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:
VOTE ON EXECUTIVE DIRECTOR/VETERANS AFFAIRS
HIRING UPDATE FOR FHP DIRECTOR
DIVISION OF BOND FINANCE
STATE BOARD OF EDUCATION
DEPARTMENT OF REVENUE
ADMINISTRATION COMMISSION
BOARD OF TRUSTEES OF THE
INTERNAL IMPROVEMENT TRUST FUND
STATE BOARD OF ADMINISTRATION
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,
May 15, 2001, commencing at approximately 9:18 a.m.
Reported by:
LAURIE L. GILBERT COX
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
CHARLES H. BRONSON
Commissioner of Agriculture
BOB MILLIGAN
Comptroller
KATHERINE HARRIS
Secretary of State
BOB BUTTERWORTH
Attorney General
TOM GALLAGHER
Treasurer
CHARLIE CRIST
Commissioner of Education
* * *
ACCURATE STENOTYPE REPORTERS, INC.
3
May 15, 2001
I N D E X
ITEM ACTION PAGE
VOTE ON EXECUTIVE DIRECTOR
DEPARTMENT OF VETERANS' AFFAIRS:
Approved 7
HIRING UPDATE ON THE DIRECTOR OF
THE FLORIDA HIGHWAY PATROL:
For Information Only 10
DIVISION OF BOND FINANCE:
(Presented by J. Ben Watkins, III,
Director)
1 Approved 20
2 Approved 25
3 Approved 26
4 Approved 26
STATE BOARD OF EDUCATION:
(Presented by Wayne V. Pierson,
Deputy Commissioner)
1 Approved 27
2 Deferred 27
3 Approved 28
4 Approved 29
5 Approved 29
DEPARTMENT OF REVENUE:
(Presented by Lisa Echeverri,
Director of Legislative and Cabinet Services)
1 Approved 31
2 Approved 31
ADMINISTRATION COMMISSION:
(Presented by Teresa Tinker,
Policy Coordinator)
1 Approved 33
2 Approved 76
ACCURATE STENOTYPE REPORTERS, INC.
4
May 15, 2001
I N D E X
(Continued)
ITEM ACTION PAGE
BOARD OF TRUSTEES OF THE
INTERNAL IMPROVEMENT
TRUST FUND:
(Presented by David B. Struhs,
Secretary)
1 Approved 80
2 Deferred 80
Substitute 3 Approved 83
4 Approved 85
Substitute 5 Approved 86
6 Approved 91
7 Approved 92
8 Withdrawn 92
STATE BOARD OF ADMINISTRATION:
(Presented by Tom Herndon,
Executive Director)
1 Approved 100
2 Approved 100
3 Approved 101
4 Approved 102
5 Approved 113
6 Approved 119
7 Approved 121
8 Deferred 131
CERTIFICATE OF REPORTER 132
* * *
ACCURATE STENOTYPE REPORTERS, INC.
VOTE ON EXECUTIVE DIRECTOR/VETERANS' AFFAIRS 5
May 15, 2001
1 P R O C E E D I N G S
2 (The agenda items commenced at 9:19 a.m.)
3 GOVERNOR BUSH: The -- I would like to make
4 a recommendation to the Cabinet for the
5 appointment of the Executive Director of the
6 Department of Veterans' Affairs.
7 And I would recommend Jennifer Carroll be
8 the Executive Director. She has served -- she
9 served 20 years in the United States Navy; and
10 retired as Lieutenant Commander in 1999,
11 honorably discharged, of course.
12 She served as administrative department
13 head under Admiral Kevin Delaney, and managed
14 an office of over 60 Navy personnel officers.
15 She's received numerous personal awards and
16 decorations during her 20-year military service
17 career, and has the support of -- which is very
18 important to me personally -- the support of
19 the American Legion, the Disabled American
20 Veterans group, the Florida County Veteran
21 Service Officers Association, the Veterans
22 Service Division of the City of Jacksonville.
23 And she's a member of various veterans
24 organizations as well.
25 Jennifer is a lifetime member of the NAACP.
ACCURATE STENOTYPE REPORTERS, INC.
VOTE ON EXECUTIVE DIRECTOR/VETERANS' AFFAIRS 6
May 15, 2001
1 She holds a Bachelor's degree in
2 political science from the University of
3 New Mexico, and a Master's degree in business
4 administration from Kensington University.
5 TREASURER GALLAGHER: Governor, I --
6 GOVERNOR BUSH: Jennifer I got to meet in
7 the political realm as well when she was a
8 candidate for public office.
9 So --
10 TREASURER GALLAGHER: If I may, Governor,
11 I'd like to move to make it a unanimous
12 approval of your recommendation.
13 COMMISSIONER CRIST: Second.
14 COMPTROLLER MILLIGAN: I'll second that.
15 GOVERNOR BUSH: Thank you.
16 Any discussion?
17 COMPTROLLER MILLIGAN: I think it's an
18 extraordinarily fine choice, Governor.
19 GOVERNOR BUSH: Thank you, General.
20 With that, Jennifer, would you like to come
21 up?
22 And I know that the veterans' groups may
23 want to speak, since they've come to --
24 TREASURER GALLAGHER: You want to call a
25 vote, just to make sure you --
ACCURATE STENOTYPE REPORTERS, INC.
VOTE ON EXECUTIVE DIRECTOR/VETERANS' AFFAIRS 7
May 15, 2001
1 GOVERNOR BUSH: Okay. Well --
2 Is there a vote --
3 All in favor, say aye.
4 THE CABINET: Aye.
5 GOVERNOR BUSH: All opposed.
6 COMMISSIONER CRIST: Congratulations.
7 GOVERNOR BUSH: Very good.
8 Congratulations.
9 TREASURER GALLAGHER: Come on up.
10 MS. CARROLL: Good morning, Governor.
11 First I would like to say thank you very
12 much to you, Governor Bush, and all the Cabinet
13 members for your trust and confidence in me to
14 effectively perform the duties to effectively
15 serve the veterans of this great state.
16 In particular -- in particular, I'd like to
17 thank the following individuals for stepping up
18 to the plate and truly lobbying and giving me
19 their wholehearted support: Representative
20 Dennis Baxley, Florida Department of
21 Veterans' Affairs, American Legion, the
22 Voters' League, the Florida's Nurses'
23 Association, Disabled American Veterans, the
24 Post -- American Legion Post 13 is here with me
25 this morning.
ACCURATE STENOTYPE REPORTERS, INC.
VOTE ON EXECUTIVE DIRECTOR/VETERANS' AFFAIRS 8
May 15, 2001
1 Stand up.
2 As -- as well as the VFW Post 3308 is here
3 to give me their support as well.
4 Can you please stand up?
5 GOVERNOR BUSH: They're all back up again.
6 It's the same group.
7 MS. CARROLL: As well as the Retired
8 Officers Association.
9 Much work has been done in this state to
10 support the veterans, but there's still a lot
11 of work to be done.
12 And as you know, because of the veterans
13 that have effectively served our country, and
14 have given up their life and sacrifices that
15 they have made to protect our freedoms, it is
16 up to us to now protect their benefits, and
17 make sure that their life is as safe and as
18 comfortable as possible, and the things that
19 they're supposed to, and have deserved
20 throughout their years of service is what we
21 put in place.
22 So that is my responsibility, to do the job
23 effectively for you, Governor Bush, to make
24 sure that we give the most -- the utmost
25 customer service to the veterans of this state,
ACCURATE STENOTYPE REPORTERS, INC.
VOTE ON EXECUTIVE DIRECTOR/VETERANS' AFFAIRS 9
May 15, 2001
1 to make sure that their well-being is
2 protected.
3 Thank you very much.
4 GOVERNOR BUSH: Thank you, Jennifer.
5 Jennifer, you want to come -- come up and
6 get a picture with us.
7 (The Vote on the Appointment of the
8 Executive Director of the Department of
9 Veterans' Affairs Agenda was concluded.)
10 * * *
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12
13
14
15
16
17
18
19
20
21
22
23
24
25
ACCURATE STENOTYPE REPORTERS, INC.
HIRING UPDATE/FHP DIRECTOR 10
May 15, 2001
1 GOVERNOR BUSH: Next we have an update from
2 Fred Dickinson, the Executive Director of our
3 Department of Highway Safety and Motor Vehicles
4 about the Florida Highway Patrol search.
5 MR. DICKINSON: Good morning, Governor,
6 Cabinet.
7 Congratulations, Commissioner.
8 COMMISSIONER BRONSON: Thank you.
9 MR. DICKINSON: Good to have you aboard.
10 As we have done, I guess, three times here
11 in the '90s -- or this'll be the third time --
12 we're up for selection for the Colonel of
13 the -- Director of the Florida Highway Patrol,
14 who serves at the rank of Colonel.
15 And as you're well aware, Charles Hall, who
16 has been a loyal, dedicated State employee for
17 some 36 years is in the DROP program, and he's
18 in that -- he's above the 75 percent average
19 compensation, so he has three years. And his
20 time will be up June 30th.
21 So in anticipation of that, we have posted
22 a job application -- a job opening for the
23 Director of the Florida Highway Patrol. And I
24 think most of your offices have been supplied
25 our time line.
ACCURATE STENOTYPE REPORTERS, INC.
HIRING UPDATE/FHP DIRECTOR 11
May 15, 2001
1 What I -- what we intend to do is go ahead
2 and advertise -- the advertisement is open now.
3 We'll leave it open for the balance of the
4 month.
5 And next week we'll put together a -- a
6 panel that will help us screen and interview.
7 We've done this in the past to try to
8 accommodate all of our stakeholders in Florida
9 that the Patrol serves -- well, not all of
10 them. But we'll try to get as many as we can
11 on the panel.
12 And then do interviews the first part of
13 June. And then the selection panel will come
14 back, we'll do some background investigations.
15 And as I say, this doesn't require any --
16 any work on your part, but I certainly don't
17 want to make this decision in a vacuum, and I'd
18 like to keep everybody posted on -- on where
19 we're heading with this job selection.
20 We've already had a number of -- of
21 inquiries, Governor. It's on the Internet.
22 It's not a Florida-only job search. And it's
23 out there. So we're getting some inquiries
24 already.
25 GOVERNOR BUSH: Any questions?
ACCURATE STENOTYPE REPORTERS, INC.
HIRING UPDATE/FHP DIRECTOR 12
May 15, 2001
1 ATTORNEY GENERAL BUTTERWORTH: Yes.
2 Governor, I do have --
3 GOVERNOR BUSH: Yeah.
4 ATTORNEY GENERAL BUTTERWORTH: This is a
5 little bit unrelated though.
6 If there are any related questions, I'll --
7 I'll wait till after they're done. Then I'll
8 ask an unrelated question.
9 GOVERNOR BUSH: You can -- General, you can
10 ask any question you like.
11 ATTORNEY GENERAL BUTTERWORTH: Thank you.
12 GOVERNOR BUSH: It'll always be related if
13 you ask it.
14 ATTORNEY GENERAL BUTTERWORTH: Thank you,
15 Governor.
16 Fred, over the past few months, we -- we've
17 seen in the national news, as well as in the
18 state of Florida where driving while distracted
19 is causing perhaps up to half of the crashes
20 and fatalities. Years ago, we were very
21 concerned, as we -- as we are now, and should
22 be, about driving while under the influence of
23 alcohol and/or drugs.
24 What is the FHP doing now insofar as
25 capturing the various distractions, whether it
ACCURATE STENOTYPE REPORTERS, INC.
HIRING UPDATE/FHP DIRECTOR 13
May 15, 2001
1 be a cell phone, or whether it be reading a
2 paper, shaving, or putting on makeup, and all
3 the others that we can think of --
4 GOVERNOR BUSH: I think your makeup looks
5 pretty good today.
6 ATTORNEY GENERAL BUTTERWORTH: I'm only
7 half a mile from the -- that's such a long
8 light over there at Apalachee and Monroe that
9 you can read the whole Tallahassee Democrat
10 right there.
11 MR. DICKINSON: That's a whole other story,
12 right, General?
13 TREASURER GALLAGHER: I'm not going there.
14 GOVERNOR BUSH: My lips are sealed.
15 MR. DICKINSON: General, is what we have --
16 as you're well aware, because you're the one
17 that instigated it. But we have put a box on
18 the crash reports, as well as now coming on the
19 traffic citations.
20 And the law enforcement officer can check
21 that box and go ahead and delineate if there's
22 further information needed, so we can at least
23 find out what the problem is.
24 ATTORNEY GENERAL BUTTERWORTH: But are
25 you -- are you going to capture that -- other
ACCURATE STENOTYPE REPORTERS, INC.
HIRING UPDATE/FHP DIRECTOR 14
May 15, 2001
1 than being in a box, is it going to be captured
2 to where in categories where we can say --
3 MR. DICKINSON: Yes, sir.
4 ATTORNEY GENERAL BUTTERWORTH: -- like in
5 New Jersey -- or New York now I think is
6 looking at legislation to -- to deal with the
7 cell phone issue.
8 The cell phone companies, if you'll take
9 your -- when you get the book from the
10 cell phone company now, it'll have -- in that
11 book, it says, we do not advise that you use
12 this while you're driving.
13 So, obviously, they're expecting something
14 to happen in the future. And -- and they're
15 trying to do whatever they can do as quickly as
16 possible to make sure you can do a hands-free
17 type situation.
18 So you'll be able to tell us how many
19 crashes are -- are registered.
20 Now, are local agencies, cities,
21 municipalities going to be using that report,
22 too? Can you get them to also do the same
23 thing as what you're doing?
24 MR. DICKINSON: That's correct. They will
25 have the same report.
ACCURATE STENOTYPE REPORTERS, INC.
HIRING UPDATE/FHP DIRECTOR 15
May 15, 2001
1 ATTORNEY GENERAL BUTTERWORTH: Okay. Now,
2 the other issue we had in Florida -- and we
3 were number one in the country, unfortunately,
4 with the -- the tragedies of the lethal
5 combination of the Ford Explorer and the
6 Firestone tire.
7 We had I think about 22 fatalities alone in
8 the state of Florida. We -- we led the
9 country, and that's -- because we're -- we're a
10 hot weather state, especially in the
11 summertime, we -- we do long driving.
12 Are we capturing the fact that it -- if
13 certain things like that, if a tire fails, that
14 we can get to the front end of the problem, as
15 opposed to having to wait until we have over
16 200 fatalities nationwide, with so many of them
17 in Florida.
18 MR. DICKINSON: General, is what we've done
19 is we have, number one, alerted the troopers
20 and law enforcement that -- and not only for
21 tires, but any irregularity, or if you see
22 anything happening on a too consistent a basis,
23 we'd like to know about it.
24 But we have sections in our crash reporting
25 for tires specifically, which relates to not
ACCURATE STENOTYPE REPORTERS, INC.
HIRING UPDATE/FHP DIRECTOR 16
May 15, 2001
1 only the tire size and tire make, but
2 inflation, lack -- or -- or -- you know, tread,
3 or -- or a problem on the tire.
4 So the answer to your question is, yes,
5 we're -- we're now gathering that information.
6 And we're kind of at the point where we need to
7 start crunching. And -- and that's what we're
8 trying to do with our crash reporting section.
9 ATTORNEY GENERAL BUTTERWORTH: Okay. We --
10 Florida is -- is perhaps the lead state on the
11 Firestone/Explorer issue, because we had a
12 number of fatalities.
13 I do not want the public of this state to
14 believe that because the advertising of
15 Firestone now is that we're a great company,
16 we're warm and fuzzy, and these -- these
17 tremendous ads.
18 The tires they made previously that were
19 bad are still bad. So if -- and we're trying
20 to make sure the public is aware to get out of
21 those bad tires -- to get out of those bad
22 tires.
23 So if you -- if you find anything, please
24 let us know. I know Firestone and Florida are
25 cooperating very well on this, but we have to
ACCURATE STENOTYPE REPORTERS, INC.
HIRING UPDATE/FHP DIRECTOR 17
May 15, 2001
1 get the public to -- to be aware, if they've
2 got that bad tire, they have to get out of it.
3 MR. DICKINSON: Thank you, sir.
4 GOVERNOR BUSH: Any questions about the
5 search?
6 I think this is -- when you're lucky to be
7 the fourth largest state, and a place where
8 people like to come, that we're -- we're lucky
9 and blessed really to have -- when jobs of this
10 importance open up, you know, to have a broad
11 range of options.
12 And it may turn out that the best, most
13 qualified person is already working right
14 there.
15 But at the same time, I think it's great
16 that you're opening this up to allow for other
17 interesting possibilities to come -- come
18 forth.
19 MR. DICKINSON: Incidentally, Governor,
20 we've had -- we've got ten troops statewide.
21 And we haven't had this opportunity -- I think
22 General Butterworth can appreciate this -- we
23 replaced three troop commanders this year, who
24 also DROPPed. And typically those jobs
25 don't -- they only come available about once
ACCURATE STENOTYPE REPORTERS, INC.
HIRING UPDATE/FHP DIRECTOR 18
May 15, 2001
1 every five or six years.
2 So we -- we had a great opportunity. And
3 the diversity is showing in our troopers. They
4 all came from inside. We now support three
5 African American troop commanders, and a white
6 female troop commander. So four of our ten
7 are -- are female or minority.
8 The education has been enhanced. As -- as
9 you're well aware, all law enforcement has to
10 bump up a little bit for education. We've
11 already tackled that.
12 Those that don't have a degree are actively
13 seeking. But come a couple years from now, all
14 law enforcement has to -- has to -- we've
15 raised the bar on education requirements, so
16 we're already tackling that.
17 And I think you're seeing a -- a better
18 work force. The education factor is there.
19 All the issues that have come up in the last
20 couple of years, if nothing else, we've got an
21 awareness level that's higher than ever.
22 And -- and raised the bar.
23 And I think the ethics of our
24 law enforcement community certainly is -- is at
25 the highest point in the --
ACCURATE STENOTYPE REPORTERS, INC.
HIRING UPDATE/FHP DIRECTOR 19
May 15, 2001
1 GOVERNOR BUSH: Fred, just one more
2 question. On the -- on the DROP issue, how
3 many officers do you think will be leaving in
4 the next couple of years? What's the --
5 MR. DICKINSON: A hundred and seven.
6 GOVERNOR BUSH: Out of --
7 MR. DICKINSON: Seventeen hundred and
8 seventy. Those are primarily lieutenants.
9 GOVERNOR BUSH: A lot of mid to top
10 management.
11 MR. DICKINSON: Yes, sir. Exactly. And
12 it's a great oppor--
13 I mean, we're losing a lot of experience,
14 and it hurts. But it's a great opportunity for
15 us. We've got some fresh blood coming up.
16 And -- and we're looking forward to it.
17 We -- we have taken some steps to make sure
18 that we handle that mass exodus. So I'm -- I'm
19 here to tell you, we're on top of it, and --
20 and we'll keep you posted.
21 GOVERNOR BUSH: Thank you.
22 Any other questions?
23 Thanks.
24 (The Hiring Update for the Florida Highway
25 Patrol Director Agenda was concluded.)
ACCURATE STENOTYPE REPORTERS, INC.
DIVISION OF BOND FINANCE 20
May 15, 2001
1 GOVERNOR BUSH: Division of Bond Finance.
2 Is there a motion on the minutes?
3 TREASURER GALLAGHER: Motion on the
4 minutes.
5 ATTORNEY GENERAL BUTTERWORTH: Second.
6 GOVERNOR BUSH: Moved and seconded.
7 Without objection, it's approved.
8 Item 2.
9 MR. WATKINS: Item 2 is a resolution
10 authorizing the distribution of an RFP for
11 underwriters for a PECO refunding that allows
12 us to utilize a financing technique to
13 effectuate a refunding that would otherwise be
14 prohibited by Federal tax law.
15 Assuming this item's approved, the next
16 step in the process would be to bring a
17 recommendation back to this Board of the
18 underwriting syndicate, and -- and at that
19 time, formally get authorization to execute a
20 negotiated transaction, as opposed to a
21 competitive transaction, which is our normal
22 policy.
23 TREASURER GALLAGHER: I have a question
24 before we move this.
25 GOVERNOR BUSH: Yes.
ACCURATE STENOTYPE REPORTERS, INC.
DIVISION OF BOND FINANCE 21
May 15, 2001
1 TREASURER GALLAGHER: Would you just
2 quickly explain that -- the -- the Federal tax
3 ramification that caused us to wait till next
4 March to fin-- to deliver these?
5 MR. WATKINS: Under Federal tax law, you
6 can only advance refund a bond issue one time.
7 So unlike your home mortgage, whereas rates
8 continue to drop, you can refinance that as
9 many times as you like. Under Federal tax law,
10 we only get one opportunity to advance refund
11 our tax exempt bond issues.
12 So on this particular issue, it's already
13 been advance refunded once. So we can't
14 advance refund it again.
15 TREASURER GALLAGHER: But what's that have
16 to do with doing it in March? That's when you
17 have enough bonds that --
18 MR. WATKINS: It becomes -- under Federal
19 tax law, it is a current refunding, which means
20 you -- you pay the bond -- you issue new bonds,
21 generate a pot of money to pay the old bonds
22 off, which is a current refunding. It becomes
23 a current refunding on March 1 of 2002.
24 TREASURER GALLAGHER: Well, that's what --
25 MR. WATKINS: So it would --
ACCURATE STENOTYPE REPORTERS, INC.
DIVISION OF BOND FINANCE 22
May 15, 2001
1 TREASURER GALLAGHER: -- I don't
2 understand.
3 MR. WATKINS: -- allow us then to refund
4 it.
5 TREASURER GALLAGHER: Why -- I'm still not
6 clear on that.
7 MR. WATKINS: Okay.
8 TREASURER GALLAGHER: What -- what stops
9 you from having a current refunding in July?
10 MR. WATKINS: The definition of a -- the
11 Federal tax law basically says 90 days before
12 the first call date qualifies as a current
13 refunding.
14 Anything with a -- with a period of time
15 longer than 90 days before the first call date
16 is an advance refunding.
17 So we don't -- the first call date on the
18 bonds is June 1st, 2002. So that's really the
19 date that we can currently refund the bonds.
20 TREASURER GALLAGHER: So the 285 million,
21 that group of bonds has a call date next June.
22 MR. WATKINS: Correct.
23 TREASURER GALLAGHER: 2002.
24 MR. WATKINS: Correct.
25 TREASURER GALLAGHER: Which allows you to
ACCURATE STENOTYPE REPORTERS, INC.
DIVISION OF BOND FINANCE 23
May 15, 2001
1 go out in March, get the money, pay them off in
2 June.
3 MR. WATKINS: Correct.
4 TREASURER GALLAGHER: And we don't have a
5 call date before that.
6 MR. WATKINS: Correct.
7 TREASURER GALLAGHER: Now, do -- don't we
8 have some other bonds that are out of the --
9 pretty high rate also that we haven't refunded,
10 or not?
11 MR. WATKINS: Most of the bonds that we
12 have -- I mean, we've been extremely active
13 over the last five years in refinancing those.
14 So we don't have any candidates that -- that
15 meet our threshold savings level to -- to be
16 economically feasible to refund at this -- at
17 this point where we are in the market today.
18 TREASURER GALLAGHER: Okay. Motion on
19 Item 2.
20 ATTORNEY GENERAL BUTTERWORTH: Second.
21 COMMISSIONER CRIST: Question?
22 GOVERNOR BUSH: Moved and seconded.
23 Yes.
24 COMMISSIONER CRIST: You said something
25 about negotiated versus competitive?
ACCURATE STENOTYPE REPORTERS, INC.
DIVISION OF BOND FINANCE 24
May 15, 2001
1 MR. WATKINS: Right.
2 COMMISSIONER CRIST: Could you elaborate on
3 what --
4 MR. WATKINS: The normal policy of this
5 Board is to sell bonds at competitive sale,
6 which basically means, we do all of the work
7 necessary, put it on 18 hours notice, announce
8 the sale, and take bids for the bonds.
9 COMMISSIONER CRIST: Right.
10 MR. WATKINS: The negotiated sales involves
11 selecting a syndicate of underwriters before
12 the transaction is executed, and actually
13 negotiate the sale with that after a
14 competitive selection process, which is
15 mandated pursuant to our rules.
16 We make a recommendation to this Board
17 about the specific underwriting firms that are
18 involved, and then we negotiate the sale of the
19 bonds, which means the interest rates on the
20 bonds with that syndicate at the point in time
21 that we implement the financing.
22 COMMISSIONER CRIST: So it's still
23 competitive.
24 MR. WATKINS: It's a competitive selection
25 process. But in -- in the --
ACCURATE STENOTYPE REPORTERS, INC.
DIVISION OF BOND FINANCE 25
May 15, 2001
1 COMMISSIONER CRIST: How many get to
2 compete?
3 MR. WATKINS: Excuse me?
4 COMMISSIONER CRIST: How many get to
5 compete?
6 MR. WATKINS: Basically the street is the
7 way we refer to it. We publish notice in the
8 Bond Buyer, we put it on our website, we send
9 a -- in a very broad distribution of the RFP to
10 every broker/dealer who's engaged in the
11 business. And so everyone is notified, and has
12 an opportunity to compete for the business.
13 COMMISSIONER CRIST: Thank you.
14 GOVERNOR BUSH: There's a motion and a
15 second.
16 Any other discussion?
17 Without objection, it's approved.
18 Item 3.
19 MR. WATKINS: Item 3 is a report of award
20 on the competitive sale of ten million
21 three hundred and ten thousand of Florida State
22 University parking revenue bonds. The bonds
23 were awarded to the low bidder at a true
24 interest cost of 4.96 percent.
25 TREASURER GALLAGHER: Motion on 3.
ACCURATE STENOTYPE REPORTERS, INC.
DIVISION OF BOND FINANCE 26
May 15, 2001
1 ATTORNEY GENERAL BUTTERWORTH: Second.
2 COMMISSIONER CRIST: Second.
3 GOVERNOR BUSH: Moved and seconded.
4 Without objection, it's approved.
5 Item 4.
6 MR. WATKINS: Item 4 is a report of award
7 on the competitive sale of thirty-one million
8 five hundred and eighty-five thousand dollars
9 in capital outlay bonds for local school
10 districts and community colleges.
11 The bonds were awarded to the low bidder at
12 a true interest cost of 4.53 percent. This was
13 a combined new money and refunding.
14 Fourteen-and-a-half million dollars of new
15 money, seventeen million dollars in refunding.
16 And the refunding piece generated 1.3 million
17 dollars in savings.
18 TREASURER GALLAGHER: Motion on 4.
19 COMMISSIONER CRIST: Second.
20 GOVERNOR BUSH: Moved and seconded.
21 Without objection, it's approved.
22 MR. WATKINS: Thank you.
23 GOVERNOR BUSH: Thank you, Ben.
24 (The Division of Bond Finance Agenda was
25 concluded.)
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 27
May 15, 2001
1 GOVERNOR BUSH: State Board of Education.
2 TREASURER GALLAGHER: Motion on minutes.
3 GOVERNOR BUSH: Is there a second?
4 ATTORNEY GENERAL BUTTERWORTH: Second.
5 SECRETARY HARRIS: Second.
6 GOVERNOR BUSH: Moved and seconded.
7 Without objection, it's approved.
8 Item 2.
9 TREASURER GALLAGHER: Motion to defer 2
10 till 8-14-01.
11 GOVERNOR BUSH: Is there a second?
12 SECRETARY HARRIS: Second it.
13 COMMISSIONER BRONSON: Second.
14 GOVERNOR BUSH: Thank you.
15 There's a motion to defer and a second.
16 Without objection, it is deferred until
17 August 14th.
18 MR. PIERSON: It--
19 TREASURER GALLAGHER: Item 3.
20 GOVERNOR BUSH: Let the man -- let the man
21 speak, Gallagher.
22 ATTORNEY GENERAL BUTTERWORTH: You got a --
23 TREASURER GALLAGHER: Trying to get home --
24 ATTORNEY GENERAL BUTTERWORTH: -- a plane?
25 TREASURER GALLAGHER: -- man. Trying to --
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 28
May 15, 2001
1 GOVERNOR BUSH: You are fired up.
2 COMMISSIONER CRIST: Busy day ahead?
3 GOVERNOR BUSH: You took your -- you drank
4 your coffee this morning.
5 Ready to go.
6 MR. PIERSON: Item 3 is a new rule,
7 6B-4.010, Instructional Personnel Assessment
8 System.
9 TREASURER GALLAGHER: Motion.
10 COMMISSIONER CRIST: Second.
11 GOVERNOR BUSH: Moved and seconded.
12 Without objection, it's approved.
13 MR. PIERSON: Item 4 is repeal of rules:
14 6B-4.001, Responsibility; 6B-4.004, Criteria
15 for the Evaluation of Professional Performance;
16 6B-4.0041, Instructional Personnel Assessment
17 Procedures Purpose; 6B-4.0042, Instructional
18 Personnel Assessment Procedures: Initial
19 Submission Process; 6B-4.0044, Instructional
20 Personnel Assessment Procedures: Initial
21 Review Process; 6B-4.0046, Instructional
22 Personnel Assessment Procedures: Initial
23 Approval Process; 6B-4.0048, Instructional
24 Personnel Assessment Procedures: Annual Review
25 and Approval Process.
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STATE BOARD OF EDUCATION 29
May 15, 2001
1 TREASURER GALLAGHER: Motion.
2 SECRETARY HARRIS: Second.
3 COMMISSIONER BRONSON: Second.
4 GOVERNOR BUSH: Moved and seconded.
5 Without objection, it's approved.
6 MR. PIERSON: Item 5 is the appointment of
7 Cecil B. Keene as a member of the
8 District Board of Trustees, St. Petersburg
9 Junior College, succeeding Kenneth T. Welch,
10 for a term ending May 31st, 2001; and
11 reappointment for a term ending May 31st, 2005.
12 TREASURER GALLAGHER: Motion.
13 COMMISSIONER CRIST: Second.
14 GOVERNOR BUSH: Moved and seconded.
15 Without objection, it's approved.
16 Thank you.
17 (The State Board of Education Agenda was
18 concluded.)
19 * * *
20
21
22
23
24
25
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE 30
May 15, 2001
1 GOVERNOR BUSH: Department of Revenue.
2 TREASURER GALLAGHER: You going to do
3 Ad Com?
4 GOVERNOR BUSH: I'm sorry?
5 TREASURER GALLAGHER:
6 Administration Commission?
7 GOVERNOR BUSH: Oh, I had it down --
8 TREASURER GALLAGHER: Sorry.
9 GOVERNOR BUSH: -- as the one after --
10 TREASURER GALLAGHER: You're right.
11 GOVERNOR BUSH: Am I in the wrong order?
12 I think we're right.
13 COMPTROLLER MILLIGAN: You're correct.
14 MS. ECHEVERRI: Okay. Good morning.
15 My name is Lisa Echeverri. Dr. Zingale
16 sends his apologies for being unable to attend
17 the meeting this morning.
18 GOVERNOR BUSH: Where is Dr. Z?
19 MS. ECHEVERRI: He's been traveling around
20 the state meeting with the managers and
21 supervisors of the Department to discuss the
22 opportunities of service first. And he's over
23 in the panhandle this morning.
24 GOVERNOR BUSH: Good for him.
25 Item 1. Motion on the minutes.
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE 31
May 15, 2001
1 ATTORNEY GENERAL BUTTERWORTH: Second.
2 TREASURER GALLAGHER: Second.
3 GOVERNOR BUSH: Moved and --
4 TREASURER GALLAGHER: Motion.
5 GOVERNOR BUSH: -- moved and seconded.
6 Without objection, it's approved.
7 MS. ECHEVERRI: Item 2 is a series of sales
8 and use tax rules, and one corporate income tax
9 rule. They address a variety of industries and
10 types of transactions, and are basically a
11 general cleanup of those provisions, and some
12 implementation of previous legislative
13 enactments.
14 TREASURER GALLAGHER: Motion.
15 GOVERNOR BUSH: Wow.
16 COMMISSIONER CRIST: Second.
17 ATTORNEY GENERAL BUTTERWORTH: Second.
18 GOVERNOR BUSH: There's a lot of them.
19 MS. ECHEVERRI: We're trying to consolidate
20 a number of rules that -- basically different
21 issues got scattered throughout rule
22 provisions, so we're consolidating them down.
23 GOVERNOR BUSH: Moved and seconded.
24 Any other discussion?
25 Without objection, it's approved.
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE 32
May 15, 2001
1 MS. ECHEVERRI: Thank you.
2 GOVERNOR BUSH: Thank you.
3 (The Department of Revenue Agenda was
4 concluded.)
5 * * *
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ACCURATE STENOTYPE REPORTERS, INC.
ADMINISTRATION COMMISSION 33
May 15, 2001
1 GOVERNOR BUSH: Administration Commission.
2 TREASURER GALLAGHER: Motion on the
3 minutes.
4 COMMISSIONER CRIST: Second.
5 GOVERNOR BUSH: Moved and seconded.
6 Without objection, it's approved.
7 Item 2.
8 How you doing, T?
9 MS. TINKER: Good morning.
10 Fine. Thank you, Governor.
11 Item Number 2, recommend extending the area
12 of Critical State Concern for the Florida Keys,
13 the designation for one year; recommend that
14 you find substantial progress has been made
15 toward the work program; and initiate
16 rulemaking to restore the rate of growth
17 allocations.
18 We have several speakers, Governor. The
19 first speaker is Secretary Steve Seibert.
20 MR. SEIBERT: Good morning, Governor.
21 GOVERNOR BUSH: Mr. Secretary, nice to see
22 you.
23 MR. SEIBERT: Thank you, sir.
24 Members of the Cabinet.
25 Each year the Cabinet has two
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May 15, 2001
1 responsibilities as it relates to the
2 Florida Keys as an area of Critical State
3 Concern. The first is whether substantial
4 progress has been made on the work program.
5 You might know this, but the -- the work
6 program is set forth by rule of this Governor
7 and Cabinet -- of the Governor and Cabinet in
8 1996.
9 We strongly recommend a resounding yes to
10 that question.
11 The rule this year required 37 specific
12 tasks be done, in large part by the local
13 governments. Thirty-four have been
14 accomplished, two are -- are in substantial
15 progression, and one has been partially
16 completed.
17 And these deal with things like water
18 quality, habitat preservation, protection of
19 threatened and endangered species.
20 Let me just say, this is an evolving -- an
21 evolving success story. I am proud to be part
22 of it. The communities in the Keys are working
23 together. Their -- their local governments are
24 committed, the citizens are actively involved.
25 It is a -- it's a -- it's a tremendous
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May 15, 2001
1 effort. And -- and it's -- the last couple of
2 years has been really remarkable. And we're
3 just -- we're very proud of it.
4 The second question is whether the area of
5 Critical State Concern designation should be
6 continued for another year. Again, we strongly
7 recommend in the affirmative. It is the only
8 rational option at this time.
9 We believe the State has an obligation to
10 assure that some of the critical projects like
11 the Keys Carrying Capacity Study that you're
12 going to hear about in a minute be completed.
13 Now, having said that, Governor, and
14 recognizing you're going to ask me this
15 question anyway, let me look for a moment to
16 the future. And this is my opinion.
17 But that the Keys's designation of a -- as
18 an area of Critical State Concern, it has been
19 so designated for a quarter of a century. It
20 was designated as such in the after-- aftermath
21 of the dredging and the -- and the filling that
22 happened in the 1960s and 1970s. Much
23 obviously has changed since that time. And we
24 believe that much more responsibility has been
25 exercised by the communities.
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1 I believe -- I believe, and this will take
2 some time. But I believe that it is time to
3 begin the assessment of whether there are
4 conditions under which we turn the
5 responsibility back to the local governments.
6 I think that's an appropriate process for
7 us to begin. It will be, I guarantee,
8 consensus driven. It'll be a much discussed
9 process. We will work with the citizens in the
10 Keys and the local governments. And obviously
11 anything that we develop in -- as a group, as
12 an exit strategy, must come back to the
13 Governor and Cabinet.
14 Finally, as Teresa said, we ask for the
15 initiation of rulemaking. You have that in
16 your package. But in large part, it adds some
17 time frame for the completion of the Carrying
18 Capacity Study, it allows us to put a couple of
19 annual reports in August of 2002, and come back
20 to you formally at that point.
21 And as an important issue that I just want
22 to mention, affordable housing has become an
23 issue of just incredible concern in the Keys.
24 And we're asking that the restored rate of
25 growth units, because of compliance with the
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May 15, 2001
1 work program, be used for affordable housing,
2 and that they be able to be pooled and
3 transferred across jurisdictional lines where
4 the needs are greatest.
5 Those rules, by the way, would be proposed
6 and would come back to you all probably in
7 August of this year.
8 With that, Governor, I stand ready to
9 answer any questions.
10 GOVERNOR BUSH: Any qu-- we may have some
11 other speakers, or not?
12 MR. SEIBERT: We do have other speakers.
13 TREASURER GALLAGHER: Oh, yeah.
14 MR. SEIBERT: Thank you.
15 GOVERNOR BUSH: Can we hear from them?
16 Thank you, Steve.
17 MS. TINKER: Next we have a brief
18 presentation on the Carrying Capacity Study.
19 Governor and Cabinet, as you all know, the
20 carrying capacity analysis is part of the
21 work program for the Florida Keys. This is
22 something you all authorized several years ago,
23 and the State and the Federal government have
24 expended an enormous amount of money and effort
25 toward the Carrying Capacity Study.
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ADMINISTRATION COMMISSION 38
May 15, 2001
1 We --
2 (Commissioner Crist exited the room.)
3 MS. TINKER: -- anticipate that the study
4 will be completed next summer, and then the
5 local governments will be then making changes
6 to their local comprehensive plans in order to
7 implement the results of that study.
8 We also anticipate that State programs
9 might need to be modified to accommodate the
10 results of the study as well. And we felt like
11 this would be an appropriate time just to kind
12 of give you all a very brief overview of what
13 the study is all about, what it was intended to
14 do, and the status of where we are at this
15 time.
16 MR. CALVO: Thank you.
17 Thank you. Governor, Cabinet members. I'm
18 Ricardo Calvo with URS, the technical
19 contractor executing the Study.
20 The goal of the Florida Keys Carrying
21 Capacity Study is to determine the ability of
22 the Florida Keys ecosystems to withstand all
23 influx of additional land development
24 activities.
25 The -- the technical execution of this
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May 15, 2001
1 project is being done under a team led by URS,
2 and members of Florida International
3 University, University of Florida, Mote Marine
4 Lab, and others.
5 We work on a contractual arrangement that
6 we follow authorized tasks as they come.
7 And a key element of the study is to
8 determine that carrying capacity framework,
9 what is it that determines the amount of
10 development that can occur in the Keys.
11 So we're looking at thresholds of three
12 different kinds: Externally mandated
13 thresholds, such as hurricane evacuation
14 clearance times; we're looking at scientific --
15 scientifically supported thresholds, such --
16 such as having the requirement for protective
17 species; and we're looking at socioeconomic
18 thresholds.
19 For example, the effect of potential
20 development scenarios on the cost to citizens,
21 the cost to government, and the economic
22 viability of the Florida Keys.
23 We're trying to determine those thresholds
24 to then be able to evaluate the effect of
25 different potential development scenarios in
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ADMINISTRATION COMMISSION 40
May 15, 2001
1 the Keys with -- on these thresholds.
2 Next.
3 The relationship between the study and
4 policymaking related to comp plan amendments
5 and land development regulations in the Keys
6 starts with the work that the contractor is
7 doing developing a database that is complex,
8 that is trying to put together information on
9 socioeconomics, ecology, infrastructure.
10 It's a comprehensive database that will
11 feed the development of a computer model that
12 will evaluate automatically the effect of
13 development scenarios on variables that go from
14 environmental to human infrastructure to
15 socioeconomic variables.
16 And there is also what we're calling a
17 routine planning tool, where we're going to
18 organize all these many databases that are
19 being compiled for the study. And they're
20 going to be served through the Internet so that
21 the local planners can have easy access, once
22 and for all, to all this information that will
23 allow them to expedite the application of
24 regulations --
25 (Commissioner Crist entered the room.)
ACCURATE STENOTYPE REPORTERS, INC.
ADMINISTRATION COMMISSION 41
May 15, 2001
1 MR. CALVO: -- for land use.
2 Next.
3 What I want to do now is very briefly
4 discuss where we are with respect to these two
5 elements of this study: The model itself and
6 then the working planning tool.
7 A key element of these models is the
8 thresholds. So, for example, if we want to
9 evaluate the effect of development scenarios on
10 the lower Keys marsh rabbit, which is an
11 endangered protected species, we know from
12 science and from the scientific literature that
13 they require specific habitat characteristics.
14 So --
15 Next.
16 -- when we look at a potential development
17 scenario, and this -- this case, we're showing
18 in red, developed areas; and in hatch, areas
19 that would be developed under a hypothetical
20 scenario.
21 And then the model will evaluate
22 automatically the effect of these potential
23 development scenario (sic) on the lower Keys
24 marsh rabbit.
25 And the result will be easily displayed as
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ADMINISTRATION COMMISSION 42
May 15, 2001
1 maps that will show in red or green whether
2 there are habitat areas that are meeting the
3 criteria or not.
4 Next.
5 The website that will be used to feed and
6 provide all the information compiled in this
7 study to the local planner is already under
8 construction. And with this site, the local
9 planners will be able to access much
10 information about the Florida Keys in terms of
11 maps, tables, et cetera. We can look at
12 partial data.
13 And these will help then make decisions in
14 their daily job with respect to issuing
15 permits, for example, for development. So this
16 is a value-added product of the study.
17 Next?
18 The study now is in the draft model stage.
19 We presented the draft model in January to a
20 panel of over 60 experts from around the
21 country, as well as a committee of ten members
22 from the National Academy of Sciences, who were
23 tasked to evaluate the study, and make sure
24 that we are following sound scientific methods
25 of principals and data.
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May 15, 2001
1 And they did their initial review of the
2 study, and they concluded -- the National
3 Academy of Sciences concluded that the study,
4 as it has been developed, and the model as it
5 has been developed, is feasible and will
6 provide a semiquantitative tool of much
7 usefulness for --
8 GOVERNOR BUSH: What's a semiquantitative
9 tool?
10 MR. CALVO: A semiquantitative tool?
11 GOVERNOR BUSH: Yeah.
12 MR. CALVO: It won't be a specific
13 numerical tool, but it will be a tool that
14 we're allowed to compare the effect of
15 different scenarios. And it will be able to
16 tell whether a scenario is better than another.
17 Okay.
18 Next?
19 So we are moving to the final stretch of
20 the study. And we are completing the test
21 model by default. And the National Academy of
22 Sciences will review the test model at the end
23 of the year.
24 And then next year, we will finalize the
25 model and test it, and -- and run calibration.
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May 15, 2001
1 And by June 2002, the study will be completed.
2 Thank you very much.
3 GOVERNOR BUSH: Thank you.
4 Any questions?
5 Okay.
6 MR. CALVO: Thank you.
7 GOVERNOR BUSH: Teresa, any other speakers?
8 MS. TINKER: Yes, sir.
9 The next speaker is Mayor Frank Kulisky
10 from the Village of Islamorada. You all will
11 remember that the Village incorporated in
12 December of 1997.
13 They've recently adopted their
14 comprehensive plan, gone through an amendment
15 process to bring that plan into compliance.
16 And we expect that DCA will either issue its
17 notice very soon, or has already issued it.
18 The challenge period will run, and then the
19 rule for the Village of Islamorada will be
20 repealed. They -- their plan is actually
21 sufficient to carry out the tasks that were
22 incorporated in the Work Flow Program, and they
23 have done an excellent job, worked very hard
24 over the last three years, and I think they
25 deserve a lot of credit.
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ADMINISTRATION COMMISSION 45
May 15, 2001
1 Mayor.
2 GOVERNOR BUSH: Welcome, Mayor.
3 I'd like to endorse Teresa's comments.
4 We're really proud of the effort that
5 you -- your leadership, and your Council's
6 leadership to bring a real consensus in your
7 community to deal with these tough issues.
8 You've done fantastic.
9 MR. KULISKY: Thank you very much,
10 Governor.
11 Governor, members of the Cabinet, on behalf
12 of the Village, I'm very grateful to have this
13 opportunity to speak to you on our
14 Comprehensive Plan. As developed and submitted
15 to the DCA, our plan is called: Islamorada,
16 the Village That Reclaimed the Keys.
17 After working with DCA, our Council
18 approved a resolution to bring the plan into
19 compliance, consistent with DCA objectives on
20 April 26th, just a couple of week (sic) ago.
21 The DCA has signed off on our compliance
22 agreement.
23 As mentioned -- as Teresa mentioned, we
24 were incorporated on December 31st, 1997; our
25 first Council meeting was in late March of
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ADMINISTRATION COMMISSION 46
May 15, 2001
1 1998.
2 A few of the segments in our plan. Our
3 housing segments, we voluntarily have limited
4 residential building permits to 14 per year.
5 And that's for our 17-mile long community,
6 which has about 7,000 residents, and a -- a
7 significant amount of business also.
8 But the 14 building permits per year is
9 well below that which would be generally
10 permitted under the Monroe County plan.
11 The plan has a major full focus on
12 work force and affordable housing. A full
13 50 percent of all the residential permits will
14 be designated for affordable housing. And they
15 cannot be reassigned, as in the past, to
16 conventional housing.
17 GOVERNOR BUSH: What is affordable in
18 Islamorada --
19 MR. KULISKY: Affordable --
20 GOVERNOR BUSH: -- these days?
21 MR. KULISKY: -- housing is -- is a program
22 that is defined by DCA. And it can have people
23 living in those residences with incomes up to
24 $58,000 per year.
25 But affordable would, for example, allow
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ADMINISTRATION COMMISSION 47
May 15, 2001
1 a -- a police officer and his school teacher
2 wife perhaps to apply for those.
3 With the average house in Monroe County
4 selling for over $250,000 each, a hundred and
5 thirty or hundred and forty thousand dollar
6 home is --
7 GOVERNOR BUSH: So that's the range is
8 one thirty, one forty?
9 MR. KULISKY: Yes.
10 GOVERNOR BUSH: Great.
11 MR. KULISKY: The parks and recreation
12 portion of our segment, we had two very small
13 parks that we inherited from Monroe County when
14 we incorporated.
15 The only playground we had was a 1-acre
16 facility behind the library. In the 17-mile
17 stretch, we had a total of 4 acres of parks, we
18 had no swimming pool, no athletic fields, no
19 tennis courts.
20 Now, the Village, without assistance, on
21 its own, acquired 48 acres -- that's Plantation
22 Yacht Harbor for any of you that may have been
23 down there -- for park and public lands.
24 We have under construction a swimming pool
25 due to open in late July. We've built a
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May 15, 2001
1 playground, we've built a beach, we're building
2 a skate park, baseball diamond, soccer fields,
3 exercise trails, we now have tennis courts and
4 marinas.
5 We have installed full pump-out facilities
6 to every slip in that marina, and are awaiting
7 clean marina designation.
8 In our land use planning element, we have
9 visited, documented, and mapped every
10 individual property in the community. Staff of
11 the community and Council have made significant
12 efforts to conduct land use planning to
13 maintain the character of our -- of our village
14 through many public workshops.
15 Some feel we have zon-- up-zoned too much.
16 Some feel we have down-zoned too much.
17 Therefore, we must be doing something right, we
18 have people on both sides.
19 In our public facilities segment, water
20 quality is the number one issue in Islamorada.
21 I've had the opportunity on a couple of
22 occasions to speak with Commissioner Crist
23 in -- in Islamorada on our water quality
24 concerns.
25 I also was able to take --
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May 15, 2001
1 GOVERNOR BUSH: Was Commissioner Crist
2 doing a site visit down there?
3 MR. KULISKY: Yes. He was doing a site --
4 TREASURER GALLAGHER: Checking out the
5 fishing, I think. Seeing that -- that resource
6 in the water.
7 COMMISSIONER CRIST: It's a very --
8 MR. KULISKY: And --
9 COMMISSIONER CRIST: -- important part of
10 our state, Governor.
11 MR. KULISKY: We also had -- a few years
12 ago, I -- Lieutenant Governor Brogan was down
13 there, and I was able to take him and his wife
14 and his Aide out on my skiff and show them some
15 of the problems that we had in Florida Bay that
16 I know you're aware of, Governor. And I
17 enjoyed meeting him at that time also.
18 So it's been -- it's the number one issue.
19 We used to refer to our waters as crystal
20 clear. And over the years, the brochures
21 changed that terminology to azure blue. And
22 now they're down to emerald green. So we want
23 to try to restore some of that quality.
24 We have worked for two-and-a-half years on
25 wastewater planning. We've considered a wide
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1 variety of wastewater alternatives. We had
2 47 of those alternatives that were studied by
3 the -- the -- the State. And we've had various
4 viewpoints to many approaches. Islamorada has
5 worked with the Florida Keys Water Quality
6 Steering Committee, and utilized the
7 Monroe County wastewater plant as provided by
8 the DCA.
9 We've had planning sessions and workshops.
10 We've conducted a productive meeting with
11 DCA in January of this year. And it was -- it
12 was a little bit of a fortune telling session,
13 because we approved the DCA wastewater
14 recommendations in general on April 25th, and
15 we're -- we've taken a big step with that
16 movement.
17 The stormwater plan was completed in
18 July of 2000, and shared with the DCA and the
19 F-DOT. We're currently working on projects as
20 we pave roads for the first time in 25 years.
21 We used targets of opportunity of -- to --
22 to conduct the stormwater fixes prior to paving
23 in areas that need it.
24 We currently have a stormwater project out
25 of -- out for bid at this time, and it'll be
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1 underway within 90 days.
2 The last segment I'm going to mention is a
3 conservation coastal management portion of our
4 plan. We've established and planned strict
5 controls to protect natural resources,
6 flora and fauna, native vegetation, and marine
7 habitats.
8 Islamorada has began a water quality
9 monitoring program within our village on our
10 own that we're paying for.
11 So we are active in that, and I know that's
12 one of the recommendations for the entire Keys.
13 We're able to do it on our own.
14 We're working with the State on the
15 Heritage Trail Project throughout the County,
16 and continue to do our share for the scenic
17 roadway designation for U.S. 1.
18 We went out and purchased and removed seven
19 billboard faces in our own short life of our
20 community. We did that as part of our land
21 acquisition plan.
22 And we also removed all of the advertising
23 benches within our city limits.
24 The Village of Islamorada has asked me to
25 convey our gratitude to the Department of -- of
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1 Community Affairs, and other State offices for
2 their assistance in the preparation of this
3 plan. And we're confident that the plan will
4 preserve and protect our community for
5 generations to come.
6 Thank you.
7 GOVERNOR BUSH: Thank you, Mayor.
8 COMMISSIONER BRONSON: I have a question.
9 GOVERNOR BUSH: Yeah. Commissioner.
10 COMMISSIONER BRONSON: Yes. Thank you.
11 Mr. Mayor, have you looked at, or are you
12 contemplating with you and your neighbors the
13 new demineralization reverse osmosis potential
14 for the state of Florida, assuming everything
15 goes according to plan, to be able to utilize
16 that as a water source for -- for your area?
17 MR. KULISKY: The -- there's only been
18 light discussion on that, Commissioner. It --
19 you know, as you may recall, there was a lot of
20 reverse osmosis plants that were installed in
21 Monroe County prior to the expansion of the --
22 of the Florida Keys aqueduct.
23 COMMISSIONER BRONSON: Uh-hum.
24 MR. KULISKY: And that -- that certainly
25 has been discussed. There's been no action
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1 taken on that at this time. But we have done
2 it in the past. I know that Key West has
3 discussed it.
4 And we now -- Monroe County has the lowest
5 use per person of -- of water in -- in the
6 entire state.
7 GOVERNOR BUSH: What is your consumption?
8 MR. KULISKY: It's 97 gallons --
9 GOVERNOR BUSH: Wow.
10 MR. KULISKY: -- per person.
11 COMMISSIONER BRONSON: Wow.
12 MR. KULISKY: It's -- it's thrown out of
13 kilter by the number of tourists that we have.
14 We have four to five million tourists a year,
15 which -- which amounts to 60 visitors for every
16 resident.
17 So we have a little more difficulty trying
18 to control the water that's used by the -- the
19 tourists.
20 GOVERNOR BUSH: So I mean, it's actually
21 lower than that?
22 MR. KULISKY: No. That's -- it's --
23 actually it's, like, 157. But --
24 GOVERNOR BUSH: Ah.
25 MR. KULISKY: -- but the use of the -- of
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1 the residents is -- is 97.
2 GOVERNOR BUSH: You're an honest man,
3 Mayor.
4 MR. KULISKY: Thank you.
5 TREASURER GALLAGHER: Governor.
6 Governor.
7 Are you -- are you -- have -- you've been
8 involved in the hurricane evacuation planning?
9 MR. KULISKY: Yes, I have.
10 TREASURER GALLAGHER: Do you want to give
11 us a little update on where that is today,
12 because that is a critical problem in the Keys
13 in my --
14 MR. KULISKY: Yes.
15 The hurricane evacuation planning,
16 of course, is predicated on the Miller study,
17 which is yet to be released. There's been at
18 least -- at least to us publicly, there's been
19 a variety of additions of that release that
20 shows that there are some concerns about
21 hurricane evacuation.
22 We've had some communications, and -- with
23 different people within the Department of
24 Transportation. I came up here some time ago,
25 and met with Secretary Barry.
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1 We talked about the -- the width of the
2 18-mile stretch, and -- which is only a small
3 portion of the hurricane evacuation problem.
4 Well, one of -- one of the impacts on our
5 community, which we had -- had a concern with
6 the Department of Community Affairs, was the
7 original direction was that we should consider
8 four-laning right through the main part of the
9 Village of Islamorada.
10 And that would have been a -- we -- our --
11 our Council issued a resolution of 5/0 on two
12 occasions to oppose four-laning through the
13 Village of Islamorada.
14 We thought it would totally destroy our
15 character. For example, the -- we have the --
16 the hurricane monument on one side of the
17 street; and right directly across the street,
18 we have the historic library, right in the
19 middle of Upper Matecumbe Key.
20 And one of those would have to go if you
21 four-lane through there. And I'm not willing
22 to -- to see any of that go.
23 Matter of fact -- might not be the place to
24 say it -- but I was accused of claiming to lay
25 down in front of the bulldozers if they tried
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1 to four-lane Islamorada.
2 TREASURER GALLAGHER: You wouldn't look
3 good with all those marks on you.
4 MR. KULISKY: Well, they called me
5 Flat Frank for a while.
6 TREASURER GALLAGHER: I guess, maybe do a
7 flyover over Islamorada, a bridge to take
8 everybody over, is that what you want to do?
9 MR. KULISKY: Yes. We -- we feel that
10 there are -- and our Sheriff feels that there
11 are alternatives to four-laning and improv--
12 increasing the size of the road. And we
13 support the Sheriff's recommendation.
14 The Sheriff had been in favor of
15 three-laning or four-laning the stretch
16 until -- until he did a -- a comprehensive
17 study. And now he has retracted his support,
18 and is in favor of keeping it two lane, as I
19 know --
20 TREASURER GALLAGHER: This is the elected
21 Sheriff of Monroe County that gets a lot of
22 votes and all. I understand that.
23 MR. KULISKY: Thank you.
24 GOVERNOR BUSH: Other questions?
25 TREASURER GALLAGHER: I do know there's a
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1 preliminary interim plan that we're going to
2 see probably June 1st, which is in a few --
3 couple of weeks?
4 MR. KULISKY: Thank you for informing me.
5 I -- I didn't know that, sir.
6 TREASURER GALLAGHER: And hopefully, we can
7 start working on that, because I'm concerned
8 about evacuation.
9 And one of the problems is Islamorada is
10 sitting here, but we have, you know, Key West,
11 and quite a few places --
12 MR. KULISKY: Yes.
13 TREASURER GALLAGHER: -- south that need to
14 come right through your community.
15 MR. KULISKY: A concern of ours is that we
16 have no control over what happens in Key West.
17 And if we have no control, then it's hard for
18 us to -- to promise that -- that we're going to
19 cooperate with whatever we need to do in our
20 community at our own expense.
21 So that is -- that's a concern that we
22 have.
23 We -- when we did our last update of the
24 Comprehensive Plan, we agreed to DCA's wording,
25 and we agreed to approach that, and -- and
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1 cooperate with them, and the other communities
2 throughout the Keys, to keep the 24-hour
3 evacuation time in effect.
4 TREASURER GALLAGHER: Thank you.
5 COMMISSIONER CRIST: Governor?
6 GOVERNOR BUSH: Yes.
7 COMMISSIONER CRIST: I -- I just want to
8 thank you, Mayor, for being here. And
9 thank you for your kindness whenever I've been
10 down in -- in the Keys.
11 You -- thank you for your stewardship of a
12 real treasure to our state. We really
13 appreciate what you do to maintain such a
14 beautiful part of Florida.
15 Thank you.
16 MR. KULISKY: Thank you, Mr. --
17 COMMISSIONER CRIST: Thank you.
18 GOVERNOR BUSH: Thank you, sir.
19 MS. TINKER: The next speaker is
20 Craig Wrathell. Craig is the City Manager for
21 the newest city in the Keys, Marathon.
22 Marathon was incorporated in November of 1999.
23 Until the City develops its own
24 comprehensive plan, it will actually operate
25 under the plan of the County.
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1 GOVERNOR BUSH: Welcome, Manager.
2 MR. WRATHELL: Thank you, Mr. Governor and
3 Cabinet.
4 Good morning.
5 My name, as Teresa Tinker had mentioned, is
6 Craig Wrathell. I am the City Manager of the
7 City of Marathon.
8 I also have with me today Councilman
9 Jon Johnson joining us.
10 As -- as Ms. Tinker had mentioned, the City
11 of Marathon is a new municipality in the
12 Florida Keys. We've been oper-- in operation
13 for a little over the past year.
14 And we have been working aggressively to
15 address the issues outlined in the workplan,
16 which is being discussed today. The City
17 currently has five major initiatives, which it
18 has -- has focused upon, one of which the first
19 is community visioning.
20 We have hired a nationally renowned
21 community visioning expert, Mr. Tony Nelessen,
22 to come down to Marathon and help us develop a
23 vision for which we'd like to see the future
24 City of Marathon.
25 Unfortunately, over years -- over the past
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1 30 or 40 years, Marathon has degraded both
2 environmentally and economically.
3 Unfortunately, environmental degradation has
4 occurred in such areas as Boot Key Harbor, as
5 certainly as you're well aware, with -- dealing
6 with the stormwater and wastewater issues, the
7 nearshore water quality, as Mayor Kulisky has
8 mentioned, has gone down dramatically in the
9 Florida Keys.
10 This community visioning process will be
11 the -- kind of the catalyst to get -- to move
12 forward in our community redevelopment program.
13 Marathon is trying to develop a consensus
14 amongst its -- its residents of Marathon, and
15 uses visioning as kind of the stepping stone
16 for developing our comprehensive plan, for
17 which we are working on now, and must have
18 completed within the next 18 months.
19 Currently the Little Venice wastewater --
20 pilot wastewater project is ongoing, and we
21 look to see a construction date somewhere in
22 November of this year.
23 The Little Venice pilot wastewater project
24 will incorporate roughly 500 low income housing
25 units within the City of Marathon, as well as
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1 some commercial properties.
2 In addition, the City is also aggressively
3 working on, and pushing forward the development
4 of a RP for a central sewer. And we anticipate
5 having the sewer -- our central sewer RP out
6 sometime in the -- the fall, with the
7 construction to occur late spring, early summer
8 of next year.
9 In addition to this, the Marathon, with
10 this community visioning, and this -- this
11 vision being developed, we are going to embark
12 upon a community redevelopment program.
13 While Marathon is in the process of
14 implementing the Little Venice pilot wastewater
15 project, as well as central sewer and tearing
16 up the roads, we are going to take this vision
17 and make it into reality. We're going to
18 repave roads, we're going to address the
19 State's concerns regarding stormwater, we're
20 going to take the vision of the future, whether
21 it's via landscaped improvements, or certainly
22 simple stuff, such as curbing and, et cetera,
23 to improve the overall look and feel of the
24 Marathon community, with the hope that we can
25 transform Marathon from the -- kind of the --
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1 unfortunately, the place you pass through as
2 you're going on down to Key West, to something
3 where we'd like to make it the family vacation
4 destination of the Florida Keys.
5 And in regard to the administrative
6 committee's recommendation, we do have one
7 minor concern regarding the restored ROGO
8 allocations, which right now, the wording is
9 such that it will only be for affordable
10 housing. Marathon does have some concerns with
11 that.
12 (Secretary Harris exited the room.)
13 MR. WRATHELL: But I am convinced and
14 comfortable that we can work with DCA to come
15 to some type of middle ground position for
16 which both the City and the -- and the State
17 will be comfortable.
18 But despite this concern, certainly the
19 City of Marathon supports staff
20 recommendations, and looks forward to
21 continually work with Mr. -- Secretary Seibert
22 and Mr. Mike McDaniel of DCA, as well as their
23 respective staffs to certainly work -- work
24 toward accomplishing what we're hoping to do in
25 Marathon, development of our comprehensive
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1 plan, and -- and just continuing to make
2 Marathon the place for which everyone is proud
3 to live, work, and play.
4 And certainly the City of Marathon looks
5 forward to within the next 18 months to making
6 us the shining example of what happens when the
7 State and local governments work together.
8 And certainly we'd like to be some-- we'd
9 like to be held up by the Governor as -- and
10 his staff and the administration as a shining
11 example of what does happen when we work
12 together.
13 So I appreciate and thank you very much.
14 GOVERNOR BUSH: Thank you.
15 Any questions?
16 MR. WRATHELL: May I just -- I know
17 Mr. Gallagher had mentioned in regard to the
18 whole hurricane evacuation issue.
19 I would, particularly I know on
20 Councilman Johnson's behalf, the City of
21 Marathon does have a similar orientation to
22 that of Key West.
23 We do support the Miller study -- the
24 implementation of the Miller study. We
25 certainly respect and understand the concerns
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1 of our Islamorada neighbors, as well as those
2 in Key Largo.
3 But it certainly is important that the City
4 of Marathon's position on this issue is brought
5 up.
6 GOVERNOR BUSH: You have too much unity in
7 Monroe County would make us all very nervous.
8 MR. WRATHELL: Well, that's right.
9 TREASURER GALLAGHER: This is as much as
10 I've ever seen.
11 GOVERNOR BUSH: No. There's --
12 TREASURER GALLAGHER: I --
13 GOVERNOR BUSH: -- you should have been --
14 TREASURER GALLAGHER: -- a lot of
15 negotiating going on.
16 GOVERNOR BUSH: -- a large conference room
17 about three weeks ago where representatives
18 from every municipality in the county all came
19 to agree on an allocation for the State and
20 Federal monies that unfortunately we didn't get
21 the full allocation, there were some problems
22 in the Senate at the last moment. But we got
23 some.
24 And there was complete agreement.
25 TREASURER GALLAGHER: I hope it lasts.
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1 GOVERNOR BUSH: It was historic. We took a
2 picture --
3 TREASURER GALLAGHER: That's good. Because
4 that -- that will last.
5 GOVERNOR BUSH: I made Teresa Tinker dance
6 with Ken Sorensen. It was an --
7 TREASURER GALLAGHER: Oh, and I missed it.
8 GOVERNOR BUSH: -- amazing thing.
9 Anyway.
10 MR. WRATHELL: Thank you very much.
11 (Secretary Harris entered the room.)
12 MS. TINKER: And it was my pleasure to
13 dance with the Honorable Sorensen.
14 GOVERNOR BUSH: The -- I bet.
15 MS. TINKER: The next speaker is
16 Charles Pattison. Charles is representing
17 several environmental groups today:
18 1000 Friends of Florida, the Environmental and
19 Land Use Law Center, Environmental Defense
20 Fund, Florida Keys Citizens Coalition,
21 Florida Keys Environmental Fund, and the
22 World Wildlife Fund.
23 GOVERNOR BUSH: Good morning.
24 MR. PATTISON: Good morning, Governor,
25 members of the Cabinet.
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1 I just wanted to be here to say, we do
2 support your staff's recommendation. We really
3 want to appreciate -- or tell you how much we
4 appreciate the time your Aides took in
5 listening to Richard Grosso's comments last
6 week. He's ill and couldn't be here today.
7 But we do very much support those changes.
8 We think -- we especially wanted to thank the
9 Aides and the -- the -- Commissioner Williams,
10 all the Keys communities that have contributed
11 to these improvements in the Keys.
12 We do have a couple of issues. We wouldn't
13 be standing here if we didn't. And we think we
14 can bring those up during the rulemaking.
15 We're appreciative that you're going to go
16 through a rulemaking process to make some
17 additional adjustments.
18 The two issues that we will discuss during
19 that proceeding is the idea of nutrient credits
20 being applied to commercial development, since
21 there's some restrictions on commercial
22 development currently. And if those are
23 lifted, we believe it's appropriate to have the
24 commercial development meet the same
25 restrictions that residential development
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1 currently meets for nutrient credits.
2 We also are a little concerned about the --
3 the idea that there are unlimited credits
4 available to transfer for affordable housing
5 anywhere within the Keys. I think that concept
6 is a good one.
7 We -- we'd just like to make sure -- and,
8 again, we'll do this during the rulemaking --
9 raise some issues about the suitability of the
10 sites where concentrations may occur, as well
11 as some of the sewage treatment issues.
12 And just to end, as critical as all the
13 water quality issues are and the funding that
14 has been secured with your help, and -- and
15 that of Congress, the land acquisition efforts
16 still needs to be promoted and increased.
17 I think you've heard the Carrying Capacity
18 Study is talking now about a limit -- a finite
19 limit to the additional development that the
20 Keys environmentally can support. And even
21 today, we know there's still ten to
22 fourteen thousand vacant platted lots in the
23 Keys, and we're going to have to step up
24 efforts to acquire those as quickly as we can.
25 But thank you again for the fine effort of
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1 your -- of your staff.
2 We appreciate it.
3 GOVERNOR BUSH: Thank you, sir.
4 MS. TINKER: The last speaker is
5 Commissioner Nora Williams from Monroe County.
6 MS. WILLIAMS: Good morning.
7 GOVERNOR BUSH: Good morning.
8 MS. WILLIAMS: Commissioner Gallagher,
9 you've got to ask me the hurricane evacuation
10 question before you let me leave. I just
11 can't -- you've got to let --
12 TREASURER GALLAGHER: Please include in
13 your -- your comments hurricane evacuation.
14 MS. WILLIAMS: Thank you so much.
15 Good morning.
16 Some two years ago, I was brand new to the
17 job of County Commissioner, I was brand new to
18 the job of Land Use Liaison, and my first task
19 was to appear before the Governor and Cabinet
20 to report on our workplan progress.
21 So I sat down to do that homework, how much
22 progress had Monroe County made in 1997 and '98
23 during years one and two of the workplan.
24 Ung-ugh.
25 My first job was to come and tell you, I'm
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1 having a hard time finding any progress we
2 made.
3 And I said to you two years ago, and I will
4 quote to myself, a bad sign:
5 I stand before you today as the face of the
6 failure of Monroe County to keep its word. I
7 promise that the next time we appear before
8 you, this will not be the story we tell.
9 And here we are two years later, with a
10 very different story. We are filled with joy
11 to be able to tell you that it is the finding
12 of our State and Federal partners in this
13 process that we have made significant progress
14 in year three of the workplan; that, in fact,
15 we have exceeded or completed requirements in
16 34 of the 37 items of the workplan, with
17 significant progress in the few remaining.
18 What changed?
19 To me, the biggest difference was the
20 partnership that I watched develop, that came
21 to be expressed among the many agencies
22 involved in our comprehensive plan; but
23 particularly, the relationship that grew
24 between Monroe County and the State.
25 Shortly after my presentation before you,
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1 or lack thereof, as the case may be, I asked
2 for a representative from every involved agency
3 to join the County at a monthly meeting that we
4 called the Comp Plan Task Force.
5 We continued to meet for as much as 5 hours
6 straight, to go over the requirements and
7 responsibilities, to work with one another, to
8 beat and meet every hurdle.
9 It has been, to tell you the honest truth,
10 one of the most profoundly rewarding work
11 experiences of my life, and it would not have
12 been possible without your support.
13 On behalf of Monroe County, I thank you for
14 making that possible, and I wish to thank every
15 one of the State employees who spent countless
16 hours with us, for how much dedication and how
17 much kindness they showed us.
18 It wasn't all milk and cookies, mind you.
19 With a 30-year history of Monroe County master
20 plans with little ever accomplished, change is
21 not an easy thing for us to swallow. And
22 things did change in year three of the
23 workplan.
24 Year three was filled with accomplishments
25 and engendered no small amount of rage from
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1 those who were comfortable with things as they
2 were.
3 There were death threats -- and, no, not
4 just at me; there was stalking; there was rage;
5 there were singularly unattractive Say No to
6 Nora signs that showed up at more than one
7 meeting.
8 It's been hard. And sometimes, for every
9 two steps forward, there's been at least a
10 little stumble back.
11 But the momentum forward has continued, and
12 that's a remarkable difference. And I can tell
13 you this: The Board of Monroe County
14 Commissioners stood strong to keep their work
15 on the -- word on the workplan.
16 More than once they had to be asked to set
17 aside other priorities to make sure we
18 continued timely compliance. And not once did
19 they refuse to give that support.
20 Year three changed our relationship to the
21 plan. And I can tell you, without hesitation,
22 that I stand before you today to represent the
23 entire Board of County Commissioners in our
24 resolve to respect that plan.
25 We know that the battle isn't won, and I
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1 know that's a huge concern for some of you,
2 that the hard questions haven't yet been asked
3 and answered.
4 We're committed to doing that. We've even
5 begun to lay out a plan for the next two
6 decades, a plan that matches development with
7 an aggressive plan for land acquisition for the
8 retirement of development rights, and that
9 makes affordable and modest housing a priority
10 for the development that does occur.
11 You don't need to force us. The Comp Plan
12 changed us to ask the big questions. We are
13 asking them.
14 We are going to need your help down the
15 line, particularly in an effort to secure
16 funding for these efforts.
17 But today we are asking you for our -- your
18 support for our progress on the workplan, and
19 for you to have a little faith that our work
20 represents a real commitment and a change for
21 Monroe County.
22 We have made substantial progress. We
23 deserve those permits back. We ask that you
24 move staff recommendation, without amendment,
25 and stand with us in this.
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1 The last time I appeared before you, I
2 asked for two things: I asked for patience,
3 and I asked for mercy. I am glad not to have
4 to ask for them today.
5 Essentially what we are asking of you today
6 is the political equivalent of a big hug, and a
7 continued commitment to the relationship that
8 we have been building, and the partnership that
9 we have that's changed the nature of our
10 relationship with the State.
11 Now who could not move that?
12 GOVERNOR BUSH: That's a good --
13 TREASURER GALLAGHER: We didn't hear
14 about --
15 GOVERNOR BUSH: What about evacuation?
16 TREASURER GALLAGHER: -- evacuation.
17 MS. WILLIAMS: Thank you.
18 Tomorrow there will be a vote by the
19 County Commission. And I feel that I can, even
20 though that vote has not taken place -- to tell
21 you that we will choose to do so.
22 We've been working with FDOT and DCA's
23 Department of Emergency Management over the
24 course of the last months on behalf of the
25 County, with the traffic control plan you
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1 mentioned, a specific interim plan, while
2 larger construction projects are being
3 considered, to make sure we fall beneath that
4 24-hour evacuation clearance time.
5 There has been some debate as to
6 approximately -- precisely what needed to
7 happen at the northern end of that. But we
8 will be funding and implementing a program that
9 will be in place by June 1.
10 The specifics are on the table for
11 tomorrow. Really just got ironed out
12 yesterday. We will be a comfortable distance
13 under 24 hours.
14 TREASURER GALLAGHER: Excellent.
15 MS. WILLIAMS: And are proud to be there.
16 TREASURER GALLAGHER: Excellent.
17 GOVERNOR BUSH: Good answer.
18 TREASURER GALLAGHER: I -- I -- thank you
19 very much for -- I want to tell you that having
20 spent another stint of about six years on this
21 Cabinet, and it used to be -- the best I could
22 say is bloody when Monroe County would come up
23 for their annual discussion.
24 And it looks like that -- the blood has
25 turned to cooperation, and hugs are in order.
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1 And I'm thrilled that you all have gotten a
2 great attitude down there, and to -- let's make
3 it work. And let's make the Keys what they
4 really are in Florida, and save them, and let
5 people enjoy them.
6 So I congratulate you. It's a wonderful
7 thing.
8 MS. WILLIAMS: Thank you.
9 TREASURER GALLAGHER: And with that,
10 Governor, I'd like to move the
11 Administration Commission's recommendation,
12 which includes extending the area of
13 Critical Con-- State Concern for an additional
14 year.
15 It includes the policy of -- in 101.2.13 of
16 finding that substantial progress has been
17 achieved by Monroe County, Marathon and
18 Islamorada; and, three, that we approve the
19 adoption of new Rule Sections 28-20.101, and
20 28-20.200 for Monroe County, which will allow
21 the substantial progress to have the additional
22 permit cap, unit --
23 GOVERNOR BUSH: For affordable housing.
24 TREASURER GALLAGHER: -- increased.
25 GOVERNOR BUSH: That's the big hug --
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1 SECRETARY HARRIS: Yeah.
2 TREASURER GALLAGHER: For affordable
3 housing, which is a big problem, as you know,
4 in your county.
5 So I'll make that motion.
6 SECRETARY HARRIS: Second.
7 COMMISSIONER BRONSON: Second.
8 GOVERNOR BUSH: Moved and seconded.
9 Any other discussion?
10 SECRETARY HARRIS: Nora, thanks for your
11 leadership, and -- and the levity.
12 MS. WILLIAMS: Thank you.
13 And I'm so sorry I missed you last week.
14 It was a pleasure to see you today, all of you.
15 Thank you so much.
16 GOVERNOR BUSH: Let me finish.
17 TREASURER GALLAGHER: Wait. Everybody's --
18 GOVERNOR BUSH: Without objection --
19 TREASURER GALLAGHER: -- been getting down
20 there but me.
21 GOVERNOR BUSH: Without objection, it's
22 approved.
23 Now I'm going to give you a hug.
24 MS. WILLIAMS: Yea.
25 TREASURER GALLAGHER: The -- the proverbial
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1 Governor hug here.
2 ATTORNEY GENERAL BUTTERWORTH: A Kodak
3 moment, and no one's here.
4 COMMISSIONER BRONSON: The big hug.
5 TREASURER GALLAGHER: And there are no
6 still cameras to catch the hug.
7 ATTORNEY GENERAL BUTTERWORTH: Can I have
8 my hug --
9 MS. TINKER: Governor --
10 ATTORNEY GENERAL BUTTERWORTH: -- in
11 Key West?
12 MS. TINKER: -- if I can --
13 TREASURER GALLAGHER: Yeah. We want those
14 Key West hugs, don't we?
15 GOVERNOR BUSH: Again, thank you all for
16 coming. It -- it really is great.
17 I'd -- I'd like to just brag a little bit
18 on the Department of Community Affairs, because
19 this is a two-way street. The hostility that
20 existed probably was mutual in two ways.
21 And now I think the -- the trust that's
22 being built up is -- is because Monroe County
23 residents realize that they have a
24 responsibility to take charge of their destiny,
25 and you don't have someone kind of sitting up
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1 here telling you how to do it, and forcing you
2 to do it, and making you do things. Rather
3 than that, they're -- Steve Seibert I think has
4 changed the culture a bit at the Department.
5 So, Steve, thank you for making it a little
6 bit easier for local communities to create
7 their own vision.
8 TREASURER GALLAGHER: Just think where we'd
9 be today if that had happened, you know,
10 15 years ago.
11 GOVERNOR BUSH: Well, it was a tough --
12 TREASURER GALLAGHER: Be a long way to
13 where we're heading.
14 COMMISSIONER CRIST: Well, at least we're
15 here now.
16 MS. TINKER: Governor, could I just clarify
17 one part of the motion?
18 There was a fourth item --
19 GOVERNOR BUSH: Oh. As to this.
20 MS. TINKER: -- that went with the staff's
21 recommendation. Just wanted to --
22 TREASURER GALLAGHER: That's included.
23 MS. TINKER: -- be clear that that was
24 included in your motion.
25 TREASURER GALLAGHER: That is correct.
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1 MS. TINKER: Thank you, sir.
2 GOVERNOR BUSH: Thank you.
3 (The Administration Commission Agenda was
4 concluded.)
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1 GOVERNOR BUSH: Board of Trustees.
2 TREASURER GALLAGHER: Motion on the
3 minutes.
4 COMMISSIONER BRONSON: Second.
5 GOVERNOR BUSH: Moved and seconded.
6 Without objection, it's approved.
7 Item 2?
8 MR. STRUHS: Good morning --
9 TREASURER GALLAGHER: Defer till June 12th,
10 2001.
11 GOVERNOR BUSH: Is there a second?
12 ATTORNEY GENERAL BUTTERWORTH: Second.
13 GOVERNOR BUSH: Motion to defer till
14 June 12th, and a second.
15 Without objection, it's approved.
16 Is that because we're getting -- is that
17 our -- is that General Milligan and my favorite
18 land acquisition?
19 COMPTROLLER MILLIGAN: One of them.
20 TREASURER GALLAGHER: That's a good one.
21 GOVERNOR BUSH: Kind of get the --
22 MR. STRUHS: We were --
23 GOVERNOR BUSH: -- working on --
24 MR. STRUHS: -- we were given --
25 GOVERNOR BUSH: -- lowering the price or
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1 something?
2 MR. STRUHS: I'm sorry?
3 GOVERNOR BUSH: Are you working on lowering
4 the price?
5 MR. STRUHS: We are -- we are working on it
6 from a number of different angles. And we'll
7 come back to you on -- in June with answers to
8 the questions that we were left with at the
9 last meeting.
10 GOVERNOR BUSH: Thank you.
11 MR. STRUHS: Item 3. Recommending approval
12 for this item. It's the creation of a
13 13-member citizen advisory board.
14 This was part of the Settlement Agreement
15 that was agreed to by the Board of Trustees as
16 part of the Fisheating Creek project.
17 The Board includes 11 members designated as
18 part of the Settlement Agreement. Two other
19 members will later be appointed by the Board of
20 Trustees. And this is what allows us to get
21 the thing started.
22 I'd like to point out the fact that in your
23 agenda item, you were provided a list of the
24 11 individuals already designated to serve on
25 this Board. I'd like to alert you to the fact,
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1 just for the record, that there has been one
2 change to that list.
3 Due to certain family obligations,
4 Mr. Jon Coffey has asked to be removed from
5 that list, and Mr. Butch Jones from Save Our
6 Creeks will serve in that position instead.
7 And with that, I'd seek your approval.
8 TREASURER GALLAGHER: Move Item 3.
9 GOVERNOR BUSH: Is there a second?
10 ATTORNEY GENERAL BUTTERWORTH: Governor,
11 I'll second. But I understand that there's
12 been a change in the -- in the --
13 TREASURER GALLAGHER: He just announced
14 that.
15 ATTORNEY GENERAL BUTTERWORTH: Oh, you
16 announced it?
17 Okay. I'm sorry.
18 TREASURER GALLAGHER: Yeah.
19 MR. STRUHS: Yes, sir.
20 Yes, sir. And we -- and we -- and we have
21 a letter --
22 ATTORNEY GENERAL BUTTERWORTH: Right.
23 MR. STRUHS: -- in the file to that effect.
24 ATTORNEY GENERAL BUTTERWORTH: Thank you.
25 MR. STRUHS: I just wanted to make sure it
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1 was on the record here for posterity.
2 GOVERNOR BUSH: Moved and seconded.
3 Without objection, it's approved.
4 MR. STRUHS: Item 4, we're seeking your
5 acceptance of the 2001 Florida Forever
6 five-year plan, and approval of the 2001
7 Florida Forever list.
8 COMMISSIONER BRONSON: Governor --
9 GOVERNOR BUSH: Yes.
10 COMMISSIONER BRONSON: -- I need to go on
11 record that I own -- my brother and I own a
12 parcel of land that's in that Big Bend area
13 that's -- that's on this list.
14 And -- and if there's any vote taken on
15 this, I'll have to abstain from -- from voting.
16 ATTORNEY GENERAL BUTTERWORTH: Governor,
17 I -- I was up real late last night.
18 I -- I mean, knowing that the new
19 Commissioner owned a interest in this parcel.
20 And I went back in the archives till --
21 literally back up to 1850s, as far back as I
22 could get in the Board of Trustees. And -- and
23 historically, whenever anyone who sat on the
24 Board of Trustees owned a piece of property,
25 they donated it --
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1 TREASURER GALLAGHER: Donated it.
2 ATTORNEY GENERAL BUTTERWORTH: -- to the --
3 COMMISSIONER BRONSON: Well, we're about to
4 break the tradition then.
5 TREASURER GALLAGHER: Doesn't he have to
6 buy his brother out first?
7 COMMISSIONER CRIST: Stand firm, Charlie.
8 GOVERNOR BUSH: I told you about that
9 hazing part.
10 COMPTROLLER MILLIGAN: Governor, if I
11 could, I -- I would like to move the item.
12 But there is one modification I'd like to
13 make. And that's accept the list as presented,
14 but without the contingency of moving items
15 from A list projects to B list projects.
16 TREASURER GALLAGHER: And what -- what
17 happens if there's -- I guess they didn't
18 remove 100 million, so we're okay.
19 COMPTROLLER MILLIGAN: Well, it doesn't
20 make any difference. It seems to me that if
21 you are prioritizing an A list and a B list,
22 you -- let the chips fall where they may as far
23 as the dollars are concerned, and how they are
24 allocated over time as we purchase the
25 property.
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1 To put a proviso in there that reflects a
2 change in the -- the amount of dollars that are
3 available doesn't make a whole lot of sense to
4 me.
5 TREASURER GALLAGHER: I'll second it.
6 GOVERNOR BUSH: Any other discussion?
7 Moved and seconded.
8 Charlie, you're not -- you can vote on
9 this, but not -- you're going to abstain on --
10 COMMISSIONER BRONSON: Right. If there
11 is --
12 GOVERNOR BUSH: Is that right?
13 TREASURER GALLAGHER: Hmm?
14 ATTORNEY GENERAL BUTTERWORTH: Unless he
15 donates it, then there's no problem.
16 GOVERNOR BUSH: That's true.
17 COMPTROLLER MILLIGAN: I know you'd do it,
18 wouldn't you, General Butterworth, if you --
19 ATTORNEY GENERAL BUTTERWORTH: If I owned
20 anything, I'd -- I would donate it. It's very
21 easy to say.
22 GOVERNOR BUSH: Moved and seconded.
23 Without objection, it's approved.
24 Let the record show that
25 Commissioner Bronson has a golden opportunity
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1 to improve his commitment to the heritage and
2 greatness of our state.
3 ATTORNEY GENERAL BUTTERWORTH: And there is
4 an election coming up.
5 GOVERNOR BUSH: His family goes back to
6 1635, and he can appreciate these traditions,
7 I think.
8 TREASURER GALLAGHER: I'd like to know what
9 that boat was like they came over on, 1635,
10 man.
11 COMMISSIONER BRONSON: Rickety.
12 TREASURER GALLAGHER: Rickety. He
13 remembers.
14 MR. STRUHS: Item -- Item 5, we're
15 recommending approval of this item. And I can
16 describe it to you if -- if you're interested.
17 But this is a -- consistent with previous
18 actions the Board has taken as it relates to
19 our ongoing business efforts in Golden Gate
20 Estates.
21 TREASURER GALLAGHER: Motion.
22 COMMISSIONER BRONSON: Second.
23 COMMISSIONER CRIST: Second.
24 GOVERNOR BUSH: Moved and seconded.
25 Without objection, it's approved.
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1 MR. STRUHS: Item 6, we're asking for your
2 approval of a request to enter into a
3 memorandum of understanding with the
4 U.S. Department of Agriculture and Forest
5 Service for a value to value exchange of
6 mineral and other property interests, and
7 various other administrative procedures, and to
8 substitute the land acquisition procedures of
9 the U.S. Department of Agriculture Forest
10 Service for this transaction.
11 We do have two individuals who would like
12 to speak to this item: Judy Hancock from the
13 Sierra Club, and Manley Fuller.
14 I'd also like to point out that
15 Kathleen Atkins has joined us today from the
16 U.S. Forest Service, and is available in the
17 event that there are any questions.
18 You may recall -- this has got a long
19 history here in the state of Florida. We have
20 long been interested as a State in acquiring
21 the mineral rights in Withlacoochee and
22 Blackwater River State Forests, something that
23 was not moving forward with any haste.
24 When the issue of the veterans cemetery
25 emerged about a year ago, we used that as an
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1 opportunity to get the Federal government's
2 attention, and to begin negotiations in earnest
3 to make these kinds of exchanges. And this is
4 the result of that process.
5 Ms. -- Ms. Hancock?
6 GOVERNOR BUSH: Good morning.
7 MS. HANCOCK: Good morning.
8 My name is Judy Hancock, and --
9 GOVERNOR BUSH: You want to lower the --
10 MS. HANCOCK: Okay. I live in Lake City,
11 Florida, near the Osceola National Forest. I'm
12 here representing the Florida Chapter of the
13 Sierra Club; Defenders of Wildlife; Four Rivers
14 Audubon, which is the local Audubon Society;
15 Mary Ellen Schumacher, who works on mining
16 issues for Suwannee Saint Johns Sierra Club;
17 and Joyce Valentino, who is the president of a
18 large homeowners group in the Citrus and
19 Hernando County area that's been active on this
20 for over eight years.
21 We're very pleased to be here to support
22 the lands and mineral exchange. Been working
23 on and supporting this for many, many, many
24 years.
25 It's truly a win-win project, which will
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1 provide significant benefits to both the State
2 and to the Osceola National Forest.
3 The State will have full control of surface
4 and subsurface lands across the state, and the
5 Pinhook unit of the Osceola National Forest,
6 which is now an island between the national
7 forest and Okefenokee, will be connected to
8 these two parts of this large ecosystem.
9 We are delighted and happy to offer our
10 support, and request your approval of these --
11 to enter into the MOU with the Forest Service.
12 Questions?
13 GOVERNOR BUSH: Thank you.
14 MR. FULLER: Governor and Cabinet, like to
15 welcome new Commissioner Bronson to the
16 Cabinet.
17 Florida Wildlife Federation speaks in favor
18 of -- of this item. We think that it's a --
19 it's a win-win situation for both the Federal
20 and State government. We supported the
21 acquisition of the Pinhook Swamp portion as an
22 addition to the Osceola National Forest for
23 many years. There have been concerns about the
24 mineral -- mineral rights under Withlacoochee
25 and Blackwater.
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1 We can -- you can solve some problems here
2 and do a -- and we -- we urge your support.
3 GOVERNOR BUSH: Thank you.
4 MR. FULLER: Thank you.
5 COMMISSIONER BRONSON: Can I ask Manley a
6 question --
7 GOVERNOR BUSH: Yeah.
8 COMMISSIONER BRONSON: -- if I could?
9 It's -- it is your opinion then that --
10 that this swap would be mutually agreeable and
11 advantageous to the -- to the people of Florida
12 then. I mean --
13 MR. FULLER: Yes, sir.
14 COMMISSIONER BRONSON: I looked at the
15 acreages and all, and I was a little -- little
16 taken back at some of the acreage totals and so
17 forth.
18 But I wanted to make sure that we weren't
19 giving more for a mutual swap than we needed
20 to. And -- and it's your opinion then that
21 this --
22 MR. FULLER: Well, the appraisal process I
23 think will -- will squarely address your
24 question.
25 COMMISSIONER BRONSON: I -- I hope so.
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1 MR. FULLER: And what -- what the -- what's
2 the appropriate acreage. And I think what's
3 before you is the best educated guess as to
4 what that -- that constitutes.
5 And one thing with the national forest is
6 they -- they are available to the citizens of
7 Florida in many respects. And so we consider
8 that -- this a -- a friendly exchange.
9 That's -- that's our -- our feeling about it.
10 COMMISSIONER BRONSON: Okay.
11 MR. FULLER: Thank you, sir.
12 GOVERNOR BUSH: Any other questions?
13 TREASURER GALLAGHER: Motion on 6.
14 ATTORNEY GENERAL BUTTERWORTH: Second.
15 GOVERNOR BUSH: Moved and seconded.
16 Without objection, it's approved.
17 Item 7?
18 MR. STRUHS: Item 7, we're seeking your
19 approval to accept an offer from the Florida
20 National College, Incorporated, in the amount
21 of four million twenty-five thousand dollars to
22 acquire the Glenbeigh Hospital Property.
23 TREASURER GALLAGHER: Motion on 7. It's
24 amazing what you can do --
25 COMMISSIONER BRONSON: I second.
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1 TREASURER GALLAGHER: -- when you follow
2 the law.
3 GOVERNOR BUSH: Amazing what happened in
4 three weeks.
5 TREASURER GALLAGHER: And it be -- just
6 follow the law. Isn't that amazing --
7 COMMISSIONER BRONSON: Second.
8 TREASURER GALLAGHER: -- what can happen.
9 GOVERNOR BUSH: Moved and seconded.
10 Without objection, it's approved.
11 MR. STRUHS: We're seeking to withdraw
12 Item 8.
13 TREASURER GALLAGHER: Motion to withdraw.
14 COMMISSIONER BRONSON: Second.
15 GOVERNOR BUSH: Moved and secon-- motion to
16 defer or withdraw?
17 MR. STRUHS: Withdraw.
18 GOVERNOR BUSH: -- withdraw -- and second.
19 Without objection, it's approved.
20 MR. STRUHS: Thank you.
21 SECRETARY HARRIS: I had --
22 Secretary Struhs, I had one question.
23 Just when we're going through the
24 surplusing of lands and other issues, I was out
25 in Washington state, and I saw that -- that
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1 many -- much of the land around the -- Seattle
2 had been purchased in terms of the development
3 rights.
4 And because of that, the -- the landowners
5 can stay there, grow their crops, continue with
6 the pikes market. And -- and it's been a
7 win-win situation in terms of preventing urban
8 sprawl, other issues.
9 It's also been win-win in terms of being
10 able to purchase a lot more development rights
11 so that these properties continue on
12 agriculturally and other things, without
13 expending so much money --
14 MR. STRUHS: Right.
15 SECRETARY HARRIS: -- of the State.
16 Is -- do we have any kind of program in
17 progress? It seems like we're lagging behind
18 some of the other states in trying to be
19 proactive in buying development rights, and
20 allowing the property owners to maintain them
21 when we know that they tend to do that much
22 better than the State had historically.
23 MR. STRUHS: Yes.
24 You -- I believe you're correct,
25 Madam Secretary, that historically, Florida was
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1 a bit of a laggard in terms of using
2 conservation easements as a way of
3 accomplishing our agenda, while keeping land in
4 private ownership, and on the tax rolls.
5 And we have made a concerted effort these
6 last two years to try to improve these efforts.
7 We've -- in fact, have done more conservation
8 easements than -- than have been done
9 historically.
10 We still have a long way to go.
11 The model in Seattle is -- is well
12 recognized around the country. It is
13 essentially a greenbelt model around the city
14 of Seattle, which has the benefit, not just of
15 keeping the land in -- in conservation, but
16 actually provides a natural barrier then to
17 sprawl --
18 SECRETARY HARRIS: Exactly.
19 MR. STRUHS: -- and keeping infrastructure
20 and development within the urban core.
21 I would point out that the Florida
22 Legislature this past session did pass the
23 Rural Land Family -- I -- I can't remember the
24 title of the bill. The Family Rural Land
25 Protection Act, or something like that, which
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1 essentially creates the program that allows the
2 State in the future to enter into those kinds
3 of long-term conservation easements, and keep
4 property in agricultural production.
5 SECRETARY HARRIS: Would it make sense --
6 I mean, in the same way that Seattle's able to
7 prevent urban sprawl, would it make sense if we
8 looked at it, inside of just kind of an
9 arbitrary scenario where we said, let's try to
10 encourage this, where we looked around cities,
11 or we looked where it could be very productive
12 for the State, and tried to proactively go out
13 and -- and work with landowners to -- to do
14 something like this.
15 MR. STRUHS: Another area where we've had
16 some success is actually near -- near your part
17 of the state, which is the Green Swamp area.
18 And there's a program there that has now
19 entered into I believe its fourth phase. And
20 there's been some success with that.
21 But I quite agree with you, that we can,
22 and should do, a better job of utilizing
23 conserva-- conservation easements in the
24 future.
25 And -- and I would share with you that the
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1 members of the Acquisition and Restoration
2 Council, which is now taking on the task of
3 providing some governance to the Florida
4 Forever program are all on board, and -- and
5 believe in that -- in that new philosophy, and
6 are -- are looking at the various acquisition
7 opportunities through that lens.
8 SECRETARY HARRIS: Does it make any sense
9 for DEP to take a look at and say, these are
10 the areas in Florida which have been most
11 productive agriculturally that are most
12 supportive in terms of our economy, that help
13 prevent urban sprawl.
14 Would it -- would it make any sense for DEP
15 to come back with recommendations of -- of
16 where we could maybe engage property owners
17 in -- in a real sense, the way Seattle was able
18 to do, instead of just letting it occur, or
19 having that as an option when people are --
20 people's properties are for sale.
21 MR. STRUHS: Right.
22 I -- I think we probably can do that.
23 We're sensitive, of course, to making sure
24 that we adhere to that highly valued principal
25 of -- of volunteerism, that -- that we -- we
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1 don't want to do anything that would undermine,
2 even in a perceived way somebody's property
3 rights, and we want to make sure that it's a
4 willing seller program.
5 In this case, maybe not a willing seller,
6 but a willing landowner in terms of entering
7 into a conservation easement.
8 In terms of identifying areas where they
9 would be particularly useful, I think we can do
10 that, as long as we're sensitive to the -- the
11 landowner's property interests.
12 SECRETARY HARRIS: Oh, I -- I couldn't
13 agree more in terms of the landowner's
14 interests.
15 I'm just -- I'm just concerned knowing a
16 lot of these -- these agriculture people who
17 care for their land so well, and sometimes when
18 the State has purchased it, that care isn't
19 quite as tender or merciful or good.
20 And sometimes these -- these landowners,
21 who have been around for generations, have a
22 real strong interest in seeing that land
23 preserved and -- and protected, and would be
24 open to this kind of suggestion, whereas maybe
25 they were never, you know, told of -- of such
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1 an opportunity.
2 I just wondered if there was a proactive
3 strategy on a statewide basis where we could
4 look at what the best areas, you know, to
5 pursue with that would be.
6 MR. STRUHS: The -- the bill that passed
7 the Legislature authorizes the program. It did
8 not appropriate any money.
9 And I think, in part, that was by design,
10 because they expected us to take the next year
11 and actually come up with specific plans as to
12 how the program would be administered.
13 And I suspect that one of the things that
14 we will do as part of that is identify those
15 areas that may be particularly appropriate for
16 that kind of program.
17 SECRETARY HARRIS: Would you be -- be
18 reporting that back to the Cabinet, or --
19 MR. STRUHS: I'd be more than happy to do
20 that.
21 SECRETARY HARRIS: I just think it'd be
22 really important for -- for --
23 MR. STRUHS: Sure.
24 SECRETARY HARRIS: -- Florida's future
25 looking down the way.
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1 Thanks.
2 MR. STRUHS: Thank you.
3 GOVERNOR BUSH: Thank you, Secretary.
4 MR. STRUHS: Thank you.
5 (The Board of Trustees of the Internal
6 Improvement Trust Fund Agenda was concluded.)
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STATE BOARD OF ADMINISTRATION 100
May 15, 2001
1 GOVERNOR BUSH: State Board of
2 Administration.
3 TREASURER GALLAGHER: Motion on the
4 minutes.
5 COMPTROLLER MILLIGAN: Second.
6 GOVERNOR BUSH: Moved and seconded.
7 Without objection, it's approved.
8 MR. HERNDON: Item Number 2 is approval of
9 a fiscal determination of an amount not
10 exceeding thirteen million five hundred
11 thousand dollar tax exempt, and six million two
12 hundred and ten thousand dollar taxable Florida
13 Housing Finance Corporation Revenue Bonds for
14 the Heritage Apartments in Collier County.
15 COMPTROLLER MILLIGAN: I think I heard what
16 he said. It was --
17 GOVERNOR BUSH: Want him --
18 COMPTROLLER MILLIGAN: -- awful noisy there
19 for a minute.
20 GOVERNOR BUSH: -- to do it again?
21 COMPTROLLER MILLIGAN: No. But I know what
22 he's talking about, and I'll move Item 2.
23 TREASURER GALLAGHER: Second.
24 GOVERNOR BUSH: Moved and seconded.
25
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STATE BOARD OF ADMINISTRATION 101
May 15, 2001
1 (Commissioner Bronson and
2 Attorney General Butterworth exited the room.)
3 GOVERNOR BUSH: Without objection, it's
4 approved.
5 MR. HERNDON: Item Number 3 is approval of
6 a fiscal determination of an amount not
7 exceeding 8 million dollar tax exempt, and
8 2.1 million dollar taxable Florida Housing
9 Finance Corporation Housing Revenue Bonds for
10 the Stuart Pointe Apartments in Martin County.
11 TREASURER GALLAGHER: Motion.
12 COMPTROLLER MILLIGAN: Second.
13 GOVERNOR BUSH: Moved and seconded.
14 Without objection, it's approved.
15 MR. HERNDON: Item Number 4 is to request
16 permission for -- from the Trustees to file for
17 notice two rules having to do with the asset
18 transition process, Rules 19-10.002, and
19 19-10.003.
20 And these are both intended to implement
21 procedures for the true-up transfer between the
22 SBA, defined benefit plan, the defined
23 contribution plan; and secondly, for employees
24 hired after the initial transfer dates to set
25 out the process, recognizing this is the
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STATE BOARD OF ADMINISTRATION 102
May 15, 2001
1 beginning of the rulemaking process.
2 COMPTROLLER MILLIGAN: I'll -- I'll move
3 the -- the new rules for notice.
4 A question of curiosity. Fixed and
5 concrete, the percentages?
6 MR. HERNDON: How -- how so --
7 COMPTROLLER MILLIGAN: Eight percent,
8 six percent, are they --
9 MR. HERNDON: They are fixed in concrete in
10 the sense that the statute gives us a method
11 for calculating them. But obviously that
12 formula will produce different results --
13 COMPTROLLER MILLIGAN: Yeah.
14 MR. HERNDON: -- over time.
15 COMPTROLLER MILLIGAN: Okay.
16 TREASURER GALLAGHER: Second.
17 GOVERNOR BUSH: Moved and seconded.
18 Without objection, it's approved.
19 MR. HERNDON: Item Number 5 is an item that
20 was deferred from the April 10th, 2001, Cabinet
21 meeting, which is a recommendation to create a
22 25 million dollar Florida Focused Venture
23 Capital Fund within our alternative investment
24 asset class.
25 Let me make one observation, again, and --
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1 and that is to stress that it's our intention
2 here with this 25 million dollars to use this
3 as the means by which we build the
4 infrastructure for an -- an alternative
5 investment program at the venture level.
6 When we say "Florida focused," we do not
7 mean to imply exclusively, Florida focus. Are
8 very mindful of the obligation that the
9 Trustees have to always seek the best return
10 given the level of risks. So that's certainly
11 not our intention.
12 But we do know we have a lot of venture
13 opportunity in Florida.
14 And this has been a program that's been on
15 our workplan for some time. And -- and one of
16 the concerns that we have, and the reason,
17 frankly --
18 (Commissioner Crist exited the room.)
19 MR. HERNDON: -- that we're bringing it to
20 you now is that we are getting to the point
21 where our planned moratorium on private equity
22 investments really does take hold for the next
23 couple of years.
24 So this is your window to do something like
25 this if you wish to do it. Otherwise we would
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1 have to recommend that you wait a couple of
2 years.
3 And that, frankly, may not be worthwhile,
4 because then you still have to build the
5 infrastructure and so forth at that future
6 date. So --
7 COMPTROLLER MILLIGAN: I'll -- I'll move
8 Item 2.
9 TREASURER GALLAGHER: Second.
10 GOVERNOR BUSH: Can we discuss this --
11 COMPTROLLER MILLIGAN: Sure.
12 GOVERNOR BUSH: -- a little bit?
13 COMPTROLLER MILLIGAN: Sure.
14 GOVERNOR BUSH: I'm a little -- I'm a
15 little --
16 (Secretary Harris exited the room.)
17 GOVERNOR BUSH: -- there seems to be a --
18 if you could clear up what Florida focused
19 means --
20 MR. HERNDON: Yeah.
21 GOVERNOR BUSH: -- because my thought has
22 been -- what was convincing to me in discussing
23 this with venture capital companies in our
24 state is that they're not of a size that
25 matches your minimum requirements to allocate
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1 money out in an efficient way, that they can't
2 take 50 or 100 million dollars -- and up till
3 now, because of the huge nature of the pension
4 fund, we've not been willing or -- or
5 interested because of economies of scale, of --
6 of having tranches in smaller amounts.
7 Never has it been my thought that it would
8 be set aside for only Florida venture capital
9 companies if we were to lower the amount.
10 And is that your understanding as well?
11 MR. HERNDON: That's correct, Governor. It
12 would not be our intention to set aside this
13 amount of money exclusively for Florida
14 companies.
15 We, however, are mindful, as you are, that
16 there are a lot of very good organizations out
17 there with a lot of excellent business
18 prospects. And the one thing that we do want
19 to do is see if we can't deploy these funds,
20 where appropriate, in Florida-based
21 organizations.
22 Now, that does not necessarily translate to
23 100 percent, or 90 or whatever. But -- but it
24 would be our priority to try and do that where
25 we can.
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1 GOVERNOR BUSH: Well, let me ask that --
2 TREASURER GALLAGHER: I --
3 GOVERNOR BUSH: Go ahead. I'm sorry.
4 TREASURER GALLAGHER: If you have two
5 deals, one in Florida, and one somewhere else,
6 and the one somewhere else is better than the
7 one in Florida, what would you do?
8 MR. HERNDON: Assuming that the level of
9 risk was the same for the two deals, the return
10 was better outside the state of Florida, we
11 would go to the return that's outside the --
12 TREASURER GALLAGHER: Okay.
13 MR. HERNDON: -- state of Florida.
14 TREASURER GALLAGHER: That takes care of
15 my --
16 MR. HERNDON: All else being equal,
17 Florida --
18 TREASURER GALLAGHER: Totally equal --
19 MR. HERNDON: -- opportunity --
20 TREASURER GALLAGHER: -- Florida would get
21 it.
22 MR. HERNDON: -- and outside Florida
23 opportunity, we would go with --
24 GOVERNOR BUSH: Are you talking about --
25 MR. HERNDON: -- Florida.
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1 GOVERNOR BUSH: -- direct investment in
2 venture capital opportunities, or investment in
3 venture capital firms that then do their own
4 underwriting --
5 MR. HERNDON: What we would anticipate is
6 the latter case, that we would invest with
7 venture capital firms that then do the
8 underlying investments themselves.
9 TREASURER GALLAGHER: Well --
10 GOVERNOR BUSH: Okay.
11 MR. HERNDON: And it's that kind of
12 infrastructure --
13 TREASURER GALLAGHER: -- as a partnership.
14 MR. HERNDON: -- that we want to build.
15 That is correct.
16 TREASURER GALLAGHER: In other words, we
17 look at the individual deal, not just give them
18 money, and say, go do what --
19 MR. HERNDON: Oh, absolutely.
20 TREASURER GALLAGHER: -- you want.
21 MR. HERNDON: We always look at the
22 individual deals. But typically in these
23 situations, as a limited partner in a GP/LP
24 structure, you don't have a lot to say about
25 the individual investment decisions that your
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1 general partner's making on your behalf.
2 And we would assume --
3 TREASURER GALLAGHER: Except whether you're
4 in or out.
5 MR. HERNDON: Well, not on a per deal
6 basis. Typically that is not the case.
7 When you put your money in as a GP/LP
8 structure, the LP status does not typically
9 give you deal-by-deal discretion.
10 GOVERNOR BUSH: In fact, I think if you're
11 a limited partner, by definition, you lose --
12 MR. HERNDON: Right.
13 GOVERNOR BUSH: -- your limited
14 liability --
15 MR. HERNDON: That's right.
16 GOVERNOR BUSH: -- if you're --
17 MR. HERNDON: And we have --
18 GOVERNOR BUSH: -- on some decisions.
19 MR. HERNDON: -- seats on advisory boards,
20 and those kinds of things, that gives us some
21 participation and some activity. But
22 typically, you don't have that kind of
23 arrangement.
24 TREASURER GALLAGHER: But then what the
25 issue is is, do you -- do you invest with a
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1 Florida-only -- and there are some that just do
2 Florida.
3 GOVERNOR BUSH: No.
4 MR. HERNDON: No.
5 GOVERNOR BUSH: There are none. I mean --
6 TREASURER GALLAGHER: There are none that
7 just do Florida?
8 GOVERNOR BUSH: No. Because --
9 TREASURER GALLAGHER: Well --
10 GOVERNOR BUSH: -- because of the same
11 reason that we would have a hard time --
12 TREASURER GALLAGHER: Right. Right.
13 GOVERNOR BUSH: -- investing in something
14 like that --
15 TREASURER GALLAGHER: Okay.
16 GOVERNOR BUSH: -- they have a hard time
17 raising money --
18 TREASURER GALLAGHER: All right.
19 GOVERNOR BUSH: -- for something like that.
20 But the practice I think -- and this is
21 where --
22 TREASURER GALLAGHER: They try to do
23 Florida.
24 GOVERNOR BUSH: -- the custom would be if
25 you're investing with a California VC, or a
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1 Boston venture capital company, there is a
2 disproportionate amount of -- of deals that
3 they would invest in close to where they are,
4 because it requires -- you know, they're
5 angels. They have to require the -- be there
6 to nurture the business, because it's a
7 start-up.
8 Isn't that right?
9 MR. HERNDON: Exactly.
10 TREASURER GALLAGHER: There's going to be a
11 lot of fighting for that 25 million, I can tell
12 you that. I don't want to be sitting around
13 when that all starts.
14 COMPTROLLER MILLIGAN: That's right.
15 GOVERNOR BUSH: But so long as we're not --
16 TREASURER GALLAGHER: That's not very much.
17 COMPTROLLER MILLIGAN: Only the start.
18 GOVERNOR BUSH: If -- if there is a
19 consensus on -- and I want to -- hope there --
20 if we can have a little discussion on this --
21 that we're not limiting the State Board of
22 Administration, or the pension fund's options
23 by doing this.
24 We're not gearing money towards Florida
25 companies, we're not -- I mean, this is
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1 getting -- this is on the margins of social
2 engineering, or whatever the term would be --
3 MR. HERNDON: Right.
4 GOVERNOR BUSH: -- where we're gearing
5 pension fund monies towards political
6 objectives -- or policy -- not political --
7 policy objectives.
8 And I -- I think we have to be very wary of
9 that, because our first responsibility is for
10 the -- the folks that are counting on this for
11 their retirement.
12 TREASURER GALLAGHER: To -- to add to that,
13 I think there's been some investments in the
14 past that -- if I was here, I wouldn't have
15 voted for, and probably would have done
16 anything I could to stop them, but they
17 happened.
18 And this is not one of those. And we also
19 aren't saying that you have to do it. This is
20 allowing you to do it --
21 GOVERNOR BUSH: Right.
22 TREASURER GALLAGHER: -- as an option, not
23 mandating that it get done. And I think making
24 that clear is another thing. This is a -- this
25 should be a staff decision --
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1 MR. HERNDON: Yes, sir.
2 TREASURER GALLAGHER: -- on what is the
3 best for the pension funds in having a diverse
4 portfolio. And that what we're doing is saying
5 that we're allowing the allocation of an
6 additional 25 million at this point.
7 COMPTROLLER MILLIGAN: I -- I think that's
8 clearly the case.
9 And you raise another issue, and I think
10 Tom is looking at coming back to try to untie
11 their hands in some investment products in the
12 future.
13 So look forward to that.
14 TREASURER GALLAGHER: Well, I tell you --
15 what I would like, because I wasn't here when
16 any tyings were done in the past, I would like
17 to make a motion that -- that any past tyings
18 are hereby withdrawn, and any future ones would
19 have to come in front of this Board to be taken
20 up.
21 GOVERNOR BUSH: Can we --
22 TREASURER GALLAGHER: Finish this --
23 COMPTROLLER MILLIGAN: Well, I'm -- I'm
24 not -- I'm not ready to second that. I think
25 it needs to be looked at. There are some
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1 things in statute that tie their hands that
2 we --
3 TREASURER GALLAGHER: Well, obviously, I'm
4 talking about Board policy, not statute.
5 But let's finish this item first.
6 I'm sorry.
7 GOVERNOR BUSH: There's -- is there any
8 more discussion on this?
9 Is there a motion?
10 COMPTROLLER MILLIGAN: I think we've had
11 it.
12 GOVERNOR BUSH: Motion and --
13 TREASURER GALLAGHER: Motion -- second.
14 GOVERNOR BUSH: -- a second.
15 Without objection, it's approved.
16 Commissioner Gallagher, would it make more
17 sense -- would it make sense for Tom to come
18 back to us with a --
19 TREASURER GALLAGHER: Well, I --
20 GOVERNOR BUSH: -- with a report of the --
21 TREASURER GALLAGHER: Well, I just --
22 GOVERNOR BUSH: -- that --
23 TREASURER GALLAGHER: -- I mean, obviously
24 restrictions that are statutory, which, in my
25 opinion, are probably South Africa and -- and
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1 Northern Ireland.
2 COMPTROLLER MILLIGAN: No.
3 MR. HERNDON: Cuba.
4 TREASURER GALLAGHER: Oh, Cuba. Right.
5 Cuba and -- and Northern Ireland.
6 GOVERNOR BUSH: Tobacco stocks aren't --
7 isn't that one --
8 TREASURER GALLAGHER: Tobacco is a Board --
9 is a Board one. And I would like to remove
10 Board ones, and have them come back while we're
11 here --
12 COMPTROLLER MILLIGAN: Well, it is -- I
13 don't think we should address a particular --
14 GOVERNOR BUSH: You just may --
15 COMPTROLLER MILLIGAN: -- investment.
16 GOVERNOR BUSH: -- lose, Commissioner.
17 COMPTROLLER MILLIGAN: I think really
18 the -- the philosophy ought to be to free their
19 hands to make the --
20 TREASURER GALLAGHER: Exactly.
21 COMPTROLLER MILLIGAN: -- investment that
22 is best -- in the best --
23 TREASURER GALLAGHER: Well, that's why --
24 COMPTROLLER MILLIGAN: -- interest of
25 the --
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1 TREASURER GALLAGHER: -- I want to
2 remove --
3 GOVERNOR BUSH: -- members of --
4 TREASURER GALLAGHER: -- any restrictions
5 that --
6 COMPTROLLER MILLIGAN: -- the FRS.
7 TREASURER GALLAGHER: -- have been done in
8 the past.
9 COMPTROLLER MILLIGAN: Yeah.
10 TREASURER GALLAGHER: When some of us
11 weren't here.
12 So I'd like to --
13 GOVERNOR BUSH: I don't think we've done
14 any since we've been here.
15 TREASURER GALLAGHER: No, we haven't.
16 That's why I'm making this motion.
17 COMPTROLLER MILLIGAN: Well, that's not
18 true. One of them happened while I was here.
19 TREASURER GALLAGHER: Right. And I don't
20 think you were on the prevailing side.
21 COMPTROLLER MILLIGAN: I was not.
22 TREASURER GALLAGHER: So I would like to
23 make the motion that we eliminate those that
24 were made prior to this administration.
25 GOVERNOR BUSH: Is there a second?
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1 COMPTROLLER MILLIGAN: No.
2 GOVERNOR BUSH: No second.
3 COMPTROLLER MILLIGAN: There is no second.
4 GOVERNOR BUSH: Can I -- I think,
5 Commissioner Gallagher, you're -- you're on the
6 right track.
7 COMPTROLLER MILLIGAN: Absolutely.
8 GOVERNOR BUSH: And I would like to see, if
9 possible, if Tom could come back with us to --
10 with a list of the -- what -- what did you call
11 them?
12 TREASURER GALLAGHER: Restrictions.
13 GOVERNOR BUSH: -- restrictions so as to --
14 TREASURER GALLAGHER: Investment
15 restrictions.
16 GOVERNOR BUSH: -- have a -- have a policy
17 discussion about that, and hear his
18 recommendations on --
19 TREASURER GALLAGHER: See, I -- I think
20 that -- looking back on the past when
21 General Milligan was a member of this Board and
22 we weren't, Governor, he voted no on -- on
23 giving instructions on individual investments
24 to the State Board.
25 And -- and I happened to fully agree with
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1 his vote at that time. And I think at this
2 point, I want to get the opportunity to
3 straighten it out.
4 COMPTROLLER MILLIGAN: I -- I agree with
5 where you're going, Commissioner. And --
6 TREASURER GALLAGHER: Just don't want to do
7 it now.
8 COMPTROLLER MILLIGAN: -- I'd -- I'd -- and
9 I would just like to make sure that we've done
10 it in an orderly fashion. And -- and ask Tom,
11 as --
12 TREASURER GALLAGHER: Okay.
13 COMPTROLLER MILLIGAN: -- as the Governor
14 has suggested, to bring it back to us.
15 MR. HERNDON: We'll be happy to do that,
16 Governor.
17 GOVERNOR BUSH: Thank you.
18 MR. HERNDON: Item Number 6 is --
19 GOVERNOR BUSH: We always have a good
20 discussion when we get off script.
21 COMPTROLLER MILLIGAN: That's the best
22 time.
23 TREASURER GALLAGHER: And I hate those
24 scripts.
25 COMPTROLLER MILLIGAN: We can -- we can
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1 solve a lot of problems that way, I think, and
2 address a lot of important issues.
3 GOVERNOR BUSH: The Cabinet Aides get
4 nervous. But --
5 MR. HERNDON: Item Number 6 is the defined
6 contribution report -- status report Number 10,
7 which is submitted for your information.
8 I don't know that there's anything in there
9 this morning that -- that you're not already
10 familiar with, since you've taken action on
11 most of these agenda items.
12 We're working through the preliminary
13 selection process for the fourth, sixth,
14 eighth, ninth, and tenth unbundled providers.
15 And we will have -- in fact, the oral
16 interviews are going on yesterday and today --
17 or excuse me -- yesterday and tomorrow and next
18 week.
19 And we're in the process of evaluating the
20 bundled providers and working through that
21 list, and working extensively with the various
22 vendors that are under negotiation with us, the
23 third party administrator, the education
24 vendors, and so forth.
25 And I don't see any -- any problems on the
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1 horizon. We -- things are looking good, and --
2 and we're making good progress. So --
3 TREASURER GALLAGHER: Motion, approval.
4 COMPTROLLER MILLIGAN: Second.
5 GOVERNOR BUSH: Moved and seconded.
6 Without objection, it's approved.
7 MR. HERNDON: Item Number 7 is a
8 legislative update.
9 And I want to just briefly highlight the
10 status of the legislation that did pass. I
11 know there's been some attention to
12 Senate Bill 2, which is the special risk
13 legislation that was passed that includes the
14 legislation that impacts the implementation of
15 the defined contribution legislation.
16 I -- I think I can say, Governor, you and I
17 talked about that at an earlier stage, 85 to
18 90 percent of the -- the troublesome issues
19 were gone. I can -- am pleased to say that --
20 that 100 percent of the troublesome issues are
21 gone.
22 The legislation that did pass does no
23 violence to the defined contribution program as
24 we know it. And, in fact, I don't
25 anticipate -- although we're looking at a
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1 couple of nuances that we may bring back to you
2 in the form of the Investment Policy Statement,
3 I don't see anything in the legislation that
4 impacts either our timetable, or the overall
5 architecture of the program, or the number of
6 providers, or anything like that at this stage
7 of the game.
8 I think we were successful in -- in working
9 through most of those changes.
10 Of course, the Trust Fund Bill did pass,
11 contingent on -- on this Senate Bill 2, and
12 we're pleased with that. We -- we had an
13 alternative strategy, but the best strategy is
14 to have the Trust Fund, and we're pleased that
15 that passed.
16 The only other point that I would make, and
17 that's just to correct an -- an error in our
18 report, and that is that the health insurance
19 supplement -- the increase in contribution
20 rates for the health insurance supplement did
21 pass. We had indicated that the substantive
22 bill did not, and that's correct. The
23 substantive bill did not, but they stripped off
24 the contribution element itself, and put it on
25 the larger Division of Retirement contribution
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1 bill. So it did pass.
2 The Division will still need to come back
3 for the disability study legislation next
4 session, I suspect.
5 So --
6 GOVERNOR BUSH: Any discussion?
7 TREASURER GALLAGHER: Motion for approval.
8 COMPTROLLER MILLIGAN: Second.
9 GOVERNOR BUSH: Moved and seconded.
10 Without objection, it's approved.
11 MR. HERNDON: And Item Number 8 is a
12 hurricane catastrophe premium formula. And I
13 know Commissioner Gallagher's forwarded a
14 letter requesting that this be deferred till
15 the May 30th agenda.
16 TREASURER GALLAGHER: Yes. Governor, as
17 you know, depending on your review of -- of the
18 budget on what you will or will not -- or
19 possibly will not veto, that could make a
20 difference in what these rates ought to be.
21 And so we want to set that as soon as possible.
22 The difference is a -- a minus .3 increase
23 in the Cat Fund assessment to insurers, or a
24 4.1 something -- I don't remember exactly what
25 it was. But --
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1 MR. HERNDON: Right.
2 TREASURER GALLAGHER: -- and that that
3 difference is -- that 4.14 increase. That's
4 based on the 20 million dollar additional
5 mitigation that was added in the Legislature
6 above the 10 million that is statutorily set.
7 GOVERNOR BUSH: The ten -- the ten was
8 appropriated as well? And then --
9 TREASURER GALLAGHER: The ten --
10 MR. HERNDON: Yes. Thirty -- thirty total.
11 TREASURER GALLAGHER: The ten was
12 appropriated, which is statutorily set --
13 GOVERNOR BUSH: Right.
14 TREASURER GALLAGHER: -- and has always
15 been, and twenty additional was done.
16 I'm concerned that the precedent set by the
17 Legislature going into the catastrophic fund
18 above the 10 million set statutorily, for two
19 reasons: One, because it does cost all of the
20 homeowners more money. Because these -- these
21 funds get passed directly to the homeowners in
22 their -- in their rates.
23 And so for whatever the money's used for,
24 I think there's probably a better way to fund
25 it than put it on the -- you know, the
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1 homeowners that are primarily from our area,
2 Governor, Dade, Broward, and Palm Beach County.
3 So I'd ask --
4 GOVERNOR BUSH: Well --
5 TREASURER GALLAGHER: -- that --
6 GOVERNOR BUSH: -- this is --
7 TREASURER GALLAGHER: -- defer this till
8 May 30th.
9 GOVERNOR BUSH: -- this is where -- also
10 where the -- as I understand it -- I haven't
11 gotten the details of what -- where the money's
12 going to be specifically spent.
13 But this appropriation goes to the
14 Water Management Districts for flood control in
15 the same area. So it's kind of an
16 interesting --
17 TREASURER GALLAGHER: Well, it is.
18 GOVERNOR BUSH: -- but very creat-- unusual
19 way of doing things. But for that --
20 TREASURER GALLAGHER: But that particular
21 Water Management District has its own taxing
22 authority. And to put a tax on people in
23 Pensacola and Jacksonville, as well as Dade,
24 Broward, and Palm Beach County, probably isn't
25 the right way to do it, to subsidize their
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1 taxing authority by putting it on
2 policyholders. So I --
3 GOVERNOR BUSH: It's a --
4 TREASURER GALLAGHER: -- that's -- that's
5 my recommendation on the veto message, but you
6 can do what you choose, Governor.
7 COMPTROLLER MILLIGAN: As long as we are
8 having this side bar discussion, let's --
9 GOVERNOR BUSH: Yes. General.
10 COMPTROLLER MILLIGAN: -- I've -- I've been
11 trying to sort out for some time, and Tom and I
12 had a good discussion here recently, about the
13 end game here really with the Hurricane
14 Catastrophe Fund.
15 When is enough, enough?
16 TREASURER GALLAGHER: Well, there -- there
17 is a point, but we're a long way from it. At
18 this -- two things that are -- there's
19 enough -- is enough actuarially when, in fact,
20 we have enough cash on hand. And then
21 I believe the actuaries would come and say that
22 we no longer need to assess the policyholders
23 in Florida, and the cash would sit there and
24 would accumulate, and we'd be able to cover a
25 two storm hit in one year, and a storm hit in
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1 the second year without borrowing any money.
2 And I --
3 COMPTROLLER MILLIGAN: Is that defined,
4 Tom?
5 TREASURER GALLAGHER: No. But I think some
6 actuaries could give you what it is.
7 But it all -- you know, what problems is,
8 property values increase, and there's more
9 property, and more potential damage, it grows
10 as the -- as the Hurricane Catastrophe Fund
11 grows.
12 So it's --
13 COMPTROLLER MILLIGAN: Well, one --
14 TREASURER GALLAGHER: -- I don't know that
15 there's a -- there's a --
16 COMPTROLLER MILLIGAN: Yeah.
17 TREASURER GALLAGHER: -- a point. Because
18 what ends up happening is that you have the
19 option to continually add more coverage at a
20 much, much cheaper amount than reinsurance
21 costs. And --
22 COMPTROLLER MILLIGAN: Well, I --
23 TREASURER GALLAGHER: -- I would
24 recommend --
25 COMPTROLLER MILLIGAN: -- one of the --
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1 TREASURER GALLAGHER: -- that we'd start
2 doing that.
3 COMPTROLLER MILLIGAN: -- one of the things
4 though that drove, of course, this whole effort
5 was the fact that secondary insurance --
6 reinsurance money was really -- or wasn't
7 available, or was hard to get unless you paid
8 through the nose.
9 And as I recall as we started on this
10 track, the limit was 7.5 billion -- the bottom
11 was 7.5 billion. And as time went on, it came
12 down, came down, came down.
13 And I think it's 3.5 now, or whatever it
14 is.
15 TREASURER GALLAGHER: Right.
16 COMPTROLLER MILLIGAN: And what drove that
17 down was the reinsurance problem.
18 TREASURER GALLAGHER: Right.
19 COMPTROLLER MILLIGAN: Reinsurance today is
20 not that big a problem, as I understand it.
21 TREASURER GALLAGHER: Well, it's still --
22 it is a major problem for Dade, Broward, and
23 Palm Beach properties, and other coastal
24 properties.
25 COMPTROLLER MILLIGAN: That -- that may be.
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1 And -- and that may be then that we might want
2 to really look at this Catastrophe Fund again
3 in terms of how it's structured.
4 Maybe 3.5 isn't the right point. Now,
5 maybe it ought to be moved back up to, say,
6 7.5 --
7 TREASURER GALLAGHER: Well, see --
8 COMPTROLLER MILLIGAN: -- which has a big
9 impact then --
10 TREASURER GALLAGHER: I looked at it the
11 other way. I think it -- it should go down.
12 COMPTROLLER MILLIGAN: Well, I --
13 TREASURER GALLAGHER: So it's a good --
14 it's a good discussion to have. But I -- I
15 would take the stand that in the reinsurance
16 market --
17 COMPTROLLER MILLIGAN: Well --
18 TREASURER GALLAGHER: -- is a very
19 cyclical, and extremely expensive. And as
20 you know, what's happened to property
21 insurance, especially in those lower counties,
22 it's tripled in cost. And reinsurance is a
23 major part of that -- of that tripling.
24 And the cost -- reinsurance is obviously,
25 you know, marketed worldwide. And -- and
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1 it's -- it's taxable, it's profitable, it's all
2 those kinds of things.
3 And it's a question of should Floridians be
4 stuck with those kinds of costs when, in fact,
5 there's a cheaper method that's been set up by
6 the State to do it. And that's part of the
7 discussion.
8 GOVERNOR BUSH: But isn't the -- hasn't the
9 reinsurance market gotten stronger, and -- and
10 rates have dropped?
11 TREASURER GALLAGHER: They -- they have.
12 But when you talk about there's -- there's very
13 little capacity for Dade, Broward, Palm Beach,
14 and Monroe County.
15 Almost -- I mean, just very -- there's just
16 not much capacity at all.
17 So unless -- if an insurance company only
18 insured there, they probably couldn't buy any
19 reinsurance. And at -- at a rate that they
20 could sell any policies.
21 So what ends up happening is you obviously
22 have to have a spread across the state, just
23 like the Catastrophe Fund spreads their premium
24 they collect across the state, obviously much
25 higher in Dade, Broward, and Palm Beach than
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1 other places.
2 But that's a -- certainly a discussion as
3 to whether the private marketplace should do
4 it, or whether the Cat Fund should do it. And
5 that's really where you set those levels.
6 And the -- the cost factor to those -- to
7 the policyholders in Florida is much, much
8 higher in the private marketplace than it is in
9 the Cat fund, because the CAT fund has a
10 1 percent cost of -- of administration, and --
11 COMPTROLLER MILLIGAN: Well, it's a good --
12 TREASURER GALLAGHER: -- no taxes --
13 COMPTROLLER MILLIGAN: -- program. And I
14 guess really -- I mean, it's -- it's -- has
15 progressed nicely. We haven't had a -- a
16 challenge of a really significant storm, and
17 I'm not suggesting that we -- we need to go in
18 there and -- and hammer this program and
19 reshape it. But I think we ought to look at
20 it. And we ought to really understand clearly
21 the end game, you know, what is the end game.
22 And -- and clearly assess whether or not we
23 have the right levels now.
24 And maybe you're right. Maybe we ought to
25 lower it. Maybe that's another way of -- of
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STATE BOARD OF ADMINISTRATION 130
May 15, 2001
1 addressing this issue.
2 TREASURER GALLAGHER: Well, that is a way
3 that we can take care of those policyholders
4 all along that have -- that have got the brunt
5 of -- after Hurricane Andrew, huge increases.
6 And it would mean that --
7 COMPTROLLER MILLIGAN: Well, I -- I
8 happen --
9 TREASURER GALLAGHER: -- it would lower
10 their rates.
11 COMPTROLLER MILLIGAN: -- to be from
12 Bay County. And --
13 TREASURER GALLAGHER: You've got the same
14 problem.
15 COMPTROLLER MILLIGAN: -- Bay County has
16 the very same problem.
17 TREASURER GALLAGHER: Coastal Bay County is
18 a big problem.
19 COMPTROLLER MILLIGAN: -- and pay through
20 the -- pay a -- a rather large --
21 TREASURER GALLAGHER: You're in the -- in
22 the same -- as --
23 COMPTROLLER MILLIGAN: So I -- I think we
24 ought to -- I don't know whether this is the
25 right time to look at it. Maybe we ought to
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May 15, 2001
1 wait and see if we get through the next
2 hurricane season.
3 But it is something that we ought --
4 I think ought to think about.
5 TREASURER GALLAGHER: That's what all the
6 reinsurers do, by the way. They wait -- they
7 want to wait until it gets through the
8 hurricane season before they write the
9 policies.
10 So we defer this to till May 30th, right?
11 COMPTROLLER MILLIGAN: And --
12 GOVERNOR BUSH: There's a motion to defer.
13 COMPTROLLER MILLIGAN: -- I second
14 deferral.
15 GOVERNOR BUSH: And a second.
16 Without objection, it's approved.
17 MR. HERNDON: Thank you.
18 GOVERNOR BUSH: Thank you very much.
19 Thank you all, gentlemen.
20 TREASURER GALLAGHER: Thank you.
21 (The State Board of Administration Agenda
22 was concluded.)
23 * * *
24 (The Cabinet meeting was concluded at
25 11:06 a.m.)
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132
May 15, 2001
1 CERTIFICATE OF REPORTER
2
3
4
5 STATE OF FLORIDA:
6 COUNTY OF LEON:
7 I, LAURIE L. GILBERT COX, do hereby certify
8 that the foregoing proceedings were taken before me
9 at the time and place therein designated; that my
10 shorthand notes were thereafter translated; and the
11 foregoing pages numbered 1 through 131 are a true and
12 correct 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 23RD day of MAY, 2001.
18
19
20
21
22
23
LAURIE L. GILBERT COX, RPR, CCR, CRR, RMR
24 100 Salem Court
Tallahassee, Florida 32301
25 850/878-2221
ACCURATE STENOTYPE REPORTERS, INC.
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