALLAGHER: I -- what do
24 you -- it's not for sale because it's -- they
25 got it for free. Or they got it already on a
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1 lease. But that's what -- you see, what I need
2 to know is, it may not be for sale. But what's
3 it worth?
4 In other words, we're buying a piece of
5 property from somebody who has a lease, okay?
6 They have given up a value for some cash. If
7 we wanted to buy that value that we're not
8 getting, how much would it cost? And nobody
9 will tell me -- nobody -- you know, you say --
10 MR. DEAN: I don't think --
11 COMMISSIONER GALLAGHER: -- we're not
12 getting it. But what -- what if we want to do
13 it, what would it cost us? I mean, they
14 would -- I guarantee you, the leasors would
15 sell it to us if they could get their money
16 now instead of waiting 25 years.
17 MR. STRUHS: I think -- I think if you go
18 back to the way I presented it, if -- if we
19 were to buy -- if the State -- if the State of
20 Florida were to buy the 22,000 acres today, fee
21 simple, total value, it'd be 66 million
22 dollars.
23 MR. DEAN: David, let me try to answer it,
24 if I may, because there is no answer. Let me
25 tell the Commissioner.
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1 Commissioner, my best guess to you this
2 morning would be the value of that lease is
3 probably three to four times, I would guess,
4 the revenue that the public, the State, and the
5 District will get over the next 25 years.
6 It's an excellent lease. Rayonier has an
7 excellent lease. And it's -- and I'm -- I say
8 that because no -- we don't --
9 COMMISSIONER GALLAGHER: It is what it is.
10 MR. DEAN: It is what it is. We haven't --
11 we've not done any calculations about what
12 profit Rayonier is making or will make on that
13 lease.
14 But my guess is, because I understand the
15 terms of the lease, and -- and I know that
16 it -- that it's roughly, I would say, two,
17 three, maybe even four times the value of the
18 net revenue to the State. So I'm doing my best
19 to answer your question.
20 And --
21 COMMISSIONER GALLAGHER: But you see,
22 what -- what my problem is is, you have a
23 seller who gave a lease out that right now, and
24 probably in the future, is a wonderful deal for
25 them.
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1 Then they sell us what's left, and -- and
2 say, gee, we don't have to worry about this
3 anymore, we got our cash here, the lease is now
4 the State's, and -- and we walk.
5 And if -- if -- if the lease is worth
6 four times what the cash -- whatever else it
7 is, that's the amount that ought to be
8 discounted from the price we pay for the
9 property. Because the property's worth that
10 much less.
11 It's not worth just what's less to the --
12 to the people that are selling it to us. It's
13 worth what's less to the people of the
14 state of Florida that are buying it. And --
15 and --
16 MR. DEAN: Well, the -- the only way,
17 Commissioner, I can -- I can respond to that is
18 to tell you that we think the property -- we
19 think the property -- the development value of
20 the property will be roughly -- in 25 years,
21 roughly 300 million dollars. Okay? In this
22 growth corridor.
23 And so --
24 GOVERNOR BUSH: And we shouldn't be buying
25 property based on development rights that don't
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1 exist when we buy it. That is -- that is my --
2 COMMISSIONER GALLAGHER: Well, that's
3 another issue.
4 MR. DEAN: I know.
5 GOVERNOR BUSH: Well, that's what you just
6 did.
7 MR. DEAN: Well, Governor, I -- I
8 understand -- I understand your point, and it's
9 well taken.
10 I'm -- I'm -- I'm trying to -- to respond
11 to -- this morning in a way to explain that our
12 only option we saw to acquire this land and put
13 it in public ownership, because it's encumbered
14 with this lease, was to pay fair market
15 value -- or less than fair market value if we
16 could negotiate it.
17 So the question in our mind became, what is
18 the fair market value. And -- and I -- and in
19 many, many instances where we have purchased --
20 the State has purchased, and -- and the Water
21 Management Districts have purchased land which
22 is zoned rural agricultural, there -- there are
23 estimates that it will appreciate in value in
24 the future, notwithstanding the fact that it
25 may need certain rezonings.
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1 And I -- and I would tell you that we're
2 dealing -- and I agree with you, Governor,
3 we're dealing in probabilities when it comes to
4 what -- whether the land may or may not be
5 developed. I don't know.
6 But I can tell you in my personal opinion,
7 the probability is very high that in the next
8 25 years, it will be developed because of its
9 particular location and attractiveness
10 surrounded by development.
11 So what we did was try to arrive at what
12 would you be willing to invest to make
13 12 percent on your money over the next
14 25 years, which is the 300 million dollar
15 figure, and that -- back out the value of the
16 property today less the lease. And that's
17 18 million.
18 And we added that to the income of the
19 timber lease of 5.9 million, and arrived at an
20 appraised value of 23.9 million, and negotiated
21 a purchase price of 20.1.
22 And that -- that may -- I -- that may be
23 convoluted. But -- but we think that it's
24 justifiable, supportable, and it -- and, again,
25 this is a good public policy to tie up this
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1 property and buy it today, because, Governor,
2 you're right, we don't know -- my crystal ball
3 is not clear, I don't know what will happen
4 with this land.
5 But I can tell you, in all probability, if
6 it's not purchased and put in public ownership,
7 it will be developed, or a large part of it
8 will be developed, and -- and it really needs
9 to be protected.
10 COMMISSIONER GALLAGHER: It's sure not
11 going to be developed for 25 years.
12 MR. DEAN: That's right.
13 GOVERNOR BUSH: Commissioner Nelson.
14 TREASURER NELSON: Governor, I -- I want to
15 just express the way I see it. Let me just ask
16 one quick question.
17 You said that the fair market value, as
18 best as you estimate it, is now about
19 sixty-five, sixty-six --
20 MR. DEAN: Sixty-six million.
21 TREASURER NELSON: Okay. My simple
22 country boy conclusion on this would be that
23 what they are doing is setting aside a piece of
24 property that has a present value of 66 million
25 dollars by acquiring it for 20 million dollars,
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1 to make sure that this property is set aside
2 from development for the future.
3 Now, that to me sounds like a good deal for
4 the State of Florida.
5 COMMISSIONER GALLAGHER: Well -- well, let
6 me ask a question.
7 What -- how much are the taxes on this
8 property?
9 MR. DEAN: With the greenbelt, I think it's
10 approximately 70,000 a year.
11 Somebody needs to correct me. But that's
12 the figure I read in the appraisal report.
13 It's greenbelted.
14 COMMISSIONER GALLAGHER: The -- see, what
15 you're gett-- you're getting $317,000 income
16 per year.
17 What's the -- what's -- what's the value of
18 that property based on the income?
19 MR. DEAN: Well, the timber lease income
20 revenue, the way the appraisal was done,
21 Commissioner, was to value that revenue stream
22 over 25 years, and place a present value of
23 that timber lease of 5.9 million.
24 COMMISSIONER GALLAGHER: And -- but that's
25 all that property's worth for 25 years.
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1 MR. DEAN: Right. That's why we had to
2 appraise the property as how it would be valued
3 in 25 years, and that's why we took the
4 6 percent growth rate and property values for
5 25 years, arrived at 300 million, and then used
6 a 12 percent discount rate, by the way --
7 COMPTROLLER MILLIGAN: He's not going to
8 like what I'm going to say.
9 GOVERNOR BUSH: General.
10 COMPTROLLER MILLIGAN: Just a -- first of
11 all, I've got a comment. I -- I'm one of those
12 Bergen County, New Jersey, people.
13 Livingston was where I lived before I moved
14 to a farm with my family.
15 GOVERNOR BUSH: I'm from Bergen County as
16 well. I didn't know that you were --
17 COMPTROLLER MILLIGAN: A New Jersey hood,
18 yes.
19 The -- you know, in some respects, I think,
20 you know, we're missing the -- the real point
21 of this whole purchase, and it's really water
22 management and water supply.
23 And, you know, we're hung up on the
24 timber lease; we're hung up on, for that
25 matter, the habitat; we're hung up on the
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1 greenway; we're hung up on the pricing
2 mechanism; the discount rate we're using; and
3 everything.
4 And there's absolutely no greater
5 challenge, I don't think, that this state faces
6 in the future than water management and water
7 supply.
8 And -- and particularly as we move further,
9 further north in Florida, and it becomes more
10 and more difficult to really sustain that
11 capacity that we need to sustain.
12 So -- and we're not putting a price on it.
13 You know, what is -- what is the productivity?
14 You know, what is -- what -- what is the value
15 of protecting that water management and that
16 water supply?
17 If we lose that, what is the cost that we
18 will incur? And that's not even, you know,
19 figured in here. And -- and so I'm persuaded.
20 There are a lot of things I don't,
21 you know, like about the -- the linkage
22 concerns me a bit. I'm not -- I think -- I --
23 I don't like the 25-year lease to a degree.
24 But I'm persuaded because of the importance
25 of water management and water supply to the
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1 state of Florida, that we ought to take this
2 opportunity.
3 GOVERNOR BUSH: Any other comments?
4 COMMISSIONER CRAWFORD: Well, just --
5 just -- just a quick question. This is kind of
6 a shot in the dark here.
7 But was there any thought given to trying
8 to buy out the lease from the
9 Rayonier Corporation?
10 MR. DEAN: My information or my
11 understanding is that they are not interested
12 in speaking with us, and have not spoken with
13 us. So we don't have a willing seller to talk
14 to.
15 Does anyone -- elaborate on that?
16 That's --
17 COMMISSIONER GALLAGHER: Well, I'll -- I'll
18 just make a prediction that there's a price
19 they'll sell it for, and we find out what it
20 is, we're going to be -- we're going to be
21 blown away. Just mark my words.
22 SECRETARY HARRIS: Well --
23 COMMISSIONER GALLAGHER: That 66 million is
24 going to look cheap.
25 SECRETARY HARRIS: What was the 5.9 million
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1 with regard to the --
2 COMMISSIONER GALLAGHER: That's what the --
3 SECRETARY HARRIS: -- timber?
4 COMMISSIONER GALLAGHER: -- value of the
5 property is based on the cash flow.
6 SECRETARY HARRIS: Based on the cash flow.
7 MR. DEAN: The timber lease.
8 SECRETARY HARRIS: Based on what the timber
9 produces.
10 So if that's -- if it's worth 5.9 million,
11 there's probably a much less significant price
12 than what we're talking about right now that
13 they would be willing to sell that timber lease
14 for, then we would have access for 25 years,
15 and it's a lot less than -- than 20 million.
16 MR. DEAN: No.
17 SECRETARY HARRIS: Twenty-three million.
18 MR. DEAN: The -- the revenue stream of the
19 timber lease has a present value today of
20 5.9 million. That's arrived at at 320,000 a
21 year for 25 years.
22 I'm telling you -- here today I'm
23 suggesting to you that the actual value, as
24 Commissioner Gallagher pointed out, the -- the
25 value to Rayonier is substantially more than
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1 that, and, in fact, they would be unwilling to
2 sell --
3 I'll tell you this: I think -- and this is
4 Henry Dean's prediction. I've lived over there
5 16 years now in St. Johns County and dealt with
6 growth and water issues.
7 Someone will probably come along, if this
8 property is still on the market, in 10 or
9 12 years, and -- and, in fact, buy the -- the
10 underlying fee and buy out the timber rights.
11 Why? Because the property will be so
12 valuable for development purposes, in my
13 opinion -- and that -- that is a possibility.
14 Charles said it best, Charles Lee, it's
15 either going to be purchased or developed,
16 and -- and that's a probability, Governor, not
17 a certainty. My crystal ball's not --
18 GOVERNOR BUSH: Yeah. I have no problems
19 with the lease. In fact, I think it's an added
20 protection it won't be developed.
21 I -- the lease part is the part -- the only
22 part of this that gives me comfort, to be --
23 MR. DEAN: Lease --
24 GOVERNOR BUSH: -- honest with you.
25 MR. DEAN: Well, let me concentrate --
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1 GOVERNOR BUSH: Because I had --
2 MR. DEAN: -- on the lease then.
3 GOVERNOR BUSH: -- the pricing of this is
4 where -- I'm going to vote yes.
5 Now, I'm just going to tell you, we need to
6 get far better along the path of having
7 Water Management Districts and State working
8 together, and County Commissions working
9 together to establish better pricing
10 strategies.
11 You know, I -- when I came -- when I got
12 elected Governor, I thought that private
13 property owners typically got the shaft from
14 the State, that there was an erosion of private
15 property rights.
16 Whatever erosion of private property rights
17 is far -- is taken care of by the sloppy nature
18 of how we negotiate and how we deal with
19 property owners. They -- they come up here
20 every other week, and they do real well.
21 COMMISSIONER GALLAGHER: Well, some.
22 GOVERNOR BUSH: Most of the time.
23 Particularly on the bigguns, on these big
24 deals.
25 And I -- and I -- you know, I'm going to
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1 vote yes, because this is a jewel of a
2 property, and I'm -- and the -- the thought
3 behind what you all have done, and the
4 Commission, although, they're not putting up a
5 dime, the County's role in this to project --
6 you know, to project in the long run and look
7 in the long-term future, all that makes sense.
8 But, man, I can't wait to get back into the
9 real estate business and sell property to the
10 State.
11 COMMISSIONER GALLAGHER: But just --
12 GOVERNOR BUSH: There's people doing it,
13 and there won't be any left.
14 Any other comments?
15 COMPTROLLER MILLIGAN: It's even better
16 when you buy it from the State, because you
17 really do buy low.
18 COMMISSIONER GALLAGHER: We're going to
19 keep it for awhile, and then sell it back.
20 GOVERNOR BUSH: Yeah. I need to --
21 COMMISSIONER GALLAGHER: We're going to
22 sell -- you don't have to buy -- we're going to
23 give it away real soon. The Legislature's
24 going to give it away, and then, mark my words,
25 we'll buy it back.
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1 ATTORNEY GENERAL BUTTERWORTH: Again.
2 COMMISSIONER GALLAGHER: It'll happen.
3 GOVERNOR BUSH: Any other comments?
4 Is there a motion?
5 COMMISSIONER GALLAGHER: Motion.
6 GOVERNOR BUSH: Second?
7 COMMISSIONER CRAWFORD: Second.
8 SECRETARY HARRIS: Second.
9 GOVERNOR BUSH: Moved and seconded, with
10 minor objections.
11 Motion passes.
12 MR. DEAN: Thank you, Governor, and
13 Cabinet.
14 (The Trustees of the Internal Improvement
15 Trust Fund Agenda was concluded.)
16 * * *
17 (The Cabinet meeting was concluded at
18 11:48 a.m.)
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1 CERTIFICATE OF REPORTER
2
3
4
5 STATE OF FLORIDA:
6 COUNTY OF LEON:
7 I, LAURIE L. GILBERT, do hereby certify that
8 the foregoing proceedings were taken before me at the
9 time and place therein designated; that my shorthand
10 notes were thereafter translated; and the foregoing
11 pages numbered 1 through 91 are a true and correct
12 record of the aforesaid proceedings.
13 I FURTHER CERTIFY that I am not a relative,
14 employee, attorney or counsel of any of the parties,
15 nor relative or employee of such attorney or counsel,
16 or financially interested in the foregoing action.
17 DATED THIS 27TH day of MARCH, 2000.
18
19
20 LAURIE L. GILBERT, RPR, CCR, CRR, RMR
100 Salem Court
21 Tallahassee, Florida 32301
850/878-2221
22
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