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 AUTHORIZATION OF
TEMPORARY DUTY FOR FORMER PAROLE COMMISSIONERS
DIVISION OF BOND FINANCE
DEPARTMENT OF HIGHWAY SAFETY AND MOTOR VEHICLES
STATE BOARD OF EDUCATION
BOARD OF TRUSTEES OF THE
INTERNAL IMPROVEMENT TRUST FUND
DEPARTMENT OF ENVIRONMENTAL PROTECTION SITING BOARD
STATE BOARD OF ADMINISTRATION
VOLUME I
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 Wednesday,
May 30, 2001, commencing at approximately 9:13 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
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ACCURATE STENOTYPE REPORTERS, INC.
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May 30, 2001
I N D E X
ITEM ACTION PAGE
VOTE ON AUTHORIZATION OF TEMPORARY DUTY:
1 Approved 4
DIVISION OF BOND FINANCE:
(Presented by J. Ben Watkins, III,
Director)
1 Approved 5
2 Approved 7
3 Approved 7
4 Approved 8
DEPARTMENT OF HIGHWAY SAFETY AND MOTOR VEHICLES:
(Presented by Fred O. Dickinson, III,
Executive Director)
1 Approved 9
2 Approved 9
3 Approved 9
4 Approved 15
STATE BOARD OF EDUCATION:
(Presented by Wayne V. Pierson,
Deputy Commissioner)
1 Approved 16
2 Deferred 112
3 Approved 162
4 Approved 162
CERTIFICATE OF REPORTER 163
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ACCURATE STENOTYPE REPORTERS, INC.
VOTE ON AUTHORIZATION/TEMP DUTY 4
May 30, 2001
1 P R O C E E D I N G S
2 (The agenda items commenced at 9:50 a.m.)
3 GOVERNOR BUSH: The next vote for the
4 Authorization of Temporary Duty for Former
5 Parole Commissioners.
6 As you know, the statutes authorize the
7 Florida Parole Commission to assign temporary
8 duties to former Commissioners, with the
9 approval of the Governor and the Cabinet.
10 At this time, I'd like to seek that
11 approval.
12 All in favor of -- in the -- I don't know
13 if you all received the list of the --
14 COMPTROLLER MILLIGAN: We did.
15 GOVERNOR BUSH: -- former Commissioners
16 that could serve, if called upon.
17 All in favor --
18 TREASURER GALLAGHER: I move approval.
19 GOVERNOR BUSH: -- say aye.
20 THE CABINET: Aye.
21 GOVERNOR BUSH: All opposed?
22 Very good.
23 (The Vote on Authorization of Temporary
24 Duty for Former Parole Commissioners Agenda was
25 concluded.)
ACCURATE STENOTYPE REPORTERS, INC.
DIVISION OF BOND FINANCE 5
May 30, 2001
1 GOVERNOR BUSH: The next Cabinet meeting
2 will be held on June 12th, 2001.
3 Division of Bond Finance.
4 MR. WATKINS: Good morning, Governor.
5 Item Number 1 is approval of the minutes of
6 the May 15 meeting.
7 COMPTROLLER MILLIGAN: Move.
8 TREASURER GALLAGHER: Motion.
9 COMMISSIONER CRIST: Motion. Whatever.
10 GOVERNOR BUSH: Is there a second?
11 Moved and seconded.
12 Without objection, it's approved.
13 MR. WATKINS: Item Number 2 is a resolution
14 authorizing the competitive sale of up to
15 50 million dollars in Florida Forever Bonds.
16 This is the inaugural issue, the first series
17 of bonds for Florida Forever, which is the
18 successor to the Preservation 2000 program.
19 And at this -- unlike the way the program
20 was implemented in the past, at this Board's
21 directive, we are moving to a more
22 cost-effective methodology for implementing the
23 program.
24 And what I mean by that is we are selling
25 smaller increments of bonds based on cash needs
ACCURATE STENOTYPE REPORTERS, INC.
DIVISION OF BOND FINANCE 6
May 30, 2001
1 for closing land transactions as a way to
2 better match our borrowings with our cash
3 needs.
4 GOVERNOR BUSH: Is there an additional cost
5 of breaking down these tranches in -- I mean,
6 one-sixth the size of the bond offering, does
7 it create an additional expense?
8 MR. WATKINS: Governor, it's minimal. It's
9 less than $100,000 per issue in printing costs
10 and rating agency fees, and things like that.
11 So in relation to the grand scheme of how
12 much we are saving by not having to pay
13 interest on debt service on money that's not --
14 that's sitting there, it -- it is -- the return
15 on that investment is significant, dramatic.
16 GOVERNOR BUSH: Plus it also makes sure --
17 makes -- allows us to -- to ensure that the
18 balance in these accounts is less than what the
19 Legislature would want to try to grab.
20 MR. WATKINS: Correct.
21 GOVERNOR BUSH: Technical --
22 MR. WATKINS: There's not a lot of
23 unused --
24 GOVERNOR BUSH: Really high tech, you know,
25 kind of bond finance stuff. I know you
ACCURATE STENOTYPE REPORTERS, INC.
DIVISION OF BOND FINANCE 7
May 30, 2001
1 reporters may not understand that part. But --
2 MR. WATKINS: There's not a lot of unused
3 cash sitting around. That's what we're
4 avoiding by doing that.
5 GOVERNOR BUSH: Thank you, Ben.
6 Did we have a -- a motion and a second on
7 this?
8 COMMISSIONER BRONSON: So move.
9 COMMISSIONER CRIST: Second.
10 GOVERNOR BUSH: Moved and seconded.
11 Without objection, it's approved.
12 Item 3.
13 MR. WATKINS: Item 3 is a resolution
14 authorizing the redemption prior to maturity of
15 bonds that we had issued on behalf of the
16 Jacksonville Transportation Authority.
17 GOVERNOR BUSH: Is there a motion?
18 Second.
19 COMMISSIONER BRONSON: So move.
20 SECRETARY HARRIS: Second.
21 COMMISSIONER CRIST: Second.
22 GOVERNOR BUSH: Moved and seconded.
23 Without objection, it's approved.
24 MR. WATKINS: Item Number 4 is a report of
25 award on the competitive sale of seven million
ACCURATE STENOTYPE REPORTERS, INC.
DIVISION OF BOND FINANCE 8
May 30, 2001
1 seven hundred and seventy thousand dollars of
2 Board of Regents parking facility revenue bonds
3 for construction of a parking facility for the
4 University of Central Florida.
5 The bonds were awarded to the low bidder at
6 a true interest cost of 4.86 percent.
7 COMMISSIONER CRIST: Motion.
8 TREASURER GALLAGHER: Second.
9 COMMISSIONER BRONSON: Second.
10 GOVERNOR BUSH: Moved and seconded.
11 Without objection, it's approved.
12 MR. WATKINS: Thank you.
13 GOVERNOR BUSH: Thank you, Ben.
14 (The Division of Bond Finance Agenda was
15 concluded.)
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ACCURATE STENOTYPE REPORTERS, INC.
HIGHWAY SAFETY AND MOTOR VEHICLES 9
May 30, 2001
1 GOVERNOR BUSH: Department of
2 Highway Safety.
3 MR. DICKINSON: Good morning, Governor.
4 Item 1 is approval of the minutes from the
5 November 16th, 2000, meeting.
6 TREASURER GALLAGHER: Motion on minutes.
7 ATTORNEY GENERAL BUTTERWORTH: Second.
8 SECRETARY HARRIS: Second.
9 GOVERNOR BUSH: Moved and seconded.
10 Without objection, it's approved.
11 MR. DICKINSON: Item 2 is the approval of
12 our quarterly report for the quarter ending
13 December 2000.
14 TREASURER GALLAGHER: Motion.
15 ATTORNEY GENERAL BUTTERWORTH: Second.
16 GOVERNOR BUSH: Moved and seconded.
17 Without objection, it's approved.
18 MR. DICKINSON: Item 3 is quarterly report
19 for the quarter ending March 2001.
20 TREASURER GALLAGHER: Motion.
21 ATTORNEY GENERAL BUTTERWORTH: Second.
22 SECRETARY HARRIS: Second.
23 GOVERNOR BUSH: Moved and seconded.
24 Without objection, it's approved.
25 MR. DICKINSON: And Item 4 is a -- for
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HIGHWAY SAFETY AND MOTOR VEHICLES 10
May 30, 2001
1 information purposes, the legislative
2 accomplishments, if you will, Governor. And I
3 want to point out that those are just what's
4 passed.
5 I don't think any of them are on your desk
6 yet. But we'll be working with your staff to
7 see how we want to go from there.
8 GOVERNOR BUSH: That was the -- is this
9 the -- the bill that was attached to the
10 transportation bill?
11 MR. DICKINSON: Yes, sir. That's one of
12 them. There are a number of items on there.
13 We had revisions to the .02 law for the
14 drinking and the minors, which requires them to
15 go to school if they're caught from between
16 .05 and .08; selective service registration.
17 There are a number of laws that -- racial
18 profiling that do impact our Department. And
19 we just thought we'd bring them to our
20 attention.
21 There's a law that passed that orders the
22 Department to suspend driver's license for
23 those convicted of retail theft, misdemeanor
24 felony, whatever.
25 And, yes, sir, that big bill. It's about
ACCURATE STENOTYPE REPORTERS, INC.
HIGHWAY SAFETY AND MOTOR VEHICLES 11
May 30, 2001
1 20 pages just of the title which deals with the
2 DOT and Highway Safety package.
3 TREASURER GALLAGHER: And, of course, the
4 new license plate. We couldn't go through a
5 session without a new license plate.
6 GOVERNOR BUSH: The golf one.
7 ATTORNEY GENERAL BUTTERWORTH: Really?
8 COMMISSIONER CRIST: Golf.
9 MR. DICKINSON: Golf tag.
10 TREASURER GALLAGHER: More --
11 GOVERNOR BUSH: Very important.
12 ATTORNEY GENERAL BUTTERWORTH: That's
13 right.
14 COMMISSIONER CRIST: Why not?
15 ATTORNEY GENERAL BUTTERWORTH: I have a
16 question, Governor.
17 GOVERNOR BUSH: Yes.
18 ATTORNEY GENERAL BUTTERWORTH: Fred,
19 I mean, as you know -- hopefully everybody
20 knows, unfortunately, the state of Florida
21 leads the fatalities in this country for the --
22 the combination of the Ford Explorer and the
23 Firestone tire.
24 According to the St. Pete Times, I believe
25 they said there's been at least 43 fatalities
ACCURATE STENOTYPE REPORTERS, INC.
HIGHWAY SAFETY AND MOTOR VEHICLES 12
May 30, 2001
1 that we know of in the state of Florida, and
2 28 of those occurring after this tire was
3 recalled in Saudi Arabia, and other countries
4 that have a -- a hot climate.
5 Just last week, Ford expanded a recall well
6 beyond the -- what the Firestone did with the
7 original 6 million tires, just -- by doing
8 better than 13 million tires, I believe at the
9 urging, not only of this Attorney General, but
10 the -- every Attorney General in the country.
11 We're very, very concerned with the hot
12 weather coming up. This is when we have most
13 of the fatalities.
14 What are you doing now, Fred? I know that
15 patrol on these rollovers I think is going to a
16 more expansive type of investigations so we can
17 be early warning. Because the -- the hot
18 weather, the heat builds up within a tire, then
19 a tire separates.
20 And people going to Disney, traveling on
21 I-4 or I-75, or whatever, after about an hour
22 or so the tire gets -- gets bad.
23 And now these tires are a year older,
24 people having traded themselves out of it. So
25 it's a real, real serious -- could be a
ACCURATE STENOTYPE REPORTERS, INC.
HIGHWAY SAFETY AND MOTOR VEHICLES 13
May 30, 2001
1 potentially serious issue.
2 So --
3 MR. DICKINSON: Governor, if I may.
4 General, we've got really two -- two
5 different prongs we're going down. As you
6 said, the troopers are really the first guys
7 that see what's going on out there. And we've
8 encouraged that reporting mechanism, which is
9 also detailed on the crash report.
10 However, we've gone back -- and -- and like
11 I said, we have a tire section, but we've also
12 gone back on the rollovers, in assistance with
13 your office, to -- to see what some statistics
14 look like there.
15 And, quite frankly, with or without the
16 tire separation, Ford and the Chevy Blazer have
17 demonstrated about a four times more likely
18 turnover ratio than all other SUVs. And the
19 SUVs are about twice as likely as normal cars
20 to rollover.
21 So the statistics are pretty strong in that
22 regard. We're working with your staff to
23 crunch them even further.
24 And in that regard, I know you'd asked
25 about this earlier. We also have a new
ACCURATE STENOTYPE REPORTERS, INC.
HIGHWAY SAFETY AND MOTOR VEHICLES 14
May 30, 2001
1 check-off on our driver distraction as a
2 causation factor. And this has just started
3 this year.
4 So out of a total of 52,000 plus crashes,
5 we had 331 check-offs for driver distraction,
6 which is 6/10 of 1 percent. Here again, it's
7 just the start of a new program. So we're
8 going to have some gear-up time, some training.
9 But cell phones accounted for 22 percent of
10 those distractions; inattentive driver,
11 reading, you know, looking at another crash,
12 checking out somebody on the highway, is
13 30 percent; passenger child distraction,
14 9 percent; and secondary equipment, messing
15 with the radio, air conditioning, whatnot,
16 about 9 percent. Food and beverage was
17 3 percent.
18 So as we go along, we're going to probably
19 have that distraction clear up a little bit,
20 and we'll be able to give you some better
21 figures. But we will continue to work with you
22 on the rollovers and the tire separation.
23 GOVERNOR BUSH: There's a motion.
24 Is there a second?
25 ATTORNEY GENERAL BUTTERWORTH: Second.
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HIGHWAY SAFETY AND MOTOR VEHICLES 15
May 30, 2001
1 GOVERNOR BUSH: Moved and seconded.
2 Without objection, it's approved.
3 Thank you.
4 MR. DICKINSON: Thank you, Governor.
5 GOVERNOR BUSH: Thanks a lot.
6 (The Department of Highway Safety and
7 Motor Vehicles Agenda was concluded.)
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STATE BOARD OF EDUCATION 16
May 30, 2001
1 GOVERNOR BUSH: State Board of Education.
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. PIERSON: Item 2 is a charter school
9 appeal: Empowering Young Minds Academy,
10 Incorporated, versus, Duval County
11 School Board.
12 For the record, the State Board of
13 Education considers appeals of denials of
14 charter school applications pursuant to 98-186,
15 Laws of Florida.
16 Florida law authorizes School Boards to
17 grant approval to applicants who wish to
18 operate charter schools within their District.
19 The law allows an applicant who's been
20 not -- denied a charter, the right to appeal
21 the School Board's decision to the State Board
22 of Education.
23 Based on the written record and oral
24 argument presented, the State Board must vote
25 to recommend acceptance or rejection of the
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 17
May 30, 2001
1 appeal to the School Board. The vote requires
2 a simple majority of the members, and by
3 vote -- and by law is not subject to provisions
4 of the Administrative Procedures Act.
5 The following requirements apply to the
6 applicant, the District School Board, and their
7 representatives.
8 The appeal must be based on errors the
9 applicant charges the School Board made in its
10 decision to deny the charter. The written
11 arguments submitted by the applicant to the
12 State Board is limited to discussion of those
13 errors.
14 The record of this proceeding is limited to
15 the written arguments, the charter school
16 application itself, and transcripts of meetings
17 before the District School Board.
18 At this hearing, representatives of each
19 party must give oral argument limited to a
20 summary of the written arguments previously
21 submitted to the State Board.
22 Each side has been requested to limit its
23 summary to 10 minutes. After the summaries are
24 presented, a vote will be taken, a written
25 recommendation of the vote will be returned to
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STATE BOARD OF EDUCATION 18
May 30, 2001
1 the District School Board.
2 GOVERNOR BUSH: Thank you, Wayne.
3 MR. PIERSON: For some reason, I'm
4 extremely nervous this morning.
5 Representing the Duval County School Board
6 is Karen Chastain.
7 GOVERNOR BUSH: Good morning.
8 MS. CHASTAIN: Good morning.
9 Good morning. My name is Karen Chastain.
10 I'm with the Office of General Counsel of the
11 City of Jacksonville. And we represent the
12 Duval County School District in this matter.
13 It is regrettable that I'm here before you
14 today as to this matter.
15 It is not something that the District has
16 savored or enjoyed. We take no pleasure in the
17 decision to close any school, be it one of our
18 public schools, or be it a charter school.
19 I believe this is the first time we've
20 appeared before you today as to the specific
21 issue for the nonrenewal or the termination of
22 an existing charter school. However, you've
23 seen us before as to applications.
24 There are numerous reasons to terminate
25 this charter. In fact, we've been questioned
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 19
May 30, 2001
1 by some why we didn't terminate it sooner. But
2 I will tell you, that's because we wanted to
3 afford the school ample opportunity to cure its
4 defaults, and unfortunately they've not done
5 so.
6 I will tell you that even today, many of
7 these defaults still exist, and are still not
8 cured.
9 For the past 18 months or so, the District
10 has sent repeated written notices outlining
11 problems to be resolved. Therefore, there's
12 been ample notice and ample opportunity for
13 this school to cure its problems.
14 This culminated in the March 6, 2001,
15 default letter sent by Superintendent Fryer
16 outlining a list of serious concerns,
17 violations of contract, violations of law;
18 ultimately concluding, and the staff
19 recommending termination of this charter.
20 The District Board unanimously accepted
21 staff's recommendation at its March 20th
22 meeting to terminate.
23 That same night, the District renewed three
24 other charters that were up for renewal, and
25 unfortunately also voted to terminate another
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 20
May 30, 2001
1 charter for different reasons. However, that's
2 not before you today.
3 The reasons in the March 6th letter involve
4 the school's failure to comply with the law and
5 the contract. And it covers the entire
6 spectrum that I can imagine with the operation
7 of a charter school, or any business, for that
8 matter.
9 There was failure to fingerprint all
10 employees and Board members as clearly required
11 by the law. And today that problem still
12 exists, not all employees are fingerprinted.
13 There was problems with teacher
14 certification. When the District receives a
15 course master and a roster listing who was in
16 the classroom, what instructional personnel,
17 the District would review its records, and
18 check with the Department of Education to see
19 if such person, in fact, had a certificate; or
20 even so, could obtain a certificate if it was
21 possible; and nonetheless still found that
22 instructional personnel were not able to obtain
23 certification. All is set forth in the
24 March 6th letter.
25 There are numerous issues that concern the
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STATE BOARD OF EDUCATION 21
May 30, 2001
1 health, safety, and welfare of the students.
2 Failure to provide due process where students
3 are involuntarily withdrawn from the school,
4 which is a nice way of saying expelled;
5 problems with providing services to ESE
6 students as federally-mandated by Federal law,
7 and those services not being delivered;
8 transportation issues, such as failure of
9 drivers to have the appropriate licensure to
10 safely transport students.
11 And I will tell you today that that still
12 exists. Just last month the District notified
13 the school that one of the drivers did not have
14 the license that he needed to have, and
15 directed the school to no longer permit that
16 driver to transport students.
17 Since that direction, we've observed this
18 driver continuing to transport students,
19 notwithstanding his failure to have the
20 appropriate licensure.
21 There's been serious and comprehensive
22 financial and mismanagement issues, as well as,
23 last, but not least -- this is a school --
24 academic performance.
25 I've already discussed briefly the
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STATE BOARD OF EDUCATION 22
May 30, 2001
1 fingerprinting and certification, and I've
2 already described to you that some of those
3 problems still exist today, and that the school
4 is presently in an uncured state of default.
5 Historically, the school has not complied
6 with this requirement notwithstanding repeated
7 notices. Therefore, we do not believe that
8 this cou-- will be complied with in the future.
9 I've already described to you the
10 situations involving due process, delivery of
11 services to ESE students, transportation
12 issues.
13 There's also been problems with food
14 service. I mean, in effect, this affects the
15 entire operation of the school.
16 Let me describe to you briefly some of the
17 academic reasons. In the March 6th letter, the
18 District analyzed last year's FCAT scores,
19 because that's what we had available at that
20 time, and found that the school was among the
21 lowest performer of all the schools in the
22 district.
23 Significantly, the District has also looked
24 at the standards of achievement that the school
25 contracted for in its charter, and we have
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 23
May 30, 2001
1 found that the school has not attained the
2 student gains that it contracted for and said
3 it would attain.
4 The school's annual report where it
5 includes a self-assessment of its performance
6 in some cases read the data inversely so that
7 when it says it's at the top performance at
8 Level One, unfortunately Level One means that
9 it's at the bottom.
10 The District has followed the same student
11 population, those that go from grade 6, 7, and
12 8 -- I think it's about 65 students -- and
13 unfortunately found little gain.
14 According to our information, we're not
15 sure what the school uses for standards of
16 measuring progress, whether it's a Pupil
17 Progression Plan, or a Dropout Prevention Plan.
18 But standards certainly must be in place
19 for this student body population, which is an
20 at-risk population.
21 We've also heard stories from teachers
22 where there has been pressure to give grades
23 higher than what has, in fact, been earned.
24 But, again, this is what others are telling us.
25 We -- we haven't been able to go into and look
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 24
May 30, 2001
1 and evaluate the school's performance as to
2 that matter.
3 In the March 6th letter, there were
4 problems outlined with access to the school so
5 that the District could monitor. There were
6 problems noted with compliance with the public
7 meetings laws and the public records law which
8 is mandated by the charter school statute.
9 And there's also been noncompliance with
10 technical issues such as annual reports and
11 reporting of student information.
12 Last, there were outlined numerous reasons
13 for termination as to the finances of the
14 school. The March 6th letter outlined a
15 negative fund balance at one point, and to
16 date, it has been increasing.
17 When we look at the March 31, 2001,
18 quarterly report, the negative fund balance --
19 this is a third quarter report, by the way,
20 because the fiscal year begins July 1 -- the
21 negative fund balance is increasing from
22 quarter to quarter.
23 There are a lack of internal controls as
24 set forth in the charter school's annual
25 financial statements. Each year contains
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION 25
May 30, 2001
1 management comments from the auditors.
2 And during the District's monitoring of the
3 school, the District reached the same
4 conclusions as to the lack of internal controls
5 and the audited financial statements. And the
6 management comments simply confirm and
7 corroborate the District's findings.
8 Some of these problems exist year after
9 year. So when the Academy says, well, we can
10 fix this in the future, in this case, we have
11 the instance of looking back at the past
12 operation, seeing that this promise was made
13 before; yet the problems were, in fact, not
14 corrected.
15 For example, in 1998 to 1999, and then the
16 next year, 1999-2000, several of the same
17 management comments for lack of internal
18 controls are repeated as uncorrected
19 notwithstanding the prior year's statements
20 from the school that they would, in fact, be
21 corrected.
22 There were also issues that weren't noted
23 in the management comments, such as failure to
24 revise the budget procedures such that if the
25 budget is changed from year-to-year during the
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STATE BOARD OF EDUCATION 26
May 30, 2001
1 course of the year, that the governing board of
2 the school considers and approves such
3 variances.
4 It's really about the governing board
5 keeping an eye on what's going on at the
6 school. But Board minutes showed that that did
7 not happen.
8 There were also issues of payroll advances
9 being in a prior management comment. Although
10 it did not appear in this last management
11 comment, if you look at the annual report and
12 the audit, you show that -- we find that
13 payroll advances for employees are, in fact,
14 increasing, notwithstanding the prior statement
15 by the school that this practice would be
16 terminated.
17 Also in the March 6th letter, it was noted
18 again from the management comments that the
19 school had failed to pay payroll taxes,
20 although now the school says that they've
21 gotten a refund. However, we're not sure why
22 this occurred in the first place.
23 There were NSF fines for bouncing checks
24 that have been occurring since 1998. The
25 school now says that this has been taken care
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STATE BOARD OF EDUCATION 27
May 30, 2001
1 of, because they have a line of credit from
2 a -- a national bank in the amount of $50,000.
3 However, if you look at the third quarter
4 financial statement this year, that $50,000
5 line of credit is overdrawn to $59,000. So the
6 overdraft protection is also overdrawn.
7 The management comments found that there
8 was a failure to keep a running balance in the
9 checkbook. In the Academy's appeal, they say
10 that's because the District fails to provide
11 funds timely, and that's why the school bounces
12 checks.
13 I would submit to you that if you don't
14 keep a running balance in your checkbook, and
15 you don't know how much money you have, that's
16 why you bounce checks.
17 Also as to the general allegation of the
18 District not timely providing funds, we've
19 looked at our practices, we've looked at our
20 records, and we have found that that is not the
21 case.
22 In some cases, we provide funds in advance.
23 So when the school failed to make payroll at
24 the end of March, and blamed the District for
25 failure to provide funds, that was an
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1 inaccurate statement, because the District,
2 in fact, provided the funds in advance, and
3 also before the District received the money
4 from the State.
5 The cumulative effect of all of these
6 problems supports the legal conclusion that the
7 charter be terminated, according to the charter
8 school statute, for failure to meet
9 generally-accepted standards of fiscal
10 management.
11 I think I've described a comprehensive
12 array of problems. There's a significant
13 amount of detail in the March 6th letter, and
14 also in the appeal.
15 And today the school is still in an uncured
16 event of default. This is not a case where we
17 sent one notice one time as to one technical
18 issue. Instead, we sent repeated notices about
19 substantive and serious issues, and
20 unfortunately, they were not corrected. And it
21 put the District in a position of having to
22 take the action that it did.
23 The District respects the State directive
24 of school choice. And currently there are
25 three existing charter middle schools, two of
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1 which were renewed on the night of March 20th.
2 In contract negotiations with these
3 schools, we've offered to these same middle
4 schools to increase their cap so that these
5 parents, if they so choose, may elect to send
6 their children to another charter middle
7 school.
8 With that, I'd be happy to answer any
9 questions that you might have.
10 GOVERNOR BUSH: Thank you.
11 Any questions?
12 MS. CHASTAIN: Thank you.
13 GOVERNOR BUSH: Let's hear from Empowering
14 Young Minds Academy, Inc.
15 MR. THOMPSON: Governor Bush, members of
16 the Cabinet, my name is William L. Thompson,
17 Jr., Bill Thompson.
18 I'm a lawyer in Orange Park, Florida. I
19 grew up in Jacksonville. I'm representing
20 Empowering Young Minds Academy.
21 I have with me Barbara Funches, the
22 principal; Steve DuVal, Marsha Fields of the
23 CPA firm; Clem Robinson, a Parent Teachers
24 Association Chair; and a couple of the parents.
25 I'm sorry we didn't have more parents.
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1 Most of them have two jobs, and can't get over
2 here on -- on a workday.
3 Empowering Young Minds Academy, of course,
4 is a charter school, and it has been terminated
5 by a reason set forth in a letter dated
6 March 6th. Of course, you've heard about
7 things that are not in that letter today, but
8 we will try to stick to the letter.
9 Empowering Young Minds did not have an
10 opportunity to correct the problems identified
11 in the March 6th letter, although other charter
12 schools were given that opportunity in writing.
13 The letter was given out to the press on
14 the morning before school on the day that FCATs
15 were given so that when the children came to
16 school to take their FCATs, Channel 4,
17 Channel 12: What do you think about your
18 school closing?
19 A very, very disheartening situation. The
20 kind of situation we have to deal with.
21 In the transcriptions that you received
22 from the March 20th meeting, the only time that
23 we had to comment was on the public hearing
24 before the meeting, 3 minutes. We tried to do
25 the best we can. Of course, that wasn't
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1 transcribed. All you had transcribed was the
2 argument of the School Board.
3 I have noticed lately an increased use in
4 this country of what is known as demonization:
5 False statements, misleading statements,
6 distorted statements, statements of -- some
7 statement of fact used to support distorted
8 conclusions to create the false reality of a
9 bad situation.
10 I have learned that the process actually is
11 studied in a course at Yale University. And
12 while I may be able to recognize it, I don't
13 deal with it very well, and neither does
14 Empowering Young Minds, unfortunately. We
15 tried to attack it head-on, we tried to answer
16 all the issues, we've tried to summarize.
17 Today we will address specific questions,
18 if you have any. We're going to focus on some
19 key issues.
20 All new 2000-2001 teachers now -- and all
21 directors now have been fingerprinted.
22 All of them are either on a path to
23 certification, or have been certified. The
24 non-certifi-- all of them have a four-year
25 degree, except two. One has been a
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1 choir director for 20 years, and one is a
2 substitute teacher formerly from the District.
3 The new teachers who were not getting
4 fingerprinted, have been terminated. The new
5 employees who do not get fingers (sic) have
6 been terminated.
7 From now on, third party -- independent
8 third party, no person will be a director
9 unless fingerprinted, no teacher will be paid
10 unless fingerprinted.
11 Marsha Fields at DuVal Horne CPAs will
12 check every one of them, and nobody will be
13 paid unless fingerprinted.
14 Empowering Young Minds is a middle school
15 with -- a middle school with 375 students.
16 Over the years, they've served 1275 students.
17 These students -- virtually every one of these
18 students have failed in public school.
19 They come to Empowering Young Minds at
20 least one grade behind, with few exceptions in
21 the lowest 25th quartile. They cannot read --
22 some of them can't -- barely read their name.
23 They cannot do their times tables in some
24 cases. They come in as sixth graders from the
25 entity that says, we're not progressing them.
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1 Some of the sixth graders are fourteen and
2 sixteen years old. Now, Empowering Young Minds
3 records indicates that the students are
4 progressing.
5 Do we get -- do we take somebody who can't
6 do their times tables, and by ninth grade,
7 they're doing calculus? No.
8 Do we take somebody that can barely read
9 their name, and by the ninth grade, they can
10 read? Our records indicate that we at least
11 are generally doing that.
12 We're keeping the students in school. Now,
13 I don't consider those items with these
14 students to be lack of success.
15 Empowering Young Minds has never been an
16 F school, and they have had testimony before
17 the School Board from Dr. Alex Penn Williams
18 that proper standards for performance can be
19 put into a new contract. They don't have
20 proper standards today. The standards today in
21 the contract refer to tests that aren't given
22 anymore.
23 Empowering Young Minds has an independent
24 certified public accountant experienced in
25 public audits. This auditor has stated in the
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1 last audit that there are no material
2 deficiencies.
3 Now, for an auditor, no material
4 deficiencies is a very important statement.
5 This auditor is required to specify material
6 deficiencies under Florida law and audit rules.
7 There have been no allegations that DuVal Horne
8 CPAs have misrepresented the financial
9 integrity of Empowering Young Minds. And I do
10 not see how a third party, even the supervisor,
11 can say there was fiscal irresponsibility, when
12 the auditor says that there are no material
13 misstatements. To me, it's a -- it -- it
14 doesn't work.
15 There are four reasons that a school can be
16 denied their -- renewal of their charter.
17 They've been generally stated: Failure to meet
18 performance, generally accepted fiscal
19 management, violation of law.
20 Empowering Young Minds has not violated
21 these prohibitions. It just hasn't happened.
22 Are there problems?
23 Yes.
24 Does a middle school with the lowest
25 quart-- lowest 25 percent quartile students who
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1 can barely read have problems?
2 Absolutely.
3 Are there kids at school?
4 Yes.
5 Is there room for improvement?
6 Absolutely.
7 Do we want to improve?
8 Absolutely.
9 There just is no good reason to refuse to
10 renew this charter. There is nothing that
11 can't be fixed, there is nothing that can't be
12 fixed easily.
13 I know we only have a short period of time,
14 and I would like to introduce Mr. Steve DuVal
15 to provide some information.
16 I know that the financial responsibility
17 part is very important. And I would like to
18 allow him to address that, and then I would
19 like to come back and -- and -- and finalize
20 for you.
21 Thank you.
22 MR. DuVAL: Thank you.
23 My name is Steve DuVal with DuVal Horne and
24 Company CPAs. I started in practice in 1972.
25 And I've audited large entities and small
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1 entities.
2 And one of the errors -- or the major error
3 in the financial area that I think the District
4 made was their conclusion due to a lack of
5 segregation of duties that this is a material
6 weakness with the schools.
7 If you read all the audit material on small
8 entities, segregation of duties is a problem
9 due to size alone, not due to lack of good
10 financial management.
11 The District has a large staff that can
12 segregate their duties. They have people that
13 can do that. A small entity cannot.
14 And as auditors, we are -- we have to go in
15 and use alternative methods to determine if the
16 financial integrity is there.
17 If it's a large entity, we look at internal
18 control, we test internal control, and then
19 make our conclusions.
20 With a small entity, we do -- do not do
21 that. We look at every single transaction --
22 or most of the transactions. We look at the
23 checks, we look at the invoices, we trace
24 things.
25 And based on that type of method, we can
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1 conclude -- and that's part of the standard
2 auditing procedures -- we can conclude if
3 there's a problem.
4 We concluded there was not.
5 I think it's ironic that they -- through
6 their monitoring procedures, that they found
7 this. We have a specific program that we
8 follow, a written standard program that you use
9 that's modified for each entity.
10 I did not see where the District went
11 through those same procedures. They merely
12 took our comments, and then said, based on
13 these comments, we see a problem. There is no
14 problem.
15 The school, like any small business,
16 sometimes they don't do things the way it
17 should be done. That's why you have auditors
18 that come in. We try to correct them, we try
19 to help them. And they've made tremendous
20 progress over this time.
21 There's many other items that were
22 mentioned earlier that were not addressed in
23 the March 6th letter. I mean, I'm trying to
24 stick to the March 6th letter, which is
25 basically the internal control.
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1 I'm at the end of the presentation. I'm
2 willing to answer any question you may have.
3 Thank you very much.
4 GOVERNOR BUSH: Yes, sir.
5 MR. THOMPSON: Sorry.
6 Now, Ms. Funches is here if you have any
7 questions about students, and she'll be happy
8 to address them.
9 The students at Empowering Young Mind
10 (sic), as I said, have a history of failure at
11 public schools.
12 I have personally been to the school on
13 numerous occasions. Although it is certainly a
14 middle school, the students seem attentive.
15 My son and I went to the school one
16 Saturday to explain to a room full of students
17 the concept of nonsectarian. Because charter
18 schools have to be nonsectarian.
19 The questions from the student (sic) were
20 on point and insightful. These are not dumb or
21 bad kids. They are not failures.
22 They have some success and hope at
23 Empowering Young Minds. Nevertheless, in my
24 opinion and experience of the principal, the
25 alternatives for these children are less likely
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1 to include public school, and more likely to
2 include drugs, jail, early death. That's why
3 I'm involved.
4 Ms. Funches knows. She spent ten years in
5 juvenile.
6 Empowering Young Mind (sic) Academy meets
7 all of the requirements of Section 228.056. It
8 requests the State Board of Education to remand
9 to the School Board with a written
10 recommendation that the charter school -- that
11 the School Board renew the charter.
12 The fate of the existing 275 students, and
13 the thousands of future students, is in your
14 hands. I know whatever your judgment is, it
15 will be the right one.
16 Thank you very much.
17 GOVERNOR BUSH: Thank you.
18 Any questions?
19 To either the District --
20 Yes.
21 COMPTROLLER MILLIGAN: I -- I have a
22 question, Governor, really for the
23 representative from the School District,
24 Mrs. Chastain -- Ms. Chastain.
25 That's a fairly serious statement in terms
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1 of the financial stat-- financial aspects of
2 the school made by Mr. Horne, and flies in the
3 face of what you had to say.
4 And -- I mean, he's an independent CPA, and
5 has certainly a lot of credibility. And -- and
6 I'd like to try to understand the variance.
7 MS. CHASTAIN: Yes, sir. Thank you.
8 Through the Chair.
9 If I understand Mr. Horne's -- or
10 excuse me -- Mr. DuVal's comments correctly,
11 he's saying that based on their analysis of --
12 of the school -- and they're the ones who
13 perform the tests and conduct the audit -- the
14 District is not challenging the auditor's
15 conclusions.
16 Instead -- instead the District is looking
17 at what the auditor found and noted in his
18 management comments. The District is also
19 infusing its interaction with the school.
20 And based on the reports that the auditor
21 prepares, which shows a negative fund balance
22 that is increasing every quarter; shows bounced
23 checks; failure to segregate duties, which was
24 not the only reason, it was one of many;
25 failure to pay payroll taxes, and the like,
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1 these same conclusions that the auditors
2 reached also support the District's conclusions
3 that this school does not properly manage their
4 finances, and, therefore, falls within the
5 statutory and contractual requirement that for
6 this failure, the charter may be terminated.
7 Some of the District's interactions have
8 been receipt of -- requests for funding that
9 include altered receipts. For example, there
10 was a landscaping invoice for $200 where a
11 1 was added, making it $1,200.
12 The District also receives repeated
13 requests for funds for things that cannot be
14 funded, according to State law.
15 These are the problems that we have in
16 working with this school, which has been in
17 operation for four years. There's no learning
18 curve at this point anymore. There shouldn't
19 be any reason for not knowing what the
20 requirements of the contract, and what the
21 requirements of law are. Yet, nonetheless, the
22 school says, please give us another chance, we
23 promise to do better next year.
24 Sadly, we have not found that to be the
25 case, notwithstanding repeated notice, and
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1 opportunity to cure a variety of these
2 problems.
3 The difference with the other schools is
4 that they took those notices to heart, and they
5 corrected their problems.
6 Sadly, this school did not, and for the
7 reasons I set forth, not -- not the least of
8 which is financial, they -- they are presently
9 in an uncured state of default right now.
10 For example, for the fingerprinting, the
11 requirement is not just that teachers be
12 fingerprinted, all employees must be
13 fingerprinted. That's clearly set forth in the
14 statute. That is not the case today.
15 GOVERNOR BUSH: Didn't they say --
16 MS. CHASTAIN: So --
17 GOVERNOR BUSH: -- that they are
18 fingerprinting now every -- all employees?
19 Mr. Thompson, didn't you say that?
20 MR. THOMPSON: Barbara Funches.
21 GOVERNOR BUSH: Please come up to the --
22 Just --
23 MS. FUNCHES: Good morning, Governor Bush.
24 The employees at Empowering Young Minds
25 have been fingerprinted.
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1 GOVERNOR BUSH: Okay.
2 MS. FUNCHES: The problem with the
3 fingerprinting is not the fact that they were
4 not fingerprinted.
5 The problem was, we went to the
6 Jacksonville Sheriff's Office to have the
7 fingerprinting done because we did not get back
8 timely responses on those people who may have
9 had some criminal activity.
10 After we received everything from the
11 District on employees who were fingerprinted in
12 '97, '98, and '99, I wound up terminating
13 people.
14 And that was the reason that they're saying
15 that we were not fingerprinted, because we
16 didn't go through the District.
17 We then, after learning that, okay,
18 everyone has to go through the District, we
19 then sent people to the District, teachers.
20 They never said anything about me having to
21 have to send my other people through the
22 District. They were only concerned about
23 teacher fingerprinting.
24 GOVERNOR BUSH: So the answer is yes.
25 MS. FUNCHES: Yes, sir.
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1 GOVERNOR BUSH: Okay.
2 You -- I'm -- please finish, if you --
3 COMPTROLLER MILLIGAN: Yeah.
4 I'd like to understand. Three hundred and
5 seventy-five students. And -- and what will
6 happen to these 375 students if this school
7 closes?
8 MS. CHASTAIN: Through the Chair.
9 Some of these students will be graduating.
10 I believe their graduation is tonight. So it's
11 not -- I don't know how many of those are
12 eighth graders that would be leaving the
13 Academy anyway.
14 I believe for the remaining, I'm going to
15 guess, in excess of 200, maybe 250, what the
16 District is working on with its existing
17 charter schools is to ensure that their
18 physical plant allows the capacity, according
19 to fire safety and, you know, other regulations
20 that apply.
21 And we're encouraging these schools that if
22 they so desire, to please increase their
23 student enrollment cap such that the existing
24 students at Empowering Young Minds, should it
25 be closed, may choose to go to a different
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1 charter school.
2 For example, one of the charter schools
3 that was renewed is located in the same
4 shopping center. So it's -- it's physically
5 proximate to this --
6 GOVERNOR BUSH: Is this --
7 MS. CHASTAIN: -- school.
8 GOVERNOR BUSH: -- in the Gateway?
9 MS. CHASTAIN: The Gateway Shopping Center
10 in Jacksonville. And it's Daniel Payne
11 Academy, for example.
12 It's my understanding that another charter
13 school is looking at this -- this premises. So
14 there's a possibility that these premises could
15 continue.
16 GOVERNOR BUSH: This next year?
17 MS. CHASTAIN: Yes, sir.
18 GOVERNOR BUSH: Can they grant a charter
19 in -- in June for --
20 MS. CHASTAIN: No, sir. An --
21 GOVERNOR BUSH: -- August?
22 MS. CHASTAIN: No, sir. An existing
23 charter school would relocate to the shopping
24 center.
25 GOVERNOR BUSH: Okay.
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1 MS. CHASTAIN: Excuse me.
2 With respect to the -- the statement that
3 this school did not have an opportunity to
4 cure, I respectfully disagree with that
5 statement.
6 The school received numerous notices about
7 the fingerprinting and the requirement and the
8 individuals that we lacked data on. And
9 inexplicably, for the most part, we did not get
10 a response. To the extent that we have
11 received a response, sadly, it's been after the
12 March 6th letter.
13 But the previous numerous -- more than
14 ten written notices to reply were not responded
15 to, and were not corrected, even though the
16 other charter schools did.
17 Therefore, this school did have opportunity
18 to cure, it did have notice. And it also had
19 an informal hearing for the District Board on
20 April 26th where they had an opportunity at
21 that point to present whatever type of reply
22 they wanted to -- to provide.
23 Therefore, the statements that they didn't
24 have an opportunity at the March 20th hearing,
25 they may believe that, but they certainly had a
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1 full and fair opportunity on April 26th, at
2 their request, in front of the District Board,
3 where -- and after that presentation,
4 unfortunately, the District Board voted to
5 terminate them again, after listening to the
6 school's presentation on April 26th.
7 So we believe that we provided ample
8 opportunity and notice to cure, and, sadly,
9 it's not happened.
10 GOVERNOR BUSH: Any other questions?
11 MS. CHASTAIN: Thank you.
12 GOVERNOR BUSH: I have -- I have a few.
13 You -- you might stick around --
14 MS. CHASTAIN: Okay.
15 GOVERNOR BUSH: -- because there may be
16 some other questions as well.
17 The -- a lot of -- there's been a lot of
18 discussion about inputs here, a lot of not
19 filling out this form, not fingerprinting, not
20 doing this, all of which is -- is important,
21 I'm sure.
22 I'd be interested in getting your views
23 about how the students did academically, and
24 I'd like to get the views of the school as
25 well.
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1 And, you know, to the standards that we
2 expect, and also annual -- what the -- if
3 there's a means of measuring annual student
4 learning gains, which there should be, frankly,
5 since the test -- the baseline test was last
6 year. I'm not sure you have the accurate
7 information for this year yet.
8 But whatever information you have about
9 what the contract says about academic
10 performance, and how you view how they did.
11 And then I'd -- if I could have the school as
12 well.
13 Because that, to me's -- the rest of this
14 stuff's kind of --
15 COMMISSIONER CRIST: It's not as relevant.
16 GOVERNOR BUSH: Not as relevant. Let's --
17 that's a better way of saying it.
18 MS. CHASTAIN: Thank you.
19 With respect to the performance of this
20 school, the March 6th letter used last year's
21 FCAT data, and found that they were among the
22 lowest performers.
23 Now the reply to that is is this is a -- a
24 student body population of -- of significantly
25 challenged students so that, in and of itself,
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1 is not as surprising or as compelling to you as
2 some of the other information might be.
3 However, when I look to the contract and
4 the items that the school agreed and stated
5 that it would achieve, we have looked at those
6 items, and we have found that the school has
7 not attained those achievements.
8 I also want to point out for the record
9 that this is not the second year this school
10 has been in operation. Baseline should have
11 been established years ago. The school first
12 opened in 1997, had a one-year contract. That
13 one-year contract was then renewed for a
14 three-year contract. And we're now at the
15 conclusion of that third year --
16 GOVERNOR BUSH: What are the --
17 MS. CHASTAIN: -- for a total of --
18 GOVERNOR BUSH: -- what are --
19 MS. CHASTAIN: -- four.
20 GOVERNOR BUSH: -- the specific academic
21 requirements in this contract?
22 MS. CHASTAIN: Yes, sir.
23 At least 65 percent of 8th grade students
24 in every ethnic group will score 3 or higher on
25 the Florida Writing Assessment.
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1 GOVERNOR BUSH: Oh, Florida Writes?
2 MS. CHASTAIN: Yes, sir.
3 GOVERNOR BUSH: That's possible.
4 MS. CHASTAIN: I am told by the District
5 that this -- this did not happen.
6 Another criteria --
7 GOVERNOR BUSH: What percen-- do you know
8 what percentage it --
9 MS. CHASTAIN: No, sir, I don't have the
10 exact percentage. But it was not 65 percent.
11 Another criteria is that 7th grade students
12 will score at or above the 50th percentile on
13 the reading comprehension and mathematic
14 concepts and applications of the Terra Nova
15 Assessment.
16 I believe when the Terra Nova Assessment
17 was administered, this did not happen.
18 Since the contract was written, this test
19 is no longer used.
20 I am told that the Terra Nova was a more
21 difficult test than the FCAT NRT. When we look
22 at the FCAT NRT, we don't find this
23 50th percentile passage rate, with an easier
24 test, if you will.
25 Another --
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1 GOVERNOR BUSH: So 50 percent of the
2 students have to be at Level Three, is that
3 what you said? I'm sorry?
4 MS. CHASTAIN: It's -- what the criteria is
5 is that 7th grade students will score at or
6 above the 50th percentile.
7 GOVERNOR BUSH: On average, is that --
8 MS. CHASTAIN: It did not give us a
9 percentage. What we did find for the FCAT NRT
10 was that it was about 18.3 percent scored at or
11 above the 50th percentile.
12 GOVERNOR BUSH: Okay. I wonder how the
13 middle schools in Duval County did. That's a
14 pretty high standard. I'm --
15 MS. CHASTAIN: Respectfully, they -- they
16 did better. If you'll give me a moment, I
17 could probably dig out the information.
18 But -- but again, it's looking to the
19 contract and what the goal was, and finding
20 that the goal was not achieved.
21 Another assessment is that 65 percent of
22 8th grade students will score at or above the
23 50th percentile on the CTBS.
24 Again, the CTBS is no longer administered
25 by the District. I'm not sure if the school
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1 has administered the CTBS, and what their
2 findings would be.
3 But, again, using a similar test, such as
4 the FCAT, we find that in reading, not
5 65 percent, but only 17.7 percent scored at or
6 above the 50th percentile in reading, and
7 8.5 percent scored at or above the
8 50th percentile in math.
9 Again, that's far below the 65 percent as
10 stated in the contract.
11 Another criteria is that at least
12 65 percent of 6th grade students -- it's a
13 similar -- it's 6th and 8th grade. I gave you
14 the 8th grade numbers.
15 Again, for reading, instead of 65 percent,
16 it was only 14.8 percent; and for math,
17 25 percent.
18 GOVERNOR BUSH: Thank you.
19 COMMISSIONER CRIST: Governor --
20 GOVERNOR BUSH: Yeah. Maybe -- maybe we
21 should -- how about if we ask the school to --
22 COMMISSIONER CRIST: Sure.
23 GOVERNOR BUSH: -- comment on the -- how
24 they measure achievement. And --
25 MS. FUNCHES: Initially, when we first
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1 started with the charter school --
2 Excuse me. Governor Bush.
3 Initially, when we first started with the
4 charter school, we neg-- we sat with the
5 District for two straight years attempting to
6 get baseline data, which is what's in my
7 contract, that we establish a baseline.
8 We worked closely with Testing. They gave
9 us information, we used that information at
10 annual reports. They said that the information
11 that we used in annual reports were false, but
12 all this information came from the District.
13 On yesterday, I contacted
14 Dr. Alice Penn Williams, who's been working
15 with me now for about six months looking at
16 test data. And we went back, and this is her
17 findings of what she sent to me last night.
18 Standardized test scores of the original,
19 because we looked at the students who were in
20 the 6th grade in 1997-98 who had stayed with
21 that school for three years. So I don't know
22 where the 65 students came from. But we only
23 had 32 students who stayed with us for
24 three years, and four of those students were
25 ESE students. So you couldn't count them in
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1 looking at whether or not they gained anything.
2 Well, they grad-- the 28 EYMA students who
3 graduated from the 8th grade last year were
4 analyzed for gains in reading and in math.
5 Their 5th grade baseline scores earned at the
6 District schools were compared to their 6th and
7 7th grade scores, which were earned at EYMA.
8 Results show that while students did not
9 gain a complete year's worth of learning in a
10 year's worth of time in math -- and I'll go
11 back and -- and talk about the math -- they did
12 so in reading.
13 It is important to note that only national
14 percentile scores were available as a gains
15 indicator, and that 8th grade scores
16 represented in the national percentile were not
17 available.
18 Therefore, only 3 set of scores were able
19 to be compared. National percentiles are not
20 accurate indicators of gain, as they do not
21 follow a linear progression.
22 In addition, it is difficult at best to
23 assess the impact of EYMA's reading and math
24 programs based on only 28 students. It is
25 clear, however, that the 28 students, most at
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1 the lowest level of achievement, who entered
2 EYMA in 1997, and graduated in 2000, gained
3 three years in their reading levels from the
4 end of the 5th grade to the end of the
5 7th grade.
6 So our students did gain something in
7 reading. And that was because we went back and
8 took direct instruction with just -- which is
9 an elementary concept, and had to bring that
10 into a middle school.
11 And we had to fine-tune that so that the
12 middle school students would not become bored
13 with the direct instruction. We had a whole
14 day of -- I mean, a whole half a day for almost
15 five months of literacy block to help these
16 children to come up to standards so that they
17 would be able to read, and they would not fall
18 short when it was time for the FCAT, like we
19 had seen in previous years.
20 My students at EYMA, when I looked at how
21 the students were progressing, and when I
22 look -- research -- before I even did the
23 charter school -- which I was in juvenile, I
24 was in and out of public schools.
25 And my students on my -- my case load were
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1 always getting locked up, they were in the
2 middle school. And when you take them back to
3 middle school, they're old kids.
4 I have those -- some of those kids now,
5 fourteen and fifteen years old in the
6 6th grade.
7 Now I'm trying to take a child who has no
8 math foundation, from elementary school, and
9 teach pre-Algebra and Algebra I, just so that
10 they can come to the table when it's time for
11 them to take the FCAT test.
12 So their math, to me, even though it looks
13 like they're not gaining anything as far as a
14 standardized test, if Johnny didn't know his
15 time tables, and now they can say their
16 time tables, from 3 to 12, that's a gain.
17 If they don't know how to add, if they
18 don't know how to subtract, decimals, percent--
19 changing it to a percentage, these children
20 didn't have a clue.
21 The majority of my 6th graders that came
22 into the school this year, the majority, we had
23 to put up time table charts for 6th graders,
24 because they didn't know their time tables --
25 GOVERNOR BUSH: But why did you -- why did
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1 you agree to standards that -- my guess is that
2 the Duval County --
3 MS. FUNCHES: That's what --
4 GOVERNOR BUSH: -- middle school system --
5 MS. FUNCHES: -- happened.
6 GOVERNOR BUSH: -- most of the
7 middle schools couldn't have complied with
8 either.
9 MS. FUNCHES: Well, when we were
10 negotiating, it was, like, this is what you're
11 going to have to do if you want to get this
12 contract.
13 And so when we went back to the table --
14 GOVERNOR BUSH: So you knew you weren't
15 going to achieve it?
16 MS. FUNCHES: We knew it, and we went back
17 to the table last year with the charter school
18 coordinator, with Dr. Hamilton and Dr. Bucci
19 from New York out of the Commission of
20 Education's office, sat down with the District
21 to attempt to revise the standards. And we
22 were told, you're either going to make the
23 State standards on the FCAT and the
24 Florida Writes, or we're not going to
25 renegotiate.
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1 That's why the standards are still the
2 same. And my students have gained on the
3 Florida Writes. The first year in 97-98, we
4 were a 2.9; the next year, we were a 3.0,
5 I believe; the next year we went up to a 3.3.
6 And this year's Florida Writes, we were at a
7 3.1.
8 So we did gain on our Florida Writes.
9 GOVERNOR BUSH: Commissioner, did you have
10 a --
11 COMMISSIONER CRIST: I -- yeah. To the
12 previous speaker actually. The -- yes --
13 GOVERNOR BUSH: Karen? Ms. Chastain?
14 COMMISSIONER CRIST: Yeah. Please.
15 It was just concerning the contract. You
16 were citing what the -- what percentages they
17 were supposed to hit. And I was curious as to
18 what the time line was toward achieving those.
19 Sixty-five percent on Florida Writes;
20 fifty percent on the something, Tassa Nova -- I
21 don't know what it was.
22 MS. CHASTAIN: Yes, sir.
23 GOVERNOR BUSH: Terra Nova.
24 MS. CHASTAIN: Terra Nova.
25 COMMISSIONER CRIST: Terra Nova. Casanova.
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1 Terra Nova.
2 MS. CHASTAIN: Terra Nova.
3 COMMISSIONER CRIST: Whatever. Super Nova.
4 MS. CHASTAIN: One of those tests.
5 COMMISSIONER CRIST: Nova Southeastern.
6 Whatever.
7 MS. CHASTAIN: My favorite is the
8 bossa nova.
9 COMMISSIONER CRIST: I'm sorry? The
10 bossa nova?
11 MS. CHASTAIN: The bossa nova.
12 COMMISSIONER CRIST: God bless you.
13 Anyway, my curiosity is, if you -- if you
14 can cite it, the provision of the contract and
15 what it said, if it's -- if you can cite it.
16 MS. CHASTAIN: Yes, sir.
17 Again -- on the same page, it starts out by
18 saying: Baselines will be established using
19 data from the 1997 through 1998 school year so
20 that the school will demonstrate annual
21 incremental progress equal to, but not less
22 than 1/5 the difference between the original
23 baseline, and then the three-year goal.
24 COMMISSIONER CRIST: Could you read the
25 three-year goal part? The --
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1 MS. CHASTAIN: The three-year goals were
2 those criteria that I had outlined, that
3 ultimately concluding in the 50th percentile,
4 the 65 percent at the 50th percentile,
5 et cetera.
6 So this didn't contemplate that in year 1
7 these goals would be achieved. What it
8 contemplated was progress through each year --
9 measured progress, ultimately culminating in
10 these -- these goals.
11 COMMISSIONER CRIST: When?
12 MS. CHASTAIN: This year.
13 COMMISSIONER CRIST: This year.
14 MS. CHASTAIN: Yes, sir.
15 COMMISSIONER CRIST: So they're -- so then
16 they're not goals anymore.
17 MS. CHASTAIN: If I understand your
18 question correctly, I -- I believe I agree with
19 you, that this was the objective to be
20 obtained. And what the District is saying is
21 that the District -- the objective was not,
22 in fact, attained.
23 COMMISSIONER CRIST: Okay. I think -- that
24 was my question.
25 Thanks.
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1 MS. CHASTAIN: Thank you.
2 GOVERNOR BUSH: Yes. General?
3 ATTORNEY GENERAL BUTTERWORTH: I had a
4 question of the school, if I could.
5 Ma'am? Yes.
6 How many students are -- do you have now in
7 the school?
8 MS. FUNCHES: Three hundred and
9 seventy-five.
10 ATTORNEY GENERAL BUTTERWORTH: Three
11 hundred and seventy-five?
12 MS. FUNCHES: Yes, sir.
13 ATTORNEY GENERAL BUTTERWORTH: And how many
14 are graduating right now?
15 MS. FUNCHES: We may have about 90 that
16 will graduate this evening.
17 ATTORNEY GENERAL BUTTERWORTH: Ninety?
18 MS. FUNCHES: Yes. Out of 145 F--
19 8th graders.
20 ATTORNEY GENERAL BUTTERWORTH: Okay. So
21 they will go -- then go on to high school
22 hopefully.
23 MS. FUNCHES: Yes, sir.
24 ATTORNEY GENERAL BUTTERWORTH: Okay.
25 The --
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1 TREASURER GALLAGHER: I just wondered what
2 happened to the difference. Ninety that
3 graduated, and 175? So --
4 MS. FUNCHES: No, no. A hundred and
5 forty-five.
6 TREASURER GALLAGHER: Ninety out of a
7 hundred and forty-five are graduating?
8 MS. FUNCHES: Yes.
9 GOVERNOR BUSH: What happened to the
10 other --
11 ATTORNEY GENERAL BUTTERWORTH: That's the
12 next question --
13 GOVERNOR BUSH: -- 55?
14 TREASURER GALLAGHER: That's --
15 ATTORNEY GENERAL BUTTERWORTH: -- right.
16 MS. FUNCHES: They're going to have to go
17 to summer school. And for some of them,
18 they're going to have to do the 8th grade over
19 again. I'm --
20 GOVERNOR BUSH: It's the A+ plan.
21 COMMISSIONER CRIST: Yes, it is.
22 GOVERNOR BUSH: Yeah. We're not --
23 COMMISSIONER CRIST: Not socially --
24 GOVERNOR BUSH: -- no more social
25 promotion.
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1 COMPTROLLER MILLIGAN: Absolutely.
2 COMMISSIONER CRIST: That's right.
3 GOVERNOR BUSH: That's -- and
4 Duval County's public schools deserve credit
5 for this as well. I mean, charter schools are
6 public schools, but they're doing the exact
7 same thing.
8 And the Superintendent deserves praise.
9 He's one of the leaders in this around the
10 state for not tolerating kids that haven't
11 learned, and a chance to -- they've got to
12 either get it right in summer, or they're going
13 to --
14 MS. FUNCHES: That's right.
15 GOVERNOR BUSH: -- have to come back.
16 ATTORNEY GENERAL BUTTERWORTH: But the next
17 question would be of the -- of the
18 School District, what percentage of your
19 8th graders are going on to -- to 9th grade,
20 and what percentage are going to summer school
21 and/or staying?
22 MS. CHASTAIN: By the look on my face, I do
23 not have that data. I'm sorry.
24 GOVERNOR BUSH: That's a Jeopardy question.
25 MS. CHASTAIN: Exactly.
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1 ATTORNEY GENERAL BUTTERWORTH: Jeopardy
2 question.
3 MS. CHASTAIN: Final Jeopardy.
4 GOVERNOR BUSH: But it's a -- it's a --
5 it's higher in Duval County, because they have
6 a policy that is less tolerant for passing kids
7 on. I know that. I don't know what the
8 percentage would be.
9 ATTORNEY GENERAL BUTTERWORTH: Well, if,
10 in fact, it's the same percentage, the school's
11 doing a pretty good job if it's -- you know,
12 they're -- we don't know.
13 TREASURER GALLAGHER: Well, one of the --
14 one of the things that happens here is each
15 year that you do this, what ends up happening
16 is that the students that get into 8th grade
17 were ready for 8th grade.
18 ATTORNEY GENERAL BUTTERWORTH: Right.
19 TREASURER GALLAGHER: So they should have a
20 much higher percentage getting into 9th grade.
21 ATTORNEY GENERAL BUTTERWORTH: Well, I
22 understand that.
23 GOVERNOR BUSH: Ultimately.
24 Can I -- can I ask a question of Mr. DuVal?
25 Just -- there's been allegations of a --
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1 or -- or -- not an allegation, a statement that
2 there's a deficit in the school's funding. I'm
3 not sure what the term was. But that troubles
4 me. A growing deficit.
5 MR. DuVAL: There was a -- there's a
6 deficit in the fund balance, and --
7 GOVERNOR BUSH: That's what it was.
8 Deficit in the fun-- growing deficit in the
9 fund balance.
10 How do you have a fund balance that's gro--
11 in deficit to begin with, and how does it keep
12 growing?
13 MR. DuVAL: Well, the -- the reason there's
14 a deficit in the fund balance is that the --
15 there's so many accruals that we would make by
16 the end of the year.
17 When that -- when those accruals take
18 place -- for example, if there's capital outlay
19 money that's due to the school where they have
20 not received it, when you book that entry, then
21 the fund balance becomes positive at that
22 point.
23 And that's -- and that's -- so we -- we
24 don't know by the end of the year if it will be
25 positive or not.
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1 GOVERNOR BUSH: So this is not a cash --
2 you're on an accrual basis. You don't -- this
3 is not a cash --
4 MR. DuVAL: That's correct --
5 GOVERNOR BUSH: -- deficit.
6 MR. DuVAL: And -- and we don't know the
7 accrual amount at this point. We will know
8 what it is by the end of the -- the audit
9 period, which is June 30th.
10 TREASURER GALLAGHER: Now -- wait a second.
11 You have a cash deficiency, but in an
12 accrual method, you say it may not be.
13 MR. DuVAL: No --
14 GOVERNOR BUSH: No.
15 MR. DuVAL: -- the fund balance is not
16 cash. Fund balance -- if -- if you -- let's --
17 if you have a regular business, you have assets
18 minus liabilities equal your -- your capital,
19 your owner's equity. That's what the fund
20 balance is --
21 GOVERNOR BUSH: Okay. So it's not a --
22 MR. DuVAL: -- on a balance sheet. That is
23 not cash. Okay. There -- there's a big
24 difference, and there's a misunderstanding by a
25 lot of people. Fund -- accounting is -- is a
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1 term for governmental units. Different --
2 GOVERNOR BUSH: It would be the equivalent
3 of net worth.
4 MR. DuVAL: Equals net worth,
5 that's correct.
6 GOVERNOR BUSH: All right.
7 MR. DuVAL: Okay?
8 And that can be -- and in -- in some
9 entities, they have negative balances, but
10 they're -- they're well-run. They just have
11 high depreciation. Not in this case, but in
12 other entities.
13 So it's -- so in this case, at the end of
14 the year, when we make the accrual for the --
15 any receivables, there is a possibility --
16 again, without knowing what the number is, I
17 can't tell you. But it probably will be
18 positive at that point.
19 As it happened in the prior year. It was a
20 negative fund balance in the prior year. When
21 we found out the exact number, we could accrue
22 the right number, it turned out to be a
23 positive fund balance at that point.
24 TREASURER GALLAGHER: Now, that --
25 MR. DuVAL: And that's -- that's normal.
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1 And that's the way that -- that you do things.
2 GOVERNOR BUSH: It also could lead to a --
3 a -- I mean, if it continues -- if it's
4 growing, that -- that could -- that could lead
5 to a problem, right?
6 MR. DuVAL: Well, yes, it will -- is
7 leading to a problem, because if -- if the
8 funds are not received from capital outlay, it
9 would be a problem, because the District's
10 policy is, before they will give you any money
11 for capital improvements, you have to spend
12 that money out of your regular operating
13 account --
14 GOVERNOR BUSH: Oh.
15 MR. DuVAL: -- and provide them a copy of
16 the invoice. And that -- that is a problem.
17 And --
18 GOVERNOR BUSH: Ms. Chastain has a comment.
19 MR. DuVAL: -- in fact -- if I can finish.
20 Dr. -- or Steven Bright, who's their budget
21 director, and I have talked about this -- the
22 budget director for Duval County.
23 And he said, if they had to do that, they
24 would have a problem, too.
25 TREASURER GALLAGHER: Sure they would.
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1 MR. DuVAL: So --
2 Thank you.
3 GOVERNOR BUSH: Could I just -- one more --
4 one more quick question.
5 Are you aware of any financial
6 improprieties, any -- any theft, any
7 negligence, any gross mismanagement of the
8 financial accounts of the school?
9 MR. DuVAL: No, sir. My -- my license --
10 and I -- the only thing I'm good at is being an
11 accountant. I want to keep my license.
12 So we looked at it very carefully. And I
13 take it very seriously when we do this. I've
14 audited county governments where I had
15 differences with them, and -- and had to resign
16 because they did not like my opinion.
17 I believe in strongly that's my duty to say
18 exactly what it is.
19 GOVERNOR BUSH: Okay.
20 MR. DuVAL: Thank you.
21 GOVERNOR BUSH: Would you like to comment
22 on the --
23 TREASURER GALLAGHER: Could I ask him one
24 more --
25 GOVERNOR BUSH: Yeah.
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1 TREASURER GALLAGHER: -- question?
2 GOVERNOR BUSH: Yeah. Commiss-- I'm sorry.
3 Commissioner.
4 TREASURER GALLAGHER: This is not a huge
5 enterprise, and it looks to me like because of
6 the lack of property insurance for contents --
7 apparently it was left out of the policy that
8 was purchased, they ended up with a $200,000
9 damage from a -- from a plumbing flood.
10 How is that loss going to affect the
11 balance sheet of this institution?
12 MR. DuVAL: Of course, they've spent the
13 money to correct those problems. And that --
14 and that's one of the reasons why we have a --
15 a problem right now with cash flow, because
16 they had to spend the money to get the school
17 corrected.
18 The insurance policy -- as part of the
19 auditor -- our audit procedures, we have to
20 follow what the contract says, and -- and do
21 they have the insurance in place based on the
22 contract. And they did have the insurance in
23 place.
24 But for contents, they do not have enough
25 coverage. The insurance agent assured the
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1 school that they did have the coverage, and,
2 in fact, they're -- we're -- we're in a lawsuit
3 now -- the attorney's in a lawsuit with the
4 insurance company under discovery to see if we
5 can -- they can recover that money.
6 If they recover that money, again, that
7 will be a -- a -- help the --
8 TREASURER GALLAGHER: Sure.
9 MR. DuVAL: -- fund balance become
10 positive. So --
11 TREASURER GALLAGHER: They're suing --
12 they're suing the -- the company or the agent?
13 MR. DuVAL: The agent and the company for
14 the representation. And -- at least that's my
15 understanding. The attorney's here. He'll --
16 TREASURER GALLAGHER: Yeah. He's --
17 MR. DuVAL: -- tell you exactly.
18 TREASURER GALLAGHER: -- about to say
19 something behind you. So if you'll give him a
20 chance, he'll --
21 MR. DuVAL: Okay.
22 MR. THOMPSON: About to have a
23 heart attack.
24 MR. DuVAL: I -- I don't want to talk about
25 legal matters.
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1 MR. THOMPSON: The -- the insurance company
2 is -- is probably going to be limited to --
3 TREASURER GALLAGHER: The contract.
4 MR. THOMPSON: -- to the contract.
5 Although --
6 TREASURER GALLAGHER: What company is it?
7 MS. FUNCHES: Pan America.
8 MR. THOMPSON: Excuse me?
9 MS. FUNCHES: Pan America.
10 MR. THOMPSON: Pan America.
11 We -- we have given them the -- the notice
12 of -- of filing lawsuit against them, however.
13 And we have -- we've given the agent --
14 we've gotten the policy for the agent. And,
15 yes, it's the agent who is the one who is
16 responsible for the problem.
17 The agent was Isaiah Rumlin in
18 Jacksonville.
19 TREASURER GALLAGHER: Yeah.
20 GOVERNOR BUSH: Commissioner.
21 COMMISSIONER BRONSON: Well, I -- having
22 started out in the teaching profession, I'm a
23 little bit concerned, too, because I know how
24 this works in the public school system, because
25 I was in vocational education.
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1 And I know I got an awful lot of the kids
2 that the other teachers didn't want to have to
3 break up their class to handle all the time.
4 So I ended up with them.
5 And I ended up raising about a
6 million dollars in State and Federal funds
7 through that overburdening classroom of those
8 children.
9 Now, some of those children would never
10 meet the criteria -- never meet the criteria
11 that was put on this school. Now, I'm -- I'm
12 saying that if the school agreed to this, that
13 was -- I'm not sure you should have -- you
14 should have agreed to that based on the fact
15 that what you just told me a while ago was that
16 this school, unlike the average public school
17 system which has A+ students and F students,
18 and you average it together, and that's what
19 you're going to come up with as a standard for
20 that school.
21 You're starting out with probably an upper
22 base of a C student with an extra low F student
23 that's -- that sometimes can't even read. So
24 you're already starting out with a big crutch
25 here. You're never going to meet the standards
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1 that -- that was agreed to.
2 And I -- so I -- I'm having -- I'm trying
3 to work through my mind here the -- the parts
4 that I'm concerned about, Governor, is -- is
5 the financial part and the fact that what I
6 read was is that a lot of these teachers or
7 people working at the school have not been
8 fingerprinted. That -- that concerned me.
9 And those were the issues that concerned me
10 the most.
11 And then -- but when it comes down to
12 debating on the issues of whether you should
13 have made the standard cut under that proposal
14 tells me, you were working off of an awful low
15 group of students that are having a hard time
16 understanding, learning, reading, mathematics.
17 And I don't see how in the world they could
18 ever meet that standard, based on the fact that
19 you probably started with an upper level C, at
20 the most, maybe even a lower level C, as your
21 upper grade for these students.
22 And the other thing that I'm worried about,
23 Governor, is where are these children going to
24 go when this school closes down?
25 Are they going to quit school? Is the --
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1 is the -- is the school system going to be able
2 to absorb these children and put them into
3 similar programs where they're willing to
4 learn, or are they just going to give up and be
5 on the streets, and -- and get into crime and
6 some of these other issues.
7 So I'm trying to work this out. This is my
8 first time of dealing with this.
9 GOVERNOR BUSH: Welcome. Welcome.
10 COMMISSIONER BRONSON: And -- so --
11 ATTORNEY GENERAL BUTTERWORTH: You've
12 analyzed it very well. You've analyzed --
13 COMMISSIONER BRONSON: But I --
14 ATTORNEY GENERAL BUTTERWORTH: -- it very
15 well.
16 COMMISSIONER BRONSON: -- but I like to
17 separate the wheat from the chaff because --
18 GOVERNOR BUSH: That's an ag expression.
19 COMMISSIONER BRONSON: Yeah.
20 But I -- I'd like --
21 GOVERNOR BUSH: Mr. Thompson --
22 COMMISSIONER BRONSON: -- I'd like the
23 answer to --
24 GOVERNOR BUSH: -- would you like to --
25 COMMISSIONER BRONSON: -- some of those
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1 questions.
2 TREASURER GALLAGHER: Rightfully so. And
3 rightfully so.
4 GOVERNOR BUSH: Legitimate.
5 MR. THOMPSON: I would -- I have two
6 comments. One is I would request that you
7 consider that this is one of the first charters
8 in Duval County.
9 And -- and the standards -- standards
10 are -- in the -- in the early years -- I mean,
11 we're -- we're -- we're continuing to grope and
12 to grow and to -- to understand. And -- and
13 obviously we're asking from indulgence -- some
14 indulgence on the contract standard.
15 The students have been physically
16 reassigned to Ribault Middle and Paxon Middle.
17 To the extent that other charter schools may
18 take them is problematic.
19 (Secretary Harris exited the room.)
20 MR. THOMPSON: If they have the capacity,
21 obviously they're going to increase the number
22 of students, which I know the Superintendent
23 is -- is -- doesn't like to do.
24 And if somebody else moves into that space,
25 it may be. I mean, the -- the -- I think the
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1 reality though is -- is a little bit more grim
2 than that.
3 If -- if you want to ask Mr. Robinson of
4 the PTO, I mean, he may have a better idea. He
5 has children there. But I -- I'm not -- I'm --
6 I'm concerned with --
7 GOVERNOR BUSH: Yeah, Tom.
8 TREASURER GALLAGHER: Are -- let me ask a
9 question.
10 Do you -- is the -- is the lease on the
11 property, is that where the school's going to
12 be next year? I mean, you have an existing,
13 continuing lease, or do you have to move
14 somewhere else?
15 MR. THOMPSON: We're -- we're -- how many
16 years do you have to go on your lease?
17 MS. FUNCHES: 2003.
18 TREASURER GALLAGHER: Okay. So you're
19 still in the --
20 MR. THOMPSON: Yeah.
21 TREASURER GALLAGHER: -- same place.
22 GOVERNOR BUSH: Ms. Chastain, would you
23 like to comment?
24 MS. CHASTAIN: If I could. Thank you.
25 Thank you.
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1 I was taking notes like a mad person back
2 there, so I have a variety of things I'd like
3 to discuss.
4 First of all --
5 GOVERNOR BUSH: If you could just answer
6 their -- there was enough --
7 MS. CHASTAIN: There were a few.
8 GOVERNOR BUSH: Yeah.
9 MS. CHASTAIN: With respect to the
10 allegation that the District coerced the school
11 into setting these standards, I do not believe
12 that to be the case. But, nonetheless, those
13 were the standards that were contracted for.
14 With respect to the concern as to where are
15 these students going to -- to go should this
16 school be closed, the District shares that
17 concern as well.
18 I -- I think if there's anything we have in
19 common is that we all are concerned about the
20 welfare of these students and what -- what the
21 future holds for them.
22 Whether these students will go back to the
23 traditional public schools, the -- the District
24 is prepared to take that.
25 But significantly, these -- these students
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1 have chosen to be at a charter school, and we
2 have three other middle charter schools that we
3 believe can absorb the bulk of -- maybe not
4 all -- but the bulk of these students.
5 And we are working with those charter
6 schools to make sure that that can, in fact,
7 happen. Because the District is very concerned
8 about the parents being able to continue their
9 choice, and to make the decision that they --
10 they choose for their -- their children.
11 GOVERNOR BUSH: Commissioner?
12 COMMISSIONER BRONSON: One question. And I
13 would appreciate it.
14 The -- the other charter schools, are they
15 dealing with primarily the same type --
16 (Secretary Harris entered the room.)
17 COMMISSIONER BRONSON: -- students that
18 we're talking about here? Are they the same
19 lower end 25 percent student that we're talking
20 about here with the same potential problems
21 from home and other places that these children
22 are going through?
23 Or are these different schools that -- that
24 handle a different type of -- of student?
25 And -- and -- and the other -- and to
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1 follow that up, if you took these same
2 25 percent lower end students, and kept them in
3 the public school system as a group -- as
4 they've done here, would -- do you think in
5 your -- in your mind, do you think the public
6 school system would have a -- any higher
7 average grade on these FCAT scores and all than
8 what -- what they're doing here?
9 MS. CHASTAIN: As to your first question,
10 the other charter schools I believe also serve,
11 maybe not exactly the same, but generically
12 speaking, an at-risk population.
13 So it may not exactly be apples to apples,
14 but it's -- it's pretty close. It's not as if
15 the charter schools that we have are equivalent
16 to the Julliard or -- you know, performing arts
17 or something like that.
18 It's -- it's pretty much serving at-risk
19 students. So we believe that that would be
20 a -- a comparable move.
21 With respect to your second question as to
22 how these students might perform in other
23 traditional public schools within the District,
24 that's -- that's hard to say.
25 But I -- I can tell you this: To the
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1 extent that we have compared this school's
2 performance, not with District Schools that
3 would have the variety of a student population,
4 or your A+ students, as well as your lesser
5 end -- lesser end population, or at-risk, we
6 have also conducted an analysis of
7 similarly-situated students using a definition
8 of at-risk students, specifically one where the
9 student population are those receiving free or
10 reduced lunches, you know, using that
11 definition of at-risk.
12 And we have found that in some cases,
13 district schools that have a higher percentage
14 of this at-risk population, have done, not
15 remarkably better. I mean, I need to be candid
16 with you, but have done better.
17 So it's really --
18 GOVERNOR BUSH: Some of them?
19 MS. CHASTAIN: Some of them have --
20 GOVERNOR BUSH: Which means that some
21 haven't.
22 MS. CHASTAIN: Some have not. Maybe one or
23 two. But for the most part, most of them
24 have -- have done better with a higher
25 percentage of at-risk students, which should
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1 have harmed the District school in that regard,
2 using that --
3 COMMISSIONER CRIST: You said for the most
4 part they have done better.
5 How much of the most part? Can you define
6 that a little more clearly for us?
7 MS. CHASTAIN: I don't have my hands on a
8 table. But -- but specifically in some cases
9 with specific tests, whether it's the -- I
10 can't remember if it's the math or the reading,
11 using last year's data, I believe this school
12 was at the lowest.
13 (Commissioner Bronson exited the room.)
14 MS. CHASTAIN: In other cases, they were
15 among the lowest, but not the lowest.
16 And then if you generalized, some of our
17 schools have done better. And I don't know
18 if -- if this one -- I don't believe is at the
19 bottom. Actually there -- there may be another
20 charter school that is.
21 GOVERNOR BUSH: Is there any other
22 questions?
23 We've thoroughly discussed --
24 COMPTROLLER MILLIGAN: Well, other --
25 GOVERNOR BUSH: -- this.
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1 COMPTROLLER MILLIGAN: -- other than she
2 chose not to refute the -- Mr. DuVal's
3 assessment of the financial situation.
4 MS. CHASTAIN: Thank you.
5 I -- I plan to, so I --
6 COMPTROLLER MILLIGAN: Okay.
7 MS. CHASTAIN: -- I appreciate the segue.
8 Thank you.
9 With respect to the financial analysis, one
10 thing that disturbs -- disturbs me, and -- and
11 I don't understand, is this repeated allegation
12 that the District owes the school money. And I
13 cannot find the basis for this -- this
14 statement.
15 There are Department of Education -- there
16 are statutes and there are rules and
17 regulations as to how these funds may be spent.
18 With respect to capital outlay and
19 SIT funds, those funds can only be used for
20 specific purposes. And specifically they
21 cannot be used for operating expenses such as
22 payroll.
23 There are laws, there are memorandum
24 outlining the guidelines. And the District,
25 because it's the State's money, follows those
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1 guidelines, and is actually using the DOE
2 requirements as to how funds are provided.
3 So, for example, when the school says that
4 its owed money from capital outlay, it may be
5 that the District is holding the capital outlay
6 money that is allocable to this school. But
7 until the school makes a request in accordance
8 with the DOE memorandum, the -- the money is
9 then turned over after --
10 GOVERNOR BUSH: But you're not --
11 MS. CHASTAIN: -- proper --
12 GOVERNOR BUSH: -- aw-- are you aware of
13 use of capital outlay dollars for operating
14 expenses, or just -- this is just a --
15 you know, a -- filling out a form the right way
16 to get -- get reimbursed.
17 MS. CHASTAIN: Sometimes it is filling out
18 the form in a correct way to get reimbursed and
19 following the guidelines. In which case, if we
20 find that something is not in order, we
21 immediately notify the school, you -- you
22 forgot --
23 GOVERNOR BUSH: How about --
24 MS. CHASTAIN: -- to impose --
25 GOVERNOR BUSH: -- this school?
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1 MS. CHASTAIN: This school in particular.
2 GOVERNOR BUSH: This school, is there
3 any -- you have concerns that they're using
4 capital outlay dollars for operating expenses,
5 is that what you're saying?
6 MS. CHASTAIN: With respect to the timing
7 of teachers not gett-- getting their payroll
8 met in March, there were pending requests for
9 the purchase of a van, which would have been an
10 appropriate expenditure under the capital
11 outlay requirements.
12 That van had not yet been purchased, so
13 what we did is we --
14 (Commissioner Bronson entered the room.)
15 MS. CHASTAIN: -- cut the check -- after
16 talking with DOE representatives, we cut the
17 check directly to the vendor, to make sure that
18 the school could use the funds in an
19 appropriate way, and purchase the van in
20 accordance with their request.
21 With respect to -- there's also something
22 known as the 2 percent rule, which puts a cap
23 on the amount of public funds -- a combination
24 of capital outlay, SIT, and the other funding
25 source. After a complicated formula, the
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1 2 percent rule, in effect, limits the amount of
2 funds that can be spent on repairing,
3 renovating, altering leased premises.
4 GOVERNOR BUSH: Uh-hum.
5 MS. CHASTAIN: There was a significant
6 amount of work that the school undertook, to
7 the tune of about $279,000 renovating their
8 lease premises at the end of 1999.
9 In 1998, before that, the District informed
10 the school in writing of the existence of the
11 2 percent rule. The school then entered into a
12 contract with a -- with a contractor for this
13 significant amount of renovations.
14 And subsequent to that point, the
15 accounting firm acknowledged that the 2 percent
16 rule applied, and that the school has exceeded
17 its cap -- it can spend no more money through
18 2003 actually -- it covers the life of the
19 lease -- for any further alterations to the
20 leased premises.
21 Notwithstanding that, there -- there --
22 continue to be requests for capital outlay and
23 SIT funds for renovations to leased premises
24 which we cannot find. It's not our money.
25 It's the State's money, and -- and we have --
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1 we need to follow the law as foll-- as far as
2 those disbursements.
3 Some of this may be the result of the flood
4 damage from last year. To the extent that
5 flood damage occurred and they're having a
6 claim with their insurance company, what the
7 District did find are textbooks, furniture, and
8 computers, those things that are not subject to
9 the 2 percent rule. But we cannot find
10 requests to repair --
11 (Commissioner Crist exited the room.)
12 MS. CHASTAIN: -- the flooring --
13 GOVERNOR BUSH: Okay.
14 MS. CHASTAIN: -- and the like.
15 GOVERNOR BUSH: But the point is that
16 you're doing your job, they -- they've not used
17 the money inappropriately, because you all have
18 not either allowed them to do it, or they
19 haven't -- they haven't requested to do so.
20 MS. CHASTAIN: That's the goal.
21 GOVERNOR BUSH: Okay.
22 MS. CHASTAIN: Thank you.
23 GOVERNOR BUSH: Any other discussion?
24 Maybe we should wait for the Commissioner
25 of Education to come back.
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1 Let's have a discussion. He ought to be
2 here --
3 TREASURER GALLAGHER: I --
4 GOVERNOR BUSH: -- for the vote.
5 TREASURER GALLAGHER: -- think a motion --
6 GOVERNOR BUSH: He should probably be here
7 for the -- for the close here.
8 ATTORNEY GENERAL BUTTERWORTH: Maybe he
9 left for a reason.
10 GOVERNOR BUSH: Oh, no. That's in the
11 Legislature they do that.
12 ATTORNEY GENERAL BUTTERWORTH: Oh, the
13 Legislature. He's a former legislator.
14 COMPTROLLER MILLIGAN: Well, while -- while
15 we're killing time, there's a parent or two
16 here, aren't there?
17 Maybe one of them would like to --
18 GOVERNOR BUSH: Would you --
19 COMPTROLLER MILLIGAN: -- say something.
20 GOVERNOR BUSH: -- like to speak?
21 MR. CLEM ROBINSON: My name's
22 Clem Robinson.
23 GOVERNOR BUSH: Mr. Robinson, how you
24 doing?
25 MR. CLEM ROBINSON: Great, Governor. How
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1 you doing?
2 GOVERNOR BUSH: I'm happy that you're here
3 with us.
4 MR. CLEM ROBINSON: I -- I serve as the PTO
5 President for Empowering Young Minds Academy.
6 I have a student there, an 8th grade student
7 who's going to graduate this year.
8 After I kept him two years in the public
9 school, at the school -- Northwestern Middle
10 School where he constantly was in trouble,
11 constantly being picked on, constantly was not
12 meeting my expectation that I feel he should
13 do.
14 So I put him in Empowering Young Minds. As
15 the District will say, the kid's not learning.
16 Well, my kid came there pretty well on a
17 C level. He -- he mastered algebra -- through
18 the help of Empowering Young Minds, he mastered
19 English. Tough teachers, stayed on top of him,
20 made sure he did what he had to do.
21 My concern is that on March 6th when this
22 letter came out to close the school was that my
23 son, and several other students were in the
24 middle of taking the FCAT test.
25 The School Board did not respect the
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1 parents nor the students by putting this
2 information out to the media first during the
3 day. About 8:00 o'clock in the morning, the
4 media would have had the information.
5 I arrived to the school to see my son to
6 get him -- find out what's going on. I got
7 a -- got a news bulletin telling me, they're --
8 they're closing this charter school down.
9 I've got a concern with that problem.
10 I've got a concern with Duval County, where
11 they -- they continue to do things --
12 (Commissioner Crist entered the room.)
13 MR. CLEM ROBINSON: -- that -- I believe
14 they shouldn't do.
15 And 375 kids got to go somewhere. Where
16 are you going to put them at?
17 In -- in the School Board meeting, I asked
18 the same question of the School Board, where
19 are you going to put the kids at? If you close
20 the school, where are you going to put the
21 kids?
22 We'll put them somewhere. We'll put them
23 in another public school.
24 GOVERNOR BUSH: Right.
25 MR. CLEM ROBINSON: Governor, Cabinet, they
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1 won't make it.
2 I go to this school every day. The kids
3 are behind the 8 ball already. They won't make
4 it in regular public school.
5 They need a charter school that,
6 number one, meet (sic) their needs on their
7 level. Meet what -- meet them where they are,
8 bring them up to where they need to be.
9 Empowering Young Mind has done this. Grant
10 you -- I've been to Daniel Payne. I've been
11 down to Daniel Payne, I talked with the
12 principal down there, I talked to some of the
13 kids down there.
14 I'm telling you, please, sir, please,
15 ma'am, Empowering Young Mind (sic) need to stay
16 around.
17 GOVERNOR BUSH: Thank you, sir.
18 We appreciate you coming. And all the
19 family members that -- make it all the way to
20 Tallahassee.
21 SECRETARY HARRIS: Governor --
22 GOVERNOR BUSH: Yes.
23 SECRETARY HARRIS: -- I have a question.
24 When I read this first -- this information
25 when we were briefing on this, the
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1 fingerprinting, the financial issues, and
2 certainly the low achievements were of great
3 concern.
4 There's such differing opinions, and that's
5 real frustrating to kind of not get to the --
6 to the bottom of the actual tests as they
7 compare to the rest of the school district
8 percentages, or -- or some of these other --
9 other issues.
10 But obviously there is improvement. If
11 we -- if we vote today to accept the
12 School Board's decision, and the school is
13 closed, if -- if we don't, then what is the --
14 what happens, is it -- for how long?
15 How long is the renewal, is it just one
16 year so we could address --
17 GOVERNOR BUSH: No. I mean, this is --
18 actually this is a topic that I wanted to bring
19 up after the end of this.
20 Because if we vote -- if we vote to deny
21 the School District's recommendation to close
22 it, they -- it goes -- as I understand it, it
23 goes back to them, doesn't it? And they can do
24 it again.
25 TREASURER GALLAGHER: And have, in some --
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1 GOVERNOR BUSH: And they have in every --
2 TREASURER GALLAGHER: Not this one, but
3 other --
4 GOVERNOR BUSH: Well --
5 TREASURER GALLAGHER: -- school boards.
6 GOVERNOR BUSH: -- what they've done in
7 every recent case where we have remanded it
8 back down to the District is they have done
9 what they did the first time.
10 I mean, we've -- we've -- we're -- we've
11 spent an hour-and-a-half on this. We don't
12 ult-- ultimately -- we don't have the ultimate
13 say. And maybe -- maybe we shouldn't.
14 But one of the things that we could do, if
15 we vote to -- we go against the Duval County
16 recommendation here is to ask the Department of
17 Education to monitor this at least, and to
18 either provide assistance, or to go to the
19 School Board meeting, and represent the
20 District's -- the Board of Education's view, at
21 a minimum. Because I don't think we've done
22 that.
23 And, you know, it's -- it's a little
24 frustrating, because we do spend a lot of time
25 on these, and -- and we end up -- ultimately
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1 the District has the right to politely take our
2 views and ignore them.
3 TREASURER GALLAGHER: Well, they are a
4 constitutional body that has that authority.
5 SECRETARY HARRIS: Well, that was my
6 concern. And I didn't want to just end it.
7 I wondered if we could have it extended --
8 you know, I mean, if -- if we rejected the --
9 their -- I just needed to know what the process
10 was, because it -- it just doesn't seem --
11 if -- if we wanted it to move forward, and --
12 and if we could watch it more closely, then
13 perhaps some of the financial issues could be
14 rectified to our satisfaction, as well as
15 making certain that we follow up on the
16 fingerprinting and some of the other specific
17 issues of concern and safety.
18 GOVERNOR BUSH: Well, I think the way this
19 would work would be that the -- the
20 School Board at their next meeting would --
21 would take up this issue, and they could either
22 renew the contract or not.
23 TREASURER GALLAGHER: Let -- if I may
24 mention something here. This may get into the
25 unusual.
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1 But what ends up happening if the school --
2 the charter school would -- doesn't --
3 you know, we, let's say, go along with them
4 staying, and they go back to Duval, and Duval
5 turns them down. They do have the ability to
6 go to Circuit Court.
7 And one of the problems with a
8 charter school doing that is, of course, how
9 much it costs.
10 And one of the things we might want to look
11 at is if we disagree with the School District
12 on the decision that they've made, even though
13 they -- and they may make it again, we may want
14 to put ourselves in a position to assist in
15 that challenge legally.
16 I just throw that out to think about. Not
17 I recommend it today, but something we should
18 think about --
19 GOVERNOR BUSH: Like that tobacco thing.
20 TREASURER GALLAGHER: -- because -- and I
21 do drop those things periodically.
22 But -- but it's something that we should
23 look at if we truly disagree with what the
24 School Board ends up doing, we should maybe,
25 you know, back up the schools -- this one or
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1 others.
2 We do have one, by the way, in
3 Circuit Court right now, Berkley from
4 Polk County.
5 GOVERNOR BUSH: Right.
6 TREASURER GALLAGHER: And we -- that --
7 that's something I think we -- if -- if we feel
8 that strongly, we should back them up, because
9 they don't have the money to pay for the legal
10 costs to go to Circuit Court.
11 GOVERNOR BUSH: Well, one of the issues I
12 think that would come up is the timing -- I'm
13 not sure what the law would say --
14 General, I don't know --
15 -- if -- this would still not -- a court
16 challenge wouldn't --
17 ATTORNEY GENERAL BUTTERWORTH: I don't know
18 if it'd be stayed or not.
19 GOVERNOR BUSH: I mean, if it's not stayed,
20 then the school won't be able to --
21 TREASURER GALLAGHER: Right. That's true.
22 GOVERNOR BUSH: -- continue, which is the
23 timing issue of doing this stuff in June.
24 TREASURER GALLAGHER: Well, the reason
25 Berkley works is because it's already a public
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1 school trying to convert.
2 GOVERNOR BUSH: Exactly.
3 TREASURER GALLAGHER: So it -- it's going
4 to be there anyway.
5 GOVERNOR BUSH: Any other discussion?
6 COMPTROLLER MILLIGAN: Governor --
7 GOVERNOR BUSH: Yes.
8 COMPTROLLER MILLIGAN: -- I do think it's a
9 very -- a very good point to ask the
10 Commissioner of Education and his department
11 to -- to really get more involved in this --
12 this, and others, particularly those that we
13 may remand, and be a -- a strong player, and
14 have representation, and convey our concerns,
15 and -- and try to bring some -- some different
16 focus on it than perhaps has been brought on.
17 GOVERNOR BUSH: Well --
18 COMMISSIONER CRIST: It's almost like
19 becoming an intervenor in the process, and
20 an -- and an advocate for at least expressing
21 the view of the State Board of Education. And
22 I think it would be appropriate --
23 GOVERNOR BUSH: Very --
24 COMMISSIONER CRIST: I'm ready to make a
25 motion when you want --
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1 TREASURER GALLAGHER: Well, it --
2 COMMISSIONER CRIST: -- one, Governor.
3 TREASURER GALLAGHER: -- we can do the mo--
4 I just have --
5 GOVERNOR BUSH: Let's do the --
6 TREASURER GALLAGHER: -- one other comment.
7 One of the things that I -- I think we as a
8 Board have been frustrated with, and it --
9 certainly shows here, is the lack of knowledge
10 that we get from the two parties in regards to
11 how the students are doing.
12 SECRETARY HARRIS: Uh-hum.
13 TREASURER GALLAGHER: And it is, in the
14 ability of the Department of Education to --
15 who does track and can track those students,
16 and can get test scores from the school, and
17 they can give us a -- a layout in a manner that
18 would give us the -- the -- the knowledge that
19 we want on how these individual students have
20 done.
21 Which we're not -- we're getting no solid
22 data, we're getting, you know, this is what we
23 think. And they're -- you know, they're doing
24 well, but we don't have solid individual
25 student data.
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1 I think that would help us a lot in trying
2 to analyze how well --
3 GOVERNOR BUSH: Good point.
4 TREASURER GALLAGHER: -- the school's
5 doing.
6 And I think if that data would be brought
7 to us in a manner -- there's certain things
8 that can be public, and certain things can't,
9 depending on how many students there are,
10 et cetera, and how they -- how well they did.
11 So they don't get individual data out.
12 But I do think that the --
13 GOVERNOR BUSH: That's a good point.
14 TREASURER GALLAGHER: -- the Department can
15 look at that, and give us that kind of
16 information.
17 And I'd be a lot more comfortable
18 continuing a school that I saw some solid --
19 SECRETARY HARRIS: Exactly.
20 TREASURER GALLAGHER: -- increases, than
21 one that I hear the school saying, we're doing
22 great; and the -- and the School Board saying,
23 we're doing terrible.
24 And -- and we're just in the middle, not
25 having a -- any real data, when real data is
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1 available to us.
2 SECRETARY HARRIS: Yeah.
3 GOVERNOR BUSH: And remember --
4 SECRETARY HARRIS: That's very --
5 GOVERNOR BUSH: -- in this particular case,
6 and this will be the way it is in every case,
7 I guess, the data that the School District used
8 was the data they had available, which was last
9 year's tests.
10 Now the new tests have come in, which could
11 validate or not validate their -- their
12 thinking at the time they had to make that
13 decision in March.
14 So the information that the Department of
15 Education can give us would be a -- very
16 useful, because it's kind of an open-ended
17 question without knowing how the test scores
18 were this year.
19 SECRETARY HARRIS: Does the Department have
20 any information available today? I mean --
21 TREASURER GALLAGHER: Well, they're --
22 SECRETARY HARRIS: -- for this --
23 TREASURER GALLAGHER: -- not going to have
24 it today. This is -- this takes a lot of --
25 GOVERNOR BUSH: No.
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1 TREASURER GALLAGHER: -- computer runs
2 and --
3 SECRETARY HARRIS: Oh, does it?
4 TREASURER GALLAGHER: -- everything else to
5 come up with.
6 I mean, we -- we could possibly hold up and
7 have them do some runs, and let us know how
8 the --
9 SECRETARY HARRIS: It's just very
10 frustrating to make a decision when financially
11 there are differing opinions; on the -- on
12 the -- on the educational results, there are
13 differing opinions. And it's just --
14 COMPTROLLER MILLIGAN: Well, that -- that's
15 certainly information that could be carried
16 back to Duval County if we chose to remand
17 this. And part of the deliberation that -- in
18 the process that the Commissioner of Education
19 and his people would be involved in.
20 ATTORNEY GENERAL BUTTERWORTH: Is there a
21 timetable, Governor, do you know on this? I
22 can't recall if we have to --
23 GOVERNOR BUSH: I --
24 ATTORNEY GENERAL BUTTERWORTH: -- if we
25 have to respond in X number of days or not on
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1 one of these --
2 SECRETARY HARRIS: But every time we've
3 remanded back to Jacksonville -- to Duval,
4 rather -- it -- it's always been the same,
5 that -- that they've --
6 TREASURER GALLAGHER: But, see, we'd do
7 better to remand it, and see -- and have some
8 student data that said, look, these students
9 did this -- did this --
10 GOVERNOR BUSH: Right.
11 TREASURER GALLAGHER: -- and we're -- and
12 that's why we want you to look at this that
13 they did, and, you know --
14 GOVERNOR BUSH: Mr. Robinson --
15 TREASURER GALLAGHER: -- give y'all a shot.
16 GOVERNOR BUSH: -- are you representing the
17 Duval County School District?
18 MR. JAMES ROBINSON: No, sir. I'm
19 representing the Department of Education.
20 GOVERNOR BUSH: Give us the time -- what is
21 the time table?
22 MR. JAMES ROBINSON: You get 30 calendar
23 days.
24 GOVERNOR BUSH: From --
25 MR. JAMES ROBINSON: From the date of the
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1 receipt of -- of the Board's decision.
2 GOVERNOR BUSH: Is when Duval has to
3 respond back.
4 MR. JAMES ROBINSON: They have to have
5 their hearing --
6 GOVERNOR BUSH: What about our timing?
7 MR. JAMES ROBINSON: Your timing is
8 60 days --
9 GOVERNOR BUSH: And when did -- when did
10 that start?
11 MR. JAMES ROBINSON: From the date of the
12 decision.
13 GOVERNOR BUSH: Well, we're already past
14 60 days.
15 TREASURER GALLAGHER: That's not unusual.
16 GOVERNOR BUSH: I say we move forward.
17 I think the timing of this is really
18 related to the school year if the
19 Duval County -- depending on what we do here,
20 but --
21 MR. JAMES ROBINSON: Governor --
22 SECRETARY HARRIS: And how --
23 MR. JAMES ROBINSON: -- 60 days from --
24 SECRETARY HARRIS: -- how long would it
25 take --
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1 MR. JAMES ROBINSON: -- the date of the
2 appeal. The receipt -- our receipt of the
3 appeal, the filing with the agency clerk of the
4 appeal. And I believe we're within our
5 time frame.
6 May 4th. So --
7 TREASURER GALLAGHER: We received it
8 May 4th?
9 GOVERNOR BUSH: Wow.
10 COMMISSIONER CRIST: That's rather
11 efficient --
12 TREASURER GALLAGHER: Well then --
13 COMMISSIONER CRIST: -- then, isn't it?
14 SECRETARY HARRIS: How long would it take
15 to do the runs, to see where --
16 TREASURER GALLAGHER: Oh, the deadline --
17 SECRETARY HARRIS: -- the --
18 TREASURER GALLAGHER: -- was May 4th.
19 SECRETARY HARRIS: -- the actual --
20 TREASURER GALLAGHER: -- so we're supposed
21 to have it back to them by then.
22 MS. CASTILLE: We have to act by May 4th.
23 TREASURER GALLAGHER: By May 4th.
24 MR. JAMES ROBINSON: May 4th was the
25 receipt date.
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1 GOVERNOR BUSH: No. No.
2 Say it again now.
3 Jim? May 4th is when we received --
4 MR. JAMES ROBINSON: May 4th was the date
5 that the agency clerk received the filing, the
6 appeal.
7 GOVERNOR BUSH: So we have 60 days from
8 then.
9 MR. JAMES ROBINSON: Which we're timely.
10 TREASURER GALLAGHER: Yeah. So we get till
11 July 4th.
12 ATTORNEY GENERAL BUTTERWORTH: So we can --
13 TREASURER GALLAGHER: So why don't we hold
14 this off for two weeks, and find out some real
15 student data?
16 SECRETARY HARRIS: How -- how long would it
17 take to get that kind of data? You said to do
18 the runs and --
19 TREASURER GALLAGHER: Depends on what
20 resources you put at it.
21 ATTORNEY GENERAL BUTTERWORTH: I think
22 staff will --
23 TREASURER GALLAGHER: It depends --
24 ATTORNEY GENERAL BUTTERWORTH: -- do it in
25 the amount of time you -- you give them. I
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1 mean, it's like a -- it's like a term paper. A
2 term paper tak-- it's, like, 24 hours.
3 SECRETARY HARRIS: Well, they -- the former
4 Commissioner of -- of Education said that it
5 took -- took a long time to do. I just
6 wondered what the time frame --
7 TREASURER GALLAGHER: Well, not a long
8 time. It's just that they -- some -- some of
9 the data they may have to go to get -- from the
10 school.
11 GOVERNOR BUSH: Here's -- here's a more --
12 a practical issue, which is that these families
13 need to know what they're going to be doing
14 with their children, and the School District
15 needs to know, and the school needs to know.
16 And I -- I don't know if we wait
17 two weeks --
18 COMMISSIONER CRIST: What we accomplish.
19 GOVERNOR BUSH: Well, we wait -- we --
20 we -- and then the School Dist-- the
21 School District may not have a meeting some--
22 I mean, we don't meet in July, right, or --
23 they may not meet -- I don't know.
24 I mean, we may have a timing issue that is
25 a -- is a problem. I mean, most
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1 school districts don't meet in July, do they?
2 Don't they give the --
3 TREASURER GALLAGHER: Do we know when --
4 GOVERNOR BUSH: Ms. Chastain, where'd you
5 go?
6 TREASURER GALLAGHER: She disappeared.
7 GOVERNOR BUSH: She's over there now.
8 TREASURER GALLAGHER: Oh.
9 When is the next Duval County School Board
10 meeting?
11 GOVERNOR BUSH: Can you give us a -- a
12 sense of the logistics of this?
13 MS. CHASTAIN: Sorry to disappear on you.
14 We meet the first and third Tuesday of each
15 month. I know that we have a meeting the first
16 Tuesday in June and the third in June.
17 I do not know what the schedule is in July,
18 if we have meetings scheduled or not. I -- I
19 simply don't know.
20 GOVERNOR BUSH: So --
21 MS. CHASTAIN: But -- but in any event, to
22 respect the -- the statutory process and the
23 time line, we would convene a special meeting
24 if we had to.
25 GOVERNOR BUSH: But we could also -- I
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1 don't how you notice these, but you could -- if
2 you have a meeting the third week of June, we
3 could meet in June -- on June 12th --
4 TREASURER GALLAGHER: June 12th.
5 GOVERNOR BUSH: Is there a -- a notice
6 requ--
7 TREASURER GALLAGHER: Well, I'll -- I'll
8 move that we wait till June 12th, and get some
9 information on how the students have done so we
10 could more comfortably send a writ-- a message
11 back to the school board based on some data
12 that we have.
13 MS. CHASTAIN: Respectfully --
14 SECRETARY HARRIS: Governor --
15 MS. CHASTAIN: -- the information I gave
16 you with the percentiles was the 2000-2001 --
17 I believe it was this year's test scores.
18 Please recall that when the March 6th
19 letter came out, certainly we didn't have this
20 year's results.
21 TREASURER GALLAGHER: Under-- understand
22 our concern is not directly with what your
23 contract is, it's internal on have the students
24 proceeded well or not?
25 And we -- I think all of us recognize,
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1 that's a tough contract to meet.
2 GOVERNOR BUSH: Yes.
3 TREASURER GALLAGHER: A laudable goal, but
4 tough.
5 SECRETARY HARRIS: I'm sorry. I just don't
6 remember the process.
7 What -- if we remand it back, can we do it
8 with recommendations? Is there anything else
9 we -- you know --
10 GOVERNOR BUSH: Well, we --
11 SECRETARY HARRIS: I mean, if we're going
12 to wait two weeks, then we -- we --
13 TREASURER GALLAGHER: What we do is we send
14 it back, and say, we recommend that you
15 don't -- can't -- that you renew the -- the
16 contract; or we say that we agree that you
17 close it. And --
18 GOVERNOR BUSH: Or we have --
19 TREASURER GALLAGHER: -- all we have to do
20 is the --
21 GOVERNOR BUSH: -- a hearing.
22 So I mean, the only time it would require
23 school --
24 Yes.
25 MR. JAMES ROBINSON: Governor.
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1 Excuse me. I'm told by the clerk's office
2 that it would be prudent to request both
3 parties to voluntarily defer until the date
4 that you choose to hear it again, so that we
5 don't run into a default lapse in -- in time.
6 TREASURER GALLAGHER: That's a good idea.
7 MR. JAMES ROBINSON: So --
8 COMMISSIONER CRIST: Do they voluntarily do
9 that?
10 TREASURER GALLAGHER: Well, we've got
11 Ms. Chastain to tell us if she --
12 COMMISSIONER CRIST: How about on the
13 record?
14 TREASURER GALLAGHER: -- wait two weeks.
15 SECRETARY HARRIS: She might not be able
16 to --
17 MS. CHASTAIN: On behalf of the District,
18 we have no problem with that. And I would just
19 wonder with the school and their time frame,
20 I think it's more pressing for them, to be
21 candid.
22 GOVERNOR BUSH: Would you like to --
23 I mean, we can vote right now, too.
24 COMMISSIONER CRIST: I'm sure we can.
25 GOVERNOR BUSH: Take your chances.
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1 ATTORNEY GENERAL BUTTERWORTH: And it's a
2 unanimous School Board.
3 TREASURER GALLAGHER: So you've got
4 two weeks is what you have to wait.
5 ATTORNEY GENERAL BUTTERWORTH: When does
6 summer school start?
7 MR. THOMPSON: We have -- we have -- we
8 have two issues: One -- one is the -- one is
9 the -- the -- the farther along we go, the
10 farther -- the closer to the next school year
11 we get should any -- effect a decision to
12 occur.
13 And -- and the second issue is just the
14 cost of getting over here and explaining to my
15 wife again why I'm doing all this.
16 GOVERNOR BUSH: That seems like a secondary
17 issue.
18 COMPTROLLER MILLIGAN: It does.
19 MR. THOMPSON: Absolutely.
20 GOVERNOR BUSH: Well, I mean, you've got
21 to --
22 MR. JAMES ROBINSON: I didn't hear --
23 GOVERNOR BUSH: No, there wasn't a --
24 TREASURER GALLAGHER: There wasn't --
25 COMMISSIONER CRIST: I didn't hear it
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1 either. So --
2 TREASURER GALLAGHER: Let's hear if you've
3 agreed to extend or not. Notwithstanding your
4 wife getting mad at you, have you agreed to
5 extend?
6 MR. THOMPSON: We will -- we will agree to
7 any action that you deem appropriate, sir.
8 TREASURER GALLAGHER: No. You've got to
9 say if you'll agree --
10 MR. THOMPSON: Yes.
11 TREASURER GALLAGHER: -- independent --
12 okay.
13 GOVERNOR BUSH: Very good.
14 TREASURER GALLAGHER: I move we extend it
15 till June 12th, and get some student data.
16 GOVERNOR BUSH: Is there a second?
17 ATTORNEY GENERAL BUTTERWORTH: Second.
18 SECRETARY HARRIS: Second.
19 COMMISSIONER BRONSON: Second.
20 GOVERNOR BUSH: Any objections?
21 Motion pass.
22 Thank you very much for coming. And I hope
23 you have a wonderful graduation night.
24 MS. FUNCHES: Thank you.
25 ATTORNEY GENERAL BUTTERWORTH: Governor,
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1 maybe in the future, maybe staff should be
2 looking at this beforehand, and knowing what
3 our -- I think staff knows now what our --
4 TREASURER GALLAGHER: Yeah. You need to --
5 ATTORNEY GENERAL BUTTERWORTH: -- our --
6 TREASURER GALLAGHER: -- get started on
7 these.
8 ATTORNEY GENERAL BUTTERWORTH: -- problems
9 are, I think that Commissioner Bronson hit
10 the -- hit it right on the -- hit the nail
11 right on the head with -- with his questions
12 that he had, and staff should be prepared to
13 advise us on those issues.
14 GOVERNOR BUSH: Very good.
15 COMMISSIONER CRIST: Very good.
16 TREASURER GALLAGHER: And now the -- the
17 next.
18 GOVERNOR BUSH: Start.
19 (Governor Bush exited the room.)
20 TREASURER GALLAGHER: You're in charge.
21 MR. PIERSON: Wayne --
22 COMMISSIONER CRIST: Wayne.
23 MR. PIERSON: Item 3 is another charter
24 school appeal, Frank Sganga Charter School,
25 Incorporated, versus Volusia County Schools.
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1 TREASURER GALLAGHER: -- walk outside, or
2 you'll never hear.
3 MR. PIERSON: Representing the --
4 COMMISSIONER CRIST: Excuse me, Wayne.
5 MR. PIERSON: -- charter school --
6 COMMISSIONER CRIST: Excuse me. We can't
7 hear you.
8 If we could take the discussion outside,
9 that'd be great.
10 MR. PIERSON: It's another charter school
11 appeal, Frank Sganga Charter School, versus,
12 Volusia County Schools.
13 Representing Frank Sganga Charter School is
14 Gary Early.
15 ATTORNEY GENERAL BUTTERWORTH: Wayne, are
16 we dealing with the same 10 minutes like we did
17 the last time on each side?
18 MR. PIERSON: Yes, sir.
19 (Treasurer Gallagher exited the room.)
20 COMMISSIONER CRIST: Good morning.
21 MR. EARLY: Good morning.
22 I was going to say, good morning, Governor,
23 and members of the Cabinet. But I guess I just
24 get to say, good morning members of the Cabinet
25 and --
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1 COMMISSIONER CRIST: Oh, I'd bid him good
2 morning --
3 MR. EARLY: -- greet the Governor when he
4 comes back.
5 My name is Gary Early. I'm with the law
6 firm of Akerman, Senterfitt in Tallahassee, and
7 I'm here on behalf of the Frank Sganga Charter
8 School.
9 My remarks are going to be extraordinarily
10 brief because there are people who are going to
11 be able to answer your questions and provide
12 you information that will step up.
13 They include Mr. Giovannoni, and
14 Principal Adewumi of the -- of the
15 Sganga Charter School.
16 We also have several -- or a number of
17 parents and students here.
18 I understand that there may be some
19 procedural issues that will prevent them
20 from -- from addressing the Board of Education.
21 There are a couple that wanted to, and -- and
22 if they don't, that's okay.
23 But I -- I -- I do want their -- their
24 presence here in support of the school to -- to
25 be neither discounted or dismissed by this
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1 Board. They are interested in this school in
2 support of -- of the school.
3 (Governor Bush entered the room.)
4 MR. EARLY: Based on the meeting that we
5 had with your Aides last week, it became fairly
6 apparent to us that the -- that the issues of
7 concern, and that the issues that we should
8 focus on are those of student performance and
9 financial management of the school.
10 There are a number of issues that are
11 addressed in the briefs that we believe are
12 entirely secondary, and that we also believe
13 were withdrawn -- if -- if not formally
14 withdrawn, at least the -- the recognition of
15 their secondary status was acknowledged by
16 Volusia County.
17 And we're not going to address those, but
18 the individuals appearing here today will be
19 able to answer any question that you have.
20 There -- there has been an issue that's
21 been raised subsequent to the action of the
22 Volusia County School Board, and it deals with
23 the -- an alleged termination of the lease
24 space.
25 We -- Frank Sganga Charter School believes
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1 that we have a binding lease to the existing
2 space. We are current on our payments. There
3 is no reason that we have seen, based on a
4 review of that lease for a termination.
5 But we will represent to you today, and
6 Mr. Giovannoni will -- will be able to give you
7 a -- further information.
8 We will represent to you today that the
9 school does have acceptable alternative space
10 available to it --
11 (Treasurer Gallagher entered the room.)
12 MR. EARLY: -- if this becomes of a concern
13 to the Board.
14 The -- the -- Frank Sganga Charter School
15 is striving, to the best of its abilities, and
16 we think in the spirit that charter schools
17 were -- were authorized, to meet the public
18 purpose of providing quality education to the
19 students of the state of Florida.
20 We believe that the information that will
21 be provided today will demonstrate that this
22 school is providing quality education for
23 children who have -- who -- who may have been
24 overlooked by the public school system.
25 We will give you information today that
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1 shows that the scores are going up, and we ask
2 that you consider not only the raw scores that
3 you're looking at, with -- with a recognition
4 that -- that a good many of the students in
5 this school are -- are probably students that
6 would have ended up in Commissioner Bronson's
7 class.
8 But don't look at only the raw scores that
9 are presented. Look at the rates of
10 improvement. And we -- we have data today that
11 we will give -- show you to show the rates of
12 improvement of these children.
13 We also will be prepared to -- to discuss
14 issues of financial management. This school
15 has undergone DOE audit procedures, and have
16 come through with a finding of compliance with
17 all applicable financial standards.
18 We hope at the conclusion of this process
19 that you will agree, and you will vote to --
20 you'll vote to recommend to Volusia County that
21 they renew the charter so that this school
22 can -- can continue its mission of educating
23 these children.
24 And with that, I'm going to yield the floor
25 to Mr. John Giovannoni of the Frank Sganga
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1 Charter School, and he will be able to -- to
2 give you any information that you believe
3 necessary today.
4 Thank you very much.
5 GOVERNOR BUSH: Thank you.
6 MR. GIOVANNONI: Good afternoon, Honorable
7 Governor Bush, and the Cabinet of the great
8 State of Florida. I am truly pleased to be
9 here today.
10 On behalf -- and I'm very proud to be here
11 today as the Board Chairman of the Frank Sganga
12 Charter School located in New Smyrna Beach,
13 Florida.
14 Standing behind me is a wonderful gentleman
15 who joined our Board, the fifth man to join our
16 Board -- or fifth person to join our Board
17 four years ago, who not only serves as our
18 principal, but also as the minister -- serves
19 our community as the minister of the
20 Mount Olive Primitive Baptist Church also in
21 New Smyrna Beach.
22 Now, if -- if my folks wouldn't mind, if
23 you'd all stand just a moment. All our
24 students, teachers, and parents came 280 miles
25 from Edgewater and Oak Hill and
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1 New Smyrna Beach.
2 GOVERNOR BUSH: Welcome.
3 MR. GIOVANNONI: Like to introduce
4 Mrs. Edwards as our math teacher; Mrs. Stretar,
5 if you'd raise your hand, also one of our
6 faculty members; and Mrs. Adewumi over here.
7 And also sitting over here with the large
8 notebook is Ms. Donna Poling, our Deputy Chief
9 Financial Officer, with 20 years experience in
10 nonprofit and educational accounting.
11 And Dr. Alexandra Penn Williams from the
12 USF Charter School Center, who -- the center
13 was very helpful to provide her services in
14 helping us analyze our student scores.
15 Now, again, I'm just going to reiterate,
16 this whole lease issue came up rather
17 interestingly in the past month.
18 And -- but I have conferred with
19 Mr. Adewumi; and my Vice-Chairman, Mr. Howard;
20 and with our PTO President, Mr. Melanson, who's
21 sitting back there. And we now have one, and
22 an alternative location lined up.
23 The story of how this letter came to us is
24 rather interesting, and of itself may be of
25 interest.
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1 Now, I will briefly comment on the fact
2 that I believe the public record clearly shows
3 that the Notice of Final Agency Action was,
4 in fact, a justification for a decision made as
5 early as October of 2000, a month before the
6 program review was started, and two months
7 before it was presented to the School Board on
8 January 9.
9 I would be willing to discuss that. The
10 evidence in the newspapers and spoken in front
11 of us on the public record is clear; and
12 I believe to anyone with experience in
13 political matters, rather convincing.
14 Now, Ms. Poling and I are respectively --
15 she is the Deputy Chief Financial Officer and
16 I'm the Chief Financial Officer of the
17 corporation.
18 We're both agents enrolled to practice,
19 proof of the United States Treasury, and I'm a
20 Certified Management Accountant and a former
21 CFO in industry.
22 And we have spent the last two years
23 lugging those heavy notebooks around the city
24 of Tallahassee catching poor DOE staffers
25 unawares, and like grandparents with pictures
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1 of their grandchildren, showing off our
2 wonderful accounting system.
3 And if you're willing to risk the danger,
4 it'll be like talking to an engineer who's just
5 brought -- built a new machine.
6 I will answer you clearly that we are proud
7 of our standard, we have had -- just had our
8 second audit completed a year ago. There were
9 no management letter items at all.
10 When I turned a copy of that to somebody
11 over at the Auditor General's Office, they
12 said, gee, there must be a problem.
13 Something's wrong.
14 I said, no, we're perfect.
15 And I was only half joking. We have worked
16 hundreds of extra hours each year to make our
17 charter school the exemplary fiscal management
18 charter school in the state of Florida. And
19 rather than burden you with all that now, I
20 invite your questions.
21 The most important matter before us is the
22 participation and quality of the education for
23 our students.
24 I'd like to show you a few quick visuals if
25 someone could -- and the one I want to grab
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May 30, 2001
1 first is this one.
2 Thank you, Mr. Adewumi.
3 And we --
4 GOVERNOR BUSH: We can't see that.
5 MR. GIOVANNONI: -- can pass these around,
6 but let me tell you what they say.
7 This is a listing -- and I picked these up
8 from the --
9 GOVERNOR BUSH: Why don't we look at them?
10 I -- there's no way --
11 MR. GIOVANNONI: Okay. In fact, we'll pass
12 them around.
13 GOVERNOR BUSH: -- sixteen years old.
14 MR. GIOVANNONI: I picked up from the
15 Florida DOE site. And you'll notice some of
16 the test scores there in the percentage of
17 improvement.
18 And, Mr. A, if you'd --
19 GOVERNOR BUSH: Why --
20 MR. GIOVANNONI: -- let them see these --
21 GOVERNOR BUSH: Why don't you ask -- why
22 don't you start -- start with where --
23 MR. GIOVANNONI: Let me tell you -- let me
24 tell you what -- let me tell you --
25 GOVERNOR BUSH: Start with --
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1 MR. GIOVANNONI: -- what the --
2 GOVERNOR BUSH: -- what the contract says,
3 or your --
4 MR. GIOVANNONI: Well, the contract --
5 because I didn't under-- I was the one who
6 negotiated it.
7 The contract does not have specific goals
8 in it, other than two very general ones, for
9 this reason. I didn't understand -- because
10 I'm a noneducator -- exactly how to measure
11 these things.
12 What we agreed with the District we would
13 do is look at the kind of students we got, and
14 negotiate some goals, which we've done in each
15 of the two years.
16 GOVERNOR BUSH: And what were those goals?
17 MR. GIOVANNONI: They were specific
18 performance goals on the FCAT for the 4th, 5th,
19 and 8th grade.
20 GOVERNOR BUSH: And what were the goals?
21 MR. GIOVANNONI: If --
22 GOVERNOR BUSH: Has the District --
23 MR. GIOVANNONI: -- my attorney would be --
24 GOVERNOR BUSH: -- what --
25 MR. GIOVANNONI: -- nice enough to bring
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1 up --
2 GOVERNOR BUSH: -- how was he --
3 MR. GIOVANNONI: -- the annual report? I
4 apologize.
5 ATTORNEY GENERAL BUTTERWORTH: That's the
6 $100 question.
7 GOVERNOR BUSH: This is what we need to
8 get --
9 TREASURER GALLAGHER: We've got -- we've
10 got that pretty much here.
11 MR. GIOVANNONI: Right. This is --
12 TREASURER GALLAGHER: -- not --
13 GOVERNOR BUSH: Not where they --
14 TREASURER GALLAGHER: -- are supposed to
15 be.
16 GOVERNOR BUSH: -- contractually need to
17 be.
18 MR. GIOVANNONI: Okay. Our goals -- okay.
19 This is the third year.
20 Okay. For the year 1999-2000,
21 Florida Writes in 4th grade, 60 percent will
22 score greater than equal to 3.
23 GOVERNOR BUSH: Equal than 2.3, is that
24 what you said?
25 MR. GIOVANNONI: No. Sixty percent of the
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1 students would score greater than or equal
2 to 3.
3 GOVERNOR BUSH: Three. Okay.
4 MR. GIOVANNONI: Okay. In the 8th grade,
5 45 percent of the students would score greater
6 than or equal to 3.
7 FCAT reading, 4th grade, 60 percent would
8 score greater than or equal to 2; and
9 40 percent will score greater than or equal
10 to 3.
11 And the FCAT reading in the 8th grade,
12 65 percent would score greater than or equal to
13 2; and 40 percent greater than or equal to 3.
14 F--
15 GOVERNOR BUSH: How did you do?
16 MR. GIOVANNONI: Well, give me a moment,
17 and I will flip back and tell you exactly how
18 we did.
19 There were three goals in the 4th grade
20 that were not measurable, and that's a bone of
21 contention between us and the District.
22 Because the number of 4th graders tested was
23 only eight.
24 Now, under the Department of Education
25 rules, populations less than nine are not
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1 supposed to be analyzed for a number of
2 reasons, statistical validity being one of
3 them.
4 So we didn't miss -- make those three
5 goals. But part of the problem was, in some
6 cases, one-half of a student would have swung
7 it, because eight students -- one student is
8 25 percent.
9 GOVERNOR BUSH: Right.
10 MR. GIOVANNONI: So -- I'm sorry. One
11 student is twelve-and-a-half percent. I
12 apologize. Yes.
13 Sorry. This is a math school, and I messed
14 that up.
15 Now --
16 GOVERNOR BUSH: The financial auditor.
17 MR. GIOVANNONI: -- of the remaining seven
18 goals -- of the remaining seven goals, we made
19 six.
20 GOVERNOR BUSH: So you made six, one --
21 MR. GIOVANNONI: And we missed one by
22 one-and-a-half students.
23 TREASURER GALLAGHER: Well, you want to go
24 through each one of those for me?
25 MR. GIOVANNONI: Okay. Just a moment.
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1 GOVERNOR BUSH: Is there a requirement in
2 the contract that you make them all?
3 MR. GIOVANNONI: No. In fact, when we
4 negotiated this, Dr. Colwell said to us that
5 they understood that we would not necessarily
6 make them all, particularly in the first year.
7 Bear in mind, I understand from some of our
8 consultants, that our first cohort, 4th through
9 8 entered about the 43rd -- 34th percentile.
10 Charter schools are supposed to be doing
11 this kind of work. This is not an apology or
12 an excuse. These are the people we're trying
13 to help, because they need the help.
14 Now, the school report card for academic
15 year 1999-2000 is done by me. Let's look at
16 the 4th grade -- well, we -- there's no point
17 in looking at the 4th grade.
18 Let's go to the 8th grade, because that's
19 easy to see.
20 Our goal was 65 percent being greater than
21 or equal to 2, and 78 percent did that.
22 Our goal was 35 percent greater than or
23 equal to 3 in FCAT math. Forty-three percent
24 accomplished that.
25 TREASURER GALLAGHER: Say -- read -- do
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1 that again. This is in 5th grade, right?
2 MR. GIOVANNONI: I'm sorry. Eighth grade.
3 TREASURER GALLAGHER: Eighth grade.
4 MR. GIOVANNONI: Eighth grade. And the
5 Level Two is raw scores between 280 and 308,
6 for instance.
7 Now, we have 65 percent was the goal that
8 would meet greater than or equal to 2 on FCAT
9 math in the 8th grade. We had 78 percent
10 accomplish that.
11 TREASURER GALLAGHER: All right. Let --
12 let me read something, and you can maybe
13 counter this.
14 Twenty-seven percent of grade 8 students
15 scored below expectation Level One in reading.
16 And 30 percent of students scored at
17 Level Three or higher. And no students scored
18 a Four or Five.
19 Now, those results ranked eighth out of
20 twelve schools.
21 GOVERNOR BUSH: Salud.
22 TREASURER GALLAGHER: And I -- I'm -- if I
23 remember correctly, eighth out of 11 or
24 12 schools, your school tied -- there was two
25 other schools, so there's three schools that
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1 were eighth. So you really were last.
2 Because three -- two other schools ranked
3 the same as you did in Volusia County.
4 MR. GIOVANNONI: I mean, that may well be
5 true. And -- and I -- among the analyses we
6 performed over here, I did not do that.
7 What we're looking at over here is what
8 Dr. Penn Williams did, and what we did in
9 connection with the FCAT for this year, the
10 scores of which have just been released.
11 But that may well be true. And I would
12 tell you that our argument in this area is that
13 we are not only improving, but there is
14 significant individual gain scores by the
15 students who stay with us one year or longer.
16 And in the briefing document -- in the
17 briefing document, there's the report by
18 Dr. Penn Williams pointing out that our first
19 two cohort groups, which are the first two
20 groups that entered the school the first year,
21 and then the second year, that we were
22 achieving individual and average class gains
23 greater than the average in what they call the
24 NCEs, or the normed curve equivalents.
25 Now, what that means is --
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1 GOVERNOR BUSH: What does that mean?
2 MR. GIOVANNONI: What that means is -- and
3 Dr. Penn Williams, if I stumble badly, you
4 promise to save me.
5 What that means is that if they had just
6 had one year of knowledge gained on -- on the
7 national norm, then there would have been a
8 flat curve. Okay?
9 Our curve is positive -- has a positive
10 slope. So for our average students that were
11 measured on these reading tests, as a
12 for instance, we were getting more than one
13 year of learning in one year of being with us.
14 And our students are, in fact, catching up.
15 It takes -- it -- only in this third year
16 do we see some interesting things with the FCAT
17 where, for instance -- let me give you an
18 example of something we saw in the third year.
19 In raw score, I got a total of 15,
20 including Flagler County average,
21 Volusia County average, statewide average, and
22 all the middle schools in Volusia County that
23 were reporting.
24 Now, we were 15th on raw score. But if you
25 took our gain from the previous year, we were
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1 ninth; if you took the percentage of gain, we
2 were eighth.
3 In other words, if you look at the gain
4 scores, both on the FCAT and on the
5 standardized reading tests, our gains are
6 picking up significantly each year, and this
7 year, we're quite proud -- now, this particular
8 chart that was prepared by Dr. Penn Williams --
9 and here's the point:
10 A normal gain over a year's time would be a
11 flat or horizontal line. What you're looking
12 at is a line with a positive slope. That
13 means, those students as a whole -- that group
14 that's averaged are learning more than average
15 in one year.
16 And if you see the raw DRP scores in our
17 annual report, which I passed out last
18 September to all the Cabinet members, what
19 you'll see is that our students started behind
20 in the DRP, but almost caught up or passed the
21 rest of these students, and on the normed
22 average.
23 GOVERNOR BUSH: What's a DRP?
24 MR. GIOVANNONI: Degrees of Reading Power
25 Test administered throughout Volusia District.
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1 GOVERNOR BUSH: Yes, Commissioner.
2 COMMISSIONER BRONSON: I guess my question
3 would be: What -- at what point do you count
4 the students taking the test at whatever grade
5 level in your school?
6 In other words, if you've just received a
7 student in the 4th grade or 8th grade or
8 whatever that actually came from another
9 school, or another school system even, are they
10 averaged in with the students that you've had
11 on a -- for a -- for one year to -- to find out
12 whether your students -- I mean, is it -- is
13 there a way to find out whether your students
14 on the average are doing better than the
15 students you just received who are coming to
16 your school for a particular reason?
17 MR. GIOVANNONI: The current rule from the
18 Department of Education is that students have
19 to be there for the October FTE count to be
20 picked up in the school's average.
21 Now, we have not had the data before us to
22 do a discriminate function to look at the ones
23 coming in. Bear in mind, we're a 4 to 8
24 school, which is a nonnormal grade spread.
25 So all our 4th graders are brand new.
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1 They've never been to us before. And we do
2 have intake of students in each level. It's
3 not like we're closed. We're open enrollment.
4 And, no, we have not had the data -- and I
5 know that Dr. Colwell testified that they had
6 tried to do it as well. And it's tough to do
7 because when we started the -- in 3rd grade,
8 there was not, for instance, an FCAT test. So
9 we don't have something to go against.
10 In the future, as the FCAT program filters
11 out throughout the system, we should be able to
12 actually track that, and we're hoping this year
13 to do it for the first time.
14 GOVERNOR BUSH: You will.
15 MR. GIOVANNONI: That's right. And we
16 think that's important.
17 GOVERNOR BUSH: So do we.
18 MR. GIOVANNONI: Good. We're on the --
19 TREASURER GALLAGHER: We're almost --
20 MR. GIOVANNONI: -- same team on that.
21 TREASURER GALLAGHER: We're almost in the
22 same position on this one as we are on --
23 GOVERNOR BUSH: Well, you know --
24 TREASURER GALLAGHER: -- the other one.
25 GOVERNOR BUSH: -- I -- I made the mistake
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1 of -- of temporarily leaving the room, and the
2 Volusia County School District didn't get a
3 chance to speak first? Or -- you want to
4 speak, I assume.
5 MR. GRAHAM: We're waiting.
6 GOVERNOR BUSH: Okay. I just want to make
7 sure you're here.
8 TREASURER GALLAGHER: Oh, they're here.
9 GOVERNOR BUSH: Any questions?
10 There -- if you have a -- a -- are you --
11 you want to continue, do you have --
12 MR. GIOVANNONI: Well, there's --
13 GOVERNOR BUSH: -- more to talk about?
14 MR. GIOVANNONI: -- there's a couple other
15 quick charts I wanted to show you to make a --
16 a point about the percentages again.
17 Get me the --
18 Okay. Mrs. Poling did these, and she's
19 much better at --
20 (Attorney General Butterworth exited the
21 room.)
22 MR. GIOVANNONI: -- graphics than I am.
23 But these show the percentage rates of
24 improvement in the two sets of 8th grade scores
25 last year and this year.
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1 But one is in math and one is in reading.
2 And you'll notice where our school is is about
3 in the middle of the pack. In fact, in the
4 math grade, I believe we exceed the County
5 average percentage improvement. And absolute
6 numbers were very close.
7 GOVERNOR BUSH: Where are you?
8 Okay. Continue. We've got --
9 MR. GIOVANNONI: Thank you, sir.
10 Let's just briefly cover the fact, like
11 many charter schools, we are dealing with
12 students who are challenged.
13 But what I've discovered, that doesn't mean
14 there's anything wrong with that student. It
15 means that they have just missed -- somehow
16 the -- the current educational system, even in
17 home schooling, private schooling, whatever,
18 didn't fit them, and they do come to us
19 significantly behind.
20 But what we're showing is that once you dig
21 in, and when you're there for two or
22 three years, and you concentrate on it, you do
23 see -- begin to see significant gains in
24 catching up.
25 And we don't want to excuse bad
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1 performance. To the contrary. And if you look
2 at Penn Williams' work as well, you'll see that
3 bit by bit, we have been moving them along.
4 And as we gain steam, we're looking forward to
5 very healthy gains.
6 We're not satisfied with what we have here.
7 Our Board --
8 (Attorney General Butterworth entered the
9 room.)
10 MR. GIOVANNONI: -- and our faculty, I will
11 tell you, are not the kind of people who would
12 take even this measure of improvement as -- as
13 adequate.
14 But what we're showing is that what we're
15 doing is working for those students that need
16 our kind of help.
17 And I would invite any questions. And
18 Mr. A would also be willing to respond as well.
19 COMMISSIONER BRONSON: What -- what is the
20 average size of your class in this -- in this
21 particular school?
22 MR. ADEWUMI: About 12.
23 COMMISSIONER BRONSON: Okay. So you're --
24 you're giving a lot more hands-on --
25 MR. ADEWUMI: Yes.
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1 COMMISSIONER BRONSON: -- individual --
2 MR. ADEWUMI: Yes, we do.
3 COMMISSIONER BRONSON: I -- I forgot to ask
4 that of the other -- of the other school.
5 GOVERNOR BUSH: Okay. If you could just
6 bear with us. Maybe we should hear from the
7 Volusia County --
8 MR. ADEWUMI: Yes.
9 GOVERNOR BUSH: -- School Board. And --
10 and then we'll open it up for questions. How
11 about that?
12 MR. GIOVANNONI: Rich.
13 MR. GRAHAM: Governor Bush, members of the
14 Cabinet, I'm Dick Graham -- excuse me. I
15 represent the Volusia County School Board.
16 With me today is Ms. Judy Conte, the Board
17 Chairman; Mr. William Hall, the Superintendent
18 of schools; Mr. Tim Huth,
19 Deputy Superintendent --
20 GOVERNOR BUSH: Brought out all the big
21 dogs.
22 MR. GRAHAM: -- Dr. Chris Colwell, the
23 Assistant Superintendent in charge of
24 Curriculum and School Improvement Services;
25 Mr. Rich Kizma, Chief Counsel; and
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1 Dr. Mary Bennett, Governmental Relations
2 Specialist.
3 I had a prepared presentation, but I see
4 what you're interested in is student
5 performance, and I do have Dr. Chris Colwell
6 here. I'm going to call him up in a minute.
7 I -- I have a few comments to make on it.
8 But he has the details on the testing and the
9 results and things I think that your questions
10 have showed you're interested in.
11 One thing --
12 GOVERNOR BUSH: Let's go just --
13 MR. GRAHAM: -- I would like to --
14 GOVERNOR BUSH: -- Mr. Graham, if you could
15 just focus also on any kind of financial --
16 COMPTROLLER MILLIGAN: Yes.
17 GOVERNOR BUSH: -- improprieties or
18 financial issues, I think it -- that might be
19 another --
20 MR. GRAHAM: Okay.
21 GOVERNOR BUSH: -- area of concern.
22 MR. GRAHAM: The financial improprieties
23 are not the measure grounds for the
24 School Board's nonrenewing the charter.
25 There are some financial improprieties that
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1 are mentioned, hopefully have been corrected --
2 most of them. There are some problems with use
3 of categorical funds for noncategorical
4 expenses, problems with capital outlay and
5 SIT fund applications, and -- and getting those
6 funds in a timely basis.
7 But that's not the primary focus of -- of
8 the School Board's reasons.
9 We do have some very serious problems which
10 were raised in the order of the School Board
11 and in the briefs that we've submitted, and in
12 our discussions with your Aides dealing with
13 some very significant deficiencies in the area
14 of ESE education.
15 In every chart -- ESE chart that was
16 reviewed at the evaluation, there were
17 deficiencies noted.
18 As of the filing of the briefs before this
19 Board, 10 of the 15 areas where deficiencies
20 were noted have not been corrected -- at least
21 had not been responded to favorably by the
22 appellant. So we assume those are ongoing.
23 We have some serious problems with charter
24 agreements to provide curriculum such as music,
25 art, and physical education, which were not
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1 provided, or -- and -- and grades were not
2 given for these particular subjects.
3 We have problems with teacher certification
4 that was not done properly. We have a problem
5 with background checks that were not conducted
6 in accordance with the charter agreement, and
7 with State law, and we have many other
8 deficiencies which were noted in the evaluation
9 that was conducted by the School Board staff in
10 December of 2000.
11 At the outset, I'm -- would like to say
12 that the Sganga School was notified at a
13 meeting on November 10 of 2000 that this
14 evaluation would take place.
15 They were given the exact questions that
16 would be asked, the information that would
17 be -- be requested at the time, and given
18 almost a month to prepare for the evaluation.
19 They were essentially given the answers to
20 the test before the test. When the staff went
21 down there on December 4th, these serious
22 problems still existed.
23 Now, the State statute requires that the
24 School Board, at least 90 days prior to the
25 termination date of a charter, which this was a
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1 three-year charter, in its deliberations on
2 whether to renew the charter, to do this
3 evaluation, which was done in accordance with
4 State law.
5 The statute also says that we are not, as a
6 School Board, to continue to sponsor and to
7 renew a charter for a charter school that has
8 failed in certain areas such as student
9 performance, fiscal mismanagement, violation of
10 statute, and other good cause.
11 And we have outlined in our reasons
12 before -- in the School Board order which are
13 on appeal here, violations in every one of
14 those areas.
15 I -- we did thoroughly go over this -- most
16 of this with -- with your Aides last week, and
17 they had some very pertinent questions to -- to
18 some of these issues, and I assume that they've
19 briefed you on them.
20 I -- and -- and in an effort to save time,
21 I won't go into all of them. But I will -- I
22 do want to get to the student performance area,
23 because as opposed to the -- the Duval group
24 which we heard before us, we didn't set high
25 standards for the Sganga School.
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1 We allowed them in the annual evaluation --
2 annual report that they -- we go through every
3 year by statute, for the 1998-1999 school year,
4 at the conclusion of that year, to set their
5 own goals for the 2000-2001 -- or the 1999-2000
6 school year.
7 Those goals, had they been achieved, the
8 school would have performed at a level of D.
9 So, therefore, it was important and -- to
10 the School Board, and it was communicated to
11 the school that we expected them to reach all
12 of those goals because that would even then
13 leave them at a D level. They not make four of
14 the ten goals.
15 They have consistently on the FCAT scores,
16 ranked either last or tied for last, or right
17 at the bottom of all our schools.
18 The scores for this year -- I know that
19 that's not in the record on this appeal, but I
20 know you're interested in them. The reason
21 that you continued the last case is so you
22 could evaluate them.
23 We do have them, we have evaluated them,
24 they've been out a couple of weeks. They
25 essentially showed no improvement.
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1 So the bottom line on student performance
2 is the Sganga School has performed
3 substandardly in every grade level, in every
4 subject for all three years of its existence.
5 And that's the bottom line.
6 I have Dr. Colwell here, who is our
7 Assistant Superintendent in charge of
8 curriculum. He is the one responsible for the
9 School District for evaluating these scores,
10 for assisting the school in preparing for the
11 FCAT test, and the other State-required
12 standardized tests.
13 And I know that you probably have some
14 specific questions you'd like to go over with
15 him. Or I would like for him to have the
16 opportunity to review the performance --
17 student performance over these three years.
18 GOVERNOR BUSH: Welcome, Doctor.
19 DR. COLWELL: Thank you, Governor Bush, and
20 members of the Cabinet. Appreciate the
21 opportunity to speak to you this morning.
22 I think Mr. Giovannoni is correct, and as
23 you were working with Duval, I can understand
24 the frustration in looking at longitudinal
25 data, with lots of different tests as we -- as
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1 districts move from different kinds of
2 standardized tests to different kinds of State
3 assessments.
4 I will make a -- like to make a couple of
5 brief statements before attempting to answer
6 your -- any of your questions.
7 First of all, from the purpose of the --
8 the charter that our School Board entered into,
9 we believe that it was extremely important to
10 deal specifically with FCAT, in other words,
11 the State accountability plan.
12 So we have no issues with the DRP test and
13 the CAT tests which are given at the school.
14 We see some gains in those scores that they
15 give.
16 However, that is not what our contract
17 deals with in year 2 and year 3. We deal with
18 FCAT reading, FCAT writing, and FCAT
19 mathematics. We established some goals for the
20 2000 year, the year that was a year ago,
21 recognizing that the -- the school had some
22 performance issues.
23 And for that deliberate reason, although,
24 as a charter district, our goals are clearly
25 that each and every school will have a grade of
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1 B or higher no later than 2003, and C or higher
2 no later than this year. We did establish
3 goals, and we agreed to goals that, if they
4 were all met, would come in with a grade of D.
5 The school was not able to meet all of
6 those goals. And we do think it's a
7 significant issue when you've got goals that if
8 you meet them, will bring you to a D standard,
9 wanting to give the school some time to improve
10 student perfor--
11 GOVERNOR BUSH: But they weren't grad--
12 the -- the school wasn't graded because of the
13 size of the --
14 DR. COLWELL: Yeah. We don't have an issue
15 with the 4th grade. I agree with
16 Mr. Giovannoni.
17 I think when you've got a population of --
18 of less than ten, the State Department of
19 Education has statistics that show that it's
20 inappropriate to analyze those.
21 I have -- the District has no issues
22 with --
23 GOVERNOR BUSH: Are there --
24 DR. COLWELL: -- their 4th grade --
25 GOVERNOR BUSH: -- is the 8th grade the
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1 same -- same issue, population size, not --
2 DR. COLWELL: No. Their -- their middle
3 school population is much bigger, and those
4 scores are reported by the State, and we did
5 analyze --
6 GOVERNOR BUSH: And what were they graded?
7 DR. COLWELL: -- the scores.
8 GOVERNOR BUSH: What were they graded in
9 the middle school?
10 DR. COLWELL: For the year 2000, their goal
11 was to be -- have 60 percent of their
12 population at 2 or higher. Their actual
13 performance was 40 percent. That was in --
14 GOVERNOR BUSH: What was the school's
15 grade?
16 DR. COLWELL: If the school had received a
17 grade, it would have been a grade of D.
18 GOVERNOR BUSH: Also we didn't -- it's not
19 broken up by --
20 DR. COLWELL: The State --
21 GOVERNOR BUSH: -- entry --
22 DR. COLWELL: -- the State did not provide
23 a grade for Frank Sganga Middle School
24 separated out for the '99-2000 school year.
25 GOVERNOR BUSH: I'm sorry.
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1 DR. COLWELL: However, if we look at the
2 data, it is clear to us that if the grade had
3 been given, it would have been a grade of D,
4 primarily dealing with issues of reading and
5 writing more than issues of --
6 GOVERNOR BUSH: Is this for last year?
7 DR. COLWELL: That's for last year.
8 TREASURER GALLAGHER: What -- what was
9 the -- if you use the 8th grade for the
10 middle school grade, what would it have been?
11 DR. COLWELL: It would have been a D.
12 For 8th grade writing, they would have
13 ranked twelfth out of our 12 middle schools;
14 for 8th grade mathematics, they would have
15 ranked eighth out of our 12 -- 12 schools; and
16 for 8th grade reading, they would have ranked
17 eight out of 12 -- eighth out of our 12
18 schools.
19 TREASURER GALLAGHER: How -- how many --
20 how many schools were D in Volusia County?
21 DR. COLWELL: We had one elementary school.
22 The neighboring middle school was rated
23 an A.
24 We also did -- I know some issues have come
25 up on the 2001 data. And that -- that was
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1 obviously an issue to us, and we looked at it.
2 And as we established our goals for this year,
3 recognizing that last year, we had agreed to
4 goals, that if reached, would only achieve a D.
5 We wanted to move the school to goals that
6 would reach a C level. So the goals that were
7 established and are in the annual report for
8 this year call for the school to be at a C
9 level.
10 And the -- the Frank Sganga Charter School,
11 we had good negotiations with them on the
12 goals. And I felt that there was comfort level
13 to agree to those goals.
14 We do have the all curriculum student
15 results. Those have been out for a couple of
16 weeks. Now, that is not the results that will
17 be released soon that disaggregate out
18 exceptional ed populations --
19 GOVERNOR BUSH: This afternoon --
20 DR. COLWELL: -- in that --
21 GOVERNOR BUSH: -- at 1:30.
22 DR. COLWELL: Our analysis of the
23 all curriculum group scores, in other words,
24 when we count every student, show that the
25 school would not reach its goals for this year
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1 to be a C.
2 We show them having student performance,
3 which would continue to be in the D level, and
4 would continue to rank at the end of -- at the
5 bottom end of our districts.
6 For example, in reading, grade 6 for this
7 year on the FCAT, they would rank 12th out of
8 our 12 schools; in grade 7 reading, they would
9 rank 12th out of our 12 schools; and
10 grade 8 reading, they would rank 11th out of
11 our 12 schools; in mathematics -- this is on
12 the NRT -- grade 6, 12 out of 12; grade 7,
13 12 out of 12; grade 8, 12 out of 12.
14 However, we should really look at the FCAT
15 reading and writing and math, because those
16 were the goals stated in the charter district.
17 In grade 8 reading, for this year based on
18 all curriculum analysis, they would rank 12 out
19 of 12; grade 8 mathematics, 12 out of 12;
20 grade 8 writing, 12 out of 12.
21 A couple of other just real brief comments.
22 The school does, in their analysis, include
23 two schools that I am not including. And to be
24 fair, I should mention that.
25 Their analysis includes Riverview School
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1 and Euclid Avenue School, which are alternative
2 schools. The reason we do not include them in
3 our analysis is those schools are not designed
4 for students to remain at that population.
5 Our goal is to move them in and out over
6 nine-week periods. We do have students that
7 remain 18 weeks. And on some occasions, we'll
8 have students remain an entire year.
9 Those are students that are -- have been
10 referred there by our student placement
11 committee.
12 Also, Mr. Giovannoni in -- in their
13 analysis, they are correct when they talk about
14 some of the gain scores. The problem that we
15 have with those gain scores is that,
16 for example, if the school moved up 4 or
17 5 percentile points this year on FCAT
18 mathematics, say, from a 270 to a 275, and the
19 District also moved up 5 points, what you're
20 not seeing is that the District movement
21 started here, and went to here; where this
22 school's movement started very low, and moved,
23 but still remains very low.
24 Our issues really come down to this: Our
25 concern is that the issues are systemic in that
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1 they tend to cross subject areas.
2 We will have schools from time to time
3 that'll have a particular area in reading or
4 writing or mathematics. These areas appear to
5 cross them. They appear to cross grade levels,
6 and they don't appear to be improving over
7 time.
8 We think the teachers are working hard. We
9 are not -- we have very real concerns about
10 whether the curriculum -- the instructional
11 materials are in place so that these students
12 can meet the FCAT graduation requirements by
13 grade 10.
14 GOVERNOR BUSH: Commissioner.
15 COMMISSIONER BRONSON: I -- thank you.
16 Oh, I'm sorry.
17 GOVERNOR BUSH: I'm sorry.
18 Commissioner Bronson.
19 TREASURER GALLAGHER: Okay. Go ahead.
20 COMMISSIONER BRONSON: Thank you.
21 I -- I'm still having a hard time with all
22 this. And -- and one of the things that I'm
23 having a hard time with is, I would like to
24 know -- and maybe -- maybe you can give this to
25 me, maybe you can't. And I'd like to know this
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1 on all these issues.
2 What is percentage of SLD students in -- in
3 the school that we're talking about, as
4 compared to the general population of the -- of
5 the --
6 GOVERNOR BUSH: SLD being --
7 COMMISSIONER BRONSON: Slow learning
8 disability students --
9 GOVERNOR BUSH: ESE --
10 COMMISSIONER BRONSON: -- ESOL program
11 students that -- where -- where English is not
12 their main language.
13 I mean, there's a lot of factors involved
14 here in whether some of these charter schools
15 can meet the same criteria that the general
16 populace of the -- of the public school system
17 is going to meet.
18 I --
19 DR. COLWELL: Yes, sir.
20 COMMISSIONER BRONSON: -- I'd -- I'd like
21 to compare all that to see where we are, not
22 take a school -- and -- and I'm not saying -- I
23 don't even know what the population of this
24 particular school is.
25 If you've got a population of SLD students
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1 at 60 percent of your school, that's going to
2 make a big difference on how -- how much -- how
3 much harder it's going to be --
4 GOVERNOR BUSH: Why don't you --
5 COMMISSIONER BRONSON: -- to get these
6 children up to speed.
7 DR. COLWELL: Yes, sir.
8 I -- I cannot give you specific data. I
9 can tell you that the school has a lower
10 percentage of free and reduced lunch students
11 than --
12 GOVERNOR BUSH: What's -- what's the number
13 of ESE kids -- how many students are there?
14 MR. GIOVANNONI: Ninety-nine, of which
15 23 are ESE.
16 GOVERNOR BUSH: That's a high percentage.
17 COMMISSIONER BRONSON: Twenty-seven.
18 DR. COLWELL: District-wide, I believe we
19 run about 17 percent.
20 GOVERNOR BUSH: ESE?
21 DR. COLWELL: Yes, sir.
22 GOVERNOR BUSH: And -- so this is higher.
23 TREASURER GALLAGHER: But those -- those
24 scores aren't counted when you --
25 GOVERNOR BUSH: Well, they were counted
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1 as --
2 DR. COLWELL: The analysis we've done for
3 2001 would include those --
4 GOVERNOR BUSH: Yes, it does.
5 DR. COLWELL: -- in comparison to the
6 other, the analysis for 2000 would not.
7 TREASURER GALLAGHER: How many charter
8 schools are in Volusia?
9 DR. COLWELL: There are currently two
10 charter schools in Volusia. The Reading Edge
11 Academy just received a five-year renewal.
12 In addition, we have two other charter
13 schools whose applications have been approved.
14 GOVERNOR BUSH: Are there -- the -- you
15 brought up something that gave me -- I don't
16 know, maybe it was -- Mr. Graham may have
17 brought it up, gave me some concerns about ESE
18 children about not providing -- it sounded like
19 the implication was they were not providing ESE
20 services.
21 DR. COLWELL: The issues that we have --
22 there were a total of 15 issues. As I
23 understand in the rebuttal, five of those
24 issues were contested.
25 The issues that I see from my office of
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1 being most serious would fall into three areas.
2 We had some students in our program review who
3 had IEP services listed that were not being
4 provided --
5 GOVERNOR BUSH: Any parents -- this -- cut
6 to the chase here.
7 Any parents express concerns about their
8 children not receiving IEP services, which the
9 Federal law requires?
10 DR. COLWELL: Not to my office.
11 COMMISSIONER CRIST: To anybody else's
12 office?
13 DR. COLWELL: What we have done, I think
14 fairly successful with Mr. Adewumi and
15 Mr. Giovannoni, is try very hard to route
16 parent concerns. So I have had parent concerns
17 come in.
18 I've tried to route them to the principal,
19 and then to the director of the school, because
20 we -- we honor the governance process that we
21 established.
22 GOVERNOR BUSH: But you know for a fact --
23 I mean, this is a subject that's very --
24 difficult one for all school districts.
25 And if -- if there are no parent complaints
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1 about this issue -- I mean, I -- I don't know
2 another place where you could say --
3 DR. COLWELL: I guess --
4 GOVERNOR BUSH: -- that. I mean, this is
5 a -- these -- these parents are very mobilized,
6 they're very energized, they know what their
7 rights are, they -- they -- they let me have
8 it. I know that. So I'm sure they'll let the
9 superintendent have it.
10 So if there's not a problem in the
11 school -- I mean, if -- I mean, if there is a
12 problem in the school, it would become pretty
13 evident --
14 DR. COLWELL: Well --
15 GOVERNOR BUSH: Wouldn't it?
16 DR. COLWELL: Well, obviously our concern
17 would be that if we know we have compliance
18 issues, and they're compliance issues dealing
19 with students having IEP services not provided,
20 or students receiving services for which they
21 are not listed on the IEP, it's the kind of
22 thing that we certainly would not expect to see
23 in other schools, and would be an issue for us.
24 And continue --
25 GOVERNOR BUSH: You'd also have parents
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1 validating your concerns, I would think.
2 MR. GRAHAM: Governor, could I raise one
3 additional issue?
4 GOVERNOR BUSH: Sure.
5 MR. GRAHAM: Be very brief.
6 And this was not in the record on appeal,
7 but it was raised by the appellants earlier,
8 and it's an issue that we have to face.
9 And that is their lease. We have been
10 notified by the -- have received a copy of a
11 notice by the attorney for the church which
12 leases the school site to the Sganga School
13 that as of August 31 of this year, that lease
14 will be terminated -- or it will not be renewed
15 under its terms.
16 Now, we've suggested that Mr. Giovannoni
17 leave a copy of the lease up here for
18 General Butterworth, or someone else to review
19 to see. They claim that they have a right to
20 renew.
21 We -- we are neutral in that. We don't
22 interfere with their lease. But we do know
23 about the notice.
24 And as of yesterday, in a conversation with
25 the attorney, I've been advised that if they
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1 intend to rent for the month of September of
2 2001, it will be returned to them.
3 So that's -- we can't in good faith let you
4 make a decision without knowing that. Because
5 it's a very critical issue.
6 GOVERNOR BUSH: Yes, sir.
7 MR. ADEWUMI: Governor Bush,
8 Adewale Adewumi is my name.
9 On the lease issue that was just raised, we
10 have a lease with the church that is for
11 five years, and renewable after that.
12 Suddenly we received a letter from them
13 about two or three days before the brief was
14 filed that the lease would not be renewed.
15 We had contact with the pastor of the
16 church as of last week, and his response was, I
17 never said we couldn't talk about it. And if
18 we are going to stay at that specific location,
19 we have the lease in place.
20 Now when this started, we immediately went
21 out, and three or four alternative sites were
22 located. And any one of them would fit. We're
23 just waiting to finish with this hearing. And
24 when we return home, we will go and begin to
25 pursue this.
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1 But it is a certainty that we have a place
2 to go, even if this lease does not continue.
3 Thank you.
4 GOVERNOR BUSH: Thank you.
5 Any questions or comments?
6 All right. There is a -- how do I say this
7 motion? This -- there's a motion to --
8 TREASURER GALLAGHER: We don't have a
9 motion.
10 GOVERNOR BUSH: We don't have a motion.
11 But the motion would be to approve the
12 District's recommendation not to renew the
13 charter.
14 ATTORNEY GENERAL BUTTERWORTH: I'd make
15 that motion, Governor.
16 GOVERNOR BUSH: There's a motion.
17 Is there a second?
18 TREASURER GALLAGHER: Second.
19 GOVERNOR BUSH: Moved and seconded.
20 All in favor, say aye.
21 THE CABINET: Aye.
22 GOVERNOR BUSH: All opposed?
23 No.
24 THE CABINET: No.
25 GOVERNOR BUSH: The ayes have it?
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1 Did everybody vote?
2 TREASURER GALLAGHER: I didn't hear it.
3 SECRETARY HARRIS: I --
4 GOVERNOR BUSH: The ayes were --
5 TREASURER GALLAGHER: It was two to
6 nothing.
7 SECRETARY HARRIS: I didn't hear the --
8 GOVERNOR BUSH: Can we do this over again?
9 COMMISSIONER CRIST: Let's do it again.
10 GOVERNOR BUSH: The -- the motion is to
11 accept the District's recommendation not to
12 renew the charter.
13 All in favor, say aye.
14 THE CABINET: Aye.
15 TREASURER GALLAGHER: Aye.
16 SECRETARY HARRIS: Aye.
17 COMMISSIONER BRONSON: Aye
18 ATTORNEY GENERAL BUTTERWORTH: Aye.
19 GOVERNOR BUSH: All opposed, no.
20 No.
21 COMMISSIONER CRIST: No.
22 COMPTROLLER MILLIGAN: No.
23 GOVERNOR BUSH: It is 4 to 3 to approve the
24 District's recommendation.
25 Thank you all for coming.
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1 (Discussion off the record.)
2 MR. PIERSON: Item 4 is an amended rule for
3 6A-1.0453, Educational Program Audits.
4 GOVERNOR BUSH: Is there a motion?
5 COMPTROLLER MILLIGAN: Second.
6 I move that.
7 TREASURER GALLAGHER: Second.
8 GOVERNOR BUSH: Moved and seconded.
9 Without objection, it's approved.
10 GOVERNOR BUSH: Thank you.
11 (The State Board of Education Agenda was
12 concluded.)
13 * * *
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25
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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 162 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 8TH day of JUNE, 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.
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 AUTHORIZATION OF
TEMPORARY DUTY FOR FORMER PAROLE COMMISSIONERS
DIVISION OF BOND FINANCE
DEPARTMENT OF HIGHWAY SAFETY AND MOTOR VEHICLES
STATE BOARD OF EDUCATION
BOARD OF TRUSTEES OF THE
INTERNAL IMPROVEMENT TRUST FUND
DEPARTMENT OF ENVIRONMENTAL PROTECTION SITING BOARD
STATE BOARD OF ADMINISTRATION
VOLUME II
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 Wednesday,
May 30, 2001, commencing at approximately 9:13 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
165
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
* * *
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I N D E X
ITEM ACTION PAGE
BOARD OF TRUSTEES OF THE
INTERNAL IMPROVEMENT
TRUST FUND:
(Presented by David B. Struhs,
Secretary)
1 Approved 177
Substitute 2 Approved 177
3 Approved 177
4 Approved 196
Substitute 5 Approved 197
6 Withdrawn 199
Substitute 7 Approved 199
8 Approved 200
DEPARTMENT OF ENVIRONMENTAL PROTECTION
SITING BOARD:
(Presented by David B. Struhs,
Secretary)
1 Approved 202
2 Approved 203
STATE BOARD OF ADMINISTRATION:
(Presented by Tom Herndon,
Executive Director)
1 Approved 220
2 Approved 221
3 Approved 221
4 Deferred 234
5 (A) and (B) Approved 240
6 Approved 241
CERTIFICATE OF REPORTER 242
* * *
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1 P R O C E E D I N G S
2 GOVERNOR BUSH: Board of Trustees.
3 MR. STRUHS: Good morning.
4 Item Number 1 is a conservation easement.
5 And I just wanted to reflect for a moment
6 that the last time you gathered as the Board of
7 Trustees, Secretary Harris asked a number of
8 questions about conservation easements as the
9 land conservation strategy here in the state of
10 Florida.
11 And we did respond to you with -- with a
12 letter that --
13 SECRETARY HARRIS: Thank you for your
14 letter.
15 MR. STRUHS: Yes.
16 SECRETARY HARRIS: Appreciate it.
17 MR. STRUHS: -- which outlined some of the
18 work that has been done. We shared it with
19 your colleagues on the Board.
20 One thing that we left out of the letter
21 that I'd like to brag a little bit about is
22 that over the last two years here in Florida,
23 we have completed five conservation easements,
24 for a total of a little more than 70,000 acres.
25 And those were easements which fully
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1 protect the State's interests in conserving
2 that land. And we're doing it at just a little
3 bit more than $1,000 an acre.
4 So clearly a very economic approach to
5 conservation, because it keeps the land in
6 private ownership, keeps it on the tax rolls,
7 but protects the public interests that we're
8 trying to preserve.
9 GOVERNOR BUSH: David, are we comfortable
10 with these percentages?
11 I mean, this is kind of new territory, so
12 it's hard to -- are the conservation easements
13 the same interest in the title so we can create
14 kind of a -- a standard that will apply?
15 MR. STRUHS: Yes. I -- I think we are
16 becoming more and more sophisticated in
17 understanding the value of conservation
18 easements, and how you determine their value.
19 I'm sure you've noted in reading this
20 particular item, Item 1 that's before you now,
21 is that depending on which appraised value you
22 use, we're getting what we desire for either
23 55 percent or 48 percent of the appraised fee
24 value.
25 Another way to look at that is figuring out
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1 what you think the conservation easement value
2 is. If you did that, according to our experts,
3 this item would be acquired for about
4 87 percent of the conservation easement value.
5 But it is -- it is a -- an emerging art, an
6 emerging science. And I think we have
7 demonstrated --
8 GOVERNOR BUSH: -- scientific is my point.
9 MR. STRUHS: -- I think we've demonstrated
10 sort of a growing sophistication in using this
11 kind of strategy.
12 SECRETARY HARRIS: Secretary, with Seattle
13 and some of the other examples, have -- have
14 they demonstrated that kind -- is it still just
15 a growing interest?
16 I mean, obviously you want to protect
17 private property rights ownership, and you
18 don't in any way want to impede. This --
19 I think it's a matter of education
20 across-the-board as well so that people
21 understand who may wish their property to -- to
22 continue on agricultural or -- or like it that
23 way, that they at least have the information,
24 and know this would be accessible to them as
25 well.
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1 MR. STRUHS: One of the things we've been
2 contemplating, which -- which actually came to
3 us after your comments two weeks ago, was
4 potentially to have a national conference here
5 in Florida that we --
6 SECRETARY HARRIS: Great.
7 MR. STRUHS: -- would host on conservation
8 easements where we could bring in leading
9 experts from other jurisdictions, and learn --
10 SECRETARY HARRIS: That'd be fantastic.
11 MR. STRUHS: -- how they're doing that.
12 And bringing the private sector, as well as
13 the public sector, to see if we are really
14 using state of the art techniques in
15 determining how you do the valuation -- how you
16 get the interest that you want, and -- and
17 still be protecting the private property
18 interests.
19 SECRETARY HARRIS: Would that include -- I
20 mean, after that, would that include some kind
21 of survey or understanding of the areas that --
22 that would be -- be best, but still with the
23 extraordinary sensitivity to the private
24 property owners that in -- in no way is their
25 property going to be taken or -- or would we
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1 be --
2 MR. STRUHS: Yes.
3 SECRETARY HARRIS: -- pushing that, but
4 they would have the availability to have access
5 to this opportunity.
6 MR. STRUHS: Yes. Exactly right. Exactly
7 right.
8 So I think -- again, Florida two years ago
9 at least --
10 (Commissioner Crist exited the room.)
11 MR. STRUHS: -- for our CARL program, we
12 had zero conservation easements. And over the
13 last two years, we've done five. So we -- we
14 are on a steep learning curve.
15 But I think Florida has emerged from being
16 a laggard, to now being a leader in utilizing
17 these kinds of techniques. And it's now time
18 to work with other states to see how we're --
19 how we're -- compare --
20 SECRETARY HARRIS: We're -- I mean, I'm
21 just interested in terms of 70,000 acres. In
22 terms of the CARL lands, I mean, we've
23 purchased, you know --
24 MR. STRUHS: Millions.
25 SECRETARY HARRIS: -- millions.
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1 MR. STRUHS: Million-and-a-half.
2 SECRETARY HARRIS: Yeah.
3 And so I just didn't know that 70,000
4 compared -- I mean, but it's -- we're moving
5 forward. But now we've become the leader?
6 I mean, we're that -- that's considered
7 aggressive? I don't really have it in context,
8 so I understand how significant --
9 MR. STRUHS: I wouldn't --
10 SECRETARY HARRIS: -- 70,000 acres is.
11 MR. STRUHS: -- call us a leader in terms
12 of actual acreage.
13 SECRETARY HARRIS: Uh-hum.
14 MR. STRUHS: But in terms of an emerging
15 leader. I mean, going from zero to five over
16 the course of just two years has -- has clearly
17 been recognized as -- as turning a corner by a
18 very important state, a state that is
19 recognized nationally as a leader in land
20 conservation.
21 SECRETARY HARRIS: I just think -- I think
22 this is such an extraordinary opportunity and
23 so important for Florida. And I appreciate
24 your leadership.
25 And a conference would really highlight
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1 the issue, and maybe we could escalate the --
2 the science and the learning curve.
3 MR. STRUHS: And we would -- we would
4 obviously appreciate your office's involvement
5 in participating --
6 SECRETARY HARRIS: Whatever we can do.
7 MR. STRUHS: -- participating in that.
8 Anyway, thank you for allowing me that
9 opportunity --
10 COMMISSIONER BRONSON: Mr. --
11 MR. STRUHS: -- to brag a little bit.
12 COMMISSIONER BRONSON: Mr. Secretary, I
13 need to ask a question --
14 MR. STRUHS: Yes, sir.
15 COMMISSIONER BRONSON: -- too.
16 I've -- I've had some concerns based on the
17 number of cattle grazing on State lands. And
18 it's -- some of the -- some of the figures I've
19 heard are just unreal. The -- the cow per
20 acre, which most cattlemen know what that land
21 will take.
22 We're not going to get into a situation on
23 these easements where somebody from the State's
24 going to come in and try to tell a cattleman
25 who's -- who's had that property for
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1 generations or -- or their family has, and
2 they what -- they know what the carrying
3 capacity of that land is --
4 MR. STRUHS: Right.
5 COMMISSIONER BRONSON: -- that now because
6 of this easement, we want you to -- to reduce
7 your cattle by -- by 50 percent or whatever on
8 this property.
9 We're not -- we're not going to --
10 you're -- you're keeping hold --
11 MR. STRUHS: You --
12 COMMISSIONER BRONSON: -- of that, right?
13 You're not --
14 MR. STRUHS: -- you -- you -- it's an
15 excellent question, because it actually gets to
16 this item before you today.
17 Specifically, we want to rely on the best
18 expertise of the land managers who are there
19 and operating cattle on the property now.
20 Of course, what you do in the conservation
21 easement is you -- you then constrain the --
22 the head of cattle to that existing number.
23 But that existing number is the one that is
24 determined by the -- by the land --
25 GOVERNOR BUSH: You do that -- you do that
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1 before you sign the easement.
2 MR. STRUHS: Yes, sir.
3 GOVERNOR BUSH: I mean, so -- you can't
4 change the conditions of the easement after
5 you've signed it.
6 COMMISSIONER BRONSON: But, Governor, what
7 I was getting to is --
8 GOVERNOR BUSH: That's a taking.
9 COMMISSIONER BRONSON: -- you can -- you
10 can say in the easement that you can graze
11 cattle, but I just didn't want them to come
12 back and -- and figure out then they want to
13 change the number of cattle.
14 And that's -- that's what I want to make
15 sure. Because there's a lot of people who
16 might want to go --
17 GOVERNOR BUSH: That's a good question.
18 (Commissioner Crist entered the room.)
19 COMMISSIONER BRONSON: -- into these
20 easement programs, but they don't want to go
21 into it knowing they're going to keep it for
22 cattle grazing, and then have somebody change
23 the figures on them after they've --
24 GOVERNOR BUSH: Secretary Struhs --
25 COMMISSIONER BRONSON: -- after they've --
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1 GOVERNOR BUSH: -- can you answer that?
2 MR. STRUHS: Well, we -- one -- one of the
3 things that we do in -- in negotiating these
4 terms is we rely on the best management
5 practices as established by the Florida
6 Cattlemen's Association in -- in cooperation
7 with the -- the State agencies.
8 GOVERNOR BUSH: But the -- to the -- to the
9 point, you sign a conservation easement, it has
10 a specific cattle -- number head per acre,
11 whatever it is --
12 MR. STRUHS: Right.
13 GOVERNOR BUSH: -- it can't change after
14 you've signed the easement.
15 MR. STRUHS: That's correct.
16 GOVERNOR BUSH: Okay. Move on.
17 We haven't got the count --
18 MR. STRUHS: So we were -- we're
19 recommending approval of Item Number 1.
20 GOVERNOR BUSH: Item 1?
21 Are you asking for -- are you starting now
22 in the agenda?
23 COMPTROLLER MILLIGAN: Motion.
24 MR. STRUHS: Yes. Item Number 1 --
25 TREASURER GALLAGHER: Second.
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1 MR. STRUHS: -- recommending approval.
2 GOVERNOR BUSH: Moved and seconded.
3 Without objection, it's approved.
4 Item 2.
5 MR. STRUHS: Item 2 is -- is two option
6 agreements to acquire thirty-six-and-a-quarter
7 acres within Spruce Creek CARL Project.
8 Recommending approval.
9 TREASURER GALLAGHER: Motion.
10 SECRETARY HARRIS: Second.
11 COMMISSIONER BRONSON: Second.
12 COMMISSIONER CRIST: Second.
13 GOVERNOR BUSH: Moved and seconded.
14 Without objection, it's approved.
15 MR. STRUHS: Item 3 is a purchase agreement
16 to acquire 44.7 acres within the Lake Jackson
17 Mounds Archaeological State Park.
18 TREASURER GALLAGHER: Motion.
19 ATTORNEY GENERAL BUTTERWORTH: Second.
20 COMMISSIONER BRONSON: Second.
21 GOVERNOR BUSH: Moved and seconded.
22 Without objection, it's approved.
23 MR. STRUHS: Item 4 is an option agreement
24 for the West Orange Trail Phase III in
25 Orange County.
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1 This is -- actually, a very interesting
2 project, one of the more popular trails in the
3 state of Florida with 60,000 users per month.
4 Nineteen miles of the trail are now open, and
5 being used. And when it's finally complete,
6 there will be 30 miles total.
7 This --
8 COMPTROLLER MILLIGAN: Governor --
9 MR. STRUHS: -- this fulfills the State's
10 agreement as part of a multiparty agreement
11 with -- with Orange County.
12 GOVERNOR BUSH: General Milligan.
13 COMPTROLLER MILLIGAN: Well, it -- I -- I
14 agree that this is probably a great trail.
15 But as we've talked about this before,
16 I mean, we're paying $100,000 for an acre that
17 runs approximately 28.
18 GOVERNOR BUSH: Feet long by 14 feet wide.
19 And, you know -- and, fortunately, one of them
20 goes by a 7-Eleven store here, and --
21 GOVERNOR BUSH: Oh, this is the same one
22 we've --
23 COMPTROLLER MILLIGAN: Oh, absolutely.
24 Absolutely.
25 GOVERNOR BUSH: Is it back again?
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1 COMPTROLLER MILLIGAN: Well, it's -- it's
2 another piece of that pie.
3 SECRETARY HARRIS: Another piece of it.
4 COMPTROLLER MILLIGAN: And --
5 GOVERNOR BUSH: The same 7-Eleven though.
6 COMPTROLLER MILLIGAN: It's -- it's -- it's
7 the same 7-Eleven problem. You know, the folks
8 down there are going to have a hard time
9 understanding how we're paying $100,000 an acre
10 for a piece of property that's 14 feet wide.
11 MR. STRUHS: Gives a whole new definition
12 to the 7-Eleven test, doesn't it?
13 COMPTROLLER MILLIGAN: Yeah.
14 GOVERNOR BUSH: Well, what -- what's the
15 answer though? I mean, this is a benefit --
16 I --
17 TREASURER GALLAGHER: Well, I mean, how --
18 you can't -- you can't look at -- at -- at an
19 acreage cost when it's a -- when it's basically
20 a road right-of-way.
21 GOVERNOR BUSH: And this is a -- this is a
22 trail.
23 TREASURER GALLAGHER: Well, and --
24 GOVERNOR BUSH: This is a -- this is an
25 amenity.
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1 TREASURER GALLAGHER: Probably was a
2 railroad at one time, wasn't it?
3 COMPTROLLER MILLIGAN: No.
4 MR. STRUHS: This one actually is not.
5 COMPTROLLER MILLIGAN: No, no.
6 MR. STRUHS: And, interestingly, it -- it
7 would have been much easier for --
8 COMPTROLLER MILLIGAN: It's --
9 MR. STRUHS: -- us had it been a rail--
10 COMPTROLLER MILLIGAN: Well, yeah. We --
11 we've been through that before, too.
12 The -- you know, the idea of -- that
13 this -- that this trail is going to pass
14 through a piece of commercial property, or for
15 that matter, residential property --
16 TREASURER GALLAGHER: Might apply.
17 COMPTROLLER MILLIGAN: -- in a commercial
18 property sense, it probably enhances the value
19 of that commercial property.
20 GOVERNOR BUSH: That's -- that's my point.
21 COMPTROLLER MILLIGAN: It doesn't detract
22 from it. But we are -- we are paying for it as
23 if it were a nice piece of useable commercial
24 property.
25 GOVERNOR BUSH: The 7-Eleven's going to
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1 have 60,000 people that walk by it, or ride
2 their bike by.
3 COMPTROLLER MILLIGAN: Yeah. Absolutely.
4 MR. STRUHS: That's a lot of Slurpies.
5 COMPTROLLER MILLIGAN: And it just doesn't
6 make any sense to me.
7 MR. STRUHS: A couple of responses to that.
8 One is because Federal money is being used
9 as a part of this project construction, as --
10 as you well know, using ISTEA -- ISTEA monies
11 from the Federal Department of Transportation,
12 if we -- if we utilize the Federal dollars, we
13 are required to pay 100 percent of the value.
14 And I would also --
15 COMPTROLLER MILLIGAN: Of the appraised
16 value.
17 The question is really --
18 MR. STRUHS: Yes, sir.
19 COMPTROLLER MILLIGAN: -- the appraisal,
20 not the fact that we have to live with the
21 Federal requirement.
22 I mean, how do you -- how do you judge
23 a piece of property that -- as was just pointed
24 out, goes in front of a 7-Eleven, and will put
25 thousands of people by there -- I've forgotten
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1 the number already of what you said --
2 MR. STRUHS: Sixty --
3 COMPTROLLER MILLIGAN: -- already use it,
4 but it's a huge number.
5 MR. STRUHS: Sixty thousand a month.
6 COMPTROLLER MILLIGAN: That are going to be
7 popping in there buying Cokes and --
8 GOVERNOR BUSH: Slurpies.
9 COMPTROLLER MILLIGAN: -- and --
10 TREASURER GALLAGHER: Slurpies.
11 COMPTROLLER MILLIGAN: -- and whatever.
12 TREASURER GALLAGHER: Slurpies.
13 COMPTROLLER MILLIGAN: And --
14 TREASURER GALLAGHER: A lot of Slurpies.
15 COMPTROLLER MILLIGAN: -- and we're paying
16 the commercial value of that land?
17 MR. STRUHS: I -- the other -- the other
18 comment I wanted to make was --
19 GOVERNOR BUSH: Is this frontage -- I mean,
20 describe this property. How does it --
21 COMPTROLLER MILLIGAN: It's --
22 GOVERNOR BUSH: -- relate --
23 COMPTROLLER MILLIGAN: -- it's both,
24 Governor. Some of it is kind of -- runs
25 parallel to the road, and other -- kind of
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1 ducks in behind some of the property.
2 GOVERNOR BUSH: Between the road and the --
3 and the commercial property?
4 COMPTROLLER MILLIGAN: Some of it. And
5 some of it goes to the rear of the commercial
6 property.
7 GOVERNOR BUSH: Okay. Thank you.
8 MR. STRUHS: One of the -- one of the
9 things I wanted to point out -- and I might
10 need some help getting the precise numbers --
11 but a good portion of this amount of money is
12 actually used to -- trying to think of the
13 right term -- to -- to make whole -- to make --
14 to make -- to -- to correct any negative
15 effects we may have on the property.
16 For example, the 7-Eleven --
17 GOVERNOR BUSH: Sorry.
18 MR. STRUHS: -- there's a -- there's a --
19 there's a vacuum -- you know, one of these
20 coin operated vacuums you can vacuum out your
21 car. Part of that requires that they pay to
22 actually put that piece of equipment up and --
23 and relocate --
24 COMPTROLLER MILLIGAN: No. I understand
25 that. I understand that.
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1 MR. STRUHS: And I believe it's somewhere
2 approximately 45 percent in some cases of the
3 money is actually not for the acquisition of
4 the land, but actually moving curbs, moving
5 utilities, moving lamp posts, that sort of
6 thing.
7 Am I correct on that?
8 MS. ARMSTRONG: It's 43 percent.
9 MR. STRUHS: Forty-- it's 43 percent.
10 GOVERNOR BUSH: How long has this
11 commercial property -- I mean, who came up with
12 the idea of building -- connect-- the trail and
13 the connection to the parks and all this is a
14 wonderful idea.
15 But who came up with the idea of -- of
16 aligning this trail through property where it's
17 2 bucks a foot?
18 MR. STRUHS: Well, the alignment --
19 GOVERNOR BUSH: Is it not so long ago as
20 the commercial values may have gone up
21 afterwards, or is this --
22 MR. STRUHS: I think the alignment,
23 we're -- probably determined about ten years
24 ago when this project began in 1991.
25 MS. ARMSTRONG: By the County.
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1 MR. STRUHS: By the County. By the County.
2 And we -- we actually have a representative
3 here from Orange County who could probably
4 speak to that more directly if you'd care to
5 hear that.
6 GOVERNOR BUSH: If he dare come up.
7 MR. STRUHS: If you dare.
8 GOVERNOR BUSH: Welcome.
9 I was just joking.
10 MR. THOMAS: Thank you, Governor.
11 I'm Bill Thomas. I'm a Senior Planner with
12 Orange County Parks and --
13 GOVERNOR BUSH: Oh, you were --
14 MR. THOMAS: -- Recreation.
15 We -- we had done a study in this area. We
16 looked at several alternative corridors to try
17 to get through this area.
18 One of them was the utility corridor, some
19 others were through some residential areas.
20 Sometimes it's -- it's difficult to put these
21 trails through residential areas. A lot of
22 times, the -- the residents, you know, are
23 concerned about, you know, loss of privacy and
24 stuff and property values, even though studies
25 have shown that those don't really pan out.
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1 We looked at about three or four different
2 corridors, then we arrived at this one as --
3 (Commissioner Bronson exited the room.)
4 MR. THOMAS: -- as being the -- the
5 easiest, and actually the -- the cheapest of
6 getting through. It was a long existing
7 transportation corridor.
8 One -- one thing you have to remember,
9 to -- to make these connections, sometimes you
10 have to go through areas that are not that
11 attractive. This is going to connect some very
12 attractive portions of the corridor.
13 But to -- to be honest, this is not that
14 attractive of -- a segment of the trail. But
15 it's -- it's a vital link. It's one that has
16 to be made.
17 But we did study alternatives, and this was
18 the best of the -- the alternatives that we
19 studied.
20 GOVERNOR BUSH: I mean, we're buying --
21 we're buying a 14-foot right-of-way,
22 easement --
23 MR. THOMAS: Right.
24 GOVERNOR BUSH: -- for this trail. How
25 long -- I mean, what exists now that you could
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1 use, is there sidewalks?
2 MR. THOMAS: There's a 5-foot sidewalk
3 along the --
4 GOVERNOR BUSH: So we're --
5 MR. THOMAS: -- road that's there.
6 GOVERNOR BUSH: -- gaining -- we're gaining
7 9 feet of extra bicycle room or something?
8 I mean --
9 MR. THOMAS: Right.
10 GOVERNOR BUSH: -- at 2 bucks a foot.
11 TREASURER GALLAGHER: Well, if you -- the
12 sidewalk already has an easement, right?
13 So we're just buying an easement here?
14 We're buying the property.
15 MR. THOMAS: We're -- we're actually
16 purchasing the property. We're going from a
17 5-foot sidewalk to a -- a 14-foot wide
18 landscaped trail.
19 TREASURER GALLAGHER: Why wouldn't we just
20 do an easement for the 14 feet? I mean, why
21 would we buy the property?
22 I mean, certainly that's what happened to
23 the sidewalk, right?
24 Isn't the sidewalk an easement?
25 MR. THOMAS: The sidewalk's a public
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1 right-of-way.
2 TREASURER GALLAGHER: Public right-of-way?
3 MR. THOMAS: We're adding to the --
4 TREASURER GALLAGHER: Property owner --
5 MR. THOMAS: -- existing --
6 TREASURER GALLAGHER: -- sort of --
7 MR. THOMAS: -- public --
8 TREASURER GALLAGHER: -- owns it, but they
9 have to give up that part for sidewalk. And
10 how much does the County pay for that when they
11 put the sidewalk in?
12 MR. THOMAS: Well, actually when we -- we
13 built the road, the -- the right-of-way for the
14 sidewalk was purchased along with the road.
15 TREASURER GALLAGHER: And so now we're
16 going in a little closer to the property?
17 MR. THOMAS: We're taking some additional
18 property. We're using as much of the
19 right-of-way as we can.
20 But to expand the sidewalk out the 14 feet
21 to meet the grade, to -- to meet all the
22 engineering requirements that -- we have to buy
23 the additional property.
24 We're -- we're trying to create something
25 more than just a sidewalk. We're trying to
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1 create a linear park. Even though it's in an
2 urban area, with the additional land, we're
3 able to do more with amenities.
4 GOVERNOR BUSH: This is why I'm a little
5 confused, because we're paying -- we're paying
6 the -- the -- the price of a commercial
7 property that enhances the commercial property
8 that we're buying it from --
9 (Commissioner Bronson entered the room.)
10 GOVERNOR BUSH: -- at a -- at -- you know,
11 we're -- seem like they win twice.
12 ATTORNEY GENERAL BUTTERWORTH: Governor,
13 DOT does this all the time.
14 GOVERNOR BUSH: Oh, I know. That's why
15 I'm --
16 ATTORNEY GENERAL BUTTERWORTH: They spend
17 much more money per mile than this --
18 COMPTROLLER MILLIGAN: You know, that --
19 that doesn't make it right though. Or doesn't
20 make --
21 TREASURER GALLAGHER: It's just --
22 COMPTROLLER MILLIGAN: -- it something we
23 want to --
24 TREASURER GALLAGHER: -- more of a park.
25 COMPTROLLER MILLIGAN: -- endorse.
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1 MR. THOMAS: We -- we would have liked to
2 have paid a lot less. But we have to pay what
3 the appraisers tell us it's worth. And --
4 GOVERNOR BUSH: Yeah. But what -- what
5 could --
6 TREASURER GALLAGHER: Get a new appraiser.
7 ATTORNEY GENERAL BUTTERWORTH: Right.
8 GOVERNOR BUSH: I just --
9 COMPTROLLER MILLIGAN: You've already
10 purchased this, I believe, haven't you?
11 MR. THOMAS: Yes, sir. The -- this was
12 a --
13 COMPTROLLER MILLIGAN: I mean, you're
14 looking -- you're looking to recover what
15 you've already spent.
16 MR. THOMAS: Right. Under the agreement we
17 had signed with the State.
18 It was a very fragmented corridor. The
19 State wouldn't have had the resources to go in
20 there and negotiate with all the different
21 owners. So the County took the lead,
22 reassembled the corridor. And now we're --
23 we're hoping to be able to sell to the State
24 under the agreement what we had purchased.
25 GOVERNOR BUSH: Well, I -- I concur with
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1 General Milligan that the -- complying with
2 Federal law is fine, 100 percent of appraisal,
3 if that's what they require, that's --
4 that's -- that's okay.
5 But to suggest that the appraisal --
6 appraised property for an already developed
7 piece of land, which at least in the -- front
8 of the 7-Eleven, that's the case, is the -- is
9 2 bucks a foot, when you're enhancing the
10 property, and they can't develop it anymore
11 than what they have, I just -- I've -- I've
12 got -- I respectfully disagree.
13 And -- but you know me -- oh, you don't
14 know me.
15 Secretary Struhs knows me. I just -- I --
16 I think when we're the only buyer of something,
17 that somehow the appraisal ought to be a little
18 bit different than -- than if it's a green
19 field, you know, that has development rights
20 that would generate a $2 a foot price.
21 COMPTROLLER MILLIGAN: Well, I -- I guess
22 really how do we -- how do we send the right
23 signal so that they -- in -- in Orange County,
24 or wherever it may be, appreciates the concern
25 that we have, and tries to deal with these
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1 appraisers on a -- a more realistic way?
2 ATTORNEY GENERAL BUTTERWORTH: Well,
3 Governor --
4 GOVERNOR BUSH: Yes, General.
5 ATTORNEY GENERAL BUTTERWORTH: -- if,
6 in fact, it's the -- the 7-Eleven, I don't know
7 how many 7-Eleven type of situations there are,
8 but let's just buy everything that's not in
9 front of a -- a commercial establishment.
10 GOVERNOR BUSH: Well, maybe -- maybe that
11 would be the appropriate thing.
12 TREASURER GALLAGHER: They built this nice
13 trail onto the sidewalk, and back onto the
14 trail again. And you'll automatically be
15 pulled into that 7-Eleven because you're on
16 this little sidewalk, and you have to go get
17 something to drink.
18 COMMISSIONER CRIST: Well, Circle K is
19 going to get upset with us if we continue doing
20 this.
21 MR. STRUHS: And, General Milligan, to
22 respond to your question or comment.
23 In terms of going forward with
24 Orange County, or for that matter, any other
25 county that we're engaged as a partner in trail
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1 building, I think the way to -- to fix the
2 problem would be to perhaps go back and revisit
3 these multiparty agreements so that there's an
4 expectation up front as to what the Board of
5 Trustees is willing, or is not willing, to --
6 to provide as a partner.
7 And -- and that's something that probably
8 has not been done -- at least in this case for
9 a decade.
10 COMPTROLLER MILLIGAN: Yeah. I -- I mean,
11 I have a lot of trouble with this one. But I
12 also have trouble not approving it, because we
13 have reached an agreement with them.
14 So it is really how do we -- how do we
15 continue to get ourselves into this problem,
16 and how do we get out of it?
17 MR. STRUHS: Yes, ma'am.
18 GOVERNOR BUSH: How much -- how much has
19 Orange County put up in this?
20 TREASURER GALLAGHER: Well, right now a
21 half a million dollars if we don't approve it.
22 MR. THOMAS: I believe we have about
23 $570,000 on this particular parcel we're
24 conveying.
25 GOVERNOR BUSH: No. I mean, in general.
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1 Are we -- are we --
2 TREASURER GALLAGHER: We're buying them
3 out.
4 GOVERNOR BUSH: -- are we putting up money
5 in this, or you're just -- you're being our --
6 TREASURER GALLAGHER: Conduit.
7 GOVERNOR BUSH: -- conduit.
8 MR. THOMAS: Oh, no. We'll -- we'll wind
9 up paying a lot more for the property than what
10 we're getting from the State. Some of these
11 are -- are still in litigation --
12 GOVERNOR BUSH: Is the County putting up
13 money in the trails program?
14 MR. THOMAS: Yes, sir.
15 MR. STRUHS: Yes.
16 GOVERNOR BUSH: Okay.
17 TREASURER GALLAGHER: Plus Federal, plus
18 us.
19 MR. THOMAS: Right.
20 MR. STRUHS: Yes. And while --
21 GOVERNOR BUSH: So you're feeling our pain
22 on the price.
23 MR. THOMAS: We're -- we're probably paying
24 more than the State is, yes, sir.
25 GOVERNOR BUSH: Oh.
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1 MR. STRUHS: I would --
2 GOVERNOR BUSH: Actually you're paying it.
3 MR. STRUHS: For -- for -- for the -- for
4 the record, I went back and asked. And during
5 the history of this project thus far, to date,
6 the State has paid 1.1 million dollars, up to
7 this point, just as a point of interest.
8 But back to the policy issue that -- that
9 General Mulligan -- I'm sorry, General Milligan
10 raised, I -- I think what we could do is --
11 is -- is perhaps go back and -- and pull all
12 these multiparty agreements with local
13 governments for trail development, review them
14 all with an eye towards what the Board of
15 Trustees would view as appropriate or not in
16 terms of contribution, perhaps actually fold it
17 into our more focused attention on the use of
18 conservation easements --
19 COMPTROLLER MILLIGAN: I -- I think --
20 I think it makes good sense, David, and I hope
21 you will -- and would recommend that you do
22 that.
23 TREASURER GALLAGHER: It's getting late.
24 I'd like to move the item.
25 GOVERNOR BUSH: Is there a second?
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1 ATTORNEY GENERAL BUTTERWORTH: Second.
2 COMMISSIONER BRONSON: Second.
3 SECRETARY HARRIS: Second.
4 MR. STRUHS: We will do that.
5 COMPTROLLER MILLIGAN: Well, the fact that
6 it's late is not as important as solving this
7 issue and addressing this issue. And I -- I
8 hope we'll see something back on it, David.
9 GOVERNOR BUSH: There's a motion and a
10 second.
11 Any objections?
12 Motion passes by a landslide.
13 MR. STRUHS: And I -- I would point out
14 that Ms. Jena Brooks, who is sitting behind me,
15 and is the new Director of our Greenways and
16 Trails Program, who is known to many of you,
17 appreciates your -- your support on this item
18 as well.
19 TREASURER GALLAGHER: The first one she
20 brings to the Cabinet almost went down.
21 COMMISSIONER CRIST: But didn't.
22 GOVERNOR BUSH: Item 5.
23 MR. STRUHS: Item 5, approval subject to
24 receipt of an easement appraisal acceptable to
25 DEP, Bureau of Appraisal, a request for six
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1 nonexclusive utilities easements.
2 These are easements on dry land. This is
3 not sovereign submerged land, rather dry land,
4 as owned by State agencies for the siting of
5 the Gulfstream Natural Gas System.
6 The properties include one parcel owned by
7 Recreation and Parks; one owned by the Board of
8 Trustees, and leased to a private agricultural
9 interest; two that are held by the Fish and
10 Wildlife Conservation Commission; one by IFAS;
11 and another parcel managed by the Bureau of
12 Mine Reclamation.
13 TREASURER GALLAGHER: Motion on 5.
14 COMMISSIONER BRONSON: Second.
15 GOVERNOR BUSH: Second.
16 Moved and seconded.
17 Any discussion?
18 What's the price that we get when we give
19 out the easement? Nothing?
20 TREASURER GALLAGHER: No, we get -- we get
21 some.
22 GOVERNOR BUSH: We get the utility?
23 TREASURER GALLAGHER: We get money. I
24 don't know how much, but we get it.
25 COMPTROLLER MILLIGAN: Peanuts.
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1 SECRETARY HARRIS: I need to recuse myself
2 on this one. My family will be --
3 GOVERNOR BUSH: Okay.
4 MR. STRUHS: There -- there's -- there's
5 a -- there's actually a difference between
6 siting a utility -- or -- or -- or a
7 nonutility --
8 GOVERNOR BUSH: By law we're --
9 MR. STRUHS: By law.
10 GOVERNOR BUSH: -- we have less, much less.
11 MR. STRUHS: Yes.
12 GOVERNOR BUSH: There's a motion and a
13 second.
14 Without objection --
15 Secretary Harris is abstaining --
16 SECRETARY HARRIS: Yes.
17 GOVERNOR BUSH: Is that what you want to
18 do, abstain?
19 SECRETARY HARRIS: Yes.
20 GOVERNOR BUSH: -- the -- the motion is
21 approved.
22 TREASURER GALLAGHER: Move to withdraw
23 Item Number 6.
24 MR. STRUHS: Thank you.
25 GOVERNOR BUSH: Motion to withdraw.
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1 Is there a second?
2 COMMISSIONER BRONSON: Second.
3 GOVERNOR BUSH: Moved and seconded.
4 Without objection, the motion is withdrawn.
5 MR. STRUHS: Substitute Item 7, we're
6 seeking affirmation that a proposed public
7 sailing school is consistent with an existing
8 dedication, modifying that dedication to add a
9 number of special conditions, and authorizing
10 the severance of 500 cubic yards of sovereign
11 material.
12 Recommending approval.
13 TREASURER GALLAGHER: Motion on 7.
14 GOVERNOR BUSH: Is there a second?
15 SECRETARY HARRIS: Second.
16 GOVERNOR BUSH: Moved and seconded.
17 Without objection, it's approved.
18 MR. STRUHS: Item 8, we are requesting to
19 publish a notice of proposed rulemaking for
20 amendments to the rules that determine what is
21 a sufficient upland interest to be able to
22 apply for and gain a sovereignty submerged land
23 lease.
24 Essentially what we are doing is putting
25 this out for a public review and public comment
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1 through the normal rulemaking process. One of
2 the effects is that it would actually allow
3 easements to be considered an adequate
4 controlling interest to apply for and secure a
5 sovereign submerged lease.
6 If -- if you have questions about this, we
7 can go into more detail. Obviously this issue
8 will come back to you again for final approval
9 once it's gone through the rulemaking process.
10 I would also point out that this rule that
11 we're proposing to go forward with has been in
12 the works for some two years, is the result of
13 a consensus that was achieved by a broad based
14 Technical Advisory Committee, and has already
15 been reviewed during three separate public
16 workshops.
17 COMPTROLLER MILLIGAN: Move Item 8.
18 ATTORNEY GENERAL BUTTERWORTH: Second.
19 GOVERNOR BUSH: Moved and seconded.
20 Without objection, it's approved.
21 MR. STRUHS: I -- I would beg your
22 indulgence to go back to Item 1, and -- and
23 just for the record, state that there was this
24 morning one change in -- in the terms with the
25 Grimes family.
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1 It's a -- it's a clarifying amendment only.
2 And it has been shared with your Cabinet Aides,
3 and, indeed, maybe with you.
4 It was initialed and signed off on by the
5 landowner this morning. It doesn't affect any
6 substantive issues, but it just is a clarifying
7 amendment.
8 It's letter G on page 5.
9 GOVERNOR BUSH: Very good.
10 MR. STRUHS: Thank you.
11 TREASURER GALLAGHER: Is there a motion
12 on 8?
13 GOVERNOR BUSH: We did it, I think.
14 TREASURER GALLAGHER: We did it? Okay.
15 (The Board of Trustees of the Internal
16 Improvement Trust Fund Agenda was concluded.)
17 * * *
18
19
20
21
22
23
24
25
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1 GOVERNOR BUSH: Siting Board.
2 MR. STRUHS: Oh, that's me. I'm sorry.
3 GOVERNOR BUSH: That's okay.
4 TREASURER GALLAGHER: Motion on the
5 minutes.
6 COMMISSIONER CRIST: Second.
7 GOVERNOR BUSH: Moved and seconded.
8 Without objection, it's approved.
9 Item 2.
10 MR. STRUHS: Item 2 is a consideration of
11 an order to be executed -- executed by the
12 Siting Board adopting the Administrative Law
13 Judge's recommended order, recommending the
14 Siting Board grant full and final certification
15 to the Florida Power Corporation's Hines Energy
16 Complex for --
17 (Secretary Harris exited the room.)
18 MR. STRUHS: -- Power Block 2.
19 I would point out that this is a project
20 that has been approved by a variety of State
21 agencies, including the Public Service
22 Commission, the Department of Environmental
23 Protection, the Department of
24 Community Affairs, the Southwest Florida Water
25 Management District, the Fish and Wildlife
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1 Conservation Commission, the Department of
2 Transportation, and the Central Florida
3 Regional Planning Council.
4 Your role, of course, as the Siting Board
5 is to make sure that all these various
6 regulatory agencies have, indeed, coordinated
7 their work and come together with a -- a
8 unified plan. And that is what you have before
9 you today.
10 So we're recommending approval of this
11 item.
12 I've also been advised that there are --
13 there's counsel here from the Florida Power
14 Corporation that may wish to speak to the item,
15 if -- if necessary.
16 COMMISSIONER BRONSON: Move the item.
17 COMPTROLLER MILLIGAN: Second.
18 TREASURER GALLAGHER: Second.
19 GOVERNOR BUSH: Moved and seconded.
20 Any discussion?
21 The motion passes.
22 MR. STRUHS: Thank you.
23 GOVERNOR BUSH: The item passes.
24 Just -- can I make a statement for the
25 record here, just related to this item that I'd
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1 like to suggest that the interests of the
2 ratepayer should be considered carefully in the
3 event that the Florida Supreme Court overturns
4 the separate need determination for this
5 power plant.
6 This issue's outside of our jurisdiction.
7 It's in the responsibility of the Public
8 Service Commission, which has the statutory
9 authority and responsibility to consider
10 Florida Power Corporation's ability to recover
11 costs from ratepayers and related issues.
12 And I trust their ability to --
13 (Secretary Harris entered the room.)
14 GOVERNOR BUSH: -- do so, but I wanted to
15 state -- put that on the record.
16 State Board of Administration.
17 Are you -- we have something here?
18 MS. BROOKS: We have a speaker.
19 GOVERNOR BUSH: A speaker?
20 MS. BROOKS: On the last item.
21 MR. STRUHS: Yeah. I'm -- I'm sorry,
22 ladies and gentlemen. I was advised that there
23 was a -- counsel here from Florida Power Corp.,
24 was not advised that there was counsel from
25 another business interest here who wanted to
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1 speak to the item.
2 That was an oversight on my part. I
3 apologize.
4 GOVERNOR BUSH: Let's let him speak if he's
5 come.
6 Who's -- who's --
7 TREASURER GALLAGHER: Panda.
8 GOVERNOR BUSH: Welcome.
9 MR. BERTRON: Thank you.
10 My name is Andy Bertron. And I'm here on
11 behalf of Panda Energy.
12 As some of you may know, Panda Energy
13 submitted a bid to propose this -- to construct
14 this proposed power plant.
15 And I fully understand your concerns, and
16 agree with you, that the Power Plant Siting Act
17 requires the PSC and the Supreme Court to
18 resolve issues related to the need
19 determination.
20 We're simply here today to point out that
21 the underlying need determination upon which
22 the --
23 GOVERNOR BUSH: Salud.
24 MR. BERTRON: -- proposed certification is
25 based is not yet final, and is still in
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1 dispute. Both Panda Energy and
2 Florida Power Corporation have appealed that
3 need determination to the Florida Supreme Court
4 where it's still pending. Both parties have
5 issues.
6 That puts you in the unfortunate position
7 of being asked to certify a power plant where
8 the underlying need determination on which it's
9 based -- the very basis for building that
10 power plant, is not yet final.
11 I'm not asking you to resolve those issues.
12 TREASURER GALLAGHER: That's why the
13 Governor made his statement.
14 MR. BERTRON: Fine.
15 TREASURER GALLAGHER: And I think it stands
16 for what we all think.
17 MR. BERTRON: And we're here --
18 GOVERNOR BUSH: Actually, there -- there
19 was a deter-- wasn't there a -- a determination
20 made, but it's under appeal.
21 TREASURER GALLAGHER: Right.
22 MR. BERTRON: Correct.
23 GOVERNOR BUSH: So that there was a
24 final --
25 MR. BERTRON: Correct.
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1 GOVERNOR BUSH: -- determination.
2 MR. BERTRON: We're here simply to point
3 out what the consequences are to ratepayers.
4 If you proceed today to certify while that need
5 determination is on appeal, and ultimately it's
6 reversed, as it was in the Duke case, there
7 will be adverse consequences, we believe, to
8 ratepayers because this plant is being built in
9 rate base, meaning that as the plant is
10 constructed, the costs will be billed to
11 ratepayers.
12 If you approve with no conditions or no
13 other qualifications to ensure that ratepayers
14 are protected, and the Supreme Court reversed,
15 you'll have the very real possibility of a half
16 completed plant.
17 And the question then will be who's going
18 to pay the cost?
19 And at this point --
20 (Comptroller Milligan exited the room.)
21 MR. BERTRON: -- I submit to you it's going
22 to fall on the backs of ratepayers.
23 Now, I think you have some options though.
24 You have authority in the Power Plant
25 Siting Act, under Section 403.511, to impose
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1 conditions.
2 And I think it's simply a matter of making
3 clear in your final order -- make it
4 conditioned upon and effective upon the
5 Supreme Court's affirmation, if that's what
6 they do, of the need determination.
7 Alternatively, I think you can make clear
8 in your final order, should you approve, that
9 FPC essentially proceeds at its own risk, and
10 that if FPC is determined to be wrong by the
11 Supreme Court, then FPC, and not ratepayers,
12 will bear the cost of any half completed plant.
13 And I'm sure that whatever you do, you'll
14 have ratepayers' best interests at heart.
15 SECRETARY HARRIS: I have a question.
16 GOVERNOR BUSH: Yes.
17 SECRETARY HARRIS: I thought the most
18 appropriate remedy for this was for Panda to
19 seek a stay. I thought that was the most
20 logical response for you to do. I don't
21 understand why that hasn't been done.
22 MR. BERTRON: And -- and I did not
23 represent Panda in the underlying
24 Public Service Commission proceedings.
25 I can tell you this much, that they looked
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1 at the similar situation, which was the Duke
2 case --
3 SECRETARY HARRIS: But it's not a similar
4 situation at all. You're in --
5 (General Milligan entered the room.)
6 SECRETARY HARRIS: -- a completely
7 different position.
8 MR. BERTRON: Right.
9 SECRETARY HARRIS: I mean, it's not similar
10 at all.
11 MR. BERTRON: Yeah.
12 If -- like Florida Power Corp. when it
13 challenged Duke's need determination, it
14 proceeded to the Supreme Court and did not seek
15 a stay. And it likewise --
16 SECRETARY HARRIS: But it is not the same,
17 because Duke allowed it to -- you dec-- they
18 decided to -- what is -- what is the word --
19 MR. BERTRON: To stipulate?
20 SECRETARY HARRIS: What -- they waived --
21 they waived that ability. So, I mean, you're
22 not in the same position whatsoever, so you
23 can't look at -- and I thought they'd backed
24 off that position a lot, because you're not in
25 a similar position as Duke as -- whatsoever.
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1 MR. BERTRON: Yeah.
2 I -- I'll just assume for -- for purposes
3 of argument that Panda could have sought a
4 stay. I -- I don't know whether they would
5 have been able to attain one.
6 SECRETARY HARRIS: I think you could still
7 get -- you could still do it. I mean, there's
8 no -- there's no real deadline on it. I mean,
9 that seems the most --
10 MR. BERTRON: One the --
11 SECRETARY HARRIS: -- significant --
12 MR. BERTRON: If it really is --
13 SECRETARY HARRIS: -- important appropriate
14 remedy.
15 MR. BERTRON: Well, I -- perhaps for FPC.
16 But for Panda, Panda will obtain its remedy or
17 not in the Supreme Court, they'll grant
18 whatever relief to Panda they're going to
19 grant, and it will either go back to the PSC,
20 or it won't.
21 My concern here is more on behalf of
22 ratepayers who ultimately --
23 TREASURER GALLAGHER: I am so glad --
24 MR. BERTRON: -- will be served --
25 TREASURER GALLAGHER: -- Panda is looking
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1 out --
2 MR. BERTRON: -- by this plant.
3 TREASURER GALLAGHER: -- for the
4 ratepayers.
5 GOVERNOR BUSH: We're all --
6 TREASURER GALLAGHER: I really -- tell your
7 client, we are so happy that they're working --
8 looking out for our ratepayers.
9 I guess if they'd have been out in
10 California, that's what they'd have said there,
11 too, and the ratepayers are getting hurt pretty
12 bad out there because they didn't build the
13 plants they should have built.
14 So you want us to get in the same position
15 here, to protect the ratepayers?
16 MR. BERTRON: I'm suggesting that we take
17 some action here to protect the ratepayers.
18 TREASURER GALLAGHER: Well, like
19 California's were protected?
20 MR. BERTRON: No, sir. I'd submit it's a
21 very different --
22 TREASURER GALLAGHER: That's how you'd end
23 up.
24 Unfortunately, we -- we either approve it,
25 or we don't. We don't do it with caveats. And
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1 we've done it.
2 GOVERNOR BUSH: That's -- I think your
3 recommendation's based on what the legal
4 counsel of the Department has said is -- the
5 suggestion's, while maybe interesting ones, are
6 not appropriate for us to do that we are
7 constrained with the agenda item in front of
8 us, which is why I made the statement. Because
9 I do concur with your point that -- that there
10 should be -- ratepayers need to be taken into
11 consideration in these issues.
12 Is there -- we've already -- actually --
13 TREASURER GALLAGHER: We've done it.
14 GOVERNOR BUSH: -- we've done it. I
15 just -- if anybody wants to reconsider, we can
16 do that.
17 But if not, we'll -- we'll move on.
18 COMMISSIONER CRIST: I have a question for
19 the Secretary.
20 GOVERNOR BUSH: Okay.
21 Thank you.
22 COMMISSIONER CRIST: It's -- it's a
23 friendly question, David.
24 How many more plants are, you know, in line
25 to be built any time soon in Florida?
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1 Do you know?
2 MR. STRUHS: I thought you said it was a
3 friendly question.
4 COMMISSIONER CRIST: Well, I thought --
5 it's intended to be.
6 TREASURER GALLAGHER: You know, you're
7 supposed to -- he's -- he's supposed to have
8 the answer when you ask him a friendly one.
9 COMMISSIONER CRIST: I'm sorry. Are there
10 a few?
11 TREASURER GALLAGHER: When'd you stop
12 beating your wife?
13 COMMISSIONER CRIST: I have a sister who
14 happens to live in California, and I'm
15 concerned that we don't have the kind of
16 situation that she's dealing with in southern
17 California. So --
18 GOVERNOR BUSH: We don't. No, sir.
19 MR. STRUHS: Okay. There are -- there are
20 currently three new plants pending for approval
21 by the Power Plant Siting Board in the state of
22 Florida.
23 COMMISSIONER CRIST: Any time frame as to
24 when they'll get to us for approval?
25 MR. STRUHS: Actually let me introduce
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1 Mr. Buck Oven, who -- who actually is the
2 Director of the --
3 COMMISSIONER CRIST: Yes, sir.
4 MR. STRUHS: -- Power Plant Siting Program
5 for the Department.
6 TREASURER GALLAGHER: Good move.
7 MR. OVEN: Calpine's plant, it will come
8 before you either the last meeting in June, or
9 the first meeting in August.
10 COMMISSIONER CRIST: Yes, sir.
11 MR. OVEN: The Orlando Utilities Commission
12 expansion could come in late August or early
13 September.
14 And then the JEA Brandy Branch expansion
15 should come before you probably in February.
16 COMMISSIONER CRIST: I'm informed
17 there's -- Enron wants to do one in south
18 Florida somewhere? Do you know anything about
19 that?
20 MR. OVEN: The Enron projects in south
21 Florida are outside the Siting Act, will not
22 come before you.
23 TREASURER GALLAGHER: Yeah. Those are
24 private.
25 COMMISSIONER CRIST: I see.
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1 GOVERNOR BUSH: They're below the -- below
2 the threshold. There's many, many projects
3 that are building capacity below the --
4 whatever the megawatt threshold is, 75 or --
5 MR. OVEN: They are either below the
6 75 megawatt threshold for steam, or they have
7 no steam at all, and are --
8 COMMISSIONER CRIST: Okay.
9 MR. OVEN: -- completely outside the Act.
10 COMMISSIONER CRIST: Okay.
11 GOVERNOR BUSH: So it's a single --
12 COMMISSIONER CRIST: Any idea how many of
13 those there are?
14 MR. OVEN: In the last two years, we have
15 been looking at -- or are still looking at
16 something like 17,000 megawatts of capacity
17 since '99. So there's been a lot of permitted
18 and a lot more being permitted.
19 COMMISSIONER CRIST: So we're --
20 MR. OVEN: I don't know how much is being
21 built. But a lot --
22 COMMISSIONER CRIST: We're moving along, so
23 we're powered up.
24 MR. OVEN: We're not California.
25 COMMISSIONER CRIST: I know that. I don't
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1 want to be. That's all.
2 Thank you.
3 GOVERNOR BUSH: That doesn't -- I mean,
4 that's a -- that's not the most efficient way
5 of building capacity for a state like Florida,
6 in my opinion.
7 MR. OVEN: Yes, sir, that's correct.
8 One of those units may never be built. Or
9 they're being permitted so that if the statute
10 were changed, they'll probably convert those
11 plants to the combined cycle and move forward
12 with them.
13 But there's only so much need for peaking
14 units.
15 GOVERNOR BUSH: All right.
16 MR. OVEN: So a lot of these probably will
17 not be built. But they are permitted.
18 TREASURER GALLAGHER: California has a lot
19 of need for peaking units.
20 COMMISSIONER CRIST: So I guess -- I mean,
21 the question -- the question is, do we have a
22 plan to, you know, do this before we have a
23 situation --
24 GOVERNOR BUSH: Secretary Struhs can answer
25 that one.
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1 MR. STRUHS: The answer is: Really for the
2 first time in -- in anybody's recent memory,
3 thanks to actions in the Legislature and the
4 Governor, through Executive Order appointing
5 the Energy 20/20 Study Commission, we are now
6 about a third of the way through public
7 processing, which we're trying to develop a
8 plan for the State's consideration.
9 And these are precisely the kinds of
10 issues -- policy issues that are being
11 deliberated. Progress is -- has been good.
12 And -- and it's -- it's a -- a wide group
13 of interests, both residential users,
14 commercial users of power, utility industry,
15 the independent power producers, all coming
16 together to see if we can't come back by
17 December of this year with some consensus views
18 on -- on how to resolve some of these policy
19 issues.
20 So we are -- we are on schedule, and -- and
21 look forward to having that done by December.
22 COMMISSIONER CRIST: Thank you, Secretary.
23 Thank you for your indulgence, Governor.
24 GOVERNOR BUSH: No. It's an important
25 subject. And -- and it -- one of the things
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1 that -- I think one of the ironies is the fact
2 that we're probably the -- if we're not the
3 most regulated marketplace for the utility
4 industry, we're close to it, has provided some
5 short-term protection.
6 But it's -- it's a false -- in my opinion,
7 a false situation in the sense that we have to
8 build capacity, and in the open marketplace,
9 I think we can build capacity faster.
10 So the questions become, how do you move to
11 that -- a new marketplace. And that's fraught
12 with a lot of policy challenges for us related
13 to stranded costs versus stranded benefits,
14 protection of the consumer.
15 These are issues that are very complex, and
16 we're going to be methodical in how we go about
17 it.
18 But the good news is that we're not on the
19 same power grade as California. That's the
20 best news.
21 And the second best news is that we have
22 reserves built today that would allow us to
23 sustain any kind of -- we can continue to grow,
24 we can -- I'm -- I'm looking for the
25 Florida Power Corp. guys to make sure that
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1 we're shaking forward like this -- that we can
2 have -- we can have our typical summer kind of
3 conditions, and we're not going to see anything
4 remotely close to what we had in -- what we see
5 in California with brownouts and blackouts.
6 Good. Good.
7 COMMISSIONER CRIST: The jury agrees.
8 I guess we're done.
9 (Discussion off the record.)
10 (The Department of Environmental Protection
11 Siting Board Agenda was concluded.)
12 * * *
13
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15
16
17
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21
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23
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25
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1 (Commissioner Bronson,
2 Attorney General Butterworth,
3 Commissioner Crist, and Secretary Harris exited
4 the room.)
5 GOVERNOR BUSH: Tom Herndon.
6 MR. HERNDON: Item Number 1 is the minutes
7 of the meeting of May 15th.
8 TREASURER GALLAGHER: Motion on minutes.
9 GOVERNOR BUSH: Uh-oh.
10 Oh, there you are.
11 COMPTROLLER MILLIGAN: I'm here.
12 GOVERNOR BUSH: Disappeared.
13 COMPTROLLER MILLIGAN: I'm just waiting
14 till things settle down a little bit.
15 GOVERNOR BUSH: You want to sec-- move
16 the -- second the --
17 COMPTROLLER MILLIGAN: I'll second the
18 minutes. Yeah. That's not a big deal.
19 GOVERNOR BUSH: Moved and seconded.
20 Without objection, it's approved.
21 MR. HERNDON: Item Number 2 is approval of
22 a fiscal sufficiency of an amount not exceeding
23 50 million dollars, State of Florida,
24 Department of Environmental Protection,
25 Florida Forever Revenue Bonds.
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1 COMPTROLLER MILLIGAN: And I'll move that
2 one.
3 TREASURER GALLAGHER: Second.
4 GOVERNOR BUSH: Moved and seconded.
5 Without objection, it's approved.
6 MR. HERNDON: Item Number 3 is a request of
7 the Trustees by the staff of the State Board to
8 approve filing the Investment Policy Statement
9 which was approved -- last approved at your
10 February 27th, 2001, meeting.
11 We've gone through, as you know, extensive
12 rulemaking starting back in Panama City last
13 year, and are before you today.
14 The most recent hearing we had back in
15 April resulted in three changes which are
16 enumerated, and I would characterize as -- as
17 primarily clarification.
18 We're ready to move forward with the
19 rulemaking process, if you approve that.
20 TREASURER GALLAGHER: Motion on 3.
21 COMPTROLLER MILLIGAN: Second.
22 GOVERNOR BUSH: Moved and seconded.
23 Without objection, it's approved.
24 MR. HERNDON: Item Number 4 is to recommend
25 that -- the dissolution of any nonstatutory
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1 based restrictions on the investment authority
2 of the State Board of Administration.
3 As a corollary to that proposal, we would
4 also request your authorization to make any
5 corresponding change to the total fund
6 investment plan as needed to reflect the
7 elimination of any nonstatutory based
8 restriction.
9 Needless to say, this does have the effect
10 of removing the only current policy based
11 restriction at the Board, which is tobacco.
12 We do have some folks here who would like
13 to speak to that subject.
14 And, Governor, members, if it's your
15 pleasure, we can go ahead and have them come
16 now.
17 GOVERNOR BUSH: Yeah. Please.
18 MR. HERNDON: Okay. I have two that I'm
19 aware of: Mr. Kennedy and Ms. Olsen.
20 MS. OLSEN: Thank you.
21 Good afternoon.
22 GOVERNOR BUSH: Good afternoon.
23 MS. OLSEN: It's been a long morning, so
24 I'm going to keep my comments brief.
25 My name is Brenda Olsen, and I'm the
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1 Assistant Executive Director for the
2 American Lung Association.
3 I'm here today to speak on behalf of the
4 Triagency Coalition on Smoking or Health, which
5 consists of the American Cancer Society, the
6 American Heart Association, and the
7 American Lung Association.
8 I'd like to, of course, begin my comments
9 by thanking the State Board of Administration
10 for giving us this opportunity to express our
11 concerns about your consideration of dissolving
12 the restrictions on investing in tobacco
13 stocks.
14 Although we recognize the State Board of
15 Administration has a fiduciary responsibility
16 to maximize the returns for the State pension
17 fund, we believe moral and ethical obligations
18 sometimes rise above those fiduciary
19 responsibilities.
20 We believe this is one of those times.
21 By its own admission, the tobacco industry
22 markets an addictive and deadly product.
23 Today, in this country, 3,000 children will
24 start smoking. And 1,000 of those will die
25 prematurely as a direct result of their
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1 addiction.
2 In Florida, tobacco will claim more than
3 29,000 people this year alone. We believe the
4 State should not share in the profiting from
5 the destruction of so many lives.
6 Whether it chooses to acknowledge it or
7 not, we believe this state has a responsibility
8 to protect the health of its residents.
9 Oftentimes, these responsibilities calls upon
10 the State to display leadership in rejecting
11 activities, that while legal, to us are morally
12 offensive.
13 The tobacco industry's willful and
14 methodical addiction of Florida's children to
15 its deadly product constitutes a business
16 practice so reprehensible as to outweigh any
17 marginal gain reinvestment in tobacco stocks
18 might provide to the State's pensioners.
19 We again ask for your leadership, and we
20 urge you to reject the proposal to remove the
21 nonstatutory limitations on State investments
22 on tobacco stocks.
23 Thank you.
24 GOVERNOR BUSH: Thank you.
25 I -- just a -- can I have a -- ask you a
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1 question, because --
2 MS. OLSEN: Sure.
3 GOVERNOR BUSH: -- you -- you said
4 something that surprised me a bit.
5 You didn't believe the State should profit
6 from -- I don't know the exact wording -- but
7 the tobacco companies' operations.
8 What about the 550 or 600 million dollars
9 of taxes that we receive and the tobacco
10 settlement? I mean, we're profiting in very
11 good ways for all sorts of people because of
12 that.
13 Is that different than --
14 MS. OLSEN: I -- I do see it -- we do see
15 it as different, because you're investing in --
16 in a company's business, as opposed to other --
17 other means. The tobacco settlement was
18 because of a -- a court case in which the
19 tobacco industry settled with -- with the
20 State of Florida.
21 And, of course, taxes are levied on -- on
22 a -- a number of different products. But when
23 you start talking -- talking about investing in
24 a -- in a company that has a product that when
25 used as intended, kills, it becomes a different
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1 matter, in our view.
2 GOVERNOR BUSH: That's an interesting
3 dilemma. Because I -- I would guess that the
4 American Lung Association, American Cancer
5 Society, would like for us, as a country, to
6 ban cigarette smoking, wouldn't you, make it
7 illegal?
8 MS. OLSEN: We -- we've -- we've never --
9 we've never had that position where we think
10 that it should be banned.
11 GOVERNOR BUSH: No?
12 MS. OLSEN: But we work very hard to keep
13 the youth from our -- our country to keep from
14 becoming addicted to this product.
15 We -- we've seen prohibition. We saw
16 prohibition in alcohol, and it doesn't keep
17 people from using the product.
18 And so it's important for us as a state,
19 and as organizations, to do everything we can
20 to convince our -- our constituents --
21 GOVERNOR BUSH: Absolutely.
22 MS. OLSEN: Not to use the product.
23 GOVERNOR BUSH: It is a -- it is a dilemma,
24 because --
25 MS. OLSEN: It -- we realize --
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1 GOVERNOR BUSH: -- we're -- we get about a
2 billion --
3 MS. OLSEN: -- that.
4 GOVERNOR BUSH: -- dollars of revenue from
5 something that is legal, but also is harmful.
6 It's a -- and it has health costs that -- that
7 are significant.
8 It's a -- there's no easy answer on this.
9 TREASURER GALLAGHER: Well, I -- you know,
10 I recognize this problem. I want -- just want
11 to remind some people here that in 1992, I
12 moved the resolution that eliminated smoking in
13 the Capitol and other buildings that the
14 Governor and Governor and Cabinet had authority
15 over.
16 So just to let you know, I'm -- I'm in your
17 direction, I believe in what you're working
18 toward. I also realize that we have a -- the
19 fiduciary responsibility that you mentioned.
20 COMPTROLLER MILLIGAN: And -- and that --
21 MS. OLSEN: And we -- we recognize how
22 difficult this decision must be for you.
23 COMPTROLLER MILLIGAN: And that's really
24 the -- the -- the horns of the dilemma that
25 you're on. You have your Trustee
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1 responsibility and from what the law says you
2 must do, versus what you may think personally,
3 or for that matter, in your responsibilities in
4 your elected position.
5 And -- and unfortunately they don't always
6 match up. And -- so it is -- it's -- it's a
7 very difficult decision.
8 MS. OLSEN: Thank you.
9 GOVERNOR BUSH: Thank you for coming.
10 MR. HERNDON: Trustees, let me just make
11 one point of clarification. I think it's
12 important to -- to be clear about this.
13 The fact that this restriction may be
14 lifted by your action does not necessarily
15 imply that we will this afternoon begin to
16 invest in tobacco stocks.
17 What you're basically doing by removing the
18 restriction is leaving the investment decision
19 in the hands of the investment professionals
20 that we hire on your behalf.
21 There may be ultimately investments in
22 tobacco. I certainly don't want to -- to
23 discount that. That certainly is a likely
24 outcome, given the performance of the sector as
25 a whole from an investment point of view.
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1 But it's not necessarily a direct
2 one-to-one correlation with your decision here
3 today.
4 The other point that -- that is worth
5 mentioning here, because it -- this item is
6 couched in the sense of -- of dissolving this
7 former policy statement.
8 So it will operate to eliminate the policy
9 statement in all of the Board's equity
10 portfolios. So that means not only the Florida
11 Retirement System, but other equity portfolios
12 where we have that kind of exposure.
13 And one of those is, of course, the
14 Lawton Chiles Tobacco Endowment. And I want to
15 be clear that -- that your action today does
16 have that effect. And, of course, they can be
17 severable decisions if you would like that to
18 be the case.
19 But --
20 COMPTROLLER MILLIGAN: So we don't -- we
21 don't know enough, Tom. You and I have talked
22 about this already. And we -- we don't know
23 enough about what it would mean to exclude the
24 Lawton Chiles portion of this.
25 What we do know is that it would probably
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1 cost them something. But we don't -- we don't
2 really know.
3 GOVERNOR BUSH: Why would it cost?
4 MR. HERNDON: Well, what we have done --
5 and -- and recognizing the -- the age of some
6 of these products -- for example, the
7 Lawton Chiles Endowment came along after this
8 policy was put in place --
9 GOVERNOR BUSH: So they have no tobacco.
10 MR. HERNDON: Beg your pardon?
11 GOVERNOR BUSH: They have no tobacco stock.
12 MR. HERNDON: Well, they don't have any
13 tobacco stocks. The Board approved that
14 decision.
15 But what we have done as a consequence is
16 we invest in index products, for example, where
17 tobacco stocks are excluded. Those are custom
18 indexes designed only for us, and for very few
19 other clients.
20 If we take the FRS out of those indexes,
21 which is the lion's share of the money --
22 GOVERNOR BUSH: Okay.
23 MR. HERNDON: -- the costs to the remaining
24 parties in the index goes up.
25 GOVERNOR BUSH: Got it.
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1 TREASURER GALLAGHER: Goes way out of
2 whack.
3 GOVERNOR BUSH: I got it. I got it. I got
4 it.
5 MR. HERNDON: So it -- it does have some
6 nuances on a very practical level that we
7 haven't explored pending your decision.
8 GOVERNOR BUSH: Why wouldn't you explore
9 them before we have to make a decision?
10 MR. HERNDON: Well --
11 GOVERNOR BUSH: I mean, look at the crowd
12 here.
13 TREASURER GALLAGHER: Here's the thing
14 that's --
15 GOVERNOR BUSH: You're -- you're asking us
16 to make a decision that may have -- I got -- I
17 got real problems with the -- the
18 Chiles Endowment being a part of this, just --
19 COMPTROLLER MILLIGAN: And --
20 GOVERNOR BUSH: -- an endowment.
21 COMPTROLLER MILLIGAN: -- and -- and so do
22 I. And it turns out it is the only one
23 apparently that we're -- that we're talking
24 about that would be a problem.
25 MR. HERNDON: That's correct.
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1 COMPTROLLER MILLIGAN: External to the FRS.
2 I mean, there are other funds that they handle.
3 But this is the only one that would be a
4 problem.
5 MR. HERNDON: And what -- what we have
6 suggested, General, with -- with your
7 permission --
8 COMPTROLLER MILLIGAN: Yes. Please.
9 MR. HERNDON: -- let us pursue some of
10 these specifics, because we've been reluctant
11 up to this point to tip our hand to our vendors
12 to say, you know, we're going to back out
13 without knowing exactly what's going to happen.
14 Let us explore some of these issues with
15 respect to the Chiles Foundation. You can lift
16 the restriction on the FRS, and we can bring
17 you back a separate recommendation with respect
18 to the Chiles Endowment --
19 TREASURER GALLAGHER: Why don't you --
20 MR. HERNDON: -- at a later time.
21 TREASURER GALLAGHER: -- make a motion for
22 everything but that till we get more
23 information?
24 GOVERNOR BUSH: And if you're lifting
25 the -- I mean, that may have a -- in -- in my
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1 particular case, it may have an impact on my
2 decision if -- if there's no way -- I mean,
3 we're in conflict here with --
4 TREASURER GALLAGHER: Fiduciary
5 responsibility.
6 GOVERNOR BUSH: -- fiduciary responsibility
7 again. If the Chiles Endowment is impacted,
8 I -- I don't know if it could be impacted in
9 a -- by a huge magnitude based on --
10 COMPTROLLER MILLIGAN: We -- we just don't
11 know.
12 GOVERNOR BUSH: Do -- but if there is a --
13 a problem of it, then that might have an impact
14 on my decision on the first vote.
15 COMPTROLLER MILLIGAN: Well, I -- why don't
16 we defer it?
17 I don't see any problem with deferring it
18 really. Do you, Tom? Deferring it.
19 MR. HERNDON: No. There's -- you're not
20 under any kind of timetable or anything --
21 COMPTROLLER MILLIGAN: No.
22 MR. HERNDON: -- like that.
23 COMPTROLLER MILLIGAN: I mean, it's popped
24 up quickly --
25 GOVERNOR BUSH: This is all --
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1 COMPTROLLER MILLIGAN: -- two weeks ago.
2 GOVERNOR BUSH: -- this was Gallagher's
3 stream of consciousness thing.
4 COMPTROLLER MILLIGAN: I --
5 TREASURER GALLAGHER: Then I have --
6 COMPTROLLER MILLIGAN: -- I'll -- I'll move
7 that we defer it till -- to the next meeting,
8 assuming that you can look at what the impact
9 is on particularly the --
10 GOVERNOR BUSH: That'll really disappoint
11 everybody in the room.
12 COMPTROLLER MILLIGAN: Well, sorry about
13 that, but I --
14 TREASURER GALLAGHER: They -- they'll get
15 to write the story another time.
16 GOVERNOR BUSH: They may write it now and
17 write it again.
18 TREASURER GALLAGHER: They will.
19 COMPTROLLER MILLIGAN: So I move
20 deferral --
21 TREASURER GALLAGHER: Second.
22 COMPTROLLER MILLIGAN: -- till the 12th.
23 GOVERNOR BUSH: There's a motion and a
24 second.
25 The item is deferred.
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1 Can I ask a question?
2 TREASURER GALLAGHER: Have we got another
3 little --
4 GOVERNOR BUSH: Yeah. Tom.
5 TREASURER GALLAGHER: I do.
6 MR. HERNDON: Yes, sir.
7 GOVERNOR BUSH: When this policy decision
8 was made --
9 MR. HERNDON: Yes, sir.
10 GOVERNOR BUSH: -- five or six years ago,
11 did you liquidate --
12 MR. HERNDON: Yes, sir.
13 GOVERNOR BUSH: -- all these indi--
14 COMPTROLLER MILLIGAN: Right.
15 GOVERNOR BUSH: So there are no -- there's
16 no --
17 MR. HERNDON: No, sir. And, in fact, we've
18 had to contract for customized indexes of which
19 there are very few other participants. And
20 that's why the cost is high for us, compared to
21 our normal --
22 TREASURER GALLAGHER: And there's probably
23 been a -- not only that cost figured in, but
24 there's probably been a difference in our yield
25 based on --
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1 COMPTROLLER MILLIGAN: Yeah. You don't
2 want to really go there I don't think.
3 TREASURER GALLAGHER: Well, sometimes there
4 is, sometimes there isn't. Depending on when
5 you bought and when you sold.
6 COMPTROLLER MILLIGAN: Well, I know that.
7 MR. HERNDON: Item Number 5, Governor,
8 members, two parts to Item 5(A) and 5(B), and
9 this is the Hurricane Catastrophe Fund premium
10 formula for 2001-2002 contract year that we've
11 discussed before.
12 It was originally before you on May 15th,
13 and was deferred pending the Governor's action
14 on the additional mitigation dollars in the
15 appropriations bill.
16 And I read in the paper where you got it --
17 of the appropriations bill, and then --
18 GOVERNOR BUSH: I don't know --
19 MR. HERNDON: -- the Senate took it back --
20 GOVERNOR BUSH: Yeah.
21 MR. HERNDON: -- apparently.
22 TREASURER GALLAGHER: They took it back.
23 MR. HERNDON: So you still don't have any
24 item -- any action. I don't know whether it's
25 your --
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1 GOVERNOR BUSH: I hope we'll get it today.
2 MR. HERNDON: -- wish to defer it, or -- or
3 what at this point. The item is before you for
4 your pleasure.
5 TREASURER GALLAGHER: I'll move Item 5.
6 It -- it allows flexibility, according to your
7 decisions, Governor.
8 COMPTROLLER MILLIGAN: I'll second that.
9 GOVERNOR BUSH: Yeah. I -- there's a --
10 are we deferring, is that what you're doing?
11 TREASURER GALLAGHER: No. We're on the
12 next one, and we're -- moved and seconded.
13 GOVERNOR BUSH: All right. I -- I just --
14 for the record, I'm getting e-mails now from
15 people based on information apparently that
16 Dr. Nicholson gave that says that there's going
17 to be 47.3 percent, 35.8 percent increases in
18 Jacksonville and Pensacola homeowners insurance
19 because of this.
20 Have you seen this?
21 TREASURER GALLAGHER: No, I have not.
22 GOVERNOR BUSH: You know. It's welcome to
23 my world.
24 But I -- it -- for the record, at least we
25 can clarify that that information must have
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1 been not accurately -- may have been given out
2 accurately, but it may not have been inputted
3 properly by the realtors and others that are
4 concerned about this.
5 TREASURER GALLAGHER: I don't know -- is
6 this the realtors sending this out?
7 GOVERNOR BUSH: Yeah.
8 TREASURER GALLAGHER: Florida Association
9 of Realtors?
10 I don't know where they got that particular
11 information. It could or could not be true, I
12 just don't know.
13 Do you know, Jack?
14 DR. NICHOLSON: I -- I think what had
15 happened is the -- the press had picked --
16 picked up the 4 percent -- 4.14 percent
17 increase that we had talked about in terms of
18 the Cat Fund rates, interpreted that to mean
19 that consumers would pay as much as 4 percent
20 higher.
21 And that's not a correct interpretation
22 since the CAT fund is only a small part of what
23 the consumer pays.
24 COMPTROLLER MILLIGAN: Exactly.
25 GOVERNOR BUSH: Thank you.
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1 Your --
2 TREASURER GALLAGHER: But what-- whatever
3 is charged to the companies, which -- because
4 this is a company based deal, will be passed on
5 automatically to the consumers. And it will
6 not be a flat 4 percent, it will be different
7 based on --
8 GOVERNOR BUSH: I have --
9 TREASURER GALLAGHER: -- who those people
10 are.
11 GOVERNOR BUSH: -- an -- I have an e-mail
12 from Dr. Nicholson that says that -- that the
13 average cost exposure unit could be expressed
14 as $3.69 cents a year. And that's assuming
15 that all of it is passed on I guess.
16 DR. NICHOLSON: We -- we have approximately
17 5.4 million exposure units accounted for in
18 terms of the Cat Fund exposure. That would
19 include a house, a mobile home, apartments,
20 condominiums. So we count each exposure unit,
21 as opposed to the policyholder.
22 If you divide the 5.4 million into
23 20 million, that works out, on average, three
24 point six nine dollars a year.
25 GOVERNOR BUSH: Thank you.
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1 DR. NICHOLSON: Average is not quite
2 descriptive of what --
3 GOVERNOR BUSH: Because it -- varies --
4 DR. NICHOLSON: -- goes on overall.
5 GOVERNOR BUSH: -- a little bit.
6 DR. NICHOLSON: But it is an average
7 number.
8 TREASURER GALLAGHER: Well, it could vary a
9 lot in certain areas.
10 DR. NICHOLSON: Right.
11 TREASURER GALLAGHER: Unfortunately,
12 Miami --
13 GOVERNOR BUSH: Okay.
14 TREASURER GALLAGHER: -- is one of the ones
15 that varies a lot.
16 GOVERNOR BUSH: There's a -- a motion and a
17 second.
18 COMPTROLLER MILLIGAN: Yeah.
19 GOVERNOR BUSH: Without objection, it's
20 approved.
21 MR. HERNDON: And Item Number 6 is the fund
22 activity analysis for the month of March 2001.
23 TREASURER GALLAGHER: Motion.
24 GOVERNOR BUSH: Second?
25 COMPTROLLER MILLIGAN: Second.
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1 GOVERNOR BUSH: Moved and seconded.
2 Without objection, it's --
3 COMPTROLLER MILLIGAN: We didn't have to
4 approve --
5 MR. HERNDON: Thank you.
6 COMPTROLLER MILLIGAN: -- that though I
7 don't know.
8 GOVERNOR BUSH: Oh, we didn't --
9 COMPTROLLER MILLIGAN: -- it is for
10 information.
11 TREASURER GALLAGHER: We did.
12 COMPTROLLER MILLIGAN: Information, but we
13 approved it.
14 (The State Board of Administration Agenda
15 was concluded.)
16 * * *
17 (The Cabinet meeting was concluded at
18 12:48 p.m.)
19
20
21
22
23
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25
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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 161 through 241 are a true
12 and 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 8TH day of JUNE, 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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