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T H E C A B I N E T
S T A T E O F F L O R I D A
_____________________________________________
VOTE AND LEGISLATIVE MATTER DISCUSSION
Representing:
DIVISION OF BOND FINANCE
FINANCIAL SERVICES COMMISSION
DEPARTMENT OF VETERANS' AFFAIRS
DEPARTMENT OF REVENUE
ADMINISTRATION COMMISSION
STATE BOARD OF TRUSTEES
STATE BOARD OF ADMINISTRATION
The above agencies came to be heard before
THE FLORIDA CABINET, Honorable Governor Bush presiding,
in the Cabinet Meeting Room, LL-03, The Capitol,
Tallahassee, Florida, on Tuesday, January 28, 2003
commencing at approximately 9:20 a.m.
Reported by:
SANDRA L. NARGIZ
Registered Professional Reporter
Registered Merit Reporter
Certified Realtime Reporter
ACCURATE STENOTYPE REPORTERS, INC.
100 SALEM COURT
TALLAHASSEE, FL 32301 (850)878-2221
3
APPEARANCES:
Representing the Florida Cabinet:
JEB BUSH
Governor
CHARLES H. BRONSON
Commissioner of Agriculture
CHARLIE CRIST
Attorney General
TOM GALLAGHER
Commissioner/Treasurer
* * *
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I N D E X
DIVISION OF BOND FINANCE
(Presented by Ben Watkins)
ITEM ACTION PAGE
1 Approved 21
2 Approved 21
3 Approved 21
4 Approved 22
5 Approved 25
6 Approved 26
7 Approved 27
8 Approved 27
9 Approved 28
FINANCIAL SERVICES COMMISSION
(Presented by Paul Mitchell)
ITEM ACTION PAGE
1 Approved 29
2 Approved 28
3 Approved 30
DEPARTMENT OF VETERANS' AFFAIRS
(Presented by Rocky McPherson)
ITEM ACTION PAGE
1 Approved 31
2 Approved 32
DEPARTMENT OF REVENUE
(Presented by James Zingale)
1 Approved 33
2 Approved 33
ADMINISTRATION COMMISSION
(Presented by Teresa Tinker)
ITEM ACTION PAGE
1 Approved 36
2 Approved 36
5
BOARD OF TRUSTEES
(Presented by David Struhs)
ITEM ACTION PAGE
1 Deferred 40
2 Deferred 40
3 Deferred 40
4 Approved 66
5 Approved 68
6 Approved 68
7 Approved 70
8 Approved 74
9 Approved 75
10 Approved 76
11 Approved 97
12 Approved 100
13 Approved 111
14 Deferred 140
15 Approved 146
16 Deferred 40
17 Deferred 40
18 Approved 245
STATE BOARD OF ADMINISTRATION
(Presented by Coleman Stipanovich)
ITEM ACTION PAGE
1 Approved 246
2 Approved 246
3 Approved 247
4 Approved 240
5 Approved 248
6 Approved 249
7 Approved 249
8 Discussion 249
9 Deferred 275
10 Approved 286
CERTIFICATE OF REPORTERS 287
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1 P R O C E E D I N G S
2 (The agenda items commenced at approximately
3 9:20 a.m.)
4 GOVERNOR BUSH: Before we begin the agenda, I
5 thought it would be appropriate in this public
6 forum to have a conversation about some of the
7 issues that actually relate to the agenda today,
8 but also on an on-going basis we need to deal with
9 as relates to the change in the Cabinet structure
10 that was done through the initiative and
11 referendum process.
12 There are some issues that probably, I
13 assume these were unintended consequences -- I
14 would hope that someone wouldn't have
15 intentionally done this, I doubt that they
16 would have -- but there are some issues now
17 that need to be clarified through the
18 legislative process, in my opinion, that I
19 think we can do. And we ought to have a
20 discussion about it today because there are
21 some agenda items that would be impacted by our
22 views on this subject.
23 The new constitutional language of Article
24 IV, Section 4, states that in the event of a
25 tie vote of the Governor and the Cabinet, the
7
1 side on which the Governor voted shall be
2 deemed to prevail.
3 However, there are elements in statute
4 that refer to five out of seven extraordinary
5 votes. And I am suggesting that we have --
6 that we work on proposed legislation that would
7 replace the five out of seven extraordinary
8 references in statute with an affirmative vote
9 of at least three members of the board to
10 comply with the general intent, at least in
11 terms of percentage, but to deal with the
12 obvious, which is that we ain't got five; we
13 ain't got seven; we got four, which is a
14 problem.
15 In addition to that, I believe that the
16 legislature needs to correct the current
17 Administration Commission extraordinary vote
18 requirement of the Governor plus three vote
19 members to the Governor plus two board members.
20 I worry not with this illustrious group
21 here, all of us being so illustrious; I worry
22 though in the future, that future Governors and
23 Cabinets could -- we could place ourselves as
24 relates to appointments of Cabinet Members, of
25 Secretaries of departments that report to us in
8
1 a position of gridlock. And I don't believe
2 that that was the intent of what this
3 constitutional amendment meant to do.
4 I fully recognize there are elements in
5 the law that we ought to continue to require
6 that there be an extraordinary majority vote.
7 This is not an intent on my part to try to
8 garner yet more power, because frankly that's
9 not what service is about. It is about
10 bringing some clarity to some issues that
11 should have been thought about when the
12 initiative was done.
13 TREASURER GALLAGHER: Repeat what you just
14 said.
15 GOVERNOR BUSH: Repeat what?
16 TREASURER GALLAGHER: The comments, the part
17 you want to change.
18 GOVERNOR BUSH: It would be two things.
19 One, wherever there is a reference of five
20 out of seven votes, we go to the three out of
21 four.
22 The Administrative Commission vote of
23 going from the Governor and three members to
24 the Governor and two members, so there is an
25 extra majority vote.
9
1 And then on issues, any other issues that
2 may come up, I think the key ones there would
3 be the appointments of Cabinet members, or
4 excuse me, department heads, that report to us.
5 There are how many of those? There are six or
6 seven, I believe, which they have different --
7 they have varying descriptions in statute.
8 So the idea would be to go to the
9 legislature and ask for their bringing some
10 clarity to that. And what I would like to do
11 is work with --
12 TREASURER GALLAGHER: That clarity is going
13 to require them to put a constitutional amendment
14 on the ballot.
15 GOVERNOR BUSH: It depends, it could.
16 TREASURER GALLAGHER: The Constitution is
17 real clear, it says three Cabinet members,
18 unfortunately; it should probably say two or
19 otherwise.
20 GOVERNOR BUSH: That may be one of the
21 alternatives, but I would suggest we look at
22 providing some guidance to the legislature on it.
23 But we have issues here in this agenda
24 where, because of current requirements, current
25 statutes, in my opinion at least we can't deal
10
1 with because of the lack of clarity right now
2 because of this inconsistency.
3 And because we needed to discuss this in a
4 public setting by law, I wish we would have had
5 the chance to notify people that traveled up
6 here to say that this was perhaps going to be
7 changed.
8 Having said that, I would suggest that
9 everybody that came to talk about items that
10 may require an extra majority vote or five
11 votes out of seven, where we can't comply with
12 it because of the lack of clarity, that may
13 create a problem with transfer of title and
14 other things, that we -- we'll have everybody
15 speak, perhaps with a little brevity, since I
16 am sure there will be another bite at the apple
17 later on.
18 TREASURER GALLAGHER: It might be worthwhile
19 stating -- I think all of these, there are six
20 items on the Board of Trustees, and so we probably
21 should let everybody know which items those are so
22 that those people can either stay or go or
23 whatever.
24 COMMISSIONER BRONSON: Members, I also am --
25 I think we should discuss, if the opportunity
11
1 comes up here, if there are any issues that are so
2 sensitive right now on a Cabinet vote that it's
3 going to create some problems before we get all
4 this rectified to come back; is there any remedy
5 for those issues that could be held up? And can
6 we -- is there anything we can do as a Cabinet to
7 rectify that?
8 GOVERNOR BUSH: I know of one issue that is
9 time sensitive. Stump Pass is time sensitive, and
10 I think that the option there perhaps, if it
11 requires an extension of a permit both at DEP and
12 the -- Jerry, no? Doesn't require an extension of
13 the permit.
14 (Inaudible from audience.)
15 GOVERNOR BUSH: We'll get to it. You are
16 going to get a chance to speak. You drove all the
17 way up here at 2:00 in the morning.
18 TREASURER GALLAGHER: Governor, these items
19 that are under the Board of Trustees and Internal
20 Improvement Trust Agenda, item 1, item 2, item 3,
21 item 16, 17 and 18. So if you have one of those
22 items, at this particular point they are not going
23 to be voted on. Is that your understanding?
24 GOVERNOR BUSH: (Nods affirmatively.) Yeah,
25 he listed them; that's my view based on the need
12
1 to deal with this issue through the legislative
2 process. And I am willing on any time-sensitive
3 issue that -- I think there is only one that is
4 truly time sensitive, perhaps I am wrong -- that
5 we need to figure out a way to -- if we are
6 supportive of the concept, which is why I would
7 like to hear people's view on this -- that we do
8 everything we can to try to accommodate them.
9 The best case scenario would be that the
10 legislature would view this as a serious issue
11 and handle it in the first week which could
12 create a time -- could help on Stump Pass and
13 other issues.
14 TREASURER GALLAGHER: We probably should have
15 done something before the organizational session
16 and asked them to do it then as a quick going
17 through.
18 GOVERNOR BUSH: To be honest with you, there
19 wasn't a whole lot of interest. I did discuss it
20 last year actually, not all of these issues but a
21 series of them, and people suggested we should
22 wait until -- not prospectively.
23 TREASURER GALLAGHER: Well, that's all you
24 can do.
25 GENERAL CRIST: I know you recognized the
13
1 fact that there are people who have traveled a
2 long way that might want to talk about some of
3 these issues, the ones particularly you say are
4 time sensitive. And maybe now is a good
5 opportunity to let them speak.
6 It's unfortunate we are in a situation
7 where maybe this could have been rectified
8 previously, but here is where we are.
9 GOVERNOR BUSH: I suggest we, just as the
10 normal course, as the agenda items come up, if
11 people want to speak on the agenda items, to hear
12 it, we'll do it then.
13 TREASURER GALLAGHER: While we are on this
14 sort of issue, we have a new Cabinet, and we have
15 agency heads, and we are about to do one that
16 needs to be reaffirmed, reevaluated, chosen,
17 whatever.
18 And so after we finish with the Cabinet's
19 affairs, I think we need to at least talk
20 about -- we had a discussion back when Coleman
21 was named as State Board of Administration back
22 in January, we would look at that again because
23 we would have a new Cabinet and I think we need
24 to look at all the Cabinet, Governor
25 recommendations, Cabinet appointees or those
14
1 that just end up being Cabinet appointees over
2 the next 60 days or so; and probably here we
3 should affirm them to continue doing what they
4 are doing just to make them legal.
5 GOVERNOR BUSH: Why don't we just make them
6 all legal now?
7 GENERAL CRIST: I would make such a motion.
8 GOVERNOR BUSH: If you are going --
9 TREASURER GALLAGHER: I think you need to do
10 one at a time.
11 GOVERNOR BUSH: You have a list?
12 TREASURER GALLAGHER: I have a list. We
13 need -- we ought to wait for the State Board of
14 Administration to do Coleman. What is our goal
15 here?
16 GOVERNOR BUSH: I am more than happy to have
17 someone make a motion. My personal view is that
18 every person that is working for us has done a
19 fine job, and they are worthy of our unanimous
20 affirmation of that.
21 GENERAL CRIST: I would make such a motion.
22 I think they are doing a great job, and I think
23 the list, Division of Bond finance --
24 GOVERNOR BUSH: Why don't we start with the
25 executive director of Veterans' Affairs and do
15
1 these individually so there is no --
2 GENERAL CRIST: I would move for Department
3 of Veterans' Affairs, Rocky McPherson, Colonel,
4 excuse me, Colonel, be appointed executive
5 director.
6 TREASURER GALLAGHER: Second.
7 GOVERNOR BUSH: Is there any discussion?
8 Rocky, can I ask you a question.
9 There is -- we have performance
10 measurements for all agency heads that report
11 to the Cabinet. And I think there is interest
12 that you all also develop those as quickly as
13 possible to get back to the Governor and
14 Cabinet.
15 COLONEL McPHERSON: Yes, sir, we are working
16 that and we'll have that for you by the next
17 Cabinet meeting.
18 GOVERNOR BUSH: Thank you. Any other
19 discussion?
20 All in favor of Colonel McPherson being
21 named as executive director of Veteran's
22 Affairs, say aye.
23 THE CABINET: Aye.
24 GENERAL CRIST: Governor, I would move
25 Department of Law Enforcement, Tim Moore.
16
1 GOVERNOR BUSH: The motion passes.
2 GENERAL CRIST: I would make a motion that
3 for the Department of Law Enforcement, we appoint
4 Tim Moore.
5 GOVERNOR BUSH: Is there a second?
6 COMMISSIONER BRONSON: Second.
7 GOVERNOR BUSH: Any discussion? All in favor
8 say aye.
9 THE CABINET: Aye.
10 GOVERNOR BUSH: All opposed?
11 TREASURER GALLAGHER: These require
12 unanimous?
13 GOVERNOR BUSH: Yes, they do.
14 Motion passes unanimously.
15 TREASURER GALLAGHER: I move Jim Zingale,
16 Department of Revenue.
17 COMMISSIONER BRONSON: Second.
18 GOVERNOR BUSH: There is a motion and second
19 for Dr. Zingale to be named Secretary -- is it
20 Secretary --
21 TREASURER GALLAGHER: Executive director.
22 GOVERNOR BUSH: -- Executive Director of the
23 Department of Revenue. Any discussion?
24 All in favor say aye.
25 THE CABINET: Aye.
17
1 GOVERNOR BUSH: All opposed?
2 Motion passes unanimously.
3 TREASURER GALLAGHER: I Move Fred Dickinson,
4 Department of Highway Safety.
5 COMMISSIONER BRONSON: Second.
6 GOVERNOR BUSH: There is a motion and second
7 for Fred Dickinson to be named the Executive
8 Director of this long name.
9 TREASURER GALLAGHER: Department of Highway
10 Safety and Motor Vehicles.
11 GOVERNOR BUSH: Any discussion? All in favor
12 say aye.
13 THE CABINET: Aye.
14 GOVERNOR BUSH: All opposed?
15 GENERAL CRIST: Move David Struhs as head of
16 Department of Environmental Protection.
17 TREASURER GALLAGHER: Second.
18 GOVERNOR BUSH: There is a motion and a
19 second for Secretary Struhs to be named as the
20 Secretary of Department of Environmental
21 Protection. Any discussion? This will require
22 Senatorial confirmation as well.
23 All in favor say aye.
24 THE CABINET: Aye.
25 GOVERNOR BUSH: All opposed?
18
1 Congratulations, David.
2 GENERAL CRIST: I would nominate David Struhs
3 as I guess, it's Executive Director for the Board
4 of Trustees.
5 GOVERNOR BUSH: What was the other one we
6 just did?
7 GENERAL CRIST: Environmental Protection.
8 GOVERNOR BUSH: Okay. There is a motion to
9 name David Struhs the -- what's the title?
10 TREASURER GALLAGHER: I think that only
11 requires you and one person. And I think the
12 person who is department head of Environmental
13 Protection is automatically --
14 GOVERNOR BUSH: Okay. Good. General Crist
15 withdraws the motion.
16 GENERAL CRIST: Yes.
17 GOVERNOR BUSH: Is that it?
18 Should we do --
19 TREASURER GALLAGHER: Did we do Ben Watkins,
20 Division of Bond Finance?
21 GENERAL CRIST: Second.
22 GOVERNOR BUSH: There is a motion and second
23 for Ben Watkins to continue as the -- I don't know
24 what the title is.
25 TREASURER GALLAGHER: Director of Division of
19
1 Bond Finance.
2 GOVERNOR BUSH: Director of the Division of
3 Bond Finance. Any discussion? All in favor say
4 aye.
5 THE CABINET: Aye.
6 GOVERNOR BUSH: All opposed?
7 TREASURER GALLAGHER: We can do Coleman.
8 GOVERNOR BUSH: General, we need to confirm
9 Eva Armstrong as well.
10 GENERAL CRIST: I move Eva Armstrong as head
11 of Division of State Lands.
12 GOVERNOR BUSH: Is there a second?
13 TREASURER GALLAGHER: Second.
14 GOVERNOR BUSH: There is a motion and a
15 second. Any discussion? All in favor say aye.
16 THE CABINET: Aye.
17 GOVERNOR BUSH: All opposed? Motion passes
18 unanimously.
19 Tom, do you think it would be appropriate
20 to, since the old Cabinet, we did the old SBA.
21 TREASURER GALLAGHER: We need to do that as
22 part of the agenda.
23 GOVERNOR BUSH: Okay. Very good. Thank you.
24 And we will have some draft language to be
25 submitted to your offices.
20
1 TREASURER GALLAGHER: That's fine.
2 GOVERNOR BUSH: You already got it there?
3 TREASURER GALLAGHER: Yeah.
4 GOVERNOR BUSH: Very efficient.
5 In addition to those votes and for all the
6 Secretaries and Division Directors and
7 Executive Directors, we commend you for your
8 continued service and thank you for your hard
9 work.
10 I also need to seek approval from the
11 Governor and Cabinet for the appointment of
12 Colleen Castille as the substitute agency head
13 for the Department of Environmental Protection,
14 to take final agency action regarding IMC
15 Phosphate Company Environmental Resource
16 Permit.
17 As you recall, Steve Siebert was delegated
18 this authority and Colleen has now replaced
19 Steve as Secretary of Department of Community
20 Affairs.
21 There is a motion and a second. Any
22 discussion? All in favor say aye.
23 THE CABINET: Aye.
24 GOVERNOR BUSH: All opposed? Thank you.
25 The next Cabinet meeting will be held
21
1 Tuesday February 11, 2003.
2 GENERAL CRIST: That's your birthday, isn't
3 it?
4 GOVERNOR BUSH: No comment.
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1 GOVERNOR BUSH: Division of Finance.
2 TREASURER GALLAGHER: Motion on the minutes.
3 GOVERNOR BUSH: Yes, indeed. Still can't
4 dress, 50 years old.
5 Ben, how are you doing?
6 MR. WATKINS: Great.
7 TREASURER GALLAGHER: Motion on the minutes.
8 COMMISSIONER CRIST: Second.
9 GOVERNOR BUSH: Moved and seconded. Without
10 objection, the item passes.
11 Item 2.
12 MR. WATKINS: Item 2 is a resolution
13 authorizing the competitive sale of up to
14 $237.6 million of PECO bonds.
15 TREASURER GALLAGHER: Motion.
16 GENERAL CRIST: Second.
17 GOVERNOR BUSH: Moved and seconded. Without
18 objection, the item is approved.
19 MR. WATKINS: Item number 3 is a resolution
20 authorizing the issuance and competitive sale of
21 up to $175 million in PECO refunding bonds.
22 TREASURER GALLAGHER: Motion.
23 GENERAL CRIST: Second.
24 GOVERNOR BUSH: Moved and seconded. Without
25 objection, the item passes.
23
1 MR. WATKINS: Item number 4 is a resolution
2 authorizing the competitive sale of up to $150
3 million of Florida Forever Bonds.
4 COMMISSIONER BRONSON: Motion.
5 TREASURER GALLAGHER: Second.
6 GOVERNOR BUSH: Moved and seconded. Without
7 objection, the item passes.
8 MR. WATKINS: Item number 5 is a resolution
9 authorizing the solicitation of proposals for a
10 financing agreement for our consolidated equipment
11 financing program.
12 This is an on-going program that had been
13 administered by the Comptroller's office which
14 will be administered by the chief financial
15 officer's office as successor to the
16 Comptroller.
17 The financing agreements will provide for
18 $30 million a year for three-year periods, so
19 $90 million in total.
20 And it's also expected that there would be
21 a second financing agreement for the statewide
22 accounting and cash management system, so we'll
23 have two separate credit facilities; one for
24 normal equipment acquisitions and another for
25 the new statewide Accounting Cash Management
24
1 System.
2 So this is a solicitation for proposals
3 for those financing agreements. We expect to
4 award that to the low bidder; whatever vendors
5 provide the lowest cost of financing for the
6 state, we would award on that basis.
7 TREASURER GALLAGHER: Would you mention the
8 interest rates we have been getting in the past on
9 these?
10 MR. WATKINS: On the floating -- it basically
11 is an index that's keyed off Treasury; so to the
12 extent that Treasury rates have come down, which
13 they have dramatically, depending on when the
14 agency wants to acquire the system or wants to
15 acquire the equipment, it's keyed off an index to
16 that Treasury security.
17 So obviously rates have -- we have been in
18 a very favorable rate environment. And so
19 those rates in some cases have been between 2
20 and 3 percent.
21 TREASURER GALLAGHER: Right. Do these end up
22 being variable rates or are they fixed?
23 MR. WATKINS: They are fixed once you lock
24 them. In other words, it's variable through the
25 term of the vendor offering the credit facility.
25
1 And then once the money is drawn down, it stops at
2 that point in time to provide certainty for the
3 agency for budgeting purposes.
4 TREASURER GALLAGHER: Okay. Rates have been
5 extraordinarily low.
6 GOVERNOR BUSH: They use to be
7 extraordinarily high?
8 MR. WATKINS: Not during our --
9 GOVERNOR BUSH: Treasurer Gallagher told me
10 the story of rates, that when we started this in
11 the previous generation, it was --
12 TREASURER GALLAGHER: We went back, way, way
13 back a couple generations ago when I was with the
14 legislature; we found that agencies were
15 purchasing in those days, believe it or not,
16 Selector typewriters and copy machines, and
17 instead of using the capital outlay budget, they
18 were buying them with expense money and would pay
19 18, 22, sometimes even higher interest rates just
20 because that's what the vendor was offering.
21 So we did a little survey in the
22 Appropriations Subcommittee of state agencies
23 to see how much that was, and it was millions.
24 They were doing, I don't know, $20 million
25 worth of hard purchases, that's not counting
26
1 all the interest thrown away and you figure
2 20 percent interest on that, it was costing
3 millions of dollars.
4 So it made sense to do the financing in
5 one place, one time, and let everybody draw
6 from that as opposed to using the vendors'
7 rates, and that is how this whole thing
8 started.
9 GOVERNOR BUSH: Plan B is a lot better.
10 TREASURER GALLAGHER: Saves a lot money.
11 MR. WATKINS: It's the Home Depot purchasing
12 power model.
13 TREASURER GALLAGHER: Motion on 5.
14 GENERAL CRIST: Second.
15 GOVERNOR BUSH: Motion and seconded. Without
16 objection, the item passes.
17 MR. WATKINS: Item number 6 is a report of
18 award on the competitive sale of $233,555,000 in
19 Lottery Revenue Bonds. The bonds were awarded to
20 the low bidder at a true interest cost rate of
21 4.39 percent.
22 And I would like to bring to your
23 attention that this concludes the state's
24 commitment to provide over two and a half
25 billion dollars in funding for school
27
1 construction. It was authorized in '97, the
2 money has been made available over -- it's
3 taken five years for that money to be drawn
4 down by the school districts in order to pay
5 bills for construction of schools.
6 The entire program was implemented at a
7 rate of approximately -- a sort of weighted
8 average rate of all the different series of
9 bonds of about 4.89 percent. So --
10 TREASURER GALLAGHER: And they are not full
11 faith and credit bonds.
12 MR. WATKINS: That's correct, secured solely
13 by Lottery revenues.
14 TREASURER GALLAGHER: You can quit buying
15 tickets to pay the bonds.
16 COMMISSIONER BRONSON: Motion on 6.
17 TREASURER GALLAGHER: Second.
18 GOVERNOR BUSH: Moved and seconded. Without
19 objection, the item passes.
20 MR. WATKINS: Item number 7 is a report of
21 award on the competitive sale of $14,055,000 in
22 Housing Refunding Bonds for the University of
23 Central Florida. The bonds were awarded to the
24 low bidder at a true interest cost of 4.08 percent
25 generating gross debt service savings of
28
1 approximately 2.9 million or $2 million on a
2 present value basis.
3 COMMISSIONER BRONSON: Motion on 7.
4 TREASURER GALLAGHER: Second.
5 GOVERNOR BUSH: Moved and seconded. Without
6 objection, the item passes.
7 MR. WATKINS: Item number 8 is a report of
8 award on the competitive sale of $46.9 million of
9 refunding bonds for the Florida Facilities Pool.
10 The bonds were awarded to the low bidder
11 at a true cost of 4.26 percent, generating
12 gross debt service savings of approximately
13 4.7 million or 3.1 million on a present value
14 basis.
15 TREASURER GALLAGHER: Motion.
16 COMMISSIONER BRONSON: Second.
17 GOVERNOR BUSH: Moved and seconded. Without
18 objection, the item passes.
19 MR. WATKINS: Item number 9 is an
20 administrative matter; it's an adoption of a
21 resolution acknowledging the Orlando Orange County
22 Expressway Authority as the issuer of prior debt
23 that had been jointly issued by this board and the
24 Board of the Expressway Authority.
25 This is consistent with legislation that
29
1 was passed last session and has become law and
2 simply acknowledges the fact that they are the
3 issuer of those prior lien obligations.
4 GENERAL CRIST: Motion.
5 COMMISSIONER BRONSON: Second.
6 GOVERNOR BUSH: There is a motion and second.
7 Without objection, the item passes.
8 MR. WATKINS: Thank you.
9 GOVERNOR BUSH: Thank you.
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1 GOVERNOR BUSH: Financial Services
2 Commission.
3 TREASURER GALLAGHER: Motion on the minutes.
4 COMMISSIONER BRONSON: Second.
5 GOVERNOR BUSH: Moved and seconded. Without
6 objection, the item is approved.
7 MR. MITCHELL: Item 2 is the report or the
8 results of the negotiations you all authorized
9 Treasurer Gallagher to enter into with the
10 directors of the Office of Insurance Regulation
11 and the Office of Financial Institution and
12 Security Regulation.
13 TREASURER GALLAGHER: Motion on 2.
14 GENERAL CRIST: Second.
15 GOVERNOR BUSH: Moved and seconded. Without
16 objection, the item is approved.
17 MR. MITCHELL: And item 3 is the submission
18 of a final report of the Committee of Transition
19 Management for the Department of Financial
20 Services.
21 TREASURER GALLAGHER: Motion to accept the
22 report.
23 COMMISSIONER BRONSON: Second.
24 GOVERNOR BUSH: There is a motion to accept
25 the report and a second. Without objection, the
31
1 items passes.
2 I want to thank everybody that worked
3 really hard on this. This is not an easy thing
4 to do to bring two departments together,
5 complicated -- added by when you combine the
6 fact it's really not -- there are two
7 semi-autonomous or autonomous entities inside
8 administratively of a combined department that
9 had two cultures and two different missions.
10 It's a real tribute to everybody that worked
11 hard on that.
12 TREASURER GALLAGHER: Let me just say that
13 Paul Mitchell has done an extraordinary job on
14 making everybody on both sides feel comfortable
15 about the changes and feel good about them, he has
16 kept ahead of the problems before they come up so
17 that they are solved before they happen.
18 And I think that the leadership we have
19 right now in both offices that we oversee,
20 there are a lot of things happening, but they
21 are happening in an orderly manner. So thank
22 Paul Mitchell for the job he did.
23 GOVERNOR BUSH: Thank you, Paul.
24
25
32
1 GOVERNOR BUSH: Okay. Department of
2 Veterans' Affairs.
3 TREASURER GALLAGHER: Motion on the minutes.
4 GOVERNOR BUSH: Director McPherson.
5 COLONEL McPHERSON: Good morning, sir.
6 I would like to take a minute, we have a
7 group of veterans who traveled here today to
8 support the department and I would like to take
9 a second if I can introduce them.
10 GOVERNOR BUSH: Sure. Let me mention there's
11 been a motion on the minutes and a second.
12 Without the objection, the items passes. Please
13 go ahead.
14 COLONEL McPHERSON: Thank you, sir.
15 We have a group of veterans this morning
16 from the area who came, I would just like to
17 let us know who they are.
18 They are Disabled American Veterans Tony
19 Cartlidge and Charlie Price; Veterans of
20 Foreign Wars, Arnie Gruning, Pat Brown, Tony
21 Cartlidge; American Legion, Pat Brown; Military
22 Office of Association of America, Jerry Moore;
23 Military of World Wars, Curt Craig; Reserve
24 Officers Association, Jerry Moore; Vietnam
25 Veterans of America, Curt Craig; Vietnam
33
1 Veterans of Florida, Tony Cartlidge, and the
2 Army ROTC, Sergeant Major Pat Brown, all came
3 as support for the department. And thank you.
4 GOVERNOR BUSH: Thank you all for being here.
5 COLONEL McPHERSON: Our second item today is
6 our quarterly report for the first quarter,
7 attachment two; recommend acceptance.
8 TREASURER GALLAGHER: Motion to accept.
9 COMMISSIONER BRONSON: Second.
10 GOVERNOR BUSH: There is a motion and a
11 second. Without objection, the item passes.
12 COLONEL McPHERSON: Thank you, sir.
13 GOVERNOR BUSH: Thank you.
14
15
16
17
18
19
20
21
22
23
24
25
34
1 GOVERNOR BUSH: Department of Revenue.
2 TREASURER GALLAGHER: Motion on the minutes.
3 COMMISSIONER BRONSON: Second.
4 GOVERNOR BUSH: Moved and seconded. Without
5 objection, item 1 passes.
6 MR. ZINGALE: Item 2 is a rule consolidation,
7 repeal 3, role them into one, clean them up,
8 clarify it.
9 The rule deals with the protest process
10 for a substantive refund denial. This is a
11 clean up issue; request approval.
12 TREASURER GALLAGHER: Motion to approve 2.
13 COMMISSIONER BRONSON: Second.
14 GOVERNOR BUSH: Moved and seconded. Without
15 objection, the item passes.
16 MR. ZINGALE: A little quick status, if I
17 may.
18 The last two weekends, a big core of our
19 Suntax staff has been working day and night,
20 almost 24 hours, to load $17 billion of sales
21 tax in the new Tax Administration System which
22 is going to happen this weekend.
23 And when you get up on Monday you will
24 have the largest integrated Tax Administration
25 System, maybe in the world, here in Tallahassee
35
1 and we are kind --
2 GOVERNOR BUSH: Can you find an extra billion
3 without raising taxes?
4 MR. ZINGALE: Pardon?
5 GOVERNOR BUSH: Never mind.
6 TREASURER GALLAGHER: Congratulations.
7 MR. ZINGALE: We are excited about it. And
8 we really appreciate, me personally, your
9 confidence in us. It's a public service job and
10 it's a privilege to serve and we appreciate it.
11 GOVERNOR BUSH: You do great work.
12 One of the things I think would be very
13 helpful, we are trying to do, at least with the
14 department heads that report directly to me, is
15 to share their talents across the enterprise of
16 government, something we want to look at as
17 relates to -- we have some really talented
18 people that handle their departments well, and
19 they should always have that as their first
20 responsibility.
21 But Dr. Zingale, I seek out his advice on
22 other things that relate to how to change
23 business processes across government. And I do
24 the same with the other Cabinet people from
25 time to time and it's a healthy thing. I think
36
1 it, at least it seems like people appreciate
2 being asked about doing things outside the
3 normal realm.
4 And I think it might be helpful in some of
5 the challenges we face to get public service to
6 be involved in other things. Just a thought.
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
37
1 GOVERNOR BUSH: Administration Commission.
2 TREASURER GALLAGHER: Motion on the minutes.
3 GENERAL CRIST: Second.
4 GOVERNOR BUSH: T-Square, there is a motion
5 and second. The item passes.
6 Item 2.
7 MS. TINKER: Item 2, recommend approval of
8 amendments to personnel rules of the Florida
9 Administrative Code, Chapter 60L-31, 32 and 33.
10 TREASURER GALLAGHER: Motion on 2.
11 COMMISSIONER BRONSON: Second.
12 GOVERNOR BUSH: There is a motion and second
13 on item 2. The motion passes without objection.
14 MS. TINKER: Thank you, sir.
15 GOVERNOR BUSH: Well done.
16
17
18
19
20
21
22
23
24
25
38
1 GOVERNOR BUSH: State Board of Trustees.
2 MR. STRUHS: Good morning.
3 Before we begin, I would like to just
4 thank all of you for your vote of confidence.
5 It's a real privilege to serve you in this
6 capacity and look forward to doing it for
7 another four years.
8 Item number 1, I might suggest you
9 reconsider the observation earlier that this
10 item requires a super majority. Ordinarily
11 that does apply when we are selling land, but
12 only conservation land.
13 This is, in fact, a 28.17-acre parcel
14 that's owned by the state, but it is not a
15 conservation piece of property. So I would
16 suggest you might reconsider item 1, and I
17 believe you might be able to pass it today.
18 GOVERNOR BUSH: David, I don't think that's
19 how others are reading this item. I think out of
20 an abundance of caution, we need to seek clarity
21 from the legislature. That's their
22 responsibility. That's why they exist, and while
23 I would have preferred to have done this in
24 anticipation of these problems.
25 It's interesting that all of a sudden we
39
1 have now issues like this, more items on this
2 agenda that are impacted by this than we had in
3 an entire year; maybe not an entire year, at
4 least entire quarter.
5 Do we need a motion on the --
6 TREASURER GALLAGHER: We need a motion to
7 defer.
8 GENERAL CRIST: Maybe it would be appropriate
9 that those items that might be affected by it -- I
10 know as we chatted earlier -- some people traveled
11 a long way, probably would like to give a little
12 input about that. I think Representative Paul may
13 be one of them on that point, I think.
14 TREASURER GALLAGHER: His item is coming.
15 GOVERNOR BUSH: What I suggest we do, if you
16 want to give commentary about the legal challenge
17 we face, that's fine.
18 But I would suggest that if you are here
19 to talk about the substance of the agenda item,
20 irrespective of whether it's deferred or not,
21 we will treat it as though -- we'll hear your
22 concerns because you traveled up, and there are
23 actually some very interesting items that I
24 want to hear from people about anyway.
25 So what I would like to do is have a
40
1 motion to defer the items that we discussed,
2 but still hear them, so people can -- defer
3 them because we can't do anything about them,
4 but then allow for the discussion.
5 MR. STRUHS: Governor, I would, just as a
6 matter of counsel, suggest if they are deferred,
7 we defer them, as is custom, to a date certain
8 rather than leaving it open-ended. I think there
9 are some legal issues associated with that.
10 COMMISSIONER BRONSON: Governor, I don't know
11 how we are going to do that until this is voted on
12 by the legislature, how do we determine a date
13 certain until we know how the vote is going to be
14 and when?
15 TREASURER GALLAGHER: We can always defer the
16 second time if we have to. We could defer it to
17 the second meeting in March and hope that -- and
18 hope that they will take it up the first week and
19 get it out. And if they don't, we defer again.
20 We have deferred some a long time.
21 GOVERNOR BUSH: We could defer again. That
22 would make sense. But I would urge that we, if
23 that is the case, we work hard with the
24 legislature to see if we can get it through the
25 process quickly. And if we can't, that we advise
41
1 the people who are affected in advance of the
2 meeting so they don't come back up here.
3 TREASURER GALLAGHER: I've actually seen a
4 bill introduced and passed and down on the
5 Governor's desk in 10 minutes; actually happened.
6 GOVERNOR BUSH: All right.
7 TREASURER GALLAGHER: I doubt it's going to
8 happen on this one, but maybe we can get it the
9 first week.
10 GOVERNOR BUSH: There is a motion to defer to
11 what date, Tom?
12 TREASURER GALLAGHER: Second meeting in
13 March, I don't know what the date is.
14 GOVERNOR BUSH: Second meeting in March. And
15 there is a second. Any other discussion? These
16 are to defer all --
17 TREASURER GALLAGHER: 2,3, -- 1, 2, 3, 16, 17
18 and 18.
19 GOVERNOR BUSH: There is a motion and second.
20 Without objection, the items are deferred till the
21 second Cabinet meeting in March.
22 MR. STRUHS: Thank you.
23 Item 2, is anybody here to speak on
24 item 1?
25 MR. STRUHS: There is not.
42
1 GOVERNOR BUSH: How about item 2?
2 MR. STRUHS: Yes, there is. On item 2, which
3 is a land exchange, I would like to introduce Sam
4 Ard, who is representing the land that we are
5 looking to exchange; Commissioner Bob Giesler from
6 Glades County; Yvonne Gsteiger is here from the
7 South Florida Water District; and Andrew Frish
8 represents the Clark family, which is the adjacent
9 property owner.
10 I would point out just that Eva Armstrong,
11 above and beyond the call of duty, personally
12 visited the property, so she is familiar with
13 it.
14 GOVERNOR BUSH: That sounds like tough duty,
15 Eva. That's a beautiful part of the state, why
16 would that be beyond the call of duty?
17 MR. STRUHS: She did it on her own time and
18 her own expense.
19 GOVERNOR BUSH: Oh, okay, that's different.
20 MR. STRUHS: It's a value-for-value exchange.
21 We believe it has significant environmental
22 positive benefits for the state. Mr. Ard.
23 MR. ARD: Thank you, Mr. Secretary, Governor,
24 Members of the Board.
25 Very briefly, this is the same exchange
43
1 that we had in front of this board a couple of
2 months ago that was declined on a 3/3 vote.
3 What we have here is we do have a
4 time-sensitive issue in that options that
5 Mr. Chapman has available to purchase property
6 to exchange with you expired January 31st. And
7 so, I guess what he would have to do is go out,
8 if he wanted to continue that, and find another
9 parcel of like kind and bring that back up.
10 I do want to remind you a little bit about
11 Glades County. It's roughly 10,000 people in
12 population, they are at a 10 mill cap, they are
13 a rural county of critical economic concern.
14 And what this project would do is take a
15 small parcel of property that the state owns,
16 roughly 100 acres, put it into productive
17 economic use and development, putting it on the
18 tax roll, as well as getting two pieces of
19 property that the state desires with no money
20 out of the state budget. And I do think that's
21 important.
22 There are a couple of people here that
23 would like to make a few comments on behalf of
24 the local citizenry. I have introduced first
25 Chairman Bob Giesler, chairman of the Glades
44
1 County Commission, and also Sheriff Rider is
2 here as well to follow. Thank you.
3 GOVERNOR BUSH: Good.
4 MR. GIESLER: Governor, Cabinet Members, good
5 morning, and thanks for hearing me. I spoke last
6 Thursday to the aides and --
7 GOVERNOR BUSH: How did you do?
8 MR. GIESLER: I did real well. In fact, they
9 said they had to run it pass you.
10 GOVERNOR BUSH: Once in a while they have to
11 do that.
12 MR. GIESLER: Did I do good?
13 GOVERNOR BUSH: You got additional votes from
14 the Cabinet aides, I am not sure you did real well
15 with us.
16 MR. GIESLER: Anyway, like our lawyers said
17 before me, that we are an economically deprived
18 area down in Glades County. We are on the
19 northwest side of Lake Okeechobee. And as you
20 know, the state has taken quite bit of property
21 away from us for the water reclamation.
22 So what we are asking for this, or
23 Mr. Chapman, is 105 acres to be put on our tax
24 rolls. And we had a slide here last week,
25 but --
45
1 GOVERNOR BUSH: For the cabinet aides you got
2 the slides, but not for us?
3 MR. GIESLER: Exactly, that's why I did good.
4 TREASURER GALLAGHER: Without them, this
5 won't happen.
6 MR. GIESLER: The area we are talking about
7 is bordered by Commercial and Highway 78.
8 GOVERNOR BUSH: David, a little magnifying
9 might help. Thank you.
10 MR. GIESLER: If you look at this piece of
11 property here, this is the Rim Canal -- that's not
12 a road, that's Rim Canal. And the other road up
13 there at Highway 78, on this end of it Mr. Chapman
14 already has a boat storage facility. Down on the
15 other end there is a commercial property, it's an
16 RV park, so it's not going to interfere with
17 anything that's not already there.
18 And I understand you are not going to
19 consider this today, you can't, but I would
20 sure like to see you do it. And that's all I
21 got to say now.
22 GOVERNOR BUSH: Wasn't there a conflict last
23 time we discussed this? Wasn't there an owner, a
24 little dispute with the neighbor?
25 MR. GIESLER: I am not aware -- yes.
46
1 MR. STRUHS: He is here.
2 GOVERNOR BUSH: He is here? Good, or bad.
3 MR. GIESLER: It's been a hard road, but I'd
4 like to crack it.
5 GOVERNOR BUSH: Thank you.
6 SHERIFF RIDER: Governor, I am Sheriff Rider.
7 GOVERNOR BUSH: Thank you for coming.
8 SHERIFF RIDER: Thank you. Glades County is
9 80 percent agriculture. And I know our ranchers
10 and farmers, they don't want to part with one inch
11 of land that's been in their families for years.
12 The land we are talking about, we
13 desperately need that release for development.
14 Wackenhut is our major employer in Glades
15 County. 60 percent of their employees commute
16 back and forth, they live out of the county.
17 I had to drop my policy requiring
18 employees of the sheriff's office to live in
19 Glades County to work there because there is no
20 housing; we are just going downhill in Glades,
21 so we can only ask that the state help us out
22 and let this land go for economic development.
23 Thank you.
24 GOVERNOR BUSH: Thank you, Sheriff. Any
25 other speakers?
47
1 MR. FRISH: Good morning, my name is Andy
2 Frish. I represent the adjacent landowner. I was
3 here for the Cabinet aides meeting the last time.
4 In between the Cabinet aides meeting --
5 GOVERNOR BUSH: Could you point to what
6 property, the gentleman who he represents.
7 MR. FRISH: This property here is owned by my
8 clients.
9 GOVERNOR BUSH: What is that?
10 MR. FRISH: There are some residents living
11 on it; various uses on that property actually.
12 It's extends quite a bit to the east in this case.
13 In any event, we had objected at the
14 Cabinet aides meeting on procedural grounds.
15 We feel like we were deprived of a chance to
16 bid on the property. We think it should have
17 been competitively bid and wasn't.
18 I don't know, I hesitate to get into the
19 legal argument too much today because I don't
20 know if a vote with respect to the procedural
21 history and whether or not they followed,
22 whether the state followed the procedural
23 requirements today would amount to a
24 disapproval that would also require a majority
25 vote. That issue is new to me.
48
1 GOVERNOR BUSH: I have no clue.
2 MR. FRISH: To the extent the Cabinet would
3 hear it, just very briefly, my reading of the
4 statute is that there is a two-step process.
5 First is to declare land surplus, and I
6 don't know that's been done. Maybe it's being
7 done, would have been done here today had there
8 been a vote.
9 The second is to dispose of it. Prior to
10 declaring it surplus, there is supposed to be,
11 pursuant to 253.054, the Acquisition and
12 Restoration Council shall review and make
13 recommendations to the board whether or not
14 they should be declared surplus.
15 We are not here telling you you shouldn't.
16 We think you should because we want it. But we
17 tried to get it a year ago and were told it's
18 not available. Six months later, my client
19 gets a notice in the mail saying it's going to
20 be exchanged with Mr. Chapman. How did this
21 happen?
22 So we ended up on very short notice
23 attending the Cabinet aides meeting asking how
24 did this happen. We were an interested
25 purchaser. We want to give you perhaps more,
49
1 but that's what the process is designed to
2 determine, perhaps more than this landowner, so
3 why are we deprived of that opportunity?
4 Luckily at the last hearing, between the
5 Cabinet aides hearing and your hearing we
6 actually settled. We were given an option to
7 purchase the portion of the property we are
8 most interested in, which you can't see it in
9 the map, but it actually has a waterway on it.
10 GOVERNOR BUSH: You reached an agreement? So
11 the same reason we are concerned also applies to
12 you?
13 MR. FRISH: Except that that agreement is
14 apparently not being honored. We inquired --
15 GOVERNOR BUSH: In other words, it would
16 though?
17 MR. FRISH: It would have been perhaps
18 last --
19 GOVERNOR BUSH: Your concerns would have
20 applied to yourself that you brought up if it
21 was --
22 MR. FRISH: Yes, which is why I wasn't here,
23 because we reached an agreement that suited us.
24 So that agreement is now gone.
25 So we are back to square one. We have no
50
1 option to purchase any land with Mr. Chapman at
2 this point according to Mr. Chapman's attorney.
3 GOVERNOR BUSH: As I recall, correct me if I
4 am wrong, in the discussion this was brought up --
5 and maybe I am wrong, maybe this is another
6 subject -- where Mr. Chapman agreed to provide an
7 option for the property that you were seeking at
8 the meeting, was that done in advance?
9 MR. FRISH: That was done a couple of days in
10 advance but --
11 GOVERNOR BUSH: I remember it was a pretty
12 lively debate.
13 MR. FRISH: We in the meantime, since we
14 discovered they would not honor the agreement with
15 this exchange, I guess their interpretation is
16 that agreement only applied to the prior exchange,
17 doesn't apply to this one. We are back to square
18 one, arguing the same things, perhaps to defeat
19 ourselves if we are able to settle in the next
20 couple of months.
21 GOVERNOR BUSH: Be careful about that
22 argument.
23 MR. FRISH: I understand, sir, but
24 unfortunately, since we are the adjacent landowner
25 and spent quite a bit of time, money and effort
51
1 obtaining permits to improve this particular piece
2 here between the green line and yellow borderline,
3 there is a waterway on it now; you can't see it,
4 that's an old photo -- we actually got a better
5 photo here, real quick.
6 This waterway here. My client has cleared
7 that land pursuant to a permit and improved it
8 and has always desired to buy it, which is why
9 we inquired over a year ago to buy it, at least
10 this portion of it, if not the whole thing.
11 Again, I did brief, I did -- it's a 7-page
12 brief to the Cabinet aides which was
13 unfortunately after that meeting. I didn't
14 receive notice of that meeting until less than
15 24 hours before it, which is another one of my
16 gripes. But be that as it may, I am here
17 today.
18 I think the delay is actually good. I
19 like to beef up this brief and have a little
20 more detail as to what procedure should be
21 followed. It just doesn't make sense to say
22 that everything needs to be competitively bid
23 unless we decide to exchange the property with
24 you.
25 Why should the board vote to exchange the
52
1 property for what may not be the best value
2 that you can obtain for the public? Isn't the
3 idea of disposing of any state lands that we
4 need to get the best deal we can? Isn't the
5 idea any time acquiring state lands, to get the
6 best deal we can?
7 I don't think the procedures the division
8 is following are designed to do that.
9 TREASURER GALLAGHER: Can I ask a question?
10 GOVERNOR BUSH: Sure.
11 TREASURER GALLAGHER: Are you interested in
12 the whole piece? Would you bid on the whole
13 piece?
14 MR. FRISH: We would bid on the whole piece.
15 TREASURER GALLAGHER: You bid or you would?
16 MR. FRISH: We would. In fact, on the 15th,
17 I requested an application to purchase the very
18 same land, not knowing it was set for hearing this
19 quickly, and was denied an application.
20 GOVERNOR BUSH: Why don't we get Secretary
21 Struhs to answer your very good questions.
22 The question in hand here is our
23 process -- a rhetorical question, do we want
24 the best possible price when we sell? Yes. Do
25 we want to buy at the lowest possible price
53
1 when we buy? The answer is yes.
2 TREASURER GALLAGHER: Do we?
3 GOVERNOR BUSH: Do we? Sometimes? Not all
4 the times?
5 The gentleman brings up a point that I
6 think is worthy of clarification.
7 What is our policy as relates to bidding
8 out properties? Because exchanges doesn't
9 necessarily -- we could put it out to bid
10 competitively and not in an exchange basis,
11 generate the monies, buy the properties that we
12 were going to swap, couldn't we, in areas
13 designated for purchase?
14 TREASURER GALLAGHER: Maybe, on this one,
15 could you maybe give the genesis of how we end up
16 in a swap?
17 Is it because a person comes to the
18 department and said: I would like to have this
19 land, and I am -- how much do I have to swap,
20 what do you want me to swap? That's the way it
21 appears it happens, is that right?
22 MR. STRUHS: Yes, in this instance.
23 TREASURER GALLAGHER: If all of a sudden
24 somebody else comes along and wants it also, don't
25 we have to sort of reevaluate what we are doing?
54
1 MR. STRUHS: No, we do not. You may, but you
2 do not have to.
3 TREASURER GALLAGHER: How do we know that the
4 swap is a fair deal for us?
5 MR. STRUHS: I think that's where you
6 exercise your judgment as a Trustee, as to whether
7 it is in your opinion in the state's interest.
8 TREASURER GALLAGHER: I have a hard time
9 doing anything other than to say if there is two
10 people that want this property, put it out to bid,
11 let them put the best price down. By that time
12 maybe a third or fourth will come in.
13 MR. STRUHS: I have to -- you asked me to
14 respond to the question, I have got to respond to
15 the question with another question, which I don't
16 think was lost by most people in the audience,
17 which is Mr. Frish represented to you today that
18 his client was improving this land that is owned
19 by the State of Florida, with the hopes that some
20 day the State of Florida might buy it or sell it
21 to him.
22 I think it raises a fundamental question
23 as to whether or not this is the kind of
24 individual you want to do business with,
25 frankly.
55
1 GOVERNOR BUSH: Well taken.
2 Back to the question of policy here for a
3 second. Put aside the uniqueness of this. It
4 has many unique features to it.
5 Commissioner/Treasurer Gallagher has asked
6 a good question, which is if there is more than
7 one bidder on a property that you have, someone
8 has come to you to say we are prepared to swap,
9 wouldn't it be in the interest of the state to
10 get the highest price, to create a competitive
11 situation?
12 The swap might be an alternative that
13 someone proposes for tax purposes that allows
14 them to buy our property at a higher price,
15 which is fine. But ultimately, our concern is
16 whether -- A, first, whether or not we should
17 be selling this surplus land. And I vote yes,
18 because of the -- I think that the CERP process
19 can go on quite well without this property.
20 And the second question is what is the
21 highest price that we can get? I would think a
22 competitive situation would yield the best
23 result.
24 Now if we are in the business of saying
25 the caliber of the purchaser is not up to our
56
1 standards, that gets into an interesting area.
2 TREASURER GALLAGHER: I don't know, who is
3 going to be the judgmental person that says who
4 has got --
5 GENERAL CRIST: From a legal point of view, I
6 don't think that's prudent.
7 TREASURER GALLAGHER: -- a different caliber,
8 so they are willing to pay more money or wind up
9 not buying it at all.
10 MR. STRUHS: Let me begin to respond to some
11 of these questions.
12 I think for starters, we need to recognize
13 that the item before you is a value-for-value
14 exchange, and we have done a lot of these in
15 the last few years. Whenever we do an
16 exchange, it is always on a value for value
17 basis. We don't enter into the exchange on the
18 premise of trying to enhance the state's
19 economic value.
20 What we do is we try to make sure from an
21 economic point of view it is an even exchange,
22 and then further, it provides some other public
23 interest benefit.
24 In this case the public interest benefit
25 is economic development in a community that
57
1 requires it and needs it, as well as an
2 improved environmental posture for the State of
3 Florida, people are actually getting lands that
4 are more relevant to our mission.
5 So in terms of saying are we getting the
6 best deal? We weren't really looking to gain
7 economically; we were looking to make sure it
8 was an even swap with other benefits attached.
9 GOVERNOR BUSH: David, if you could get all
10 of the same benefits plus a higher price, that
11 would be a good thing. So whoever buys the
12 property, at least in theory, depending on what
13 their use is, would generate the economic benefit
14 to Glades County, which is the principal reason
15 why I am supportive of this, because I do
16 appreciate the plight that they are in, and we
17 need to do everything we can to provide economic
18 development and opportunities for places that
19 truly need it.
20 TREASURER GALLAGHER: Let me throw something
21 out.
22 Obviously Mr. Chapman wanted the land
23 because he plans on developing that land and
24 getting it on the tax rolls. Maybe if we need
25 to have a competitive sale here, we can put the
58
1 restrictions on we want this -- this is for
2 development, it's to have X put on it and you
3 must do that within a period of time or we are
4 taking it back, so that that meets the goals
5 that the county so desperately needs to have
6 happen in this area.
7 I don't have a problem with doing
8 something like that. But I don't think we
9 ought to be, just because somebody is going to
10 exchange something that's a fair exchange, they
11 automatically -- it's a done deal -- when there
12 may be other people that are interested in it.
13 I think that's what our problem is here.
14 MR. STRUHS: I don't believe we disagree with
15 the observations you are making. I think it's
16 sort of a square peg/round hole. It started off
17 as a trade --
18 GOVERNOR BUSH: You can now circle the square
19 because we are going to have time.
20 MR. STRUHS: For the record, we started as a
21 proposed trade, value for value, and what we are
22 getting from you now is your direction is to go
23 back and suggest perhaps it's in the state's
24 interest to do an auction.
25 TREASURER GALLAGHER: We have done a lot of
59
1 trades, and in most cases nobody complains,
2 everything is fine.
3 But if you have -- if you have a number of
4 trades and you have a neighbor or somebody else
5 wants to be -- wants to play the game, I think
6 we have to -- we have an obligation to open it
7 up.
8 MR. STRUHS: You don't have that obligation.
9 You have the opportunity, you don't have the
10 obligation.
11 GOVERNOR BUSH: I think we are saying the
12 policy of this Cabinet is to follow that
13 opportunity; whether it's the law or not, it's
14 good business, makes good business sense. And you
15 have a public hearing process that would not, as I
16 understand it, wouldn't slow you down. It can be
17 done early enough in the process so as to
18 determine if there are additional buyers.
19 TREASURER GALLAGHER: There does have to be a
20 point where you have to have somebody that wants
21 to do this where you block out -- I think this is
22 not great to have people show up at the meeting
23 here or aides meeting prior to the final deal and
24 saying I looked at this deal and I think I would
25 like to do it myself. I am not looking to have
60
1 people take advantage of that, because people put
2 a lot of time and effort, as I am sure Mr. Chapman
3 has here.
4 So you may have a point that I have not
5 seen yet that would lead me to believe that
6 this deal should go through and not be bid, but
7 you are going to have come and convince me.
8 MR. STRUHS: One of the larger policy issues
9 that is also being raised here is do you want us
10 as staff going forward when we have somebody
11 proposing a land swap, value-for-value exchange,
12 to convert that then into a more public notice
13 auction situation? Or is it case-by-case?
14 Because if it's case-by-case, we need to figure
15 out when we do it and when we don't.
16 GENERAL CRIST: I think the consensus I am
17 hearing is we want it advertised, we want it open,
18 we want it competitive to benefit the taxpayers
19 the most; pretty straightforward.
20 COMMISSIONER BRONSON: If I could, there are
21 some subjective things here that also play into
22 this, and that is somebody offers a piece of land
23 that has an environmental impact issue that may be
24 subjective, because one group is going to say this
25 is a much higher swap issue than somebody else's
61
1 swap issue. And it becomes that play back and
2 forth as to whose idea it is that this is a better
3 piece of land for the money and are we getting our
4 money's worth, and so forth.
5 So I think no matter how you go, you are
6 still going to have those issues. And, of
7 course, being open, everybody gets a chance to
8 put those on the table.
9 GOVERNOR BUSH: To me, the swap is only a
10 mechanism to get a higher price. We have zillions
11 of dollars that we spend on lands that we have
12 identified to be in the priority of the state.
13 This one in Putnam County, last month or two
14 months ago it was Seminole County I believe, those
15 were lands that we have identified in the largest
16 land buying operation of any state of the 50
17 states.
18 So a swap is simply a means to -- I assume
19 it's for tax purposes that should justify a
20 higher price, that we get a little piece of
21 that. If not, we got the cash. Some people
22 would argue maybe we spend too much on this
23 stuff. I don't. I am pretty steadfast on my
24 support of these programs.
25 But the swap part shouldn't preclude
62
1 others to come up with a better idea or new
2 idea or a different idea that might generate a
3 higher return to the taxpayers of the state
4 that then allows us to go spend our money
5 wisely as we try to buy conservation land.
6 MR. STRUHS: Yes, sir, I appreciate that and
7 we'll take this counsel to heart.
8 I do have to say for the record, though,
9 on this particular item, if it wasn't made
10 clear at the beginning, knowing that the Clark
11 family was -- I don't know how to put it
12 delicately -- using state property --
13 GOVERNOR BUSH: Digging holes in it.
14 MR. STRUHS: Yes. Recognizing that suggested
15 they might have an interest in the property since
16 they were using it, we actually on two occasions
17 sent them applications to become involved in --
18 what is the term -- bidding -- on two different
19 occasions did send them applications to see if
20 they were interested in engaging in this public
21 process; and according to counsel in both
22 instances, they chose not to exercise that option.
23 TREASURER GALLAGHER: See, these are things
24 that I say may be extenuating that we should know,
25 because I don't think that somebody should be able
63
1 to change their mind when we are having our
2 meeting here and throw the whole thing up in the
3 air.
4 So there may be reasons here that we would
5 want to continue on with this swap. I would
6 like you to come -- sort of go through the
7 whole thing with us; I don't mean right now.
8 GOVERNOR BUSH: General Crist.
9 GENERAL CRIST: That's why I think
10 Commissioner Gallagher makes a good point. If you
11 advertise, you set the parameters, then everybody
12 knows what the rules are and you don't have any
13 last-minute stuff that messes up a good, valid
14 process.
15 GOVERNOR BUSH: The other issue that we don't
16 need to discuss today, but if it does come back,
17 there was a 3/3 vote and I don't believe we got
18 into any of these issues.
19 The issue at that time was is this
20 appropriate to be surplussed? And three of us
21 said yes, three of us said no. We need, what,
22 we'll need three to one if the legislature --
23 if the statute changes.
24 So there may be, just to put everybody on
25 record, the whole -- that whole initial
64
1 question next time we come up will be the first
2 part of what we should discuss.
3 TREASURER GALLAGHER: I am the only one left
4 of the three. I can tell you it was Butterworth,
5 me and Milligan voted no. Just history, whatever
6 it means. If you ever get it here, I guess you
7 got the votes.
8 MR. STRUHS: My goal is to get yours, too,
9 Commissioner Gallagher.
10 GOVERNOR BUSH: What was your recommendation
11 the first time?
12 MR. STRUHS: We recommended that the swap be
13 approved. We believe that, apart from the legal
14 issues, this really leaves the State of Florida in
15 a much better position environmentally.
16 GOVERNOR BUSH: I occasionally agree with the
17 Department.
18 MR. STRUHS: More often than not.
19 GOVERNOR BUSH: We all do more often than
20 not. Why don't we move on. I think we discussed
21 this is not an item on the agenda to be --
22 MR. STRUHS: It's already been deferred.
23 GOVERNOR BUSH: I know that. You had someone
24 behind you that wanted to opine and I think we
25 have probably given this a fair hearing.
65
1 TREASURER GALLAGHER: By the way, item 3 we
2 are doing next?
3 GOVERNOR BUSH: Yes.
4 TREASURER GALLAGHER: Do I understand this
5 right, we are changing the delegation to allow
6 upland easements to a quarter acre instead of
7 10 acres?
8 MR. STRUHS: Yes, the proposal is to increase
9 the delegated authority from one-quarter acre
10 where it is today up to 10 acres. There is two
11 speakers to this.
12 TREASURER GALLAGHER: What we are doing is we
13 are making the del -- that's what -- I said it the
14 other way.
15 What we are doing is we are not delegating
16 you to go ahead and change things at a quarter
17 acre, it's got to be 10 acres or more for you
18 to do it?
19 MR. STRUHS: No, right now if it's the
20 granting of an easement on public lands that is a
21 quarter acre or less, you delegated that to the
22 department.
23 This proposal would seek to raise that to
24 10 acres; so from 10 acres below, we would do
25 that.
66
1 Just before you -- I know the item has
2 already been deferred, but just for the sake of
3 the spirit of discussion, Eric Draper and
4 Maryanne Giggenbotten both asked to speak very,
5 very briefly on this item.
6 GOVERNOR BUSH: Sure. They traveled a long
7 way.
8 MR. DRAPER: He would just assume work our
9 issues out with the Secretary and not take the
10 Cabinet's time to discuss them at this time, if
11 that's all right.
12 GOVERNOR BUSH: Sure.
13 MR. DRAPER: Well, all right, I will just
14 raise the issues.
15 We need a process, just like the one you
16 were talking about, to make sure that
17 effectively takes into consideration public
18 concerns on these easement issues.
19 Some have come up, they do cross state
20 lands that allows the development within
21 holdings within state parks, and we think that
22 we can be value added to the Secretary in
23 working up a process for handling these types
24 of easements.
25 TREASURER GALLAGHER: It would be my desire,
67
1 when this comes up -- I may as well put it out
2 now -- that when we go through the process we are
3 going through in other areas, where when you plan
4 on doing one of these, we get notified and any
5 Cabinet members that wishes it to come, then it
6 would come as opposed to just going ahead and
7 doing it.
8 So we don't take up the Cabinet time on
9 normal everyday easements, but you notify us
10 through our Cabinet aides, and any one that
11 would come that we think could ring a bell, you
12 guys would be happy because it would hit a
13 threshold and then it would come. That's for
14 the second meeting in March.
15 MR. DRAPER: We'll work it out.
16 MR. STRUHS: Thank you very much, Mary.
17 Item 4 it's an option agreement to acquire
18 just under half an acre to benefit the Florida
19 Board of Education and Florida A&M University.
20 Recommend approval.
21 GENERAL CRIST: Motion.
22 TREASURER GALLAGHER: Second.
23 GOVERNOR BUSH: Moved and seconded. Without
24 objection, the item passes.
25 MR. STRUHS: Item 5, recommend approval of an
68
1 option agreement to acquire 12.12 acres for the
2 benefit of Florida Board and University of Central
3 Florida.
4 TREASURER GALLAGHER: $222,772 an acre? You
5 could get downtown Orlando for that.
6 GOVERNOR BUSH: It's the Research Park,
7 that's in the middle --
8 TREASURER GALLAGHER: We make values, so now
9 we get to buy it?
10 GOVERNOR BUSH: This is an, I guess this is a
11 pad, an industrial pad.
12 MR. STRUHS: Yes.
13 GOVERNOR BUSH: That's where we are building
14 the Simulation Building?
15 MR. STRUHS: Yes.
16 TREASURER GALLAGHER: It's a heck of a deal.
17 Bought it in '92 for 576,000.
18 GOVERNOR BUSH: This is the only industrial
19 park, research park, that actually has turned out
20 to be a good deal. This one is almost full.
21 TREASURER GALLAGHER: How would you like to
22 have bought it for 576 in '92 and sold it to us
23 for two million seven?
24 GOVERNOR BUSH: I used to do that for a
25 living. Not the state. Not the state. Not the
69
1 State of Florida.
2 GENERAL CRIST: Motion.
3 TREASURER GALLAGHER: Second.
4 GOVERNOR BUSH: There is a motion and a
5 second. Any other discussion? Without objection,
6 the item passes.
7 MR. STRUHS: Item 6, we recommend approval of
8 this item.
9 It's the TNC Option Agreement for the
10 Apalachicola River, Florida Forever Project.
11 This, to put it in perspective, is a
12 substantial and important addition to the
13 Torreya State Park, which is one of my
14 favorites.
15 GOVERNOR BUSH: Is there a motion?
16 TREASURER GALLAGHER: Motion.
17 COMMISSIONER BRONSON: Second.
18 GOVERNOR BUSH: Moved and seconded. Without
19 objection, the item passes.
20 How are we doing on the Tri-State Compact?
21 MR. STRUHS: Thank you for asking, I think.
22 We are --
23 GOVERNOR BUSH: The park is going to look a
24 lot prettier if we have water going down the
25 river.
70
1 COMMISSIONER BRONSON: Clean water.
2 MR. STRUHS: We are right now, as you know,
3 Governor, putting together a twin strategy of
4 re-engaging in good faith negotiations with our
5 two neighboring states as well as the federal
6 government, and at the same time not letting our
7 guard down and having in our back pocket effective
8 litigation strategy so in the event we need to do
9 that, we will.
10 GOVERNOR BUSH: Suffice it to say I was a
11 little disappointed in Georgia's efforts to try to
12 undermine the good faith efforts we made by going
13 directly to the federal government. But we
14 have -- that's been stymied, as I understand it,
15 and now we are going to attempt one more time to
16 reach consensus with the new governors of Alabama
17 and Georgia.
18 MR. STRUHS: Governor, we appreciate your
19 personal interest and support in this; it's made a
20 big difference.
21 GOVERNOR BUSH: Okay.
22 MR. STRUHS: Item 7.
23 GOVERNOR BUSH: Did we do a motion and
24 second?
25 MR. STRUHS: Yes.
71
1 GOVERNOR BUSH: Okay. Thank you.
2 MR. STRUHS: Item 7, we are recommending
3 approval of an option agreement to acquire 554.47
4 acres in the Wekiva-Ocala Greenway, Florida
5 Forever Project. This is land immediately
6 adjacent -- contiguous I should say -- to the
7 Ocala National Forest. It's an important
8 contribution to the Greenway objectives of this
9 program.
10 TREASURER GALLAGHER: Motion.
11 COMMISSIONER BRONSON: Second.
12 GOVERNOR BUSH: Moved and seconded. Without
13 objection, the item passes.
14 MR. STRUHS: Item 8, we are recommending
15 approval, and I would like to invite Dr. Jan
16 Matthews, who is the Director of the Division of
17 Historical Resources, to speak to this item
18 briefly.
19 This particular property is one of the
20 first, if not the first example of the
21 Industrial Revolution reaching what is now
22 Florida.
23 DR. MATHEWS: Good morning, Governor.
24 GOVERNOR BUSH: Good morning.
25 DR. MATHEWS: Commissioner, Financial
72
1 Officer, Attorney General, I've just been asked to
2 make a couple of comments on the significance of
3 this site.
4 This is a prime piece of British Colonial
5 History that stands aboveground on that -- off
6 the Halifax River. The capsule history of its
7 significance is this.
8 A man named Richard Oswald, in whose hotel
9 room in Paris the Treaty of Paris was signed in
10 1763 -- presumably he had more than the double
11 bed standard room -- was a close friend of the
12 Governor of Florida, John Grant. He was a
13 silent partner in an industrial enterprise
14 between St. Augustine and down to the area that
15 is Tomoka State Park and this site, which was
16 the south most site, a 20,000-acre enterprise,
17 that involved sugar planting, production of
18 sugar cane and rum distilling; the British
19 period in Florida was only 1763 to 1783.
20 Treaty of Paris was signed in 1763. So this
21 was underway within a short period of years and
22 was an active production area and distillery.
23 Some of what is very interesting about
24 this is, first of all, that it stands
25 aboveground. It's not all under-the-ground to
73
1 be archaeologically surveyed to understand it.
2 That by itself is very, very significant.
3 It is certainly significant on the state
4 level in terms of the National Historic
5 Preservation Act. It is probably significant
6 on a national level in terms of the National
7 Historic Landmark. We only have 36 national
8 historic landmarks in Florida.
9 As the new chairman of the National
10 Historic Landmark Committee, I hope we have a
11 lot more.
12 I think it's very important to point out
13 as well that this particular site tells the
14 history of a lot of today's Floridians in a
15 very different way. It had a close connection
16 with the technology that was used in Hattie for
17 sugar mills. They brought in people who knew
18 how to produce sugar and distill rum, so we had
19 the Haitian connection, as well Richard Oswald,
20 the grantee, had his own place on the western
21 coast of Africa, his own corporation shipped
22 privately slaves directly from Africa.
23 I think it offers opportunities for
24 Floridians today who may have descended from
25 those slaves, who were directly shipped by a
74
1 private corporation, to research their roots.
2 We know in the milestone epic research of
3 Alex Haley in Roots how hard it is for
4 descendents of African-American slaves to trace
5 their ancestry, and this might be an
6 opportunity for that kind of interpretation on
7 this site and throughout the sugar mill areas
8 in Florida, which use our second Seminole --
9 and will include prominent one on the west
10 coast, the Gamble Mansion, and those industrial
11 ruins were just acquired by State Lands last
12 year; and, of course, the Yule Sugar Mill. In
13 a nutshell, that's it.
14 GOVERNOR BUSH: Fascinating. Thank you.
15 By the way, for all the people that
16 traveled long and far to come to your state
17 capital, I hope that you go visit the Museum of
18 Political History, is that what you call it?
19 DR. MATHEWS: Something like that; Political
20 Governance in history, in the old Capitol, it's
21 the only one in the nation that is an old restored
22 Capitol, that on itself is significant. And, of
23 course, everybody wants to go to the north end of
24 the main corridor and hear the Governor's welcome.
25 GOVERNOR BUSH: That's the part you can pass,
75
1 but it really is interesting if, after the
2 meeting, if you want to see -- experience the
3 State Capitol as it has been and as it is; it's
4 really good work.
5 DR. MATHEWS: Thank you for that.
6 GOVERNOR BUSH: I probably commend you all
7 for the efforts, but I hadn't seen it until a
8 couple weeks ago I went to see it and I was really
9 impressed.
10 DR. MATHEWS: I hear you are over there
11 repeatedly.
12 GOVERNOR BUSH: Now I am bragging. I am a
13 self-less promoter -- promoter of this, excuse me,
14 because I think we do need to have a sense of
15 history in our state. It's one of the things we
16 lack compared to other states and we have a rich
17 history that we should be very proud of. Okay.
18 COMMISSIONER BRONSON: Moved.
19 TREASURER GALLAGHER: Second.
20 GOVERNOR BUSH: Moved and seconded. Any
21 other discussion? Without objection, the item
22 passes.
23 MR. STRUHS: I think I would do better if I
24 have Dr. Jan Matthews to do the rest of my agenda.
25 GOVERNOR BUSH: You would, but you are going
76
1 to have to carry on yourself.
2 MR. STRUHS: Item 9, recommend approval.
3 It's the acceptance of an assignment of an option
4 agreement to acquire 204 acres in the Blackwater
5 River State Forest.
6 TREASURER GALLAGHER: Motion on 9.
7 COMMISSIONER BRONSON: Second.
8 GOVERNOR BUSH: Moved and seconded. Without
9 objection, the item passes.
10 MR. STRUHS: Item 10, recommending approval
11 of an acceptance of an assignment of an option
12 agreement to acquire 267 for the Lake Wales River
13 Ecosystem, Florida Forever Project, Polk County.
14 COMMISSIONER BRONSON: This is --
15 TREASURER GALLAGHER: Motion on 10.
16 COMMISSIONER BRONSON: Second.
17 Governor, this is another continuation of
18 some of the other lands that we looked at I
19 believe over the past few meetings on that
20 ridge area where we are trying to piece
21 together that section of land, if I am --
22 David, isn't that correct?
23 MR. STRUHS: That's exactly correct,
24 Commissioner. And indeed, you are very, correct.
25 This is probably one of the largest pieces that we
77
1 have acquired in some time to complete that puzzle
2 that I know you care so much about. So we are
3 real pleased to get the 267-acre piece; it's just
4 going to be a major contribution to our effort.
5 GOVERNOR BUSH: Is there a motion?
6 TREASURER GALLAGHER: Already did it. You
7 need to call it.
8 GOVERNOR BUSH: Without objection, the item
9 passes. Thank you. Excuse me.
10 Item 11.
11 MR. STRUHS: Item 11 is a curious item. One
12 of the things you will obviously notice, if you
13 haven't already, is the substantial difference
14 between the two appraisals on this piece of
15 property; the difference that is much greater than
16 we ordinarily see, in this case the difference of
17 $1.3 million.
18 And I thought it might be useful or
19 instructive to just let you know that with the
20 department facing that difference in the two
21 appraisals, we started the negotiations at a
22 price of $8,418,000. Where we ended up is
23 essentially the halfway point between those two
24 appraised values, and that's what we bring to
25 you today.
78
1 A couple of extenuating circumstances you
2 may want to be aware of is that there is
3 actually an approved DRI on this property. It
4 dates all the way back to 1973.
5 GOVERNOR BUSH: You are kidding.
6 MR. STRUHS: No, I am not.
7 GOVERNOR BUSH: What was it for?
8 MR. STRUHS: I think it was residential
9 development, wasn't it? Residential.
10 GOVERNOR BUSH: That's a long commute, but it
11 would be a beautiful place to live.
12 MR. STRUHS: Yes, sir, I found that kind of
13 curious that all the way back in '73 they had a
14 DRI on this parcel. It's not what you would
15 expect, not what I would expect.
16 But I think it does -- while we can point
17 to the fact that the value is 93 percent of the
18 approved value, I think it does draw into
19 question the issue of what should the
20 department do when we are faced with two
21 appraisals that are so far apart.
22 I think in this case we handled it
23 reasonably well by starting our positioning
24 below the lower appraised value and ended up
25 halfway between the two. But to the extent
79
1 that you got counsel or advice to us on these
2 issues, it would be welcomed.
3 GOVERNOR BUSH: You really want my advice?
4 Never mind.
5 TREASURER GALLAGHER: What about a
6 conservation easement for 65 percent of the value?
7 Do we have a right of first refusal on this? If
8 not, I think we should.
9 MR. STRUHS: Yes, we do.
10 TREASURER GALLAGHER: We aren't going to pay
11 65 percent of -- and they can still use it for
12 everything they have been using it for before and
13 all of sudden they want to sell it.
14 GOVERNOR BUSH: How long is the right of use,
15 the use for?
16 TREASURER GALLAGHER: Forever.
17 MR. STRUHS: Perpetuity.
18 GOVERNOR BUSH: It's for timber?
19 TREASURER GALLAGHER: There are certain
20 things that they can't do, and I think timber is
21 one of them.
22 GOVERNOR BUSH: I didn't hear you.
23 TREASURER GALLAGHER: The right to harvest
24 timber only in areas that may be in the future,
25 timber plantation.
80
1 GOVERNOR BUSH: Here is the question, if
2 someone can answer it.
3 We are putting a valuation on the timber,
4 which explains apparently the difference, the
5 large variance in the two appraisals, and then
6 the timber is not being used.
7 TREASURER GALLAGHER: They can only harvest
8 timber in a place where they convert an improved
9 pasture to timber, to a timber plantation, if they
10 convert it, but they can't get timber that's there
11 now.
12 GOVERNOR BUSH: That's future value.
13 TREASURER GALLAGHER: Right, but they can't
14 harvest timber now, the way I read it.
15 MR. STRUHS: They can timber new timber they
16 would plant today, but not the timber that we
17 purchased.
18 TREASURER GALLAGHER: We are paying for the
19 stuff there to stay.
20 MR. STRUHS: Yes, sir.
21 GOVERNOR BUSH: My views on this I think are
22 pretty well established. I think that we create
23 markets by our active intervention as a major
24 purchaser of land, and then we compete with
25 ourselves as the prices move up, in essence, and I
81
1 think it's un-- it's -- it should be maybe not the
2 opposite, but there should be, when you are the
3 big guerrilla in the marketplace, you should be
4 driving price towards your interests rather than
5 away from your interests. That basic principal
6 doesn't apply, it seems, to the same extent that
7 it would in private markets when we are involved.
8 And I think the strict adherence to
9 appraisals is part of the problem. Sometimes I
10 think we need to say -- we need to call
11 everybody's bluff. If we are the only
12 purchaser, in all likelihood -- I am willing to
13 bet there is not going to be a DRI implemented
14 on this property, at least not in our
15 generation, even though -- let me be clear --
16 every time we have this conversation, these
17 properties are important for our long-term
18 strategy.
19 So, David, I would urge you all to develop
20 strategies that use our power to the benefit of
21 the taxpayers, our power in the marketplace,
22 our presence in the marketplace, for the
23 taxpayers and not consistently for the
24 landowners.
25 We are not violating their private
82
1 property rights by paying ever-increasing
2 prices. That's my opinion, one man's opinion;
3 I had it pretty consistent.
4 TREASURER GALLAGHER: I have a question. I
5 guess I would like a little history on why -- if
6 this is -- why don't we just buy the property?
7 Why are we paying 65 percent of it so we have a
8 conservation easement?
9 MR. STRUHS: There is probably more than one
10 reason. The obvious one, I think we all
11 understand, is because it saves us a lot of money,
12 which allows more money to be retained in the
13 account for other acquisitions, whether it's fee
14 simple or conservation easements.
15 So it's basically stretching our resources
16 and still preserving the goals and objectives
17 of this particular program.
18 I suspect, Commissioner, there may be more
19 specific answers as relates to this parcel
20 particularly which could be explored if you'd
21 like.
22 GOVERNOR BUSH: Don't we have a conservation
23 easement on all the neighboring properties as
24 well?
25 MR. STRUHS: We are working in that
83
1 direction.
2 GOVERNOR BUSH: At least the Fisheating
3 Creek.
4 MR. STRUHS: That's the long-term goal.
5 COMMISSIONER BRONSON: Here's the core issue
6 and this probably will help answer Commissioner
7 Gallagher's question here.
8 And that is this is the core issue that
9 the legislature dealt with for quite a number
10 of years now, two or three years now at least,
11 and that is are we going to offer these
12 easements so that those people in agriculture
13 can remain in agriculture; the state doesn't
14 have to pay full price for a piece of land; the
15 land will stay with its environmental package
16 as it has been without the state having to buy
17 up all the land.
18 The second issue is this same landowner is
19 going to be paying taxes to its county for all
20 the roads and schools and all those issues
21 without the state grabbing that piece of land
22 and not paying anything to the county, other
23 than some pittance that we give if we do
24 anything else to land, like timber or whatever.
25 So this is the core of the whole issue of
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1 how much land can the state afford to buy. And
2 can we keep it in production, can we keep it in
3 a -- with moderation, with all the caveats that
4 we put on these pieces of land?
5 And how much is it really worth to the
6 state to keep this land in private, workability
7 but control what happens on the construction on
8 that piece of land? And I think this is the
9 core issue here.
10 TREASURER GALLAGHER: Let me ask a question.
11 So we buy this land, we buy the conservation
12 easement for 65 percent of the value. So now,
13 because we won't let certain things happen on it,
14 the property taxes go down on what the people are
15 paying property tax on, so the guy gets paid
16 $9 million and his taxes go down?
17 GOVERNOR BUSH: Except you know what is going
18 to happen; the valuation will go significantly up
19 because we paid a price that is higher than the
20 initial purchase price, and my guess is the
21 assessments haven't caught up with the county tax
22 assessor; when they assessed it, they probably had
23 pretty a low valuation, and so this conservation
24 valuation may actually bring in more revenue
25 for --
85
1 The other question, Commissioner, in favor
2 of doing conservation easements I think is that
3 we have private management of the property,
4 which is significantly, at least we felt
5 that -- one of our big challenges when we buy
6 all this land is how do we manage it in the
7 public domain?
8 And I think generally we felt that private
9 management of these properties is -- people are
10 good stewards of the land. The other question
11 I had, David, was public access. Are there?
12 Is there?
13 MR. STRUHS: As you know, conservation
14 easements are different bundles of rights. This
15 one does not have public access.
16 GOVERNOR BUSH: Some do. Didn't they have
17 public access when we were talking about the
18 Pugh/Lice purchase, that was kind of the important
19 element of this.
20 MR. STRUHS: That's right.
21 GOVERNOR BUSH: A second question I have is,
22 as I recall, this is a huge tract of land. When
23 you look at what our expectations are, we are
24 going to build a gigantic swath from near the
25 coast of Southwest Florida across to Lake
86
1 Okeechobee, thousands and thousands of acres
2 ultimately. The Badcock Ranch is part of that.
3 MR. STRUHS: It's near.
4 GOVERNOR BUSH: The Panther Corridor, I mean
5 there is all sorts of exciting environmental
6 conservation reasons of why we should do this.
7 As we go about this, are we fulfilling my
8 fears, which is that we, as we go forward, we
9 ratchet up the price because we are appraising
10 the property based on the last sale but we were
11 the ones that were party to.
12 Don't look at me like that. It's a
13 question; it's not a statement. It's a
14 question. Are you all thinking about this?
15 MR. STRUHS: Yes, sir. That's an easy
16 question to answer, we are thinking about it.
17 TREASURER GALLAGHER: You asked for it; you
18 got it.
19 GOVERNOR BUSH: Are you concerned about it?
20 MR. STRUHS: One of the things that --
21 GOVERNOR BUSH: Help me out here.
22 MR. STRUHS: One of the things I can do that
23 might give you some more comfort is to remind you
24 that when we do have appraisals to acquire
25 properties either in fee simple or conservation
87
1 easements, we do not look -- in almost every case,
2 we do not look at government acquisitions. We
3 look at private sector transactions to establish
4 the appraised value for our starting point for
5 negotiations.
6 GOVERNOR BUSH: I am going to be in support
7 of this, but I would like to see the appraisals.
8 I want to see how many comparables there are for
9 this type of property at this price, without using
10 government purchases.
11 COMMISSIONER BRONSON: I understand your
12 dilemma. And it is a dilemma, but I don't know of
13 any property, unless we get into economic times
14 that we don't ever want to see in our lifetime --
15 property is never going to go down in Florida,
16 number 1, unless some volcano out there adds more
17 land to Florida. We are in a limited deal and the
18 pressure to buy and move to Florida has been so
19 great over the past few years that this property,
20 even property as remote as some of the properties
21 we have looked at, the value has jumped because
22 people are wanting to buy those properties. And
23 it is a dilemma we are in.
24 GOVERNOR BUSH: Buy to hunt and fish, not to
25 build condos on them. I worry that there will be
88
1 a point in time when the constituency for
2 conservation just wears out. We will be fatigued
3 and that we let people down because our pricing
4 strategies on these properties is part of the
5 problem.
6 You can already see, Commissioner, the
7 legislature is tired. Two years in a row we
8 have fended them off, and I believe it is
9 essential that we develop a strategic approach
10 to purchasing these critically important lands,
11 and not be tied to convention. Not -- the
12 rules of engagement need to be creative enough
13 for us not to be always the one that seems to
14 be without a little extra.
15 TREASURER GALLAGHER: Governor, is it
16 $116 million more if the appraisals don't go up,
17 66 percent of this project still needs to be
18 bought or easements bought, which at this
19 particular --
20 GOVERNOR BUSH: It's even more that. I think
21 if you look at it from the habitat, the Panther
22 Corridor, my guess is we are talking about even --
23 TREASURER GALLAGHER: This is the Fisheating
24 Creek project.
25 GOVERNOR BUSH: Right, but that's connected.
89
1 TREASURER GALLAGHER: I am just talking about
2 this one alone, is 116 million more dollars that
3 would have to be spent to buy the rest of it.
4 GENERAL CRIST: Thank you, Governor.
5 Secretary Struhs is a bright guy. Maybe
6 you can come up with some proposals, since you
7 have been thinking about this, and present them
8 to us and we can develop a policy.
9 MR. STRUHS: I develop that --
10 GENERAL CRIST: No, in all seriousness,
11 though, because it's a frustration that not only
12 the Governor expresses as well, but we all share.
13 It is something, I think you don't want people to
14 get tired of us buying land and protecting it for
15 the wrong reasons; that maybe it's too expensive
16 or the taxpayer is not getting a good deal on how
17 this is done.
18 And I think he is right, the Governor is
19 right, it's depressing to see that coming. And
20 if we can come up with reasonable ways to stop
21 it before it happens, we ought to do so.
22 So maybe by the next Cabinet meeting, we
23 can have some ideas you can share with our
24 aides as to how to do this in a logical fashion
25 that benefits the taxpayers so we can continue
90
1 to preserve this precious land.
2 MR. STRUHS: Thank you very much.
3 GENERAL CRIST: If we need a motion, I will
4 make a motion. The Governor gives his speech
5 about once a quarter.
6 GOVERNOR BUSH: Once a month. You ought to
7 listen.
8 The other thing I would add to the
9 proposal that you might come back with us, that
10 is how we deal with the issue that we faced
11 last year in Lee County where the Cabinet voted
12 o unanimously, as I recall, to purchase a
13 property that was in a designated conservation
14 area, Estero Bay, where we challenged the
15 notion that we should be buying based on
16 prospective value, based on the prospect of in
17 this case amending the comprehensive plan to
18 raise densities, therefore, raising land
19 values.
20 And the appraisal was based on that
21 perspective evaluation. And your
22 recommendation was for us to purchase it
23 because it was in the conservation area.
24 That, to me, is just -- we need to deal
25 with that in a comprehensive way, very
91
1 frustrating.
2 TREASURER GALLAGHER: I've got one more
3 question.
4 Who is coming up with the idea that we
5 ought to be paying people 50-some percent of
6 the value of the property for these
7 conservation easements? Why aren't we paying
8 them 30 percent? Why don't we just say we
9 would like to have these, but we are not going
10 to paying 53 percent anymore; we are going to
11 pay 30 or 20 or something?
12 MR. STRUHS: I think that's fine as long as
13 the state is willing to recognize that we'll walk
14 away from --
15 TREASURER GALLAGHER: Do it.
16 GOVERNOR BUSH: How many other purchasers are
17 there of conservation easements in the State of
18 Florida?
19 MR. STRUHS: Typically, as you might suspect,
20 it's only government agencies; the state,
21 counties, in some instances the federal
22 government.
23 GOVERNOR BUSH: Add that to the discussion.
24 TREASURER GALLAGHER: To me, it's such a huge
25 amount to give somebody and they get to do
92
1 everything they were going to do on their land
2 anyway.
3 GOVERNOR BUSH: There is another item to pile
4 on your -- you could have a lower -- if you have a
5 higher appraisal, you can have a lower percentage
6 and everybody could feel good about it, or we
7 could have taken the lower appraisal and given a
8 higher percentage as a conservation easement and
9 yielded a lower price for the state.
10 TREASURER GALLAGHER: Wait until we get to
11 the next one, we are paying a hundred percent.
12 COMMISSIONER BRONSON: Since this has been a
13 very philosophical discussion about all this, let
14 me throw this little package in there.
15 And that is a lot of these people have
16 another option and that's to go outside, sell
17 it privately, not worry about the conservation
18 easements or what it does to state property
19 next to it or anybody else's property.
20 And the other option and the other issue
21 that's always been involved and one of the
22 issues that's been hard for me when I was in
23 the legislature, and now on the Cabinet, is
24 when you sell these conservation easements,
25 it's not for a year or two years; it's
93
1 perpetuity in most cases, unless you work out a
2 30-year agreement under the new proposal coming
3 in, which means if the head of the family dies
4 somewhere in that period and Uncle Sam says you
5 owe us an inheritance tax, assuming inheritance
6 tax still hangs on there, they are still going
7 to pay it and they are going to have locked in
8 the value of their properties to be able to
9 sell it to keep the rest.
10 That's what is going on in agriculture
11 today; the family sells the piece to keep the
12 rest of it to take care of Uncle Sam, and the
13 State of Florida gets a little piece of it, not
14 a very big piece, but little piece.
15 GOVERNOR BUSH: It's shrinking big time,
16 don't worry.
17 COMMISSIONER BRONSON: But the point is you
18 have locked your family in down the road when the
19 head of the family dies as to what they can
20 possibly do with that land and how they are going
21 to pay for the rest of it. It's a complicated
22 series of issues.
23 GOVERNOR BUSH: They may want to escrow some
24 of that big chunk of conservation easement payment
25 that they are getting.
94
1 COMMISSIONER BRONSON: That's the whole
2 point, it's such a complicated issue now, what we
3 are doing. So on the one hand we are complaining
4 about doing it; on the other hand we want to do it
5 to make sure we don't develop the State of Florida
6 from coast to coast with 90 -- I forgot what the
7 build out is, it's 90-something million in
8 population which I don't even want to be close to
9 being here when I see 90-some-odd million.
10 GOVERNOR BUSH: Charlie, you got to stick
11 around; you are like an eighteenth generation
12 Floridian.
13 COMMISSIONER BRONSON: But it is such a
14 complicated issue as to why should we do it and
15 why don't we do certain things, but it's -- it is
16 complicated and the legislature has to deal with
17 it and we have to deal with it.
18 GOVERNOR BUSH: David, I would suggest that
19 you, with the sense of urgency but thoughtfulness,
20 look at all of these issues and maybe we could
21 have a separate meeting just to discuss this.
22 This is the time to be doing it. We are a
23 new Governor and Cabinet, we all experienced
24 this, we are all committed to protecting these
25 conservation programs. They are all under
95
1 attack, for tight budget reasons, and this is
2 important work.
3 I really -- I am not being critical to be
4 critical; I am trying to get to elevate the
5 debate of it, about the importance of this in
6 the long run.
7 We have the largest public works program
8 other than the Big Dig under way right now, and
9 it's imperiled in some ways because of rising
10 land values in areas that no way, no how, is
11 there going to be any kind of development done.
12 But we are seeing escalated prices. Now
13 you tell me why we should be a participant in
14 that.
15 So there is a lot at stake. And I would
16 appreciate, if you can't do it two weeks from
17 now, if everybody would agree, we could have
18 separate meetings in two weeks or whenever it's
19 possible to do this, and have a good debate;
20 bring people in that are experts.
21 Dean is here; he always seems to be here
22 for these big property sales, so he certainly
23 knows about it. Nature Conservancy has been a
24 good partner; the appraisal process, I have
25 some doubts about; the water management
96
1 district are partners in this and they should
2 be a party to this. Let's reflect a little
3 bit.
4 GENERAL CRIST: Let's have a conservation
5 summit; and in the tradition of Teddy Roosevelt,
6 we need to continue to do this for our state and
7 do it right.
8 And what's a reasonable amount of time? I
9 don't mean to interrupt, Governor, I am sorry.
10 When can do this?
11 MR. STRUHS: One of the things I would
12 recommend, personal advice, you want to include
13 key members of the legislature as well --
14 GENERAL CRIST: Of course.
15 MR. STRUHS: -- in your discussions; that
16 perhaps would be useful.
17 GOVERNOR BUSH: We certainly are going to do
18 it before the legislature.
19 MR. STRUHS: Before the legislative session.
20 Why don't we coordinate with your
21 respective offices and find out what works.
22 I would suggest that you would want it --
23 I would suggest you probably want to devote --
24 I know it's a lot of time but at least two
25 hours to this. Without two hours, you won't be
97
1 able to cover all the material.
2 One of the other things I would suggest we
3 might do for you as a piece of analysis you
4 would probably find useful -- I know I would --
5 is to go back, I don't know, five or ten years,
6 and identify all those items that we negotiated
7 and then walked away from, the ones that we did
8 not contract for, and actually find out today
9 what has really happened on those properties,
10 because it would be interesting to see if, in
11 fact, they are still owned by the same
12 individuals or they've been swapped or they've
13 been developed.
14 GOVERNOR BUSH: Don't pick the lots that you
15 didn't buy on Miami Beach.
16 MR. STRUHS: Of course, not. But I am
17 thinking the large scale conservation.
18 GOVERNOR BUSH: That's a good idea. Let's --
19 is there a motion on item 11?
20 TREASURER GALLAGHER: Motion.
21 GOVERNOR BUSH: Is there a second? Is there
22 a second?
23 COMMISSIONER BRONSON: Second.
24 GOVERNOR BUSH: Moved and seconded. Any
25 other discussion? In all in favor say.
98
1 THE CABINET: Aye.
2 GOVERNOR BUSH: All opposed? Motion passes.
3 MR. STRUHS: Thank you.
4 Item 12, recommend approval. It's an
5 option agreement for a conservation easement at
6 Millstone Plantation, Florida Forever Project,
7 designation of the Division of State Lands as
8 the monitor of that easement.
9 TREASURER GALLAGHER: I move it, under the
10 condition that Trustees set up the first right of
11 refusal. I don't think you have that in this
12 contract.
13 MR. STRUHS: That's true, Commissioner.
14 GOVERNOR BUSH: There is a motion as amended
15 by Treasurer Commissioner Gallagher.
16 GENERAL CRIST: Second.
17 GOVERNOR BUSH: And seconded. Any
18 discussion? Any comments? Without objection.
19 MR. STRUHS: I would suggest before you vote,
20 there is counsel here for the Trust for Public
21 Lands.
22 MR. CHELIUS: Good morning and Members of the
23 Cabinet. I really appreciate --
24 GOVERNOR BUSH: Can you for the record say
25 who you are?
99
1 MR. CHELIUS: Yes, this is Greg Chelius, I am
2 the state director for the Trust for Public Land.
3 I really appreciate the discussions you've
4 had on these issues concerning conservation in
5 Florida.
6 With this particular project, the
7 landowner is certainly willing to give the
8 state a first right of refusal on the lots that
9 will remain. And as you see, the conservation
10 easement I believe is about one-third of the
11 overall value of the property.
12 We, as a national organization, the Trust
13 for Public Land, last year -- this is not an
14 advertisement, but we acquired property to the
15 tune of $404 million worth of land and conveyed
16 it into public ownership at 352 million, which
17 is about 86 and a half percent of fair market
18 value.
19 And it is our goal and objective to convey
20 property into public ownership at the absolute
21 best price to the taxpayers throughout the
22 nation.
23 I can tell you in the State of Florida, it
24 is particularly difficult, as you know with 800
25 people coming into the state everyday, to keep
100
1 pace, particularly with lands that are desired
2 for both conservation and people. And we
3 certainly do our best to bring in land at the
4 best price for the state, and I would be glad
5 to participate in a conservation summit and
6 convey to you some of the ideas and methods we
7 use to do that.
8 GOVERNOR BUSH: Our, at least my agenda item
9 says that the property -- the purchase price for
10 the conservation easement is 53 percent.
11 MR. STRUHS: That's right.
12 GOVERNOR BUSH: I thought you said it was a
13 third.
14 MR. CHELIUS: I thought the value of the
15 property originally was 2.7 million.
16 GOVERNOR BUSH: If it was a third, I was
17 going to go back to the other agenda item. Just
18 kidding.
19 MR. CHELIUS: I believe the original in the
20 appraisal was 2.7 million, was the retail value of
21 the property. The conservation easements are I
22 think a little bit below 900,000.
23 TREASURER GALLAGHER: Just to clarify, you
24 said you would go back to the owner for a right of
25 first refusal on the other lots?
101
1 MR. CHELIUS: Yes, he agreed to do that, give
2 the state a first right of refusal.
3 TREASURER GALLAGHER: That's fine. I was
4 talking about first refusal, not for the
5 conservation easement on the other lots; I was
6 talking about first refusal to purchase the
7 property when it comes up for sale.
8 MR. CHELIUS: That's correct and he's agreed
9 to do that.
10 GOVERNOR BUSH: On the property in question
11 now?
12 MR. CHELIUS: (Nods affirmatively.)
13 GOVERNOR BUSH: Any other discussion?
14 There's is a motion and a second. Without
15 objection, the item passes.
16 MR. CHELIUS: Thank you.
17 GOVERNOR BUSH: Thank you. It's a beautiful
18 piece of property, right next to Wal-Mart.
19 This, by the way, is an example of
20 property that -- where the state needs to act
21 because it's in an area that it's in the path
22 of development, and it's inside the urban
23 service boundary, isn't it?
24 MR. STRUHS: Yes, it is.
25 GOVERNOR BUSH: The one we just approved.
102
1 It's different than something that's part of wild
2 Florida where we may be the only game in town;
3 that's my point. And that kind of strategic
4 thinking needs to be just what you all do.
5 By the way, I think you all do a great
6 job, Eva and David. I give you a hard time
7 only because I am just cantankerous about
8 taxpayers' money. I'd love for all of us -- I
9 won't ever lose the feeling that this is my
10 money. You know what I am saying?
11 MR. STRUHS: I do.
12 GOVERNOR BUSH: It isn't my money. I don't
13 near -- I am going broke doing this, but I want --
14 I think we all have that sense that we can expand
15 our reach if we challenge it.
16 MR. STRUHS: I would say in response to that
17 to each of you, your motives and your passion that
18 you bring to this only reinforces our ability to
19 try to find good value for the state. It's very
20 helpful to us.
21 GOVERNOR BUSH: Okay. Item 13.
22 MR. STRUHS: Item 13, we are seeking a waiver
23 of the eminent domain policy and to seek eminent
24 domain authorization for four parcels in the
25 Southern Golden Gate Estates, for which we
103
1 already, in fact, have contracts.
2 Our belief is we will not in these cases
3 actually have to exercise eminent domain, but
4 because the contracts are pending and because
5 of extenuating circumstances, we want to make
6 sure we have that available to us as a
7 backstop.
8 As you know, these parcels are the last
9 few remaining from a large multiyear effort to
10 acquire a parcel that is going to be critical
11 to Everglades Restoration and indeed a project
12 we fully expect the Congress will authorize
13 this year. Getting that project authorized
14 will be largely influenced by our ability to go
15 to Washington and state with certainty that
16 these parcels have, in fact, been brought into
17 public ownership.
18 GOVERNOR BUSH: So these are willing
19 participants in the eminent domain process, they
20 received the benefit?
21 MR. STRUHS: Yes.
22 TREASURER GALLAGHER: Yes, they get a nice
23 tax benefit, wholesale/retail writeoff between the
24 two over a five-year period.
25 GOVERNOR BUSH: We have a speaker, I think,
104
1 Mr. Secretary.
2 MR. HOPPE: Thank you. Members of the
3 Cabinet, my name is Bill Hoppe, and along with Jim
4 McDonald from Homestead we represent about
5 1200 acres out there of what -- of the 7 percent
6 that you already haven't purchased.
7 We would like to you to approve this item,
8 but only approve it as amended by taking out
9 that portion that deals with the eminent domain
10 certification.
11 The Cabinet has gone on record a number of
12 times as saying you are not going to take
13 eminent domain on homesteads. We are
14 willing -- we have signed the contract, we are
15 willing to sell the property, but to add the
16 extra part about the eminent domain is --
17 you're changing your entire policy for all of
18 that property out there if you approve this
19 item the way it is.
20 So you need to amend, or we would request
21 that you amend the item to do away with that
22 portion that deals with the taking by eminent
23 domain and merely approve the purchase of our
24 clients' property.
25 GOVERNOR BUSH: So our theory that somehow
105
1 you were benefitting from eminent domain is not
2 true?
3 TREASURER GALLAGHER: You will.
4 GOVERNOR BUSH: You want to have just a
5 regular purchase?
6 MR. HOPPE: We signed a contract at a
7 particular price.
8 TREASURER GALLAGHER: You represent all four
9 sellers?
10 MR. HOPPE: I represent three. Not Bond.
11 TREASURER GALLAGHER: Maybe the fourth guy
12 wants this. I don't see how it hurts you. You
13 are worried about setting policy. Forget that.
14 This is a request to reaffirm policy.
15 MR. HOPPE: But you have to understand,
16 Commissioner Gallagher, that the problem as I look
17 at it is the fact that there is still 5,000 acres
18 out there. Some of them are homesteaded. The
19 Cabinet has never taken eminent domain on
20 homestead property out there. They should not set
21 a precedent by doing it here.
22 TREASURER GALLAGHER: This doesn't
23 necessarily mean -- there is no eminent domain
24 that takes place until we have to vote on an
25 individual basis. So the policy, they can't just
106
1 go out and do eminent domain because that's the
2 new policy; we have to vote on it.
3 And in this particular instance, I think
4 what's happening is -- and it may be the fourth
5 individual gets to take -- gets a major tax
6 benefit by being able to take the retail value,
7 if we are paying wholesale, which if we are
8 buying lots of lots, we are -- and the
9 difference between those two becomes a tax
10 credit that can be used over a five-year period
11 and it's a very lucrative tax credit. I don't
12 know whether you are aware of that or not.
13 COMMISSIONER BRONSON: Governor,
14 Commissioner, the way I read this, obviously I am
15 reading it the same way the gentleman at the
16 podium is reading it. It says we will be waiving
17 the right of this Cabinet, should negotiations
18 break down on these contracts, to automatically
19 give the department the opportunity to file
20 eminent domain.
21 We won't know the details of why or
22 anything; we are just going to go ahead and
23 waive that policy and let them do it. And that
24 is a change from what this Cabinet in the past
25 has done and this new Cabinet.
107
1 I am not sure -- I would like to know the
2 reasons why there was a breakdown and whether
3 the breakdown was because of the person who
4 wants to sell the land or because the state has
5 now changed the game plan somewhere, the
6 agency, that has caused the breakdown before we
7 filed eminent domain on someone.
8 And quite frankly, if I am not mistaken,
9 the federal government has a policy or has
10 always considered a policy on eminent domain,
11 even though Florida does it a little bit
12 different and a lot more practical and more
13 citizen friendly than some states and the
14 federal government does, that in issues when
15 they pass these bills in Congress -- which I
16 don't think this one is passed to allow this to
17 go on yet, even though we are hoping it's going
18 to, that they are going to go ahead and sign
19 it -- that if we were to allow this as it's
20 written here, could throw up a red flag to
21 Congress as to the fact that Florida wants to
22 do this without coming back through its
23 procedures as we normally do. And I am a
24 little concerned about that.
25 MR. HOPPE: If I can interrupt you and just
108
1 say one thing.
2 GOVERNOR BUSH: Could I get Secretary Struhs
3 to comment on this, if you can stand by, just
4 don't move.
5 MR. STRUHS: I am sorry if I didn't present
6 this well at the beginning.
7 We fully expect these four contracts will,
8 in fact, be executed within 45 days, a high
9 confidence that is what's going to happen here.
10 But in fact, what we are asking with this
11 item is that in addition to approving the
12 contracts, you would also delegate or approve
13 today the authority for the department to
14 exercise eminent domain in the event any of
15 these contracts fall through.
16 The rationale, Commissioner, in part being
17 that it's sort of a chicken-or-egg thing with
18 the Congress in Washington.
19 There are plenty of folks who would love
20 to find a couple of parcels left out of
21 hundreds that are still not closed on so that
22 that is the excuse by which this particular
23 project is not authorized.
24 My goal, our goal, is to, in fact,
25 demonstrate to the Congress that every one of
109
1 these parcels is in public ownership, creating
2 the momentum and the imperative to then
3 authorize the project.
4 It's a lot of federal money that is at
5 stake here, as you well appreciate, and we
6 believe that this is perhaps the safety net
7 that's required at this juncture for this
8 particular project.
9 We don't enter into it lightly. As you
10 know we do it very reluctantly, but we think
11 it's in the long run the best interest for all
12 the parties.
13 MR. HOPPE: And the distinction I make is
14 that this is not where there is going to be
15 possibly a contract; our clients have signed
16 contracts. We just need the signature of the DEP,
17 which I assume if you approve it, it will be done.
18 So there is no reason for them to attach this onto
19 this item even.
20 TREASURER GALLAGHER: But it isn't going to
21 hurt you any.
22 GOVERNOR BUSH: I don't understand what the
23 concern is.
24 TREASURER GALLAGHER: Where is your pain?
25 GOVERNOR BUSH: If you are worried about our
110
1 policy being inconsistent, welcome to our world.
2 If you are -- if you are strictly worried about
3 your clients, I don't see how this, based on what
4 you just said, this should be any concern of you.
5 MR. HOPPE: Okay. In terms of my
6 representation, in terms of these particular
7 clients, you are correct and then --
8 GOVERNOR BUSH: You've got prospective
9 clients that may go through this?
10 MR. HOPPE: I represent 1200 other acres out
11 there and I don't want you setting a policy when
12 there is no need to. And there is no need in this
13 particular case where the people have all signed
14 the contracts, your staff is ready to sign the
15 contracts, merely to say we approve the sale,
16 period.
17 COMMISSIONER BRONSON: I am going to -- I got
18 to tell you, I am getting antsy about this.
19 I know of another contract that was signed
20 on some property that I believe Nature
21 Conservancy was involved in and some others,
22 and on individual that wanted to do an easement
23 contract, for example; that caveats that were
24 put on after all that was decided made the
25 individual withdraw because it changed in his
111
1 mind what the original agreement was, because
2 of the caveats that were put on there.
3 And I get antsy about that simply because
4 if there is a caveat put on that changes what
5 this contract agreement says, I certainly want
6 to know that as a Cabinet Member why those
7 contracts fell through. I don't want somebody
8 to come back and say, well, they fell through,
9 so we filed eminent domain.
10 If there is a particular reason, I agree
11 with that. And if we need to do it to try to
12 get these issues worked out with Congress and
13 everybody else, I understand that.
14 But I -- I am really antsy about doing
15 this with just an open say that eminent domain
16 can be filed.
17 If the contracts are that close and
18 agreements are made, I am not sure why this is
19 being done either.
20 GOVERNOR BUSH: Mr. Secretary, is it safe to
21 say that this is not a change in policy, that this
22 is for these contracts only?
23 MR. STRUHS: Absolutely, it applies only to
24 these. And if I might, Commissioner.
25 I would more than agree with you if these
112
1 contracts were still being negotiated because I
2 think that would provide an unfair advantage to
3 the state. I would be very sympathetic to
4 that.
5 In these instance, these contracts are
6 already signed, so there will be no negotiating
7 effect with this provision.
8 TREASURER GALLAGHER: I move item 13.
9 GOVERNOR BUSH: Is there a second?
10 GENERAL CRIST: Second.
11 GOVERNOR BUSH: Any other discussion? All in
12 favor, signify by saying aye.
13 THE CABINET: Aye.
14 GENERAL CRIST: Aye.
15 TREASURER GALLAGHER: Aye.
16 GOVERNOR BUSH: All opposed?
17 COMMISSIONER BRONSON: I am going to oppose
18 this just on --
19 GOVERNOR BUSH: Okay. That's good.
20 TREASURER GALLAGHER: Let's move on.
21 MR. STRUHS: Item 14 is the biggest -- a
22 little more interesting.
23 GOVERNOR BUSH: Where did you get this
24 agenda?
25 TREASURER GALLAGHER: This is the first one
113
1 of the year. Let me just say --
2 GOVERNOR BUSH: Saved a lot of things in the
3 closet here.
4 TREASURER GALLAGHER: I would like to save us
5 a whole lot of discussion here if I can, I am
6 going to try this.
7 I would like to defer this for a couple of
8 reasons.
9 One, a chance to negotiate a little bit
10 more with Mr. Miller and also the Tribe, the
11 Miccosukees, and see if we can't get some
12 face-to-face discussions with chairman of the
13 tribe and some others on these before we come
14 back for eminent domain.
15 I am not against it, but we got a meeting
16 two weeks from now, we can see what we can do
17 in two weeks.
18 GOVERNOR BUSH: Is someone here representing
19 the Tribe?
20 MR. STRUHS: Yes, Governor, Commissioners,
21 there are a number of speakers on these items and
22 some of them have traveled, so it may be
23 worthwhile to hear from them, although I am very
24 respectful of your recommendation.
25 GOVERNOR BUSH: Sure.
114
1 TREASURER GALLAGHER: I tried.
2 MR. STRUHS: Maybe, if I might, to provide
3 some order so we can keep this better organized.
4 We could deal with Mr. Miller's property first and
5 then Mr. Hardy's property, and then the Miccosukee
6 property, so we deal with them as groups.
7 GOVERNOR BUSH: All right.
8 MR. BRANTLEY: Governor and Members, I am
9 Bobby Brantley, I am representing Mr. George
10 Miller, owner of the first property under
11 discussion.
12 I won't bore you with it today, but this
13 album here is full of photographs of
14 Mr. Miller's property, and I think if you have
15 the time to look at some of these, you will see
16 that this is -- (Hands over albums.)
17 As you will clearly see from this, this is
18 not a squatter shack that Mr. Miller has built
19 there. The photographs, earlier part of that
20 are pictures of he and his son clearing the
21 property and working.
22 But you will see that the structure itself
23 was built to be hurricane proof, and you look
24 at the footers that are poured in those
25 pictures to the back, you will see that this is
115
1 reminiscent of a commercial building.
2 In the envelope there is some interior
3 shots that will give you an idea of what the
4 interior of the home looks like.
5 This is Mr. Miller's residence. This is
6 very precedent setting.
7 GOVERNOR BUSH: When was this constructed?
8 MR. BRANTLEY: Earlier part of those, it was
9 started I think in '89. I believe in '89.
10 TREASURER GALLAGHER: How many square feet is
11 it?
12 GENERAL CRIST: Looks like about 20,000.
13 MR. BRANTLEY: That I don't have; I will get
14 that for you.
15 But Mr. Miller takes a lot of pride
16 obviously in this property. His preference
17 would be to stay. He does not want to leave.
18 He built this with his own hands; he is 71
19 years of age; he is battling cancer and this is
20 not a prospect that he looked forward to.
21 In addition to that, he has witnessed over
22 the last several years properties that were
23 owned by neighbors of his or friends of his
24 that have come under the same threat from the
25 state and have since sold their properties to
116
1 the state, only to find now we have forest
2 rangers living in those homes, and Mr. Miller
3 is concerned about that.
4 But if the state has to have the property
5 because they are about to flood the Everglades,
6 then if and when that time comes, then that may
7 be a more reasonable time for him to have to
8 vacate his property.
9 But as I told the aides at your Cabinet
10 aides meeting, if someone has to just manage
11 the property up until that time, I would submit
12 to you that Mr. Miller would be a much better
13 manager of this property than someone from the
14 State of Florida.
15 TREASURER GALLAGHER: Let me just say here
16 that in the past, when government has done eminent
17 domain -- this is really for David -- for example,
18 you got to put a highway in -- they go buy all the
19 property; they will lease back those homes to
20 people, sometimes it's a year or two, to make sure
21 that they are at least maintained or they have a
22 place to stay and everything else.
23 To me, if you have someone like
24 Mr. Miller, we should -- we should let him
25 stay, make a deal with him to stay; if we did
117
1 the eminent domain with him, give him a fair
2 price.
3 When we move the park rangers out of the
4 other houses, would be about the time that they
5 are going to tear them down, then that's when
6 they can move Mr. Miller out.
7 And as fast as we are moving, that could
8 be a long time from now. We have a lot more
9 property to buy.
10 I think that's something that might be
11 acceptable, don't you think?
12 MR. BRANTLEY: Also, Mr. Gallagher, as the
13 Secretary stated under your previous item, to give
14 eminent domain over these properties does give the
15 state an unfair advantage in negotiating with
16 these owners.
17 Now granted, Mr. Miller really does not
18 want to sell this property, but that is not to
19 say that he is not willing to negotiate if
20 there is some fair assessment, some way that he
21 can be assured that he is not just being thrown
22 out in order for some state employee to move
23 into this home.
24 He is very protective of this home. Quite
25 frankly, if I took you down there today, he
118
1 would probably would not allow us to go inside
2 his home. He is not trustful of anyone from
3 government coming around down here just because
4 he is afraid they are going to go in and just
5 stay.
6 But it's not a pleasant thing for him to
7 go through at this stage of his life, plus the
8 fact that he is battling cancer today, too.
9 GOVERNOR BUSH: Secretary Struhs.
10 MR. STRUHS: Yes, sir.
11 GOVERNOR BUSH: Why is this property of such
12 strategic value for us that would require eminent
13 domain?
14 MR. STRUHS: In my mind, there is a
15 distinction between buying land for purposes of
16 conservation, expanding a park, increasing the
17 site of a state forest, buffer preserves; there
18 are all sorts of natural things you would like to
19 protect when you buy land to do that.
20 My own point of view on this is we should
21 push that as far as we can but stop short of
22 using eminent domain. We should deal only with
23 then willing sellers.
24 This is not buying land for conservation.
25 This is equivalent to buying land to extend an
119
1 airport runway; it's equivalent to expanding
2 transportation corridors, sewer corridors.
3 This really is more of a utility type
4 acquisition than it is simply conservation.
5 GOVERNOR BUSH: You sure?
6 MR. STRUHS: Yes, sir, this is where we are
7 going to have to move vast quantities of water on
8 a regular basis.
9 What I try to do in my mind is say, if
10 this is simply making a bigger park, we
11 shouldn't take anybody's property. But if you
12 have to have a critical pathway to convey
13 water, it's substantial quantities, over most
14 of the year, I think you have to treat this
15 more as an infrastructure investment.
16 GOVERNOR BUSH: When is this utility project
17 estimated to be implemented?
18 MR. STRUHS: As I pointed out earlier, this
19 is the same as the previous item, item 13. We
20 fully expect that this component of Everglades
21 Restoration will be authorized by the Congress in
22 the year 2003; if not this spring.
23 GOVERNOR BUSH: That's right, that's what we
24 are fighting for, but tell me when would we
25 implement it; when would we begin construction of
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1 this infrastructure project to provide waterflow
2 for the Everglades?
3 COMMISSIONER BRONSON: If I am not mistaken,
4 Governor, I thought I saw when I was chairman of
5 Natural Resources in the Senate, that there was a
6 2006 time period on this. Am I mistaken?
7 GOVERNOR BUSH: Mr. Dean will tell us.
8 MR. DEAN: Governor, Henry Dean, South
9 Florida Water Management District. We would begin
10 construction within a year after the
11 authorization.
12 GOVERNOR BUSH: Irrespective of the fact we
13 haven't bought all the property in the middle of
14 it?
15 MR. STRUHS: It will all be acquired by that
16 time.
17 GOVERNOR BUSH: All the parcels?
18 MR. STRUHS: Yes.
19 MR. DEAN: If the authorization is approved
20 this spring, then our time frame would begin
21 implementation in the spring of '04.
22 GOVERNOR BUSH: Okay. Good answer.
23 COMMISSIONER BRONSON: I think what I am
24 looking at here is hydraulic restoration for
25 Southern Golden Gate Estates says May of 2006, is
121
1 when the construction contract will actually be
2 awarded. The management plan comes in on 2004,
3 but unless there has been a change to this, I am
4 seeing 2006.
5 GOVERNOR BUSH: We accelerated these
6 projects?
7 MR. STRUHS: Yes.
8 GOVERNOR BUSH: You are so efficient.
9 MR. STRUHS: This is unfortunately good news.
10 We are ahead of schedule.
11 GOVERNOR BUSH: We are ahead of schedule on
12 many of these projects, and haven't gotten a lot
13 of credit for it.
14 Any other discussion? Let's wait for the
15 Commissioner/Treasurer. We have a motion.
16 Any other speakers?
17 MR. STRUHS: Yes. You heard from the
18 representative for Mr. Miller. Next is
19 Mr. Hardy's --
20 GOVERNOR BUSH: Welcome. I hope you found
21 our Cabinet meeting stimulating.
22 MR. MOORE: Very much so.
23 GOVERNOR BUSH: I have, too.
24 MR. MOORE: My name is Bill Moore with the
25 law firm of Brigham-Moore. We represent Jessie
122
1 Hardy. Mr. Hardy has 160 acres in this area, it's
2 in the northern portion of the project.
3 GOVERNOR BUSH: Is it the maroon? Is that
4 the Tribe's'?
5 MR. MOORE: I have one.
6 MR. STRUHS: It's the red one.
7 MR. MOORE: That's the northwest quarter of
8 section 16 in red there. And if you can just --
9 can you show I-75, slide that down a bit? It's
10 about 2 miles south of I-75, about two and a
11 quarter miles south.
12 The reason I point that out is this is not
13 an issue where a landowner just wants more
14 money from the state. Mr. Hardy doesn't want
15 to sell, period. He's got a homestead there;
16 he's owned the property for about 27 years;
17 he's a Florida native, a hundred percent
18 disabled, Navy seal. He has about 35 acres
19 that he is homesteading, and on a portion of
20 the property he has an earth-digging operation
21 there, fully permitted, fully consistent with
22 all the environmental considerations you need
23 in order to do that. He would like to make
24 productive use of that property for the rest of
25 his life.
123
1 We have had a difficult time in convincing
2 anyone at the levels that we have been dealing
3 with that which ought to talk about easements,
4 that we ought to talk about some kind of a
5 development right restriction or life estate or
6 something of that nature.
7 GOVERNOR BUSH: I know that the federal
8 government doesn't have the same creative approach
9 to this as we do as it relates to conservation
10 easements, but about how about life estates?
11 MR. MOORE: Well, the federal government
12 actually did in the Big Cypress.
13 GOVERNOR BUSH: They did, that's right. Why
14 wouldn't they do it here?
15 MR. STRUHS: The reason I would not recommend
16 a life estate is, God willing these gentlemen
17 would have long, healthy lives, and we need to get
18 this project built, and it is -- it is a critical
19 infrastructure project.
20 GOVERNOR BUSH: Out of curiosity, that house,
21 the previous person's home is like a mid-size
22 apartment complex, it looked like. It's 15,000
23 square feet or perhaps more. What are you going
24 to do with that; tear it down?
25 MR. STRUHS: Yes, sir.
124
1 GOVERNOR BUSH: Take out the foundation?
2 MR. STRUHS: Yes.
3 GOVERNOR BUSH: What are you going to do with
4 the burrowing pit, fill it up?
5 MR. STRUHS: We have to fill it up because
6 that's critical to the hydrological --
7 GOVERNOR BUSH: How much is this project
8 going to cost apart from purchase of the land?
9 MR. STRUHS: Happily, the deal we have as you
10 well know is 50/50; and we are buying the land and
11 the federal government will pay for all or most of
12 the construction -- all of the construction.
13 GOVERNOR BUSH: Out of curiosity, how much is
14 this?
15 MR. STRUHS: $60 million for construction.
16 GOVERNOR BUSH: All right.
17 MR. MOORE: I have one other thing, if I may.
18 GOVERNOR BUSH: Yes, sir, please.
19 MR. MOORE: I don't know if this will show up
20 because I am not use to this. This is one of the
21 alternates that was not considered.
22 The reason I am showing you that is that
23 you will see that if you get a closeup, there
24 are certain improvements there, spreader
25 canals, there are certain blockages in canals;
125
1 and they go right up to Alligator Alley, in
2 that alternate.
3 Now as you will note, in the one that as I
4 understand it has been selected, which is I
5 believe it's 3C from my reading, that all these
6 structures to the north have been moved to the
7 south, about 2 miles to the south; that was
8 part of the reason for alternate 3C.
9 So the utility that the Secretary is
10 talking about, the structures, there is no need
11 for Mr. Hardy's property to be taken for that
12 because all that is to the south of him.
13 So in eminent domain law, you can't take
14 property unless it's necessary to achieve the
15 public project.
16 GOVERNOR BUSH: Can we pause here for a
17 second and let's get a response to that.
18 MR. BARNETT: Governor, Members of the
19 Cabinet, I am Ernie Barnett with the Department of
20 Environmental Protection.
21 One of the difficulties we had in
22 designing this project is that we looked at a
23 number of alternatives, the whole range of
24 alternatives included, as this gentleman is
25 referring to, which canals we could leave in,
126
1 which canals we could take out, where we would
2 strategically place the plugs and the backfield
3 and which ones we would not.
4 What we were faced with in the whole
5 multitude of options and why this is a critical
6 piece of property is not only did we have to
7 design this to maximize restoration within the
8 footprint of the 55,000 acres, that is Southern
9 Golden Gate Estates, we had to do it at the
10 same time with not causing any flooding to the
11 north in Northern Golden Gate Estates.
12 So although the spreader canals, the exact
13 location is still being determined, what we
14 have to do at the same time is make sure that
15 we have ample capacity to move the water from
16 the northern, which is heavily developed; and
17 the area that is in question is right in the
18 middle of that strategic area that we would
19 need to be able to have surge area for -- it
20 would stack up. And we would have a hydrologic
21 head above these spreader canals; so that area
22 will be under water.
23 GOVERNOR BUSH: Has there been any
24 consideration for relocation into the same area,
25 respecting the owner's right or desire to be
127
1 out -- if you are living in Golden Gates Estate,
2 you probably don't want to live in a dense area.
3 You want to be out of there.
4 MR. BARNETT: This is a federalized project
5 and they are subject to the Uniform Relocation
6 Act. They have those relocation benefits, so
7 that's the first step we do, is try to find them
8 comparable housing in the same general vicinity.
9 GOVERNOR BUSH: No-go for your client?
10 MR. MOORE: No-go, I don't believe so. But
11 with respect, I ask that you defer this because
12 our information is that's not correct;
13 technically, topographically, that we are not
14 going to be innundated.
15 But if we were, we could have a flowage
16 easement or flooding easement of some kind,
17 work that out. But I would look to be able to
18 present that to the staff and work out a little
19 bit with them in terms of their engineering
20 because I don't believe they are correct on
21 that.
22 GOVERNOR BUSH: Would you -- the relocation
23 issue though, assuming this is an essential part
24 of this federal project, there are some pretty
25 darn good benefits for relocation and a like kind
128
1 property I would imagine in this amount of area is
2 available, no?
3 MR. MOORE: Governor, I think that's --
4 usually that's a good way to go. This is
5 160 acres. As I say, he's has got an earth
6 digging operation now that he wants to create into
7 catfish farming. There is probably not a whole
8 lot of places he can go now and stay away from the
9 conservation movement.
10 GOVERNOR BUSH: I am just trying.
11 COMMISSIONER MOORE: I appreciate that. We
12 would appreciate exploring legislation.
13 Legislation is replete with other types of
14 alternatives, other than fee simple acquisition.
15 I don't think that's been given a chance here.
16 That's all we are asking.
17 GOVERNOR BUSH: Secretary Struhs.
18 MR. STRUHS: Yes, sir. I just wanted to
19 speak to the issue of the development of a
20 business concern on this property.
21 The federal rules are such that if there
22 is a business enterprise on a piece of property
23 for three years, then they are entitled to
24 higher levels of relocation and compensation.
25 Short of three years, it becomes substantially
129
1 more affordable to the government.
2 GOVERNOR BUSH: How long has this operation
3 been in place?
4 MR. STRUHS: Two years, that's my point.
5 So part of our goal, in terms of providing
6 best public value, is to make sure that this
7 all occurs prior to that three-year mark
8 because at that point it would become a
9 business --
10 GOVERNOR BUSH: Now I am going to sound like
11 I am really confused, because this is -- when you
12 are in the eminent domain world, everything I said
13 about the state purchasing land, forget it. This
14 is a different animal.
15 I think we need to bend over backwards to
16 find ways to accommodate people who have made
17 life decisions; this is their property. You
18 know how uncomfortable I am about eminent
19 domain.
20 It's essential for this project, and I
21 want to support the department because of our
22 on-going efforts for the restoration of the
23 Everglades, but I would support the
24 Commissioner's suggestion of a deferral so that
25 we can just make sure that every possible
130
1 option can be explored with these landowners.
2 COMMISSIONER BRONSON: I second that.
3 GOVERNOR BUSH: I know there is a third
4 parcel; I am curious to know -- I have a few
5 questions related to the third parcel, if we could
6 allow for that discussion.
7 TREASURER GALLAGHER: Yeah, I think they came
8 this far, we ought to hear them.
9 GOVERNOR BUSH: I don't know if we missed
10 anybody that wanted to speak on the other two
11 parcels? Yes, ma'am.
12 MR. STRUHS: I'm not yet concluded. You
13 should have in your briefing photographic evidence
14 of these pits that have been dug that are
15 purportedly going to be converted into a fish
16 farming operation.
17 GOVERNOR BUSH: Was there a permit necessary
18 for that kind of deal?
19 MR. STRUHS: I don't know.
20 TREASURER GALLAGHER: He has got a contract
21 to fill for the county. When he is done digging
22 the hole, he is going to put catfish in there.
23 MR. STRUHS: The spoil from the hole is
24 actually immediately --
25 GOVERNOR BUSH: That looks like a desk. Is
131
1 this permitted? The hole in the donut, was this
2 permitted?
3 MR. STRUHS: I don't know.
4 TREASURER GALLAGHER: A hole in the donut
5 again?
6 GOVERNOR BUSH: No, this is a different hole,
7 different donut.
8 TREASURER GALLAGHER: I thought it was Dade
9 County.
10 MR. STRUHS: My point is after three years,
11 that infrastructure will be considered a business.
12 GOVERNOR BUSH: Okay. Can we move on to the
13 third parcel?
14 MR. STRUHS: Yes.
15 GOVERNOR BUSH: Good morning, still.
16 MS. CARROLL: Good morning, I am Dione
17 Carroll, counsel general to the Miccosukee Tribe
18 Indians of Florida.
19 I always get a little expectation when I
20 am headed for the podium when it comes to these
21 tribal issues because they are interesting and
22 they are unusual.
23 I have to say, first of all, the tribe
24 makes it a policy never to sell lands of
25 cultural and historic significance to the
132
1 tribe. I've heard a lot of discussion today
2 about preserving history and culture and it is
3 critical to the tribe to do that with tribal
4 lands.
5 Secondly, tribal lands --
6 GOVERNOR BUSH: Is it -- I am sorry, is this
7 beyond any reasonable doubt considered tribal
8 lands or you own it?
9 MS. CARROLL: We own this in fee simple
10 absolute, warranty deed, like anybody else would
11 own land in the conventional, nonnative American
12 sense of the word.
13 GOVERNOR BUSH: Is there a legal case you are
14 making here that this is a -- that this is --
15 MS. CARROLL: Yes, sir, I will cut to the
16 chase. This is Indian land subject to 25 U.S.C.
17 Section 177 according to the beliefs of the tribe.
18 GOVERNOR BUSH: That's -- I am not an expert,
19 I am asking sincerely you these questions, because
20 from what I understand the tribe is becoming an
21 active purchaser in other areas of critical
22 concern for the state as it relates to the
23 Everglades Restoration process. And as you buy
24 property, this was a purchase of when?
25 MS. CARROLL: 1997, prior to CERP's
133
1 authorization; it was purchased then.
2 GOVERNOR BUSH: Why was it purchased?
3 MS. CARROLL: It was purchased for the
4 purpose of using it -- this is what it's used
5 for -- for acquiring palm frons for the purpose of
6 building native chickees and for acquiring the
7 herbs necessary for tribal medicine.
8 We have the unfortunate situation, the
9 tribe was driven out into the Everglades --
10 this is a historical fact -- and now that they
11 are there and now that they are making efforts
12 to preserve and conserve cultural lands, as
13 time and development and pressures in Collier
14 County, et cetera, et cetera, and need for
15 restoration has put pressure on them again,
16 they went where nobody wanted them.
17 And they purchased the land, as I
18 mentioned, to be able to get the palm frons,
19 but understand, they have been using it for
20 generations. The land was only acquired
21 because development pressures in that area were
22 getting intense. There aren't that many places
23 the tribe can go to do its natural, native
24 cultural activities.
25 That particular area has sufficient access
134
1 and the natural resources necessary to continue
2 their historical activities. I can't
3 emphasize, I mean we may debate or discuss
4 about various parcels --
5 GOVERNOR BUSH: Where were these cultural,
6 legitimate cultural activities being done prior to
7 1997?
8 MS. CARROLL: Out there. They were being
9 done -- it was -- there was no formal agreement,
10 to my understanding.
11 GOVERNOR BUSH: On the same property?
12 MS. CARROLL: Oh, yes, according to our real
13 estate director, generations, as long as
14 anybody --
15 GOVERNOR BUSH: Who owned it?
16 MS. CARROLL: INC Agriculture, I believe. I
17 think people have the misimpression that we are
18 out there buying up lots of parcels or something.
19 This was a one-contract purchase to preserve this
20 land for --
21 GOVERNOR BUSH: You all aren't buying any
22 lands a little east of here?
23 MS. CARROLL: Oh, I am not saying we are not
24 buying other lands. I am not -- I don't want to
25 misrepresent that, but I am talking today about
135
1 the parcel that's in front of you. And I have
2 archaeologists out there right now; I may have the
3 Bloody Miami Circle out there. I don't know the
4 answer.
5 GOVERNOR BUSH: Then you may want to sell it
6 to us.
7 MS. CARROLL: Right, this could be good.
8 Plainly, though, this is a parcel with
9 very -- if you go to the history books and you
10 look at discussions of areas of significance in
11 the mid 1800s, this is one of them.
12 GOVERNOR BUSH: Your contention is
13 unequivocably that eminent domain does not apply
14 to tribal lands and these are tribal lands?
15 MS. CARROLL: Tribal lands and they under 25
16 U.S.C., Section 177, tribal lands are not subject
17 to alienation without specific authorization of
18 Congress. You have that kind of authorization, no
19 dispute.
20 GOVERNOR BUSH: I guess the question is, is
21 this tribal lands as is defined in that statute?
22 That may be the bone of contention.
23 MS. CARROLL: And staff people for DEP, and I
24 don't know who else, may contend with you that it
25 is not.
136
1 And I would say that if the tribe had
2 purchased a piece of property in Chicago,
3 Illinois, and they were putting a gas -- let me
4 say I would have said this -- if they were
5 putting a gas station in Chicago, Illinois, and
6 it was purely a commercial parcel with no
7 connection to culture, without these historic
8 ties, without the land that clearly has very,
9 very significant cultural significance, I might
10 agree with you.
11 However, BIA might not. I sat down with a
12 very high level BIA official --
13 GOVERNOR BUSH: Why don't you explain what
14 BIA is.
15 MS. CARROLL: Bureau of Indian Affairs,
16 federal agency. And I sat down with some very
17 high level officials from the regional office of
18 BIA and from Washington, and I laid out for them
19 some of the issues about, well, you know, the
20 state seems to think they can take it.
21 Their position to me at the time -- of
22 course this was a casual situation -- was that
23 Indian lands can't be alienated without federal
24 approval and they don't have that. And these
25 look like Indian lands to us.
137
1 COMMISSIONER BRONSON: Question.
2 GOVERNOR BUSH: Commissioner.
3 COMMISSIONER BRONSON: While I have the
4 utmost respect for the Indian lands and the tribe,
5 the Miccosukees, I thought it was my understanding
6 that the original, quote, tribal lands were the
7 lands deeded by the federal government to the
8 Miccosukee Tribe and also to the Seminole Tribe as
9 their tribal lands that were dedicated to them by
10 the federal government.
11 And, therefore, no one could touch that
12 land except going through Congress, was the way
13 I remember the issues involving after the Third
14 Seminole War when all of this was set up.
15 TREASURER GALLAGHER: And he was here.
16 COMMISSIONER BRONSON: I had relative in the
17 second end of the Third War, so I know a little
18 bit about it.
19 But the fact that you can go out and buy a
20 piece of land right now -- and as far as
21 artifacts goes, if you really wanted to, you
22 could go through every inch of land between
23 here and Miami and find Indian artifacts. They
24 have been here for, I guess now about 10,000
25 years of different tribes.
138
1 So you can find those artifacts, but I
2 think we have to be practical here. And what I
3 need to know is, does the federal government
4 really consider this piece of land bought in
5 '97 actual tribal lands, or was this land
6 acquired by the tribe in addition to the tribal
7 lands? And I think the Governor kind of more
8 or less asked that question a while ago, but
9 that's -- we need to get that answered.
10 GOVERNOR BUSH: Your position is clear.
11 MS. CARROLL: I think maybe I owe the
12 gentleman a response on what are tribal lands
13 because there are actually some definitions on
14 this issue.
15 What you described to me was not Indian
16 lands; it was Indian country. And I hate to
17 mince words, but that's what happens when you
18 have statutes. We have to be real specific
19 about what we talk about.
20 Indian country has a definition of
21 reservation lands, plus dependent Indian
22 communities and a few other, like one other
23 small exception. And that is a very narrow
24 concept.
25 The Indian Nonintercourse Act does not use
139
1 the term Indian country; it uses Indian lands.
2 And there are cases out there discussing
3 different types of ownership, including fee
4 ownership -- you can look at the situation
5 where the Pueblos are out in New Mexico, they
6 actually own their, quote/unquote, reservation.
7 It's not reservation land, but they own it in
8 fee simple absolute, what they call land
9 patents.
10 There is a situation in New York where
11 they were starting to attempt to condemn some
12 land that was owned in fee, and the judge in
13 that case made it clear that they needed
14 federal authorization.
15 So I don't dispute that there is a type of
16 land that clearly fits your description, but
17 that relates to one set of legal issues and
18 this relates to another.
19 And that's the Nonintercourse Act which
20 was designed to protect Indians from having
21 their lands diminished and done so in ways that
22 were not responsible.
23 GOVERNOR BUSH: Thank you. Any other
24 discussion?
25 Secretary Struhs, do you have anything to
140
1 add to this or can we have a motion?
2 MR. STRUHS: I know that there are --
3 GOVERNOR BUSH: There is a motion to defer
4 and a second. Unless you have something else to
5 say, we are probably going to vote.
6 MR. STRUHS: Let me just say, if you care to
7 have any additional discussion on this legal
8 point, Mr. Bob Scanlan is here from the Attorney
9 General's office, he can speak to this if you
10 wish.
11 GOVERNOR BUSH: It's safe to say the state
12 has a differing opinion?
13 MR. STRUHS: Yes.
14 GOVERNOR BUSH: I thought so.
15 MR. STRUHS: I don't know if he wishes to
16 speak, but Eric Draper -- he waives his time. We
17 are ready to defer.
18 GOVERNOR BUSH: He is keeping his powder dry
19 for the nondeferral.
20 There is a motion to defer and a second.
21 Any other discussion?
22 All in favor to defer say aye.
23 THE CABINET: Aye.
24 GOVERNOR BUSH: All opposed?
25 Thank you, and I appreciate you all coming
141
1 up. This was very educational for me, and I
2 hope the department and the property owners
3 work in good faith to try to come up with a
4 solution.
5 MR. STRUHS: Thank you.
6 GOVERNOR BUSH: Item 15.
7 TREASURER GALLAGHER: Motion to approve.
8 GOVERNOR BUSH: There is a motion and second.
9 Is there anybody here to speak on item 15?
10 MR. STRUHS: Yes, sir, Mr. Frank Matthews is
11 here to representing Swire Properties.
12 GOVERNOR BUSH: Waving the white flag this
13 time?
14 MR. MATTHEWS: No, sir.
15 Thank you, Governor, Members of the board,
16 Frank Matthews; I learned a lot here this
17 morning. One is I should have Dr. Jan Matthews
18 make this presentation.
19 GOVERNOR BUSH: You will do fine; this was a
20 tough one.
21 MR. MATTHEWS: We attempted, as you know, and
22 the third time may be a charm, we are back here
23 seeking this land lease. The recommendation is
24 for denial from the Administrative Law Judge.
25 We filed our exceptions, which is just the
142
1 protocol to take exception to the findings and
2 conclusions he reached.
3 The bottom line, as all of you have heard
4 this, we satisfied the Fish and Wildlife
5 Service, the Fish and Wildlife Conservation
6 Commission, we reduced the slips, we meet the
7 Manatee Protection Plan; we brought the city
8 manager, the chief of police, the marine patrol
9 unit commander to talk about law enforcement,
10 public safety.
11 Nevertheless, the extreme hardship
12 standard that's been recommended to you was
13 that we did not achieve that standard and,
14 therefore, we are recommended for denial on
15 this submerged land lease.
16 The only points that we raise is that the
17 Administrative Law Judge, looking at
18 availability of slips, acknowledged there were
19 existing slips along the Miami River where the
20 unit might be relocated, but he made no
21 findings about their actual availability.
22 The marine patrol unit, which is this 2000
23 square feet turnkey operation that we proposed
24 to include in this lease, certainly doesn't
25 exist.
143
1 So again, I am here more or less on bended
2 knee, suggesting that you do have the
3 discretion, you do have the discretion you --
4 you are the Board of Trustees, you determine
5 what constitutes extreme hardship.
6 If you follow the recommendation, I would
7 suggest to you, we found 26 decisions that your
8 predecessors made authorizing land leases in
9 the Biscayne Aquatic Preserve since 1974.
10 Virtually all of them had pilings in the
11 ground, and they were grandfathered structures
12 at some point or they were boat shows that you
13 authorized on a temporary basis. So in
14 effect --
15 GOVERNOR BUSH: We still do that, don't we,
16 that's over on the Beach?
17 MR. MATTHEWS: I sure hope so, on behalf of
18 another client.
19 But in any event, where we stand today is
20 based on our proposal to do a joint
21 private/public partnership, I am here
22 representing the City of Miami and Swire
23 Properties, and we just don't believe anybody
24 is ever going to meet this extreme hardship
25 standard.
144
1 We did our darnest to do so. We presented
2 all of the evidence and supporting rationale,
3 as to economic development, the Greenway, the
4 Miami River Redevelopment; we have done
5 everything we could to put on our case. We had
6 our day.
7 We have been recommended for denial, but
8 it's up to you all. We would urge you to issue
9 this lease.
10 We have a 1975 development order. It said
11 a marina, we just didn't have the pilings in
12 the ground. And that's our equity.
13 Why are we different from the public at
14 large? We have a mile of waterfront, and we
15 can't get a single slip.
16 The order that's been issued is that with
17 a mile of waterfront on the Biscayne Aquatic
18 Preserve, we cannot get a single slip approved.
19 We would suggest it's a bad decision. We
20 would ask you to reverse it and issue this
21 lease. Thank you very much.
22 GOVERNOR BUSH: Thank you, Frank, for being
23 here. Any discussion? Is there a motion?
24 TREASURER GALLAGHER: I made a motion.
25 GOVERNOR BUSH: You did. I am sorry.
145
1 COMMISSIONER BRONSON: I am sorry, you want
2 to come speak.
3 MS. COLLINS: I normally don't jump up like
4 that.
5 GOVERNOR BUSH: I am glad you did.
6 MS. COLLINS: My name is Martha Collins. I
7 was an attorney for Save the Manatee Club in this
8 matter. And just to emphasize again, this project
9 is located in an essential manatee habitat at the
10 mouth of the Miami River and in the Biscayne
11 Aquatic Preserve.
12 This project is configured so ingress and
13 egress into the marina would overlap with
14 proven manatee travel patterns. Over 18
15 manatee have perished within a 5-mile radius of
16 Brickell Key due to watercraft-related injuries
17 since 1974. Six have died due to
18 watercraft-related injuries within a 2-mile
19 radius.
20 This is not a good location for a marina.
21 After a two-day hearing, the Administrative Law
22 Judge determined based on competent,
23 substantial evidence that this project,
24 environmental costs, including potential harm
25 to endangered manatee, far outweigh any
146
1 environmental benefit.
2 As such, Save The Manatee Club hopes that
3 you all adopt the consolidated final order and
4 deny this permit.
5 I would also just like to take a minute to
6 thank the staff of the Department of
7 Environmental Protection for all their hard
8 work in protecting this area and ensuring that
9 this permit be denied. It was my pleasure to
10 work with all of them throughout the course of
11 this proceedings. Thank you for your time.
12 GOVERNOR BUSH: Thank you very much. Thank
13 you for being here. Any other people that would
14 like to speak?
15 There is a motion to approve the
16 consolidated final order, adopting the
17 recommended order and the delegation of
18 authority to the Secretary of the Department of
19 Environmental Protection to sign the
20 consolidated final order. Is there a second?
21 COMMISSIONER BRONSON: Second.
22 GOVERNOR BUSH: Any other discussion? All in
23 favor say aye.
24 THE CABINET: Aye.
25 GOVERNOR BUSH: All opposed.
147
1 MR. STRUHS: I am sorry, I forgot to
2 recognize Ms. Collins earlier. I missed that
3 point. Thank you.
4 Item 16.
5 GOVERNOR BUSH: This is a deferral item,
6 isn't it?
7 MR. STRUHS: This is an item that you sought
8 to defer.
9 I would suggest there are quite a few
10 people here that would like to speak to it.
11 Maybe in an effort to accelerate it a little
12 bit, I can give just a very quick introductory
13 comment.
14 This project was the result of the good
15 work of Congressman Boyd who earmarked in the
16 Army Corps of Engineers budget $2 million to do
17 this project. While that might be a good
18 thing, the fact is, it's not enough to do the
19 project right.
20 This really should be about a
21 5 million-dollar project. It's complicated
22 further by the fact I believe the Corps of
23 Engineers really doesn't want to do this
24 project. And the situation is this.
25 It's a project that would allow for some
148
1 maintenance stretching at the mouth of the
2 Suwannee River in the Big Bend Buck Preserve.
3 Ideally the spoils from reopening of the
4 channel should be either disposed of on land or
5 should be disposed of in the ocean. In both
6 cases, there is simply not enough federal money
7 attached to this project to make those a
8 reality.
9 And given the shortfall in the cash
10 available and I think the Corps' reluctance to
11 engage in this project, it leaves us in a
12 difficult position because this clearly has
13 some important navigation and safety benefits,
14 some economic development benefits, but it also
15 needs to be done right because you are in an
16 aquatic preserve.
17 One of the things we would propose
18 reluctantly as a potential solution to this,
19 Governor, is that you consider a third
20 technique for dredging, which is called
21 sidecasting.
22 GOVERNOR BUSH: What is it called?
23 MR. STRUHS: Sidecasting, so as you cut the
24 channel, the spoils, rather than being transported
25 to sea or fighting an upland disposal site, would
149
1 be essentially sidelined along the channel. We
2 propose it reluctantly; we don't think it's a
3 superior position.
4 But the fact is that's I think all the
5 federal money will pay for. So with that we
6 would recommend four points.
7 Approval for the navigation channel as a
8 public easement; authorization to settle the
9 material; authorization to do some bulkheading
10 and minimum spoiling along Little Bradford
11 Island; and then finally, to deny the 17 and a
12 half acres spoiling along Cat Island in the
13 Buffer Preserve.
14 So that's our recommendation. A number of
15 speakers. Don Fore is here from the Army Corps
16 of Engineers.
17 GOVERNOR BUSH: This is one of the items that
18 is required to be deferred?
19 MR. STRUHS: Yes.
20 GOVERNOR BUSH: So if everybody could be
21 brief, I will be very grateful to you.
22 MR. STRUHS: So Don Fore from the Corps of
23 Engineers and David Still from the Water
24 Management District.
25 And then those who seek to speak in
150
1 opposition, if you can line up be in queue.
2 And following that, those who are supportive of
3 the project, and then Commissioner Marcus Hayes
4 from Dixie County has asked if he could speak
5 last.
6 MR. STILL: Good afternoon, Governor, and
7 Members of the Cabinet, my name is David Still. I
8 am Deputy Executive Director for the Suwannee
9 River Water Management District and in light of
10 your previous decision on deferral, I will be
11 extremely brief.
12 There is a lot of history with this
13 project, as the Secretary stated. Mr. Harold
14 Michael, with Congressman Boyd, is in the
15 audience as well, to answer any questions that
16 you may have.
17 I have also given you a couple of pictures
18 to show you why this project is so important to
19 the citizens of Dixie County and State of
20 Florida.
21 The first one I would like to show is, in
22 fact, the area of the Town of Suwannee and in
23 the bottom photo you can actually see the Town
24 of Suwannee is surrounded by marsh and
25 marshland.
151
1 And this is important, Governor, because
2 we feel that there would be an opportunity to
3 use an upland area to spoil, except for the
4 fact that in this particular photo, the green
5 area is federal lands.
6 The federal agencies have told us that we
7 could not dump the spoil on their property.
8 And if you also notice the red area, the red
9 area in this particular project are land areas
10 greater than 20 acres which is required for the
11 spoil material.
12 GOVERNOR BUSH: How about that southern red
13 property?
14 MR. STILL: This one? This piece?
15 GOVERNOR BUSH: Yes, that private property,
16 why wouldn't that be a place you could negotiate
17 the spoil?
18 MR. STILL: We would like to. It is pristine
19 salt marsh habitat, we run into --
20 GOVERNOR BUSH: I thought you said it was
21 upland.
22 MR. STILL: No, sir, not those. We looked at
23 everything possible we could find. And we have
24 exhausted all the reasonable alternatives that we
25 felt we could use.
152
1 If we were to put the material on that
2 last red item, red parcel that you located, we
3 would be looking at mitigation and mitigation
4 is not an alternative also in this particular
5 track because of the availability --
6 nonavailability of lands.
7 So again, in brief, just to close, to tell
8 you that we do not have the availability of
9 other alternative methods in this particular
10 case. We would ask you to go with the
11 Secretary's recommendation. Thank you.
12 GOVERNOR BUSH: Thanks for being here. You
13 want to keep it up, that picture there. Sure is
14 pretty.
15 MR. FORE: Good afternoon, Governor and
16 board, I am Don Fore, the Corps of Engineers, and
17 I think I need to take exception to the statement
18 that we are not in support of this project,
19 because we are in support of it.
20 We have been trying to provide a safe
21 channel to the community since the late '70s.
22 In fact, there are two federally authorized
23 channels originally existing, East Pass and
24 Alligator Pass. Fish and Wildlife passed the
25 jeopardy opinion against us using Alligator
153
1 Pass and also told us we could not use the East
2 Pass, it would be the same result.
3 GOVERNOR BUSH: Where are those, out of
4 curiosity?
5 MR. FORE: Right here would be Alligator Pass
6 and this here is East Pass.
7 GOVERNOR BUSH: Is the place?
8 MR. FORE: These are two federally authorized
9 channels. We tried to dredge them, and we could
10 not dredge them. And --
11 GOVERNOR BUSH: If there is any dredging to
12 be done, it's going to be in the proposed place?
13 MR. FORE: Yes, sir. And the channel we are
14 looking at dredging, McGriff Pass, we are actually
15 just looking at maintenance dredging an existing
16 pass that's already been dredged before by the
17 locals.
18 Water Resources Development Act of '99,
19 Congressman Boyd actually pushed through an
20 authorization to allow us to maintenance dredge
21 McGriff Channel, Wadley Pass.
22 We then -- okay, the authorization is fine
23 and then 2002, $2 million was added. We pulled
24 all agencies together we could get a hold of
25 and had site visits out there to try to figure
154
1 out where to place the material.
2 The nearest upland site, not only were
3 there cultural resources on it, wetlands and
4 such a long distance, and we were also worried
5 about saltwater intrusion, possible sinkholes.
6 GOVERNOR BUSH: So you are for putting the
7 spoil on this island out there?
8 MR. FORE: We looked at the upland side
9 first, and that was a price tag of five and a half
10 million dollars, plus other environmental
11 concerns.
12 GOVERNOR BUSH: The answer yes, what's it
13 called, Cat Island?
14 MR. FORE: So we looked -- so we said, okay,
15 where else can we put it? We looked at offshore;
16 maybe the nearest area out there that didn't have
17 any sea grass would be out, about 10 or 12 miles
18 out. That would require an 0DMDS, Designation of
19 Offshore Dredge Material Disposal Site, which
20 takes to 6 to 10 years to develop and get approval
21 by EPA.
22 So we started looking at sites in the
23 Aquatic Preserve. We looked around Cat Island
24 and specifically National Fisheries suggested
25 that area because it was away from the McGriff
155
1 Channel. They were opposed to having any
2 dredging events there because of the gulf
3 sturgeon.
4 And also we looked at Cat Island, there
5 were significant cultural resources and if we
6 place the material around there, we would
7 preserve those, as well as we would place
8 material below mean high water, which is
9 something the department wants to do. If we
10 did that, we would actually create marsh
11 habitat, which everybody seemed to think was
12 probably 10 times more productive than in open
13 water.
14 And there are other options. We looked at
15 what we call No Name Island, and we also talked
16 about since somebody brought up the sidecasting
17 of the channel, that's something we are not
18 opposed to as well, but we would have to
19 stabilize the material, we would have to put
20 some type of geotechnical bags around the
21 material to contain it.
22 GOVERNOR BUSH: Okay. Thank you.
23 COMMISSIONER BRONSON: Governor, one question
24 that maybe the Corps could answer this.
25 If these channels are opened up, is it
156
1 going to increase the sturgeon populations of
2 the Suwannee area, of the native sturgeon
3 populations?
4 MR. FORE: Will it increase populations?
5 COMMISSIONER BRONSON: Will it help increase
6 the ebb and flow of the sturgeons in and out of
7 the channels areas?
8 MR. FORE: No, sir, the dredging will very
9 minimally affect the hydraulics of the area.
10 GOVERNOR BUSH: Thank you. Anybody else like
11 to speak?
12 MR. STRUHS: Some good news. In the interest
13 of time, a number of people who traveled here to
14 speak in support of the project will allow one
15 person to summarize for all of them. That would
16 be Commissioner Hayes from Dixie County, but you
17 should know that a number of people did arrive to
18 speak in support of the project.
19 But we would also offer the opportunity
20 for those who want to speak in opposition to
21 the project, to do the same; if you wanted to
22 limit your comments to one or two people, that
23 would be helpful.
24 GOVERNOR BUSH: We would appreciate it.
25 COMMISSIONER HAYES: Good morning, Governor,
157
1 Cabinet Members, I appreciate your time. I know
2 we are into the noon hour, so I will try to be
3 brief.
4 My name is Marcus Hayes, I represent the
5 Dixie County Board Of County Commissioners, I
6 am a commissioner there. The Town of Suwannee
7 is in my district.
8 The points I would like to bring, the
9 first, the experts have addressed the
10 environmental issues.
11 Through the Army Corps of Engineers,
12 Stormwater Management and DEP, I think there
13 has been a lot of communication and I think the
14 possibility of sidecasting the spoil material
15 rather than using the original Cat Island
16 permitting is a possibility that could be
17 worked out between the agencies.
18 The couple of points I would like to bring
19 out is Dixie County, we are economically
20 depressed because we are bordered by the marsh
21 on one side, the gulf, and the Steinhatchee
22 River on the north side, Suwannee River on the
23 south side. So as far as economic development,
24 we are limited.
25 We are also at a 10 mill cap as far as
158
1 taxes are concerned. So the thing we would
2 like to do is -- the commission has a
3 resolution supporting this project, also the
4 Rotary Club, the Chamber of Commerce for Dixie
5 County. I am a native of Dixie County, a
6 sportsman, and I would not support anything
7 that I felt would be detrimental to the place I
8 grew up and enjoyed growing up.
9 The economic impact to Dixie County is, we
10 only have one thing to promote because of we
11 are where we are located geographically, and
12 that's tourism. As recent as the Christmas
13 holidays we had five boats stranded in this
14 channel at one time. We have some of the best
15 fishing off of Dixie County, anywhere in the
16 state, but the people just can't use Suwannee
17 to get out --
18 GENERAL CRIST: What kind of fishing?
19 COMMISSIONER HAYES: Our proposal is --
20 GENERAL CRIST: What kind of fishing?
21 COMMISSIONER HAYES: Redfish, grouper, that
22 sort of thing. Our proposal is to support the
23 Department of Environmental Protection's possible
24 approval of sidecasting; they said they would
25 consider that. Also Army Corps said that's a
159
1 possibility.
2 GOVERNOR BUSH: Maybe in the interim, while
3 we work out this legislative fix, perhaps you all
4 could discuss that issue. That would alleviate
5 any concerns the department has, I assume.
6 COMMISSIONER HAYES: We would like to
7 entertain the idea of you considering the possible
8 sidecasting so there would be -- this has been
9 dredged three times before with no economic -- no
10 environmental impact as far as being detrimental.
11 And we would appreciate your consideration. And I
12 realize we are at the noon hour and I thank you
13 for your time.
14 GOVERNOR BUSH: Thank you. Thanks for being
15 here, thanks for your patience.
16 Anybody here to oppose this? Secretary,
17 you have no option, if Cat Island isn't used
18 and the other option that was described can't
19 be done for some technical reason, that your
20 recommendation for denial basically on that one
21 element basically kills the whole project,
22 right?
23 MR. STRUHS: That's correct, and that's why
24 we are not doing that, because while our clear
25 preference would be to adequately fund the project
160
1 so you could do some type of upland or ocean
2 disposal. The fact is the money is not there, and
3 we don't want to put the community in the position
4 where they can't get this job done.
5 That's why we proposed sidecasting as I
6 think a very reluctant but doable alternative,
7 that will try to balance these two competing
8 objectives.
9 TREASURER GALLAGHER: How about loading it up
10 and sending it to Broward County?
11 GOVERNOR BUSH: That was my line.
12 TREASURER GALLAGHER: Should have used it.
13 GOVERNOR BUSH: I don't have a trademark on
14 it. There is a motion to defer. We are deferring
15 the whole --
16 TREASURER GALLAGHER: We already done that.
17 GOVERNOR BUSH: Oh, that's right. It's been
18 a long day.
19 COMMISSIONER HAYES: Governor, one brief
20 point.
21 Also with the Army Corps of Engineers, the
22 money, federal monies set aside to do this
23 project, the sidecasting would be within the
24 project's budget.
25 Also they have agreed to accept the
161
1 responsibility for any maintenance in the
2 future which would alleviate -- the last time
3 the project was dredged, it was funded by the
4 state. This would relieve -- alleviate any
5 responsibility financially of the state or
6 Dixie County.
7 GOVERNOR BUSH: We want to do what we can to
8 accommodate you. This is important for you
9 economically and it's a beautiful part of the
10 state. I have to do a site visit. Eva
11 Armstrong --
12 Item 17 is deferred as well, I am sure
13 there are a few people here that would like to
14 discuss it.
15 MR. STRUHS: There are. And again, in an
16 effort to try to maybe accelerate, speed up the
17 conversation, I would suggest that there may be an
18 option here again that we can work on during the
19 time that's been created to try to balance the
20 needs between the reef and the beach.
21 And this Cabinet has on more than one
22 occasion demonstrated an interest in preserving
23 the environmental and economic benefits of
24 beaches. But you've also proven time and again
25 your commitment to protecting the coral reefs.
162
1 We would propose that one thing you might
2 consider is a solution that we can work on in
3 the intervening time, since this item will be
4 deferred, is to see if we can't get Broward
5 County -- give Broward County the opportunity
6 to demonstrate that, in fact, this project will
7 perform as they suggest it will through
8 monitoring the performance of segment three;
9 segment three being that part by John U.Lloyd
10 State Park, Hollywood and Hallendale, and to
11 get that monitoring data in before embarking on
12 segment two of the project; and to extend that
13 for a period of 18 months so we can see what
14 the results are at segment three.
15 Then what we would do is propose coming
16 back to the Board of Trustees with the full
17 report on what the results showed in segment
18 three after 18 months passes and before they
19 begin segment two.
20 The other advantage of this strategy is
21 not just validating what the expectation might
22 be, but to also reduce the impact that beach
23 restoration would have on the recreational
24 diving community by splitting the project up in
25 parts and allowing that 18-month window in
163
1 between.
2 Finally, one of the things I think is
3 critically important, long-term, to this
4 solution is coming up with an effective sand
5 bypassing project at Port Everglades, because
6 largely these projects, while important, are
7 treating a symptom, and they are not treating
8 the cause.
9 If we could get to the cause by dealing
10 with the sand conveying system around the
11 channel into Port Everglades, we would
12 long-term I think overall reduce our
13 environmental damage and reduce the cost to the
14 state.
15 So I hope that is a helpful starting point
16 for the discussion. And I would be happy to
17 take any questions or we can get right into the
18 comments from the public.
19 GOVERNOR BUSH: I think we should hear from
20 people that have traveled a long way to get here.
21 TREASURER GALLAGHER: Or they can talk next
22 time.
23 GOVERNOR BUSH: They always will have that
24 option as well.
25 MR. STRUHS: There is a long list. Again, in
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1 the interest of time, some guidance would be to
2 keep the comments brief, recognizing this will
3 come back.
4 We have Steve Somerville and Steve
5 Higgins, both from Broward County; Pio Iracea,
6 Brenda Lee Chalifour, Dan Clark, Bob Harris,
7 Mayor Capellini from Deerfield Beach and Larry
8 Deetjen who is the city manager of Deerfield
9 Beach.
10 Again, I will try to keep clock, Governor,
11 and keep them to about a minute a piece, unless
12 you have questions.
13 GOVERNOR BUSH: Brevity wins you points.
14 MR. HIGGINS: Good morning, Governor, Members
15 of the Cabinet, thank you very much. I am Steve
16 Higgins.
17 I am here representing Broward County and
18 its Department of Planning Environmental
19 Protection, which is the sponsor of this beach
20 project. Thank you for your courtesy in
21 allowing us to address this item in the absence
22 of a vote.
23 GOVERNOR BUSH: Thank you for your patience.
24 MR. HIGGINS: The county has a long
25 successful history of protecting, restoring and
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1 enhancing our marine resources, including beaches,
2 coral reefs, artificial reefs, sea turtle
3 conservation and fisheries.
4 The county has conducted numerous projects
5 over the past 30 years, a number of beach
6 projects -- nine, in fact, have been conducted
7 in the past 30 years -- and its coral reefs are
8 in great shape.
9 The county, along with our coastal cities,
10 academic institutions, MGAs, businesses and
11 citizens have developed the most economical and
12 effective beach replenishment project possible
13 and one, incidentally, that is the most
14 environmentally sensitive ever undertaken.
15 As you know, beaches are the foundation of
16 our economy in southeast Florida, in the region
17 and in the State of Florida. Intelligent,
18 proactive, measured management of our beaches
19 is absolutely vital to ensuring our survival.
20 The item before you is just that sort of
21 project. Now with your indulgence, I would
22 like to introduce the first of several speakers
23 who have traveled from south Florida and who
24 would like to address this issue.
25 I would like to first introduce
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1 Commissioner Keith Wasserstrom from the City of
2 Hollywood.
3 MR. WASSERSTROM: Thank you very much.
4 Governor and Cabinet, my name is Keith Wasserstrom
5 and I am a city commissioner in Hollywood. I am
6 joined here today with George Zinkler, president
7 of the Hollywood Beach Business Association and
8 Erwin Oscar, immediate past president of the
9 Hollywood Beach Civic Association.
10 We are here today representing not only
11 our city, but other coastal communities in
12 Broward County that view beach renourishment as
13 critical to our public safety, our economic
14 development and our preservation of natural
15 resources.
16 When this issue comes in front of you, we
17 look forward to presenting additional
18 information about this project. We strongly
19 encourage you to support this project.
20 This is a billion dollar issue to our
21 community. We get a billion dollars every year
22 from our beaches. As a businessman, I'd spend
23 $30 million to get a billion dollars every day.
24 I would like to introduce the assistant
25 city manager of Fort Lauderdale, Bud Bentley.
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1 GOVERNOR BUSH: Thank you.
2 MR. BENTLEY: Thank you, Governor Cabinet, my
3 name is Bud Bentley and I am assistant city
4 manager for Fort Lauderdale. I am standing here
5 because Mayor Naugle and Commissioner Katz were
6 under the impression that this item was going to
7 be deferred and, hence, changed their schedule.
8 So we apologize for that.
9 GOVERNOR BUSH: No, they were smart.
10 MR. BENTLEY: To conclude, we would like to
11 express the City of Fort Lauderdale's strong
12 support for this project. We understand that our
13 city commission will be able to express their
14 support in the future.
15 GOVERNOR BUSH: Yes.
16 MR. BENTLEY: I would like to introduce Pio
17 Iracea, the chairman of the Broward County Beach
18 Coalition.
19 MR. IRACEA: Thank you, Mr. Bentley. My name
20 is Pio Iracea. Good afternoon, and I realize it's
21 lunch time, and we are all hungry. However, I
22 wonder if the comment made earlier, Governor,
23 makes us the dumb ones for being here.
24 GOVERNOR BUSH: No, not at all.
25 MR. IRACEA: I am sorry, I couldn't resist.
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1 With that being said, I am also the
2 chairman of the Galt Ocean Mile Citizens
3 Association which is in Fort Lauderdale. We
4 represent thousands of beachfront residents. I
5 have here someplace thousands of names on
6 petitions that we would like to submit to you
7 in support of this project. We submitted
8 thousands of petitions as well to your aides
9 when they visited the Broward County beaches a
10 couple of weeks ago.
11 The coalition -- I just knocked over the
12 mouse. The coalition represents owners,
13 homeowners, condo owners, businesses,
14 government officials, environmental activists,
15 workers, throughout Broward County. It's
16 already been said, and I am sure you are aware
17 of all this, however, the impact the beaches
18 have on Broward County is nothing short of
19 phenomenal.
20 We ask you, please, to support this, to
21 approve the segment two permit as quickly as
22 you possibly can. We understand the issues.
23 We are somewhat disappointed today that we were
24 unable to move forward. However, it has become
25 a dire public safety issue as well, this issue
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1 and the permit be approved.
2 Any questions? With that --
3 GOVERNOR BUSH: I don't think so.
4 MR. IRACEA: With that, I would like to
5 present Christopher Pollock, who is the president
6 of the Greater Fort Lauderdale Lodging and
7 Hospitality Association. Thank you.
8 GOVERNOR BUSH: Welcome sir.
9 MR. POLLOCK: Good afternoon, Governor,
10 Members of the Cabinet. As president of the
11 Greater Fort Lauderdale Lodging and Hospitality
12 Association, I represent 325 hotel, motels, inns
13 and other related businesses in Broward County.
14 Our concern with the beach renourishment
15 is huge. We have properties that have no
16 beach, such as the Diplomate and the Gill
17 Hotels, so we are not only concerned about the
18 infrastructure, roads and our buildings, but
19 also the effect it will make on Broward
20 County's marketability as a destination resort
21 and the $4 billion that tourists spend in
22 Broward County and 185,000 people that are
23 employed because of tourism. Thank you very
24 much.
25 GOVERNOR BUSH: Can I ask you a question?
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1 The depth of the beach in segment three is
2 significantly narrower, isn't it, than in segment
3 two?
4 MR. POLLOCK: Yes, sir, but we are concerned
5 that what happened with segment three will happen
6 with segment two, and there are areas in Fort
7 Lauderdale that have very little beach as well,
8 not quite a drastic effect as segment three.
9 GOVERNOR BUSH: Not as bad as the Diplomate.
10 MR. POLLOCK: No, it's not waterside instead
11 of ocean front, but there are hotels that have
12 concerns.
13 GOVERNOR BUSH: What's the minimum -- I don't
14 know how you would measure width as relates to a
15 beach, but what would be the minimum width that
16 exists today if segment two--
17 MR. POLLOCK: I cannot speak from an
18 environmental point of view, but from marketing of
19 a hotel, you would have to have at least a hundred
20 feet of beach.
21 GOVERNOR BUSH: My question is what is the
22 width now of segment two beach front?
23 MR. POLLOCK: It varies, Governor.
24 GOVERNOR BUSH: What's the minimum width -- I
25 think am saying this right.
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1 MR. SOLE: This is Mike Sole with the
2 Department of Environmental Protection.
3 The designed minimum width of segment two
4 in front of Fort Lauderdale is approximately a
5 25-foot designed berm that they are going to be
6 trying to maintain in front of the Fort
7 Lauderdale beaches. The placement of material
8 will be more than that, but they want to keep a
9 minimum of 25 additional feet in front of those
10 beaches.
11 GOVERNOR BUSH: Currently what is the width,
12 minimum width of beach front in that segment?
13 MR. HIGGINS: Governor, there are areas in
14 Fort Lauderdale where at high tide there is
15 15 feet of beach. There are other areas where the
16 beach was much healthier.
17 GOVERNOR BUSH: I was just curious.
18 COMMISSIONER BRONSON: In other words, no
19 beach?
20 GOVERNOR BUSH: Yes, sir.
21 MR. ZEIGLER: I am George Zeigler from
22 Hollywood. I just wanted to respond to your
23 question. In front of the Diplomate Hotel, often
24 there is no beach.
25 GOVERNOR BUSH: That was not my question. My
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1 question was segment two.
2 MR. ZEIGLER: Thank you very much.
3 GOVERNOR BUSH: I know the Diplomate has got
4 no beach. Okay.
5 MR. STRUHS: There are other speakers.
6 GOVERNOR BUSH: Oh, I know that.
7 MS. CHALIFOUR: For the record, my name is
8 Brenda Lee Chalifour, I am an environmental land
9 use attorney and am here pro bono for Save Our
10 Shoreline.
11 GOVERNOR BUSH: Are we finished with the
12 people that are pro?
13 MS. CHALIFOUR: We are all pro, Governor --
14 proGovernor. If someone could -- I don't know if
15 you can enlarge that, that will be very helpful.
16 This photo that was on here before for
17 you, you take this photo during any storm event
18 and you are going to have the same photo
19 whether you have a hundred feet of sand out
20 there or not. Okay? Just for the record,
21 that's a storm event.
22 You are going to like this; your meeting
23 has been rivetting.
24 In this we have some eminent domain, we
25 have some waste of taxpayers' dollars. And I
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1 hope you indulge me. I am going to try to
2 stick to my written remarks; I am going to read
3 them because, as staff knows, as I get more
4 passionate about this, it sounds more like
5 anger.
6 GOVERNOR BUSH: Yeah, stay with the comments,
7 that's good.
8 MS. CHALIFOUR: Okay. First, of course,
9 thank for the opportunity to address you.
10 Secondly, your staff has represented you
11 incredibly well.
12 GOVERNOR BUSH: All of our staff or just my
13 staff?
14 MS. CHALIFOUR: I am talking about Cabinet
15 aides, all of these people who have spent a
16 phenomenal amount of time on this issue, including
17 DEP.
18 Third, on behalf of a group of children I
19 work with and who asked me to be their advocate
20 today, please, in their words, do everything
21 you can to save Sponge Bob, Square Pants, his
22 Friends and His Habitat.
23 Remarkable, the mosaic of our landscape,
24 as you view it like the birds, from above, you
25 see just how remarkable it is. Remarkable, the
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1 majestic beauty of it all; remarkable, the
2 coral reefs, the turtles, the habitat. Simply
3 remarkable, your legacy.
4 Or gone, buried, destroyed and killed.
5 Governor Bush and Members of the Cabinet, we
6 need your leadership and direction on this
7 project. Your legacy, if you will.
8 Over the past few months we have presented
9 generations of wisdom to your staff. We have
10 established that there are critical elements
11 missing from this project. For example, a
12 sand bypass at Port Everglades is not included
13 in this project. But what is included is the
14 destruction of corals, turtles, their habitat,
15 concerns raised by Deerfield Beach,
16 Hillsborough Beach and Golden Beach, all of
17 which must be addressed.
18 GOVERNOR BUSH: Golden Beach in Miami?
19 MS. CHALIFOUR: Yes, they will receive the
20 plume that would cover their reefs. So Golden
21 Beach has raised concerns that have not been
22 addressed.
23 There are very serious and nonnegotiatable
24 issues raised by Cry of the Water and all of
25 the organizations listed on the petitions they
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1 have sent to you. And that includes Audubon of
2 Florida, Charles Lee and Eric Draper. And if
3 there is an organization that isn't there,
4 we'll go and get them.
5 So please, check out that list; it's
6 exhaustive, it's extensive.
7 We have established that this permit is
8 but a first step in a lengthy process. They do
9 not have an Army Corps of Engineers' permit.
10 They are looking to see what we will do. And I
11 will tell if you we don't get it right here, a
12 Corps permit will be a very long time coming.
13 We have established that Broward County
14 and its municipalities do not come to you with
15 clean -- unclean hands -- they come to you with
16 unclean hands. Believe it or not, believe it
17 or not, there is something just not right in
18 Broward County, aside from the obvious.
19 Aside from the obvious; no manatee
20 protection plan; municipalities that are openly
21 defiantly, boldly violating state law by
22 refusing to pass turtle lighting ordinances.
23 That is required by state law; they've boldly
24 said they would not do it.
25 In addition, Broward County distributed a
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1 letter to upland property owners threatening,
2 Governor, eminent domain or a special
3 assessment to make up for the loss of federal
4 funding if you don't sign this easement.
5 GOVERNOR BUSH: What's the federal funding
6 timing?
7 MR. SOLE: We have a small appropriation
8 that we are working with now. We'll be asking for
9 incremental appropriations in future fiscal
10 cycles; it's a reimbursable project, so the county
11 is going to spend the money for the project and
12 then get reimbursed the federal share.
13 GOVERNOR BUSH: Congressman Shaw mentioned
14 that there was federal money in this. I was
15 curious to know, is there a reversion at some
16 point?
17 MR. HIGGINS: There could be. The Corps of
18 Engineers does reprogram funds that are unspent in
19 its accounts. And we have 2.5 million now.
20 GOVERNOR BUSH: Since we don't have a permit,
21 it seems like the -- that would come first, I
22 assume. Okay.
23 MS. CHALIFOUR: Permits should come first,
24 that's true. For the record, I note that there is
25 a zero in that line item in the president's
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1 budget.
2 And by Broward County, we have also had a
3 less than professional approach in working with
4 municipality and upland property owners, some
5 of which you may want to have reviewed by an
6 independent investigation or ombudsman. And I
7 am sure that you could ask Mayor Capellini from
8 Deerfield about that.
9 And Broward, unfortunately in some
10 instances -- this is difficult to divulge --
11 has been a little less than civil in dealing
12 with a community of people, who at their own
13 personal, financial and emotional costs have
14 simply tried to improve this project. And I
15 speak specifically of Dan and Stephanie Clark,
16 who you will hear from.
17 They have not been received well. And
18 again, their interest is simply in preserving
19 and protecting.
20 And in addition, my confusion regarding
21 Broward County today as we sat here, Broward
22 County passed a resolution to use $7 million of
23 taxpayer's money to sink boulders in the ocean
24 to create fake reefs for the ones we hope you
25 will not allow them to bury.
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1 So there is $7 million in the Broward
2 County budget that could be used on higher
3 priority items than sinking boulders in the
4 ocean.
5 So Governor and Cabinet, we established
6 all of this. We were going to come today to
7 cite Florida law, chapter and section, to you
8 be reminding you of your role and
9 responsibility as the Trustees; to talk to you
10 about the chapter you have in there, where we
11 assess fines for damaging the resources, so we
12 are doing to ourselves what we fine for others
13 for doing.
14 We were going to apply our complex rules
15 and laws to illustrate that we may be
16 violating; but instead we are looking at this
17 as a matter better addressed by profound human
18 caring. We are taking, if you will, the
19 kinder, gentler but very serious, very firm,
20 relentless approach today.
21 In conclusion, Governor and Cabinet, we
22 ask you to continue the legacy you spoke of on
23 inauguration day; set out principles that
24 endure and are rooted in a culture that demands
25 excellence, not adequacy.
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1 Please acknowledge our relentlessness and
2 discontent. Governor, as you know, Thomas
3 Edison done told us: First necessity for
4 progress. Show us progress by navigating our
5 ship like Governor Collins described but please
6 be careful.
7 GOVERNOR BUSH: Stole my line.
8 MS. CHALIFOUR: -- please be careful not to
9 ground that ship on our reefs. Recognize our
10 fierce determination on this issue, and that by
11 the grace of God we will be back time and time
12 again, and time and time again, to remind you that
13 you are shaping the next hundred years to come.
14 You choose the legacy. Remarkable. The
15 coral reefs, the turtles, the habitat; or gone,
16 destroyed, buried, killed.
17 We prefer remarkable. This is your
18 legacy. This can be Florida. It begins with
19 you. Thank you.
20 Any questions?
21 GOVERNOR BUSH: Very effective, taking all of
22 my inaugural speech and putting it back in my
23 face, I appreciate that.
24 MS. CHALIFOUR: And I quote.
25 GOVERNOR BUSH: Well done. Thank you very
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1 much.
2 Mayor, can you explain to me why, from
3 your perspective, why this is a bad idea, be
4 curious to know?
5 MAYOR CAPELLINI: Good afternoon, Cabinet,
6 Governor. Yes, I can explain to you. It's very
7 simple.
8 We are not quite as passionate as Brenda,
9 but we have the same ideas here in the sense
10 that the City of Deerfield Beach supports beach
11 renourishment; there is no question about it.
12 However, the way it's going about, we
13 think there may be some damage done to the city
14 or to the beach off the shores of Deerfield
15 Beach.
16 A couple months ago you deferred this item
17 so that we could negotiate with the county and
18 come up with some agreement that would satisfy
19 the county's needs.
20 GOVERNOR BUSH: What are your concerns?
21 MAYOR CAPELLINI: Our concerns are, first, we
22 want to make sure that segment one, which neither
23 segment two or segment three could be accomplished
24 without segment one, and segment one is the
25 removal of sand off the beach of Deerfield.
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1 GOVERNOR BUSH: There are no beach
2 renourishment projects in segment one, it is only
3 a pit?
4 MAYOR CAPELLINI: It's a pit. They want to
5 take the sand off a beach that is working and has
6 been working for a number of years. We have a
7 sand bypass at the Boca Inlet, so we get sand
8 deposited on our beach and our beach is actually
9 growing.
10 The other major concern that my fellow
11 commissioners had when they voted yesterday
12 four to zero not to support the county's
13 agreement is this great mistrust with the
14 county, that number 1, there is no monitoring
15 plan in place in the county.
16 Number 2, they didn't want to add our
17 conditions of the first-in/first-out; in other
18 words, in the event there was a hurricane and
19 the beach got eroded away, that we would be the
20 first fix in the county; in other words,
21 whatever federal/state money they would get,
22 that we would be the ones to get the sand back
23 on the beach. So there is that mistrust.
24 There is also no monitoring plan, and we
25 have some biological concerns on the method
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1 that they used, the MTU limit that they used
2 for determining the cloudiness of the water.
3 So basically those are the concerns. The
4 City of Deerfield Beach wants to work with the
5 county. We are very sorry that Hollywood
6 doesn't have a beach; we are sorry the
7 Diplomate located their hotel right on the
8 ocean line rather than having a beachfront, we
9 would like to help them out.
10 But our first interest is to protect the
11 beach that is working in our community, and we
12 want to make sure the safeguards are in place.
13 And whatever we can do to support the county
14 and support Hollywood, we are willing to do.
15 GOVERNOR BUSH: Thank you, Mayor, thanks for
16 coming up. Anybody else?
17 MR. HARRIS: Good afternoon, members of the
18 Cabinet, my name is Bob Harris. I am here today
19 on behalf of PADI, Professional Association of
20 Diving Instructors, the recreational diving
21 community in Florida.
22 Governor, I want to comment this morning
23 on behalf of the recreational diving community
24 and urge the Members of the Cabinet to deny
25 this permit.
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1 I understand the matter is being deferred.
2 We have a number of people who are tuning in
3 today to hear these comments, so I want to go
4 ahead and give these to you and we'll go from
5 there.
6 You did receive a letter from us
7 indicating that there are a number of reasons
8 why you should not approve this project.
9 First of all, I would like to say that CFO
10 Gallagher's comments about moving the spoils
11 from project 16 to Broward County would solve
12 that problem and we urge that immediately you
13 vote for that.
14 TREASURER GALLAGHER: I'm not taking that, it
15 was Governor Bush's idea.
16 MR. HARRIS: The reason why we urge you to
17 oppose this is primarily three reasons.
18 One, the recreational diving business in
19 the state is a multimillion dollar business,
20 Governor. As you know, from October of this
21 year, through the efforts of your offices, the
22 DEMA show will be coming to Florida, to Miami.
23 The purpose of that coming to Florida is to
24 showcase Florida's vast number of diving areas
25 and that was why the DEMA show is coming here
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1 at your office's urging. And we would like to
2 promote that.
3 We want to make sure they understand that
4 Florida takes the coral reefs seriously. Coral
5 reefs are dying at an alarming rate, and the
6 articles we provided to you shows you by
7 negligent acts over the past few months, a
8 number of coral reefs in the Broward County
9 area, Tampa side and the sanctuaries near Key
10 West are being destroyed through the negligent
11 acts of ships, by in the hundreds of acres. We
12 would ask you not to do something to
13 purposefully --
14 GOVERNOR BUSH: Why is this? Be specific.
15 MR. HARRIS: Why is this particular project a
16 problem?
17 GOVERNOR BUSH: This is like a pregame warm
18 up. We are going to have you educate us.
19 MR. HARRIS: The reason is because you are
20 purposefully destroying, if you approve this
21 project, the destruction of over 13 acres of coral
22 reefs.
23 GOVERNOR BUSH: Where?
24 MR. HARRIS: In this area.
25 GOVERNOR BUSH: Where? What area
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1 specifically?
2 MR. HARRIS: If segment two goes forward in
3 particular.
4 GOVERNOR BUSH: In segment one?
5 MR. HARRIS: In segment two.
6 GOVERNOR BUSH: I thought the burrowing pit
7 was --
8 MR. HARRIS: That's in one.
9 GOVERNOR BUSH: The problem is when you put
10 the sand on the beach, the silt goes out?
11 MR. HARRIS: Right, it's well-known, it's
12 been documented.
13 GOVERNOR BUSH: It's not the actual mining of
14 the sand, that's the laying, it's the laying of
15 the sand on the beach?
16 MR. HARRIS: Laying sand and the silt that is
17 caused that kills the reefs. That is correct.
18 COMMISSIONER BRONSON: I got a question.
19 Those beaches were bigger at one time, and coral
20 reefs take such a long time to develop; those
21 reefs -- that beach that was there before that
22 washed away didn't kill off the reef itself at the
23 time?
24 MR. HARRIS: The problem is that process is a
25 natural process that occurs over a long period of
186
1 time. You are talking about dumping a huge amount
2 of sand in a one-year period of time.
3 It's that type of thing reefs do not
4 recover from. Studies from around the world
5 clearly indicate that reefs do not recover from
6 that. That's why, when you go to other
7 areas -- and this is primarily, Commissioner,
8 why I wanted to come today.
9 Every year we have what -- again this DEMA
10 show. Once the change that occurred years
11 ago -- when I used to go to this show -- diving
12 used to be about equipment, well now it's about
13 travel.
14 Florida is the number 1 dive destination
15 in the world, and every time the State of
16 Florida takes an action like this to approve
17 the destruction of coral reefs, the message
18 goes out to other people.
19 Every other country in the world that now
20 goes to these shows all over says: Don't go to
21 Florida, because their reefs are dying or they
22 are destroying their reefs; come to our place.
23 And these reefs become sanctuaries; you
24 are not allowed to do anything in those reefs.
25 And they know that's where the diving public
187
1 around the world, they know what they are
2 attracted to. And I want to make sure that
3 Florida remains the number 1 diving destination
4 it is today.
5 And when these people come, all the diving
6 community from around the world come to Miami
7 in October, I'd love to be able to say this
8 project is not going forward because Florida
9 cares about its reef system.
10 They want to replace Florida, and that's
11 the problem. If you allow this project to go
12 forward, you are purposefully destroying coral
13 reefs.
14 GOVERNOR BUSH: The people that are opposed
15 to this, is there any -- maybe one of the next
16 speakers could describe, the Clarks perhaps,
17 describe the solution rather than just being
18 opposed, I would be curious, because the very same
19 reasons you are here in advocacy or in opposition
20 is the same reason why the folks that recognize
21 the economic potential of the beaches as well are
22 here in favor. And what we strive to do is find a
23 win/win here rather than a conflict.
24 So, maybe we could hear about a solution.
25 We are going to ask -- we'll talk to the
188
1 Secretary later about their version of a
2 solution as well.
3 MR. HARRIS: We would urge a solution,
4 Governor.
5 GOVERNOR BUSH: Okay. Because those people
6 go to the beaches first before they go out diving.
7 They can do both. That's why we are a
8 destination, it's very important. Yes, sir.
9 MR. CLARK: Yes, sir, my name is Daniel
10 Clark, I am director of Cry of the Water.
11 I have been diving in Broward County since
12 the '70s. I have seen the reefs that I learned
13 to dive on back in the '70s, early '80s, I seen
14 those reefs wiped out in past beach projects.
15 The problem there is two-fold; first of
16 all, they drew out the burial of the sand
17 migrating off the beach. By their own
18 estimation this project will bury thousands of
19 corals and acres of corals that are essential
20 fish habitats.
21 The secondary problem is, to answer your
22 question, the sand that naturally occurs in the
23 beach is washed over the years and it becomes
24 washed, most of the fines have been washed out
25 of it.
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1 The problem is this fill material they
2 dredge out of these pits has upwards of 5 to
3 6 percent fines. Those fines, once they are
4 spread on the beach --
5 GOVERNOR BUSH: When you say fines, what are
6 fines?
7 MR. CLARK: Fine material, silt material, if
8 you will.
9 TREASURER GALLAGHER: Silty material.
10 MR. CLARK: Something that will go through a
11 fine sieve, okay? And the problem is that stuff
12 is easily resuspended; I didn't bring my bottle
13 with me today but if take this dredge material and
14 put it in a bottle of water --
15 GOVERNOR BUSH: Is that what suspends more
16 than the other?
17 MR. CLARK: Suspends, stays cloudy for days.
18 The clean beach sand settles out within a few
19 seconds.
20 That is really the problem here. This
21 stuff migrates out on to the reefs. What we
22 have seen happening is it smothers the
23 nearshore reefs and what you have is a --
24 GOVERNOR BUSH: Is your concern -- I asked
25 this question to the previous speaker -- the
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1 laying of the sand on the beach or on the burrow
2 pit or the actual mining of the sand?
3 MR. CLARK: It's actually both.
4 GOVERNOR BUSH: Which is a bigger deal?
5 MR. CLARK: Short-term, the mining.
6 Long-term, the sand on the beach.
7 As far as resources, there is better
8 resources, there is much older, hundreds of
9 years old corals that are century years old
10 right off the beach in Fort Lauderdale. So
11 really I can't give you a straight answer on
12 that because --
13 GOVERNOR BUSH: That's fine. You did your
14 best. Tell me what your solution is other than --
15 MR. CLARK: My solution is not to do segment
16 two. Segment two has the lowest erosion rates in
17 the county. Segment two never had big beaches.
18 Okay. Segment two has a natural working process
19 that's still working. Winter time --
20 GOVERNOR BUSH: How about segment three?
21 MR. CLARK: Segment three has been done
22 multiple times; that's why they can't keep a
23 beach. That's why the picture they were showing,
24 to be fair, the picture they had up here, that was
25 segment three they were showing you. That just
191
1 shows that this stuff doesn't work, because what
2 it does, it degrades the nearshore reefs --
3 GOVERNOR BUSH: Given your experience and
4 interest in this issue, there is no technological
5 or scientific way to deal with this and not
6 compromise the reefs, is that your position?
7 MR. CLARK: If you want to pay to truck in
8 clean, washed beach sand or find some better fill
9 material, that's really the only long-term
10 solution.
11 The thing is what we are about to lose --
12 I was trying to get them to play a videotape
13 they have back in the booth, I like you guys to
14 see some of the things, there is coral the size
15 of automobiles literally right off the beach.
16 Incredible.
17 GOVERNOR BUSH: Maybe you can get a copy for
18 us to look at.
19 MR. CLARK: Your staff has got all the stuff.
20 They have been great. They got so much stuff, you
21 can sit for an hour and watch that the stuff, if
22 you are willing to do that. The stuff is there,
23 okay?
24 COMMISSIONER BRONSON: I would like to ask --
25 I would like to ask the question also, why can't
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1 the dredges that are used in deep ocean, why can't
2 they take the courser sands that are already out
3 in the ocean, which means you wouldn't have the
4 fines in those that you would out of a land-based
5 area?
6 MR. CLARK: This is not land-based. We are
7 talking about taking the fill off Deerfield Beach,
8 right off the beach there; it is out in the ocean
9 where they will be dredging.
10 But even that material, there is a lot of
11 this fine material there because it's not been
12 washed over the years by the process of the
13 waves up on the beach, so that stuff is not
14 whittled out of it. You still have 5 or
15 6 percent fine material.
16 GOVERNOR BUSH: Any other comments?
17 MR. CLARK: Just that the beaches -- the
18 reefs in Broward County, according to the FWCT and
19 NOAA study, they generate $2.1 billion a year to
20 the local economy; that's more than the reefs in
21 the Keys.
22 One other point I want to make real quick
23 because I know you are trying to chase me out
24 of here -- one other point I wanted to make is
25 we have no on-going monitoring plan in Broward
193
1 County for our reefs. The only time that any
2 work is being done there to study the condition
3 of our reefs -- we have other problems and
4 other things that need to be addressed
5 regarding our reefs -- this is a valuable
6 resource to the State of Florida.
7 The only time that any monitoring goes on
8 in our county involving our reefs is if there
9 is one of these dredge projects happening.
10 And what we would really like to ask you
11 for as well, besides denying the permit or at
12 least give them some time to make them prove
13 that they can do in three, which I commend the
14 Secretary for, it was a good idea; but besides
15 that, we really need some sort of long-term
16 monitoring and management plan for these reefs
17 or we are going to lose one of the greatest
18 resources in the State of Florida.
19 GOVERNOR BUSH: That's a good comment.
20 MR. STRUHS: Stephanie Clark also is here to
21 speak.
22 MS. CLARK: I am Stephanie Clark from Cry of
23 the Water, thank you for allowing me to speak
24 today.
25 I am a scuba instructor in Broward County
194
1 and have been diving there for 20 years. I
2 have seen our reefs degraded over the years. I
3 was working on a dive post during the last
4 renourishment project and saw the massive
5 plumes and the loss of some nearshore reefs.
6 This summer I worked with PEER assessing
7 the damage from fiber optic cables in
8 Hollywood. As we built the cables closer and
9 closer to the outfall pipes, we saw more and
10 more cynobacteria covering the reefs and
11 smothering them.
12 GOVERNOR BUSH: Why was that?
13 MS. CLARK: Cynobacteria grows from the
14 effluent that the outflows pull out because it's
15 not clean water coming out, it's nutrient rich
16 water.
17 GOVERNOR BUSH: This is water from where?
18 MS. CLARK: The Hollywood outfall, it's an
19 outfall pipe; it's affecting our whole beach
20 there, so we don't have the pristine, healthiest
21 reefs there because we do have Hollywood putting
22 sewer out into our waters.
23 So this is from cynobacteria which grows
24 and smothers, and you can actually pull it off
25 the sea fans and off the corals and the corals
195
1 are dead underneath. And this is from nutrient
2 rich water.
3 We ask for your help and help from FMRI to
4 address these issues, as a stakeholder and a
5 scuba diver, and ask for your help in
6 protecting these reefs and our sea turtles, not
7 just for us but for future generations.
8 GOVERNOR BUSH: Thank you very much. Thank
9 you for being here. Okay.
10 COMMISSIONER BRONSON: Governor, one last
11 thing while David is coming up.
12 I see this unfortunately as almost giving
13 up one resource for another. We are losing
14 turtle populations by serious amounts, and
15 without beaches, they can't lay their eggs and
16 they can't make a nest and they got to be high
17 enough out of the water.
18 Now maybe in these areas they will never
19 be high enough out of the water; I don't know
20 how many turtles traditionally have laid their
21 eggs on these beaches.
22 But in this instance, if we don't do what
23 you have requested, which is look for a real
24 way to save both, we are going to be giving up
25 one natural resource to protect another.
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1 GOVERNOR BUSH: Did we use to import sand
2 from the Bahamas? Is that a bad idea?
3 MR. HIGGINS: No, sir, that has been
4 investigated but some issues such as the Buy
5 America Act have precluded importing bananas and
6 sands.
7 GOVERNOR BUSH: I remember vaguely that was
8 done maybe 20 years ago in Miami.
9 Secretary.
10 MR. STRUHS: Governor, you already deferred
11 this.
12 GOVERNOR BUSH: Would you like to continue on
13 this conversation or move on to the next agenda
14 item?
15 MR. STRUHS: I would suggest in closing that
16 the compromise we suggested to you will serve I
17 believe as a good starting point for on-going
18 consideration of a solution.
19 GOVERNOR BUSH: I would like to have a better
20 understanding of the science behind beach
21 renourishment and how -- apparently it wasn't part
22 of the plan, this idea of -- the bypass was not
23 part of the plan, but aren't you proposing that
24 be -- I need to understand, this is, for my own
25 intellectual curiosity.
197
1 Certain assertions were made, that if we
2 just ignore them and assume that there is not a
3 better way of doing things, I think we do at
4 our peril.
5 So I want to be supportive of this, but I
6 need to get my arms around the science. Are
7 you listening?
8 So maybe between now and whenever the
9 legislature effectively and officially solves
10 our problem for us here, you can work with the
11 parties and brief at least me on that so when
12 we come, we can really focus on not just the
13 political science but the sound science that's
14 necessary to protect both the beaches as well
15 as the reefs.
16 I appreciate everybody coming up.
17 Now we got a big group of people that are
18 here for the last item on the agenda as fate
19 would have it. Had I known this, we probably
20 would have reversed it so you all could have
21 come first.
22 I apologize for the length of our meeting.
23 And I appreciate the fact that everybody has
24 come. I assume you are all from southwest
25 Florida, a beautiful part of the state, just as
198
1 pretty as Broward County.
2 MR. STRUHS: Governor, the item here, as you
3 know, it's one that you have identified for
4 deferral.
5 I would like to introduce representative
6 Jerry Paul, Mr. Harrington has an interest in
7 this, could not attend, Commissioner Mac Horton
8 from Charlotte County and Michael Poff from
9 Coastal Engineering all to speak in favor of
10 the project. Then we have some other speakers
11 as well, Linda and Ron Bamfield, and Tommy
12 Brock.
13 (Short recess.)
14 GOVERNOR BUSH: Secretary Struhs.
15 MR. STRUHS: Item 18 is the last item. We
16 appreciate the short recess.
17 GOVERNOR BUSH: Can I have everybody's
18 attention, please.
19 MR. STRUHS: This item has four specific
20 issues regarding the life of the project, the
21 sovereignty submerged land lease, a ten-year
22 sovereignty submerged land easement, consent of
23 use agreement for placement of materials for beach
24 renourishment, and the waiver of survey
25 requirements. Those are the four items of it.
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1 You indicated your desire to defer this
2 item. We would have and would in the future
3 continue to recommend approval of the item.
4 There are a number of speakers, including a
5 couple elected representatives, Representative
6 Jerry Paul and Charlotte County Commissioner
7 Mac Horton.
8 We invite them to go first, then followed
9 by the Coastal Engineering Consultants, should
10 you have any questions that they can answer, to
11 residents here who oppose the project, and then
12 also I think Mr. Tommy Brach wants to speak as
13 well, so that's the line up.
14 REPRESENTATIVE PAUL: Thank you, Governor,
15 Attorney General Crist, Mr. Gallagher,
16 Commissioner Bronson. This late day, with the
17 backdrop of your earlier motion to defer on some
18 of these matters, I probably would not tea this up
19 and take such a big swing, but I am going to.
20 And the reason is because if we fail to
21 act today, the harm to my bay, the harm to the
22 water in that bay, the harm to the red fish
23 that Attorney General Crist referred to earlier
24 is too great; the harm to my shrimp, my crab,
25 my fidler crabs, my manatees and turtles who
200
1 live off of the sea grasses that are slowly
2 dying in that bay, it's too great for me to do
3 nothing.
4 So I want to tell you about the project
5 and why it's important, why so many people are
6 here from Charlotte County in favor of this.
7 Certainly there is some who are opposed to it
8 and we respect that as well.
9 But here is the real issue. I have the
10 most pristine estuary in the United States of
11 America in Charlotte Harbor; Lemon Bay is
12 connected directly to that. The flow rate in
13 Lemon Bay due to the closing off of Stump Pass
14 is less than half of what it was just 10 years
15 ago.
16 If you look at the channel as it exists
17 now, if you are able to see it on your screen,
18 and if you look at the outward constriction, if
19 you were to look at the face of that and
20 measure the cross sectional area, it would
21 measure 2500 -- 2,530 square feet. That's less
22 than half of what it was or would be with the
23 1980 alignment, the last alignment that would
24 actually allow for enough energy for this
25 system to self-sustain itself.
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1 We only have one shot at this. Because of
2 the federal permit deadlines, if I don't get
3 this out today, I can't get this done before
4 the turtle nesting season. Even if I can get
5 the federal government to let me go into the
6 turtle nesting season, I don't want to do that.
7 If I don't get this approved so that I can
8 do this before April 1st, then I lose this
9 opportunity. This pass will probably close
10 during the September/October period when our
11 winds go up, as Attorney General Crist knows,
12 in the southwest Florida, southwest Florida
13 coast.
14 The ultimate result of the reduced flow is
15 an increase nutrient level which greens up the
16 water. By greening it up, it reduces the
17 photosynthesis which retards the growth of all
18 of the vegetation, it retards the successive
19 generations of every specie in the entire food
20 chain.
21 You are probably saying, Jerry seems to be
22 an expert on this. I am not an expert on it.
23 But I have a pretty good understanding of the
24 dynamics of the bay. I am a marine engineer,
25 although I don't practice engineering any more.
202
1 GOVERNOR BUSH: Marine engineer?
2 REPRESENTATIVE PAUL: That's correct. And
3 long before I was elected to office, I was a
4 voluntary water quality monitor for DEP. My
5 location, the spot that I volunteered to run a
6 quality monitor happened to be Lemon Bay, right
7 there. But more importantly, I am here as a
8 father; this is where I raise my kids. They play
9 in the bay. It's important to us.
10 GOVERNOR BUSH: I don't want to stop you from
11 swinging for the fences here, but assume for a
12 moment, and I am not going to pass judgment on the
13 views of other members of the Cabinet, assume for
14 a moment that we are supportive of this for all
15 the reasons you just outlined; I am for one.
16 TREASURER GALLAGHER: I am.
17 GOVERNOR BUSH: Help us with the reality that
18 we face, which is the --
19 REPRESENTATIVE PAUL: I will make this
20 easier.
21 GOVERNOR BUSH: -- our problem of having to
22 go to the legislature to clean up some language
23 that was unintendedly not dealt with through the
24 initiative and referendum process.
25 REPRESENTATIVE PAUL: That's a good question;
203
1 let me tea that one up. First of all, let's say
2 that --
3 GOVERNOR BUSH: Now we are changing sports to
4 golf.
5 REPRESENTATIVE PAUL: The analysis of that
6 issue necessarily depends upon the type of vote.
7 Accordingly, you have to first identify what your
8 vote is, and then do two separate analyses.
9 For example, if it is a unanimous vote,
10 you have a totally different analysis than if
11 it is something other than a unanimous vote.
12 If it is a unanimous vote, with all due
13 respect, I know of no lawyer -- myself or any
14 other -- that could with a straight face stand
15 in front of a judge and argue that unanimous is
16 somehow less than five-sevenths. That's not
17 possible.
18 That legal issue becomes moot. So that's
19 the first issue. And when I close, I am going
20 to call upon you to give me an opportunity to
21 procure that very unanimous vote.
22 But let's say that you don't get a
23 unanimous vote, something less. Then the
24 question would be: Is there some form of
25 conflict between a three/four vote, let's say,
204
1 and a five/seven. Let's say that there were.
2 What we would typically do is look to
3 precedent, examples in our history where
4 similar scenarios have occurred, and if I may
5 approach, I would like to give you a copy of
6 one.
7 GOVERNOR BUSH: You found one? Thank you,
8 sir.
9 REPRESENTATIVE PAUL: First let me point out
10 that this is an advisory opinion to Governor
11 Ferris Bryant in 1961.
12 What happened in 1961, in reality it was
13 1956 when it occurred, a constitutional
14 amendment had been passed that provided for the
15 method by which a county was to procure an
16 additional county court judge.
17 Well, it just so happens that four years
18 earlier there had been a statute, preexisting
19 statute, just like our Board of Trustees
20 statute, that conflicted with that method. So
21 you had a subsequent constitutional amendment
22 conflicting with the expressed language or not
23 accommodating the expressed language of a
24 previously enacted legislative act.
25 What did the court do? The court did not
205
1 say we can't have judges, we can't appoint
2 judges, we can't have courts, we can't have
3 trials.
4 No, the court said is what we do is -- if
5 I could direct your attention to page 169 --
6 the court said that if, by any, any fair course
7 of reasoning the statute could be harmonized,
8 that is the statute can be harmonized with the
9 constitution or reconciled with the new
10 constitutional provision in any way, that it is
11 the duty to do so.
12 And applying those rules, that's exactly
13 what they did.
14 In the case in hand, what we would say is,
15 first of all, as to the unanimous vote, which I
16 am going to seek in a moment, it's a moot
17 point. As to less than a unanimous, let's say
18 a three/fourths, 75 percent is still greater
19 than a 71 percent.
20 Now you could argue well, there is no
21 percentage reference; that's correct. And this
22 court would have looked at that and said:
23 Well, if the court had applied that type of
24 logic in this instance, they wouldn't have
25 been -- the Governor would not have been able
206
1 to appoint judges and we would have had to
2 revert back to the statute.
3 But the bottom line still --
4 GOVERNOR BUSH: He would have had the option
5 of getting the statute changed.
6 REPRESENTATIVE PAUL: Correct.
7 GOVERNOR BUSH: By the legislature.
8 REPRESENTATIVE PAUL: The difference is that
9 at the end of that legislative session, this bay
10 in that instance would not have been polluted.
11 GOVERNOR BUSH: Could we talk about that for
12 a second? Have we exhausted every possibility in
13 that regard? The principal problem, as I
14 understand it, is the turtle nesting.
15 REPRESENTATIVE PAUL: That's correct, the
16 turtle nesting season starts in April and ends in
17 October.
18 GOVERNOR BUSH: April/October, and there is
19 no way to do this dredging in a way that could
20 protect the nesting of turtles? I have no clue.
21 REPRESENTATIVE PAUL: I see what your
22 question is. Concurrently --
23 GOVERNOR BUSH: Is there a way for us to put
24 some added safeguards to protect the nesting?
25 REPRESENTATIVE PAUL: As passionate as I am
207
1 about this, I would vote no.
2 GOVERNOR BUSH: Why not?
3 REPRESENTATIVE PAUL: Because there is no
4 proven technology, no proven science to do it;
5 that's a sensitive species, it's a protected
6 species. If you go messing with the beach in the
7 middle of the time period when they are nesting
8 and incubating during that long gestation period,
9 I believe you would have a significant --
10 GOVERNOR BUSH: You can't create a
11 significant buffer?
12 REPRESENTATIVE PAUL: Is it possible to find
13 a university that would maybe come up with that
14 science in a decade? Sure.
15 In the meantime, my pass probably won't
16 make it through September. That's the sense of
17 urgency. That's what distinguishes this case
18 from the first 17 that you heard.
19 This is the only bite at the apple we get.
20 This is it. If we don't get it here, we don't
21 do the permit. I've have got over $889,000 in
22 study money, money for the studies to justify
23 this. If I go around the clock, the studies
24 are no good any more; I've got to start over.
25 It took me two and a half years to get
208
1 that money, probably can't get the money again.
2 If this pass makes it through September, it
3 will not make it through two and a half more
4 seasons. I just don't believe it.
5 COMMISSIONER BRONSON: Governor, I have a
6 question here. Thank you.
7 David may have to answer this or if
8 anybody is here from U.S. Fish and Wildlife,
9 and I haven't heard that there is, but is there
10 any recognition whatsoever if this pass closes
11 up, if there is a storm event or anything that
12 happens to close this pass up, locks it up,
13 what is the damage to the estuary and all of
14 the -- all the water and salt-sensitive, and so
15 forth, creatures in that estuary that we may
16 lose the estuary as a potential emergency
17 situation? Do we have any background on that?
18 REPRESENTATIVE PAUL: We have a detailed
19 hydraulic analysis.
20 What I can tell you is that one of the
21 things that's important in that is the
22 relationship between the cross section of the
23 pass and the actual tidal prism, the volume of
24 the flow.
25 With our proposal, we increase the cross
209
1 section by only 80 percent, but we double the
2 flow. In other words, it's a very official
3 opening.
4 If you take it in reverse, it has closed
5 at a very inefficient rate. Now what's the
6 result of that?
7 Well, one of first things I did when I got
8 elected was to get money put in the budget to
9 do the very studies on Lemon Bay that we needed
10 to show that.
11 The first preliminaries on that done by
12 SWFWMD just came out a week ago, and you may
13 have seen it in the newspaper, saying that not
14 only is Lemon Bay polluted, but the extent to
15 which circulation is a factor is greater than
16 what was thought before.
17 Most of us knew it from having grown up
18 over the years and seen the nutrification, the
19 increased greening of the water. It's
20 intuitive. I know that to be the case. We are
21 now getting data that's actually showing it.
22 COMMISSIONER BRONSON: Representative, what I
23 am trying to get at here is if there is no ebb and
24 flow of saltwater and you have only freshwater
25 going into the estuary because it's closed, how
210
1 much damage, how much real damage is going to be
2 caused to the animal life, plant and animal life?
3 REPRESENTATIVE PAUL: In reality, and all I
4 can do is tell you what my experience is and from
5 studying marine biology, it is not so much the
6 damage to the marine species themselves; it is the
7 damage to the vegetation which results in the
8 damage to the marine species.
9 When you impact the -- when you impact the
10 seagrass, when you impact the black mangroves,
11 the red mangroves, what it affects is your
12 spawning rate of all of your successive
13 generations of your marine life; it has a
14 devastating impact.
15 Their salinity tolerance is, depending on
16 the species, is very sensitive. Now some
17 fish, like a snook, can handle living in
18 freshwater. Other species do not handle
19 freshwater near as well.
20 The issue is not so much a decrease in
21 salinity; it is an increase in nutrification,
22 the increase in nitrogen, that's the problem.
23 GOVERNOR BUSH: Representative Paul, are
24 there any other people that would like to speak?
25 REPRESENTATIVE PAUL: If I could, I would
211
1 like to defer to Commissioner Mack Horton.
2 GOVERNOR BUSH: Are you all here for this?
3 REPRESENTATIVE PAUL: Commissioner Bronson,
4 if I could, a good example would be Midnight Pass
5 in Sarasota that I heard my father talk about when
6 I was young, Dona Bay, where the fecal choliform
7 levels are literally high enough right now so that
8 if your dog where to shake water on your leg,
9 you'd get dysintery. That's because Midnight Pass
10 closed. That's what we are trying to avoid in
11 Lemon Bay.
12 Commissioner Mack Gordon.
13 GOVERNOR BUSH: Commissioner, how are you
14 doing?
15 COMMISSIONER GORDON: Fantastic. Governor,
16 Members of the Cabinet, it's good to see you.
17 GOVERNOR BUSH: How are those sailboats
18 doing?
19 COMMISSIONER GORDON: They are doing fine. I
20 always enjoy coming to Tallahassee, everybody asks
21 me why. And the reason for it, it is so close to
22 south Georgia.
23 Okay. I am not an attorney. I am not an
24 engineer. So don't ask me all the technical
25 questions. That's what I hire these guys for,
212
1 to be able to answer them for you.
2 But I am a Georgia Cracker. And I spent a
3 lot of my younger years in the Tallahassee area
4 because Thomasville is not far from here. I
5 think I probably fished every lake you got
6 around here, so when I come back -- and
7 besides, my kids --
8 GOVERNOR BUSH: Where are we going with this?
9 COMMISSIONER GORDON: This young fellow here
10 is just ahead of me, he is a Gator. We are
11 Seminoles, but whatever. Gators and Seminoles can
12 work together. We are good a sign of that.
13 I have been involved in the local politics
14 scene from the '70s in my area. And in that
15 period of time I want to tell you something, I
16 have never seen government work better than it
17 has on this project. We all joined hands when
18 we started this -- I am talking about state
19 agencies, federal agencies and everything -- we
20 have gone down the road holding hands and
21 singing cobaya.
22 This is a good project. It meets every
23 need and every concern that we have addressed
24 in the community as far as resolving them.
25 The only problem we got is we need to act
213
1 now. And if there is anyway that you can give
2 us a decision, we have got the pieces of the
3 puzzle put together and we can roll, and we can
4 do it.
5 If we don't, we have to go through another
6 hurricane season with the properties and lives
7 on that island being exposed. Do you want --
8 do you want to hear from --
9 GOVERNOR BUSH: I want to hear from other
10 people.
11 COMMISSIONER GORDON: We have 14, maybe 16
12 people here.
13 GOVERNOR BUSH: We don't have to hear from
14 every one of them, but you all are in favor for
15 similar reasons.
16 COMMISSIONER GORDON: I would like to --
17 GOVERNOR BUSH: I heard, someone sent me an
18 e-mail saying if this doesn't happen, they can't
19 get a permit to build a home.
20 COMMISSIONER GORDON: There are many lots,
21 that's true.
22 GOVERNOR BUSH: I would love to have an
23 explanation of that. Please come forward.
24 COMMISSIONER GORDON: Let me get Michael Poff
25 up here so if you have any other technical
214
1 questions before --
2 GOVERNOR BUSH: We are fine. Out of
3 curiosity, I would like to understand why it is
4 you can't get a permit to build a home.
5 MR. POFF: Good afternoon. Thank you. For
6 the record, Michael Poff, Coastal Engineering
7 Consultants. I will answer any technical
8 questions that you have. In the interest of
9 time --
10 GOVERNOR BUSH: I just want the answer to the
11 question --
12 MR. POFF: I am going to go ahead and bring
13 up some of the key players.
14 GOVERNOR BUSH: I just want --
15 MR. POFF: Morris Kavaki, if you can answer
16 the Governor's question with regard to the
17 permitting.
18 MR. KAVAKI: Thank for your time, Governor.
19 My name is Morris Kavaki. I am a property owner
20 on Midnight Island.
21 GOVERNOR BUSH: Could you get closer.
22 MR. KAVAKI: I officially represent five
23 other family members and unofficially numerous
24 other people on that island who presently own
25 property there that has been deemed unbuildable
215
1 because of the problems with the beach erosion.
2 Without your support, myself and hundreds
3 others will have our properties and our homes
4 washed away within the next year or two.
5 GOVERNOR BUSH: That's why you can't get a --
6 thank you. I thought that might be important to
7 have on the record.
8 MR. KAVAKI: We definitely need your support.
9 GOVERNOR BUSH: It was important for you to
10 say that for what will be obvious reasons later.
11 COMMISSIONER GORDON: Tommy Brock asked to
12 speak today, he will not be able to return.
13 GOVERNOR BUSH: Oh, yeah, Tom.
14 MR. BROCH: I won't take long. I know it's
15 late, and we appreciate you all's patience with
16 this, but it is a very important project. I have
17 been down there in that area since I was 12 years
18 old, since early '50s; and by the way, this is --
19 where they are talking about putting this, this is
20 not new dredging. This where is the original --
21 some people, some of you misunderstood that. This
22 is not new dredging.
23 GOVERNOR BUSH: I have seen the '81 pictures.
24 MR. BROCH: As a matter of fact, there is a
25 light right there, aside of where we are fixing to
216
1 go up there in the sand, it's very misleading but
2 appreciate it. Appreciate you all voting on this
3 and getting this done because it's very important
4 for the estuary of that Lemon Bay. Thank you.
5 GOVERNOR BUSH: Thank you. Anybody else
6 would like to speak in favor?
7 REPRESENTATIVE PAUL: I have two more that
8 have asked to come up and represent some of the
9 property owners.
10 MR. MEAD: For the record, my name is John
11 Mead, I am the president of the Chamber of
12 Commerce in Englewood. On behalf all our
13 membership, I urge you to support this as fast as
14 possible, for the health of Lemon Bay and health
15 of our economy, it's very important.
16 GOVERNOR BUSH: Thank you very much.
17 I think we heard, unless people really
18 have an urge to speak.
19 GOVERNOR BUSH: There are probably a couple
20 of people as I understand that are opposed to it,
21 I would love to let them speak.
22 MR. STRUHS: I believe there are two Mr. and
23 Ms. Bamfield.
24 GOVERNOR BUSH: Okay. Thank you for coming.
25 If you can state for the record your name.
217
1 MS. BAMFIELD: Yes, my name is Linda
2 Bamfield, I am a state certified general
3 contractor, development permitting consultant, a
4 resident of Don Pedro Island. I am representing
5 87 additional property owners, including some
6 beachfront owners for this project. I am very
7 nervous today.
8 GOVERNOR BUSH: Where is your community in
9 relation to this Stump Pass?
10 MS. BAMFIELD: Don Pedro Island, where a lot
11 of the beach sand is going; it's south of the
12 pass, several -- probably a mile and a half, two
13 miles south of the pass.
14 A lot of while I support Representative
15 Paul, I think he should have made those
16 arguments earlier for the support of everyone;
17 that if we are deferring this to March,
18 everyone should have had a chance.
19 A lot of material I don't have with me
20 because I thought that was -- it was being
21 deferred till March, but I will -- I do want to
22 make some comments to have you think about this
23 project.
24 The Stump Pass dredging project destroyed
25 5.8 acres of public beach, pristine parkland
218
1 and habitat, and dumped the sand on a
2 bridgeless barrier island where you have to pay
3 $50 for one-round trip to enjoy this sand.
4 So what is this project about? This
5 project is not about flushing Lemon Bay. The
6 DEP states that in their briefs, that they have
7 not done any studies to say that this will or
8 will not help the flushing of Lemon Bay.
9 The Southwest Florida Water Management
10 District is currently conducting a two-year
11 study, they are only the second year in it.
12 And the preliminary reports that I read about
13 the SWFWMD study concerning the flushing of
14 Lemon Bay is that we have time, the bay is not
15 as bad as everyone thinks and we need to spend
16 the money, be fiscally responsible, spend the
17 money to do what the report says. We need to
18 wait for the report. It's another year away
19 from being done.
20 This project, DEP says this project is
21 mainly about navigation. And if it does, it
22 only benefits a few large boat owners part of
23 the time because it's going to be maintenance
24 dredged every three years.
25 Stump Pass isn't closed; boaters use it
219
1 every day. In fact, the beach on the state
2 parks spit, which will be destroyed by the
3 dredging, is one of the most heavily used areas
4 by recreational boaters in our area.
5 In fact, the last time my husband went
6 through, we counted 75 boats on that spit of
7 land that is planned to be taken away from the
8 dredging.
9 There are two other stablized passes that
10 can be used for safe harbor with only 33 miles
11 between them. Certainly two is enough for
12 large boats.
13 What this project is really about is -- if
14 this project is really about dredging Stump
15 Pass, then why do we need the additional fill
16 taken from the offshore spoil area? This area
17 is larger than the fill supposed to be taken
18 out once Stump pass is dredged.
19 This project is really about beach
20 renourishment and only benefits a few private
21 beachfront property owners. And it is about
22 creating buildable land where there is none.
23 This project will place the sand both from
24 the channel and the offshore spit on
25 approximately 80 privately owned lots on Night
220
1 and Don Pedro Island.
2 GOVERNOR BUSH: What's the mix between the
3 dredging of the channel and the offshore spit?
4 MS. BAMFIELD: The mix as far as --
5 GOVERNOR BUSH: Volume of sand.
6 MS. BAMFIELD: There is more in the offshore
7 spit. The numbers are in the DEP report. The
8 sand is -- it will not only be placed seaward of a
9 yet-to-be-established erosion control line, but it
10 will also be placed on the private upland
11 properties, upland portion of these lots.
12 Charlotte County and DEP are proposing to
13 spend $12.6 million to protect roughly
14 $16 million of private developed property.
15 Owning beach front property on a barrier island
16 is a very risky investment.
17 Our tax dollars should not be spent to
18 subsidize real estate investments where owners
19 were aware that their property was in front of
20 the coastal construction control lines when
21 they built.
22 This project is about spending taxpayers'
23 dollars on a project with a limited time
24 expectancy. This project will set in motion an
25 internal commitment, and before we do that and
221
1 spend this money on this commitment, we need to
2 at least wait for the studies and the reports
3 that are in progress.
4 Right now DEP is putting together a report
5 to determine the ratio between engineers'
6 projections of sand on beach and life
7 expectancy and how long that sand really lasts
8 in true projects.
9 That report has not been finished yet.
10 The Sarasota/Charlotte County Beach
11 Feasibility Study, which consultants were paid
12 800,000 to do, has not been finished yet.
13 Let's wait for that report.
14 There has never been confirmation from the
15 DCA that the project is in compliance with our
16 comprehensive plan.
17 GOVERNOR BUSH: You need a DCA approval for
18 this? Secretary?
19 MR. STRUHS: Yes.
20 GOVERNOR BUSH: Does DCA need to sign off on
21 this?
22 MR. STRUHS: I don't believe so, no.
23 MS. BAMFIELD: It's been our understanding
24 that the DCA is very concerned about encouraging
25 development on bridgeless barrier islands and that
222
1 this would be a concern from them if they were
2 presented with the opinion. And they have not
3 been presented whether to say yes or no.
4 The last time Florida and the county DEP
5 partnered in a modest dredging and beach
6 renourishment project was 2001. According to
7 the DEP contract, the engineer's estimate was
8 $205,000. In reality the project ended up
9 costing $911,000.
10 Can we depend on our county, that this
11 $12.6 million project won't increase by
12 400 percent also?
13 There has been no ballot referendum to
14 vote on this, no consensus among the primary
15 stakeholders; there have been no public
16 hearings to establish MSBUs.
17 GOVERNOR BUSH: What are MSBUs?
18 MS. BAMFIELD: An MSBU would be a district
19 where the taxpayers would -- defining an area
20 where the taxpayers pay and how much they will be
21 paying.
22 GOVERNOR BUSH: Thank you.
23 Anybody else? I am sorry.
24 MS. BAMFIELD: So this project is not about
25 Lemon Bay. This is about beach renourishment and
223
1 navigation, and DEP even states it in their
2 application.
3 GOVERNOR BUSH: Thank you very much.
4 Secretary.
5 MR. STRUHS: There is one more speaker.
6 GOVERNOR BUSH: I understand that.
7 Commissioner Gallagher has a question.
8 TREASURER GALLAGHER: The question is if --
9 has DEP been keeping people from getting permits
10 to build homes on Manasota Key and Night Island
11 because of coastal setback?
12 MR. SOLE: This is Mike Sole with DEP. The
13 answer to that question is yes, we have
14 recommended denial of several permit applications
15 that have come to the department based upon the
16 erosion rate and the lack of an acceptable dune
17 feature that would allow a structure to be built
18 and survive.
19 TREASURER GALLAGHER: So now we do Stump Pass
20 and we make beach up and down on an outside
21 barrier island. Is that going to make you guys
22 comfortable to get permits to build there?
23 MR. SOLE: For a majority of the structures,
24 yes, sir. It is a situation where currently there
25 is no dune, no viable beach. With this project,
224
1 there would be a dune and a viable beach and they
2 would be able to build appropriately based upon
3 that new setting.
4 TREASURER GALLAGHER: Let me ask you another
5 question while we got you talking. The blockage
6 that is taking place in Stump Pass, looks like
7 water is still moving through there. Is it
8 possible to just dredge that on a -- and have
9 enough flow to clean up the bay?
10 MR. SOLE: In my opinion, Mr. Treasurer, and
11 based upon my engineers looking at it, if we just
12 dredge that, it still will not provide the
13 hydraulics necessary to keep it maintained and
14 open for a long period of time.
15 TREASURER GALLAGHER: I am just trying to get
16 through to like March of next year, is what I am
17 trying to do. I am not trying to get this -- this
18 isn't the future of end all; we are trying to get
19 through a month or two here.
20 And if we are worried about turtles and
21 everything, I am thinking if we spent a little
22 money and just dredge that to have for the
23 summer through turtle season, isn't that going
24 to give us some breathing room for the bay?
25 MR. SOLE: The answer is yes, it would give
225
1 us some breathing room for a short period of time.
2 It would not be any extended period of time, and
3 it would probably shoal in pretty quick.
4 GOVERNOR BUSH: Let's talk a minute, that's
5 an interesting alternative. But is it feasible to
6 do it, to get a permit, that you have to start
7 from scratch?
8 TREASURER GALLAGHER: Why couldn't we approve
9 that in lieu of this right now?
10 MR. SOLE: Actually I think this permit is in
11 place for this existing channel as it exists, yes,
12 sir.
13 TREASURER GALLAGHER: To be maintained.
14 MR. SOLE: I don't know the status of the
15 federal permits, so I can't answer. I know that
16 there is a state permit in place for that.
17 GOVERNOR BUSH: That's an important question,
18 if it's a viable alternative.
19 TREASURER GALLAGHER: Short-term.
20 GOVERNOR BUSH: -- that doesn't double the
21 cost.
22 MR. SOLE: Let me briefly speak to the cost
23 though. Even addressing that small project, it
24 would still be a fairly sizeable cost to do just
25 the existing inlet in its current location.
226
1 It will be probably, I think the last two
2 times they did it, it was somewhere around
3 $800,000 just to dredge the existing footprint.
4 And again, it's not sustainable. It would be a
5 very short-term solution, which I understand
6 what you are going for.
7 GOVERNOR BUSH: Would you like to speak? You
8 win the patience award, unless there is one
9 speaker after you.
10 MR. BAMFIELD: I think I am last, so you can
11 relax after me.
12 My name is Ron Bamfield, I am a
13 professional captain; I have been fishing this
14 area for 17 years. I live on Don Pedro Island,
15 I make money off the tourist business; you'd
16 think I would be in favor of this. But I am
17 not.
18 GOVERNOR BUSH: What is the name of the
19 island again?
20 MR. BAMFIELD: Don Pedro Island, Night Island
21 and Stump Pass is --
22 GOVERNOR BUSH: Where the sand is going?
23 MR. BAMFIELD: The sand is going to on the
24 beaches of Don Pedro Island and Stump Island.
25 MR. SOLE: If we could have the picture here
227
1 for just a second.
2 GOVERNOR BUSH: How far away are you from
3 there?
4 MR. BAMFIELD: I live on the island, sir.
5 GOVERNOR BUSH: No, I am saying -- we are not
6 looking at the island, are we?
7 MR. BAMFIELD: Yes, this is Night Island, Don
8 Pedro Island, it's one island.
9 GOVERNOR BUSH: Okay. I must understood when
10 it was brought up first.
11 MR. SOLE: Used to be two islands.
12 GOVERNOR BUSH: About ready to be two again,
13 maybe.
14 MR. BAMFIELD: It would be two again except
15 you keep filling the pass between Night Island. I
16 won't bother you with that. Let's be real short
17 here.
18 When we are talking about, there is --
19 there is a dredging pass -- I am sorry, I am a
20 little nervous.
21 GOVERNOR BUSH: Don't be. You have seen us
22 in action, so you should be totally comfortable.
23 MR. BAMFIELD: I wrote a little bit down, but
24 I won't bother you with that.
25 The last I heard today, dredging was in
228
1 2001, it was two years ago. The pass is open,
2 boats are still coming and going, all the homes
3 on the island are still protected. That
4 project cost us a million dollars basically; it
5 was $900,000.
6 The project they are now going to propose
7 to us to do is $12.5 million, and it has a
8 three-year life expectancy before we have to
9 make this dredge again.
10 So you guys seem like pretty honest people
11 up here, and you are pretty straightforward
12 about this. Last time we did this project it
13 cost us $900,000. So far it's lasted two
14 years. This project is $12 million, with a
15 projection of maybe lasting three years.
16 GOVERNOR BUSH: Was the, three years ago, was
17 it just dredging the existing?
18 MR. BAMFIELD: Dredging the existing.
19 GOVERNOR BUSH: Not the proposal?
20 MR. BAMFIELD: Right.
21 GOVERNOR BUSH: You punch a hole through the
22 way it's being proposed, it's dramatically
23 different, don't you think?
24 TREASURER GALLAGHER: Are you telling me that
25 the new method that's going to be -- isn't going
229
1 to self-stay open, the flow? As I understand the
2 design, it's supposed to do that.
3 MR. BAMFIELD: The 1980 alignment they said
4 would maybe give us the flow because it stops the
5 southward flow of the water, which is giving us
6 our problems.
7 The trouble is an 1980 alignment is not
8 going to happen with this project. It already
9 has been removed from the project because they
10 couldn't get DEP to give them permission to go
11 with the 1980 alignment. We are going to go
12 with an alignment that's about a 1989
13 alignment, when our beach renourishment
14 problems -- our beach started to erode when we
15 had the alignment we are going to put in.
16 To simply put it, right there where my
17 finger is, that's the green marker from the
18 1980 alignment; it's still there. Here is the
19 alignment from the 1980 and the pass is suppose
20 come straight out and give you straight
21 hydrology.
22 TREASURER GALLAGHER: Now we got a curve in
23 it that is supposed to do it better.
24 MR. BAMFIELD: We are going to curve it right
25 back out where the sandbar starts in the middle of
230
1 the project right now.
2 This is where the edge -- we are going to
3 have that south alignment; when that south
4 alignment started, that's when we started
5 losing beach. We are actually going to dredge
6 it back to the alignment when we started losing
7 beach.
8 I asked DEP about that, they said yes. If
9 we dredge at this point, we could actually
10 start removing beach again. That's not the
11 point of this project.
12 Let me tell you. The point of the
13 project, as you were saying, this is state
14 land. This park right here is used by
15 thousands of people a year, and we are going to
16 sell it for free. We are giving it away.
17 GOVERNOR BUSH: Hang on a second. We are
18 making it easier to get to. But how do people
19 access this now? How do people access this
20 beautiful part of Florida right now?
21 MR. BAMFIELD: Right now it is being used, is
22 accessed almost entirely by boaters; they come up,
23 because it is a protected area on the inside --
24 GOVERNOR BUSH: So the same boaters could, if
25 they had a better way to get to the gulf, they
231
1 would get to it.
2 MR. BAMFIELD: No, the difference is here you
3 have a protective water where you can park a
4 16-foot boat up on the beach, walk across the
5 little spit of sand, and you are at the Gulf of
6 Mexico. If you park your boat on the gulf itself,
7 you have the wave action coming in from offshore,
8 which usually makes it too difficult to --
9 GOVERNOR BUSH: Wouldn't you still be able to
10 do that?
11 MR. BAMFIELD: No, you can't.
12 GOVERNOR BUSH: You could do it, it would
13 look like this. We are looking at an old picture,
14 the '81 aerial photo which more or less resembles
15 what would happen if Stump Pass was cleared out
16 again, and I could see how you could --
17 MR. BAMFIELD: Because the spit itself is
18 going to be gone, you have to understand, all the
19 protected water, if the project works, that isn't
20 removed is going to fill in.
21 TREASURER GALLAGHER: That's the picture.
22 GOVERNOR BUSH: That's the one we are looking
23 at.
24 TREASURER GALLAGHER: Where is the spit in
25 that picture?
232
1 GOVERNOR BUSH: What's this 50-dollar charge
2 thing? That sounds like it's outrageous. What's
3 going on with this?
4 MR. BAMFIELD: What that is, is the only
5 access to our island is by private ferry. The
6 gentleman that runs that ferry --
7 GOVERNOR BUSH: Is he here? He must be a
8 rich guy.
9 MR. BAMFIELD: He is a very rich guy.
10 GOVERNOR BUSH: 50 bucks?
11 MR. BAMFIELD: 50 bucks for one trip.
12 TREASURER GALLAGHER: But you take your own
13 boat free.
14 MR. BAMFIELD: I do have my own boat. I live
15 on the island. I go by boat.
16 GOVERNOR BUSH: It's not 50?
17 MR. BAMFIELD: Yes, it's 50. Let me explain
18 this again. This is another -- I never understood
19 what Scott Burley meant by what is, is, but I am
20 starting to understand that now.
21 It's a private boat ferry. If I lived
22 there, I could buy a pass for I think 1700,
23 1500? What's a yearly pass for a homeowner?
24 1200.
25 For $1,200, I could buy a yearly pass and
233
1 I can come and go as many times as I want to in
2 a day. But if I want to go out to enjoy the
3 beach one time, I can buy a 1,200-dollar pass
4 or I can buy the 50-dollar pass which allows me
5 to get there once.
6 GOVERNOR BUSH: Or you can take your boat and
7 you are saying you won't be able to access it.
8 MR. BAMFIELD: There is no dockage, there is
9 no access, except to the beach that we have now.
10 We have already access by boat to beaches all over
11 Florida. This is a unique little spot where we
12 actually have protected water where you can take a
13 small boat and really enjoy it there.
14 People use this. This isn't something
15 that we are going to look 10 years down the
16 road -- there are literally thousands of people
17 a year that go to this spit to enjoy it.
18 GOVERNOR BUSH: Can I ask DEP a question,
19 because the public access question is a legitimate
20 one.
21 David, you may not be able to answer this.
22 Is there any alternative that has been looked
23 at as it relates to access that would go away
24 because of the dredging?
25 MR. STRUHS: Governor, we are convinced this
234
1 project as presented to you will increase public
2 access and public visitation to public lands.
3 GOVERNOR BUSH: Why?
4 MR. STRUHS: Because you will have better and
5 easier boat access, safer, more reliable --
6 GOVERNOR BUSH: Tell me how the boat access
7 would occur.
8 MR. STRUHS: Right now, the channel being in
9 the condition it is --
10 GOVERNOR BUSH: Point to the one on the
11 table. Point to what theoretically this will look
12 like and where is the access?
13 MR. SOLE: Access to the park will be
14 improved two ways, or predominantly one way.
15 One, there is a proposal as part of the
16 easement that Charlotte County help build a
17 dock on the park itself and that will allow for
18 docking, safe guarding --
19 GOVERNOR BUSH: That's part of the easement?
20 MR. SOLE: Part of this project will be a
21 special easement, they would build a boardwalk
22 that provided direct access to the beach, restroom
23 facilities, so there would be improved public
24 access to the very end of the park.
25 GOVERNOR BUSH: That was one. You said there
235
1 was something else.
2 MR. SOLE: The other issue is I still believe
3 that there will still be boat access up along the
4 berm, just as there has been over the years on the
5 spit.
6 GOVERNOR BUSH: Thank you.
7 MR. STRUHS: In addition to the improved
8 public access for private vessels, I think it's
9 important to note that the high charges that you
10 heard are for taking a vehicle over to the island
11 and that for the typical park visitor --
12 GOVERNOR BUSH: You don't need a vehicle,
13 that's only for the homeowners, I assume.
14 MR. STRUHS: It's a nominal fee of a few
15 dollars.
16 GOVERNOR BUSH: Okay.
17 MR. BAMFIELD: That might be part of our
18 problem here, is that we are required to pay for
19 250 parking spots to take cars out there so people
20 can visit this park. Now you are telling me it's
21 going to cost less than $50 to take the car?
22 TREASURER GALLAGHER: The people aren't going
23 to take a car.
24 MR. BAMFIELD: Why do I have to provide
25 250 -- why do we, the taxpayers, have to pay for
236
1 250 parking spots if you are telling me the people
2 are going to walk out there?
3 TREASURER GALLAGHER: Where are the parking
4 places going; not on the island?
5 MR. BAMFIELD: Night Island and on Don Pedro
6 Island.
7 GOVERNOR BUSH: Some place that is not on the
8 picture, I know that.
9 MR. BAMFIELD: While we are getting the
10 picture, one other thing you brought up today was
11 when we sell land, state land or we buy it, we
12 should get the best bang for our buck.
13 People on Little Gaspirillo Island, which
14 is connected to the same beach, have offered to
15 pay for this sand that's going to come off the
16 spit, that they would take money out of their
17 pocket and pay to put it on there. The county
18 has refused them service because they said it
19 would slow down the process.
20 So they decided it's better to give state
21 land away for free than it is to sell it.
22 GOVERNOR BUSH: Show us the picture, so we
23 get a broader concept of this, because this is
24 clearly more than a dredging project.
25 MR. SOLE: There is our monument located up
237
1 and down the beach.
2 GOVERNOR BUSH: Where is the cut, where is
3 the pass?
4 MR. SOLE: The pass is approximately in this
5 location.
6 GOVERNOR BUSH: Where are you pointing?
7 MR. SOLE: The pass is down the beach about a
8 thousand to probably three, 4,000 feet south or
9 north of this location.
10 GOVERNOR BUSH: 500 yards, 600 yards.
11 MR. SOLE: Right. Parking and access is
12 located within the exact -- this blue template is
13 where the beach fill is to be placed from R29 to
14 R40s; you can see this blue; that's where the
15 beach is going to be placed.
16 Access is going to be located
17 approximately every thousand feet. There is
18 one, two, three, four, five --
19 GOVERNOR BUSH: Five lots.
20 MR. SOLE: Five access sites.
21 GOVERNOR BUSH: Parking lots?
22 MR. SOLE: Beach access sites.
23 GOVERNOR BUSH: Where is the parking?
24 MR. SOLE: The parking is on the road, which
25 provides approximately 100 parking spots along
238
1 this area and an additional hundred parking spots.
2 GOVERNOR BUSH: Those are already there?
3 MR. SOLE: To a large extent, the road will
4 need to be improved to allow for the parking, but
5 the access and the availability of parking is
6 there today.
7 TREASURER GALLAGHER: What's the uplands of
8 that? Private lots?
9 MR. BAMFIELD: Right.
10 MR. SOLE: Yes, sir.
11 TREASURER GALLAGHER: So all these private
12 people who think they own that land down there,
13 you are going to put a road right in front of them
14 and a parking lot in front of them?
15 MR. STRUHS: The road is already there.
16 GOVERNOR BUSH: Road is already, for the
17 parking, you have to widen the road.
18 MR. BAMFIELD: There is already a lawsuit
19 right now.
20 TREASURER GALLAGHER: So you can park and go
21 to the beach there. You drive up and park and go
22 to the beach?
23 MR. BAMFIELD: Right.
24 TREASURER GALLAGHER: Is this an island, so
25 you are going to get a ride over to this?
239
1 MR. BAMFIELD: It's an island, it is only
2 accessible by boat.
3 TREASURER GALLAGHER: So you got a road on
4 the island. And now we are going to put more
5 beach and have people pay 50 bucks to take their
6 car over there so they can park it on the beach.
7 MR. BAMFIELD: Right. That's it. That's
8 public access. And they are going to take the
9 park away from them that they have to get the
10 sand.
11 MS. BAMFIELD: Also if you do happen to walk
12 over or bring a bike over on the barge and don't
13 want to pay the $50, it's probably a mile walk to
14 this new sand beach. The access they are
15 proposing, the new public access to get to this
16 new sand beach, expires at the end of the life
17 expectancy of the project.
18 It's a life expectancy of eight to 10
19 years, and the easements go away after that, so
20 even if the sand stayed, it would be gone. And
21 this maintenance project -- and this project is
22 proposed to be maintained at least every three
23 years to keep the pass dredged.
24 GOVERNOR BUSH: Any other questions?
25 MR. BAMFIELD: Is this going to be delayed
240
1 until March, sir?
2 GOVERNOR BUSH: We are going to conclude our
3 discussion on this and make a decision on that.
4 MR. BAMFIELD: If I could make one last
5 comment before I leave.
6 GOVERNOR BUSH: Please.
7 MR. BAMFIELD: This will be the last one for
8 us today.
9 I feel sorry for people that bought this
10 land and it's a barrier island; it comes and
11 goes, they have an investment.
12 Part of the DEP reason that they are going
13 to get permits if this project passes is
14 because I believe, we as a county is going to
15 be responsible to continually maintain this
16 beach. This isn't going to be the end of the
17 project or the taxes.
18 GOVERNOR BUSH: I hope so; right,
19 Commissioner?
20 MR. BAMFIELD: I have friends that bought
21 Enron stock, and they would like to know if we can
22 pass a bill here today to protect their investment
23 too.
24 GOVERNOR BUSH: We are suing Enron. Okay.
25 Any other comments?
241
1 REPRESENTATIVE PAUL: Governor, I know your
2 patience is thin. Just to close, and to comment on
3 a couple of these comments.
4 First of all, a lot of the numbers that
5 were thrown around, I am not going to take your
6 time to dispute them. They are not --
7 GOVERNOR BUSH: Why don't you let, David, if
8 there is anything that we need, just from the
9 department's perspective -- that may not be
10 accurate, let a neutral party make that
11 determination, Jerry, and let's --
12 MR. SOLE: There are a few technical
13 rebuttals.
14 One, the cost of the project is
15 approximately about $4.9 million for the
16 initial project. The 12 million-dollar figure
17 previously used is an eight-year figure that
18 would result in continued maintenance, et
19 cetera. So overall cost, it's not a
20 12 million-dollar project we are dealing with.
21 TREASURER GALLAGHER: Who is paying?
22 MR. SOLE: A combination of the county and
23 the State of Florida.
24 GOVERNOR BUSH: The Feds aren't involved?
25 MR. SOLE: The Feds are not involved in this
242
1 project.
2 TREASURER GALLAGHER: Other than getting the
3 permit.
4 MR. SOLE: Other than actually providing a
5 permit.
6 GOVERNOR BUSH: Which they have --
7 MR. SOLE: They are in the process of
8 providing permits.
9 GOVERNOR BUSH: You are confident?
10 MR. SOLE: Yes, sir.
11 TREASURER GALLAGHER: Two weeks or how long?
12 MR. SOLE: I believe we'll see a permit
13 within approximately three weeks. They need our
14 permit first before they can issue their permit.
15 GOVERNOR BUSH: How quickly are you going to
16 do your permit?
17 MR. SOLE: As soon as you give me the green
18 light.
19 GOVERNOR BUSH: There is no other technical
20 reason that we couldn't meet the deadline if the
21 Cabinet decides to move forward, given the
22 extraordinary circumstances because of the turtle
23 nesting?
24 MR. SOLE: I believe that all things are
25 lined up where this still can go.
243
1 GOVERNOR BUSH: A little hesitation?
2 MR. SOLE: This spring, all things can go
3 this spring, and they can build this spring.
4 GOVERNOR BUSH: Okay.
5 REPRESENTATIVE PAUL: Governor, thank you for
6 indulging us. I cannot apologize for somebody
7 getting sand or the fact they own a house on the
8 beach. What I am trying to tell you is I don't
9 care whether the sand gets dumped out in the
10 middle of the gulf or whether no more boats get in
11 on it.
12 I am about increasing the flow so that my
13 water quality is protected. I am asking you
14 please to give me a unanimous vote; when my
15 colleagues meet to repair the issues you raised
16 earlier today, the most we can require is a
17 unanimous vote anyway. I respectfully ask of
18 you to vote in favor of this. Thank you for
19 indulging us this late hour.
20 GOVERNOR BUSH: Thank you, Representative.
21 TREASURER GALLAGHER: I will do this to get
22 us started. I move that we reconsider the vote by
23 which item number 18 was deferred.
24 GOVERNOR BUSH: If we don't get a second --
25 GENERAL CRIST: Second.
244
1 TREASURER GALLAGHER: We got one.
2 GOVERNOR BUSH: We need a majority vote on
3 that, if we are to do that. Is there any
4 discussion on the motion to defer? The motion to
5 reconsider the vote to defer that was done earlier
6 today, wasn't it, on item 18? Is there a second?
7 GENERAL CRIST: Yes, sir.
8 GOVERNOR BUSH: General Crist. Any
9 discussion? All in favor say aye.
10 THE CABINET: Aye.
11 GOVERNOR BUSH: All opposed. Okay.
12 Commissioner Gallagher, do you have another --
13 TREASURER GALLAGHER: We are now on the item.
14 Governor, I am going to move that we vote on
15 this -- hopefully we'll have a unanimous vote; I
16 think that will give the lawyers lots of things to
17 discuss, but it's pretty hard to say a hundred
18 percent unanimous doesn't get this done and allow
19 them to work for the future.
20 I would also say that if we don't get a
21 unanimous, that in my personal opinion is
22 probably problematic, but I am going to move
23 this item and ask for a unanimous vote so it
24 can move ahead.
25 COMMISSIONER BRONSON: I will second it.
245
1 GOVERNOR BUSH: There is a second. Given the
2 significant -- the recommendation of DEP for the
3 significant environmental benefits to the estuary
4 and the negative impacts on water quality if we
5 don't move forward, I support this idea.
6 We are on shaky grounds here as it relates
7 to the law. And I don't want anybody to be
8 thinking because Jerry enterprisingly found one
9 ruling in 1961, that that changes anything.
10 There may be a challenge to this, but
11 ultimately we need to go to the legislature
12 with what we discussed as the best means to
13 clarify this. And so I will support your
14 motion, Treasurer/Commissioner.
15 TREASURER GALLAGHER: Thank you.
16 GOVERNOR BUSH: Until you come up with a
17 name.
18 Any other discussion? There is a motion
19 to --
20 GENERAL CRIST: I want to commend the
21 Representative. He worked very hard, and I
22 respect your comments, Governor. It is not
23 because of his industrialousness alone that we
24 have this opportunity, but certainly credit needs
25 to be given to him for his care and his compassion
246
1 for his district. And you deserve that.
2 GOVERNOR BUSH: There is a motion and a
3 second. All in favor say aye.
4 THE CABINET: Aye.
5 GOVERNOR BUSH: All opposed. It's a
6 four/nothing unanimous vote. Thank you all.
7 MR. STRUHS: That concludes the Board of
8 Trustees agenda.
9 GOVERNOR BUSH: David, I hope the next agenda
10 is a little less heavy.
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
247
1 GOVERNOR BUSH: State Board of
2 Administration.
3 Is there a motion on the minutes?
4 TREASURER GALLAGHER: Motion on the minutes.
5 GOVERNOR BUSH: General Crist, is there a
6 second?
7 GENERAL CRIST: Second.
8 GOVERNOR BUSH: Moved and seconded. Without
9 objection, the item passes.
10 Item 2.
11 MR. STAPANOVICH: Item 2, approval of fiscal
12 sufficiency of an amount not exceeding 237,600,000
13 State of Florida, full faith and credit, State
14 Board of Education, Public Education Capital
15 Outlay Bonds, Series 2001.
16 It's recommended the board approve the
17 fiscal sufficiency.
18 TREASURER GALLAGHER: Motion on 3.
19 GENERAL CRIST: Second.
20 GOVERNOR BUSH: Moved and seconded.
21 TREASURER GALLAGHER: That was 2, wasn't it?
22 GOVERNOR BUSH: Item 2, excuse me.
23 TREASURER GALLAGHER: Motion on item 2.
24 GOVERNOR BUSH: And a second on item 2.
25 Without objection, the item passes.
248
1 GENERAL CRIST: Governor, if I could, I don't
2 know that we went ahead and voted on
3 Mr. Stipanovich.
4 I make that motion at this time.
5 TREASURER GALLAGHER: Second.
6 GOVERNOR BUSH: There is a motion and second
7 to re-enlist Coleman Stipanovich to serve his
8 country as the Executive Director or Director of
9 the State Board of Administration. All in favor
10 say aye.
11 THE CABINET: Aye.
12 GOVERNOR BUSH: Motion passes, three/nothing,
13 a unanimous vote.
14 MR. STAPANOVICH: Thank you Governor and
15 Members.
16 Item 3, approval of fiscal sufficiency of
17 an amount not exceeding $175,000,000, State of
18 Florida, full faith and credit, State Board of
19 Education, Public Education Capital Outlay
20 Refunding Bonds. It's recommended the board
21 approve the fiscal sufficiency.
22 TREASURER GALLAGHER: Approval on 3.
23 GENERAL CRIST: Second.
24 GOVERNOR BUSH: Moved and seconded. Without
25 objection, the item passes.
249
1 MR. STAPANOVICH: Item 4, approval of fiscal
2 sufficiency of an amount not exceeding
3 $150 million, State of Florida, Department of
4 Environmental Protection, Florida Forever Revenue
5 Bonds, Series 2003A. It's recommended that the
6 board approve the fiscal sufficiency.
7 GENERAL CRIST: Move.
8 TREASURER GALLAGHER: Second.
9 GOVERNOR BUSH: Moved and seconded. Without
10 objection, the item passes.
11 MR. STAPANOVICH: Item 5, approval of fiscal
12 determination of amounts not exceeding
13 $19,570,000, tax exempt, and $450,000 taxable
14 Florida Housing Finance Corporation Multifamily
15 Mortgage Revenue Bonds, 2002 Series. It's
16 recommended that the board approve the fiscal
17 sufficiency.
18 TREASURER GALLAGHER: Motion.
19 GENERAL CRIST: Second.
20 GOVERNOR BUSH: Moved and seconded. Without
21 objection, the item passes.
22 MR. STAPANOVICH: Item 6, approval of fiscal
23 determination of amounts not exceeding $8,700,000,
24 tax exempt, and $115,000, Taxable Florida Housing
25 Finance Corporation, Multifamily Mortgage Revenue
250
1 Bonds, 2003 Series. It's recommended that the
2 board approve the fiscal sufficiency.
3 GENERAL CRIST: Motion.
4 TREASURER GALLAGHER: Second.
5 GOVERNOR BUSH: Moved and seconded. Without
6 objection, the item passes.
7 MR. STAPANOVICH: The last fiscal
8 sufficiency, item 7, approval of fiscal
9 determination of amounts not exceeding
10 $11,020,000, tax exempt, and 2,180,000, Taxable
11 Florida Housing Finance Corporation, Multifamily
12 Mortgage Revenue Bonds, 2002 Series. It's
13 recommended the board approve the fiscal
14 sufficiency.
15 TREASURER GALLAGHER: Motion.
16 GENERAL CRIST: Second.
17 GOVERNOR BUSH: Moved and seconded. Without
18 objection, the item passes.
19 Item 8.
20 MR. STAPANOVICH: Governor, item 8 is an
21 update on the defined contribution and education
22 program as it relates to cost reductions.
23 We began to, at the board, think about the
24 cost after the choice period for the state
25 employees in August of '02. That was about
251
1 five months ago.
2 It became immediately clearer that
3 election rates for the FRS Investment Plan was
4 going to be lower than projected. As a result,
5 this past October, staff actively engaged
6 contract renegotiations with education vendors
7 about the cost and educational usage.
8 These negotiations are not final, but it
9 is our goal to reduce the DC program by at
10 least $10 million.
11 Consequently, employer contribution rates
12 for this program should be reduced from 15
13 basis points to 10 basis points. This would be
14 a 33 percent cost savings.
15 As you probably recall, last year the
16 legislature increased the employer contribution
17 rate levied from 10 to 15 basis points of
18 salary.
19 We will try to finalize these contracts
20 over the next several weeks. If I didn't feel
21 comfortable that we are probably there, until
22 you get it reduced in writing, get it signed
23 off on, I probably would not be making these
24 comments today, but I do feel like we can
25 realize these savings and be able to have the
252
1 legislature amend them 15 to 10 basis points
2 contribution rate for the defined contributions
3 program.
4 TREASURER GALLAGHER: I would -- for whatever
5 it's worth, I know from our discussion that the
6 legislation says we will take 15 basis points.
7 Instead of going to the legislature and saying
8 change it to 10, I would rather, in my opinion, we
9 say 15 or less so that if down the road all of a
10 sudden there is a good reason to spend more money
11 on education, we don't have to go to the
12 legislature to have the law changed.
13 It may never happen, but at least it would
14 give us the flexibility to do that, and then
15 this board could say, okay, there is an
16 opportunity here, people may be interested in
17 that we should tell them that. That's my
18 thoughts on it.
19 MR. STAPANOVICH: I think the Board,
20 Governor, has the option -- because you approve
21 our budget, and that was part of the discussion we
22 had with the legislature last year when they were
23 struggling over whether to let us move from 10 to
24 15.
25 I think in that legislation it talks about
253
1 you have to approve that difference, so if it's
2 not in the budget and you don't approve it, we
3 are not going to spend it and then --
4 TREASURER GALLAGHER: In that case, let's not
5 go to the legislature, we'll just make your budget
6 10 and we'll move on.
7 GOVERNOR BUSH: I would have suggested maybe
8 consider lowering it from 10.
9 TREASURER GALLAGHER: I am just saying --
10 GOVERNOR BUSH: That should be our option.
11 TREASURER GALLAGHER: I don't think we need
12 to have the legislature setting an actual rate
13 that we have to collect. If you need us to amend
14 your budget to drop you down to a 10 basis point
15 fee, I will be glad to make that motion to do that
16 so we don't need to go to the legislature.
17 MR. STAPANOVICH: We can wait until the
18 budget comes and you can make your --
19 TREASURER GALLAGHER: How soon is it --
20 GOVERNOR BUSH: When is the budget coming?
21 MR. STAPANOVICH: I think we would probably
22 be coming before you in May, at least with a
23 preliminary budget that's pretty much on target.
24 And then you would vote for approval in June. But
25 we will know, and I can update you, Governor, but
254
1 we will know on this program probably in the next
2 several weeks.
3 GOVERNOR BUSH: We don't need to wait until
4 May to make these reductions when it's clear that
5 this level of spending, based on the run rate you
6 achieved on the defined contribution
7 participation, is so low.
8 MR. STAPANOVICH: We can finalize contracts.
9 GOVERNOR BUSH: I would also love to get an
10 update on just the general -- is there a
11 different -- we are in a different context than in
12 the high-flying days when -- right before the
13 significant decline in the stock market.
14 Does that create a different education
15 strategy? We spend a lot of money on
16 education, a ton of money. So far it's the
17 best deal, the whole --
18 TREASURER GALLAGHER: Whoever is using it.
19 GOVERNOR BUSH: Exactly. But in terms of
20 the -- whoever did the education thing came out
21 well on this, the people that are in the defined
22 contribution system ultimately will be fine. But
23 should we be looking at a different approach to
24 education because of the valuations that are
25 completely different now?
255
1 MR. STAPANOVICH: That's a good point. And
2 Governor, we looked at that and we think that the
3 education program, the way it's designed, is a
4 good education program, but that we can pare it
5 back in terms of the degree, the anticipation of
6 usage, we can pare that back and, therefore, be
7 able to reduce the cost 35 percent, maybe even
8 something approaching 40 percent.
9 We'll continue to work towards that. But
10 in terms of the services that are being
11 provided and the level of services consequently
12 could be reduced in terms of call volume and
13 number of workshops and these kinds of things.
14 So in terms of the quality of services and
15 the level of services, we are not recommending
16 that anything be dropped or done that
17 differently, but we certainly can look at these
18 contracts and reduce the costs because the
19 participation rate simply is not there.
20 GOVERNOR BUSH: Just refresh my memory what
21 the course of action is now as it relates to
22 allowing members of the pension fund to get a
23 second look at the fund contribution plan.
24 MR. STAPANOVICH: That's still out there.
25 GOVERNOR BUSH: Clearly we need education.
256
1 MR. STAPANOVICH: For the entire population.
2 TREASURER GALLAGHER: We are going to leave
3 that, it's there and available. But it's not one
4 of those things -- we didn't do too good in trying
5 to hand-carry people to it to begin with, at least
6 serving new employees as part of their orientation
7 is you have a choice here and here is what your
8 choice is.
9 GOVERNOR BUSH: I assume the model makes it
10 more attractive to be in the defined contribution
11 plan now than it did two years ago.
12 MR. STAPANOVICH: There is a silver lining in
13 the cloud, and I will be talking about the markets
14 as we get into the total fund investment plan
15 revision recommendations, but certainly this would
16 have happened at the top of the market in 1999 and
17 we would have met our projections and had
18 $13 billion move over --
19 GOVERNOR BUSH: We got that going for us.
20 MR. STAPANOVICH: -- and a couple hundred
21 thousand, a hundred thousand employees, we would
22 be singing a different tune here today. So now
23 this old saying, buy low, sell high, I think today
24 we would be buying low.
25 TREASURER GALLAGHER: It could be lower. One
257
1 never knows.
2 GOVERNOR BUSH: So are we -- this is for
3 discussion only.
4 MR. STAPANOVICH: It's for discussion only
5 and we will come back.
6 GOVERNOR BUSH: Item 9.
7 TREASURER GALLAGHER: Investment plan.
8 GOVERNOR BUSH: Tell us about the changes.
9 MR. STAPANOVICH: If I may, I would like to
10 start out and put a -- I know it's been a long day
11 and I will try to be brief, put this item into
12 perspective with a little bit of background,
13 Governor.
14 In your backup materials you have several
15 items, you have the memo from me, you have the
16 general consultant's study, you have a revised
17 total fund investment plan which we are asking
18 for action on today, as well as some slides
19 that were used in the workshops and working
20 with the investment advisory council and
21 others.
22 The asset liability and asset allocation
23 study for FRS was conducted, the last one
24 conducted in 1999. Normally these studies are
25 done about every two to three years, so we are
258
1 just about on -- we are certainly due for this
2 study.
3 The study began in October and was
4 completed in December. Needless to say there
5 has been a dramatic change in the capital
6 market since 1999. The stock market has been
7 down for three consecutive years beginning in
8 March of 2000 when it topped.
9 The study comes on the heals, of course,
10 on three down years. From high to low over 31
11 months ending October 2000-2002, the broad
12 equity market was down 50 percent. And the
13 small cap market was down 75 percent.
14 This bear market represents the steepest
15 and longest bear market since World War II.
16 And in 1948, the next longest bear market, was
17 34 months.
18 This 2000 bear market is arguably the
19 worst bear market since the depression in 1929.
20 Of course, there is a disconnect between the
21 bear market and the economy, unlike 1929.
22 Even though we beat our total fund
23 benchmark over one, three, five and ten year
24 periods, and our comparative investment
25 performance among peers ranks in the top five,
259
1 fifth percentile for 10 years, 30th percentile
2 for five years ending last fiscal year 01-02,
3 the total fund has suffered significant losses
4 of past two and a half years.
5 The FRS surplus dropped from an all-time
6 high of 14.5 billion ending 00-01, to
7 12.8 billion ending 01-02.
8 GOVERNOR BUSH: That's an actuarial surplus?
9 MR. STAPANOVICH: Yes, it is.
10 We expect the surplus to decrease this
11 fiscal year as well. Consequently, it is
12 reasonable to expect that the FRS total future
13 cost levels, that is employer contribution
14 rates, will rise.
15 The 1999 capital market assumptions that
16 led to higher investment objectives than what
17 is being proposed today was based on an
18 unprecedented 17-year circular bull market.
19 Over that 17-year period, there were only three
20 bear markets. Not one of those three bear
21 markets in 1987, 1990 and 1998 lasted more than
22 four and a half months. This bear market
23 lasted 31 months.
24 Today, generally forward-looking capital
25 return assumptions across all asset classes are
260
1 being revised downward all over the country.
2 For example, our general consultant's 2000
3 capital market assumption for domestic equities
4 is more than one full percentage points lower
5 than compared to three years ago.
6 Warren Buffet has said recently that
7 domestic equities may return as little as
8 6 percent annually over future years, 10 years
9 or more.
10 I will move to the process now, Governor,
11 as to how we arrived at our recommendations.
12 The principal work on this asset
13 liability/asset allocation study was performed
14 by our a general consultant, an independent
15 general consultant who worked closely with our
16 staff, in particular our senior investment
17 policy officer, Dr. Francis, and our chief
18 investment officer Barbara Jarriel.
19 GOVERNOR BUSH: Who was your consultant?
20 MR. STAPANOVICH: Ennis Knupp out of Chicago,
21 and we also worked with Collins Associates, a
22 worldwide consultant that works at the investment
23 level for ours that is considered to be our
24 investment level consultant.
25 In addition to using Cowan and
261
1 predominantly the principal general consultant,
2 Ennis Knupp, we also involved an investment
3 advisory council.
4 We reached out and also got information
5 from a lot of different sources, but in
6 particular Frank Russell and Company, which
7 many of you heard of, Wilshire and Associates,
8 Edison and Associates, Barclays, so we spent a
9 lot of time researching outside of just our
10 stable of managers but talking to other folks
11 as well.
12 The IAC, the Investment Advisory Council,
13 participated in a day-long workshop on this
14 topic in November and two-day follow up
15 workshop on policy discussion in December.
16 We pretty much consumed an entire IAC
17 quarterly meeting as well on this topic. The
18 majority of the IAC approved staff
19 recommendations which I will elaborate on later
20 in the presentation.
21 The process for this 2000 study was
22 divided into four phases. The first two were
23 highly analytical and very similar to what we
24 did in 1999.
25 This 2002 study was more comprehensive
262
1 than the 1999 study because of phase three and
2 phase four, which were review of peer practices
3 and the SBA's comparative advantages and
4 disadvantages as an organization.
5 In phase one, the asset liability modeling
6 phase provided an analysis of the Florida
7 Retirement System Risk Reward Profile at the
8 broadest level, and that is how the plan's
9 future cost levels and funded levels are
10 expected to vary under different asset
11 allocations between fixed income and other
12 asset classes.
13 If you refer to -- and periodically here
14 for a few minutes I will refer you to slides.
15 If you will refer to your slides, slide six and
16 seven, you can see an illustration of what I am
17 talking about.
18 And in that illustration, what took place
19 was 500 different scenarios were run using a
20 probablyistic Monte Carlo simulation and that's
21 how we arrived at some of the conclusions.
22 GOVERNOR BUSH: What kind of simulation?
23 MR. STAPANOVICH: It's a standard tool model
24 used in the business, and it's a Monte Carlo
25 simulation. It's not Monty Carlo. We didn't --
263
1 in other words, we examined projections of the FRS
2 funded status employee contribution obligation for
3 the next 15 years -- that was the horizon we
4 used -- of a variety of different asset
5 allocations and possible future economic and
6 market conditions. And that's summarized in slide
7 10.
8 In phase two, the second of the two
9 analytical phases, the portfolio modeling
10 phase, fully optimization techniques were used
11 to derive specific asset allocation that would
12 most sufficiently meet the fund's investment
13 objective, given new capital market assumptions
14 about long-term returns and risks for each of
15 our asset classes.
16 Slides 13 through slide 18 illustrate what
17 took place in phase two.
18 In face three, review of peer practices.
19 While we placed great weight on the analytics
20 behind our recommendation, we also believe that
21 the best asset allocation is one that meets
22 additional tests.
23 It must not only perform under our
24 modeling assumptions, but it also must
25 satisfactorily pass the peer comparison test.
264
1 And slide 20, 21, 22, and in summary if
2 you look at slide 23, that would be worthwhile,
3 and I will reflect back to them as I get into
4 the rationale for these recommendations; that
5 would give you an idea of the peer comparison.
6 The universe used for peer comparison is
7 cost effective measurement; it's the most
8 comprehensive source of peer comparison data
9 available to funds like ourselves.
10 In addition to CEM, we also used TUCS, the
11 Trust University Comparison Services, and doing
12 some comparative performance percentile
13 rankings presented to the ICC quarter to
14 quarter and on an annual basis.
15 In phase four, the final phase, review of
16 the SBA's comparative advantages and
17 disadvantages. We considered our comparative
18 advantages and disadvantages to ensure that the
19 fund's total investment plan recommendation
20 capitalized on our strengths as an
21 organization, which involves people.
22 Governor, Members, the staff
23 recommendations, in summary the principal
24 recommendations are as follows.
25 One, revise the investment return
265
1 objective from 4.3 percent plus inflation to
2 4.0 plus inflation.
3 Two, establish a new global asset class.
4 Three, change the asset allocation. And
5 again, you can see that on page 3 of your memo,
6 but in effect, we would be moving domestic
7 equities to 50 percent, it would be 40 percent
8 static; we would go from 54 to 48 percent, and
9 international equities we would go from 12 to
10 14 percent, but we would introduce a global
11 asset class which would be split, international
12 and domestic.
13 The asset class would be rolled into the
14 international asset class; it's not going to
15 require additional personnel, additional space
16 or additional cost. The natural fit from the
17 analysis we have done would be the
18 international asset class.
19 Then in effect, what you have is
20 2 percent, if the benchmark is MSCI, World SUS
21 you would then have 2 percent of the four be
22 split, moved to domestic equities, 2 percent
23 split would be moved to international,
24 therefore, you would have a 50 percent exposure
25 to domestic equities and a 16 percent exposure
266
1 to international.
2 But keeping in mind on the 4 percent side,
3 that would give us some ability, the global
4 managers, to move off what is a static target
5 and would become more of a tactical allocation.
6 Fourth and final recommendation would be
7 the implementation of asset allocation policy
8 rates. And because the need to evaluate and
9 select new managers -- and we are anticipating
10 four to five new global managers with respect
11 to the global asset class -- and real estate,
12 because real estate is recommended to go from a
13 4 to 7 percent allocation, and we would be
14 diversifying that asset class in terms of doing
15 other types of investment vehicles in the real
16 estate area, other than solely direct
17 investment, we propose to begin implementation
18 on May 1st and phase in the new policy rates
19 over four quarters so that we don't have a
20 major cost impact, and the implementation of
21 moving assets would take place over four
22 quarters.
23 Governor, I will answer any questions in
24 terms of getting into the rationale for the
25 recommendations if you would like. I know it's
267
1 been a long day.
2 GOVERNOR BUSH: Yeah, we need to talk about
3 this.
4 MR. STAPANOVICH: I will move on to kind of
5 the views and --
6 GOVERNOR BUSH: Hang on. We need to talk
7 about it.
8 TREASURER GALLAGHER: When we take our
9 investment return objective, which right now is
10 4.3 plus inflation, and we drop it to 4.0 plus
11 inflation, that lowers the goal set by you and
12 your staff on what they are supposed to return.
13 At the same time, let's say you reach that new
14 lower goal, it puts pressure on the legislature
15 and the executive branch to increase the funding
16 in order to meet the objectives of the retirement
17 system.
18 That said, your consultants give us a
19 50/50 chance of having it fully funded and
20 lowering these goals don't help it a lot.
21 MR. STAPANOVICH: In the modeling that we
22 did, Treasurer, we considered that because you are
23 right, the challenge is the investment objective.
24 That's really what it's all about, because
25 investment objective's idea, of course, is to meet
268
1 the liability stream. And we are a young fund,
2 which means we need to be more aggressive say than
3 funds that are more mature funds.
4 In running the iterations, we are
5 satisfied -- and we can demonstrate this,
6 Dr. Francis, if you want to put up a slide --
7 we can demonstrate that the 4.0 percent
8 objective in terms of risk-adjusted return
9 still, without undue risk, will meet our
10 liabilities.
11 We think in 15 years, with our new -- and
12 again, in terms of public asset classes, we are
13 still staying at 66 percent exposure to
14 international domestic equities. Anything we
15 call, what we call equities for the sake of
16 these modeling exercises, anything other than
17 fixed income is equity, so real estate would
18 fall in that category, and so on, international
19 alternatives.
20 So we would actually move from where we
21 are, 74 percent to 79 percent. But having said
22 that, even on a risk-adjusted basis, the
23 4 percent gets us to where we want to meet our
24 liabilities to have a better than 50/50 chance
25 to be a hundred percent funded 15 years from
269
1 now, but doesn't incur any additional risks
2 versus the 4.3 objective.
3 So we have looked at that, because you are
4 right; if we put -- take two little -- if we
5 don't set our objectives high enough, it puts
6 pressure on the contribution rate, because we
7 are not being aggressive enough to get capital
8 market returns.
9 TREASURER GALLAGHER: This is a 30-year
10 objective, right?
11 MR. STAPANOVICH: Uh-huh. On this particular
12 model, we are using 15 years, and we spent a lot
13 of time talking about that, Commissioner, because
14 it's going to be 30 years -- funds are using
15 anything from five to 30 years. We are long-term
16 investors, so we use 15 years.
17 We could have used 30 years, but to try to
18 look out in terms of the capital market
19 assumptions that you make and setting your
20 objectives, we'll come back and do this again
21 in three years.
22 TREASURER GALLAGHER: One of the problems, I
23 don't think that it's -- that we do ourselves a
24 favor by changing investment return objectives
25 every three years, where we are talking about a 15
270
1 to 30 year expectation. Something, other than
2 paying a bunch of consultants to come up with a
3 bunch of new numbers.
4 GOVERNOR BUSH: And then you pay more than
5 one consultant that provided basically -- it
6 looked like they suggested basically no change at
7 all from where we are. There were two or three
8 that you mentioned.
9 MR. STAPANOVICH: The problemwise, Governor,
10 is in the capital market assumptions. If we stay
11 at the 4.3, we are going to need to increase our
12 equity exposure, so say going from we are today,
13 74 percent, and we are recommending going to 79,
14 we literally would have to go to something like 84
15 and 94 percent to reach a 4.3 percent objective.
16 TREASURER GALLAGHER: You've got to watch
17 doing that because you are increasing your risk.
18 MR. STAPANOVICH: That's our point. If you
19 look at slide 9, you can kind of see the continuum
20 where the incremental return for the amount of
21 risk you are taking diminishes as you move up
22 beyond 74 percent.
23 TREASURER GALLAGHER: Exactly. So you
24 wouldn't go up to 90 because it wouldn't make
25 sense to.
271
1 MR. STAPANOVICH: That's correct.
2 TREASURER GALLAGHER: So that's not really an
3 alternative if, in fact, we are at 4.3, is it?
4 GOVERNOR BUSH: Have other states lowered
5 their investment return objectives, and,
6 therefore, changed -- is this a common thing
7 because Warren Buffet said it should be so, and
8 everybody just kind of follows?
9 MR. STAPANOVICH: No, in our study all across
10 the country, everyone, because of the new capital
11 market assumptions -- there is a slide. Jim, do
12 you know what slide that is they can refer to?
13 Because, we went out, and that was part of the
14 peer comparison that we did; we went out and
15 looked at other consultants and what they were
16 doing with their funds.
17 And you can see on -- I think it's 16.
18 You can see what other consultants are
19 recommending in terms of the capital --
20 domestic equities returns. And Governor, if
21 you go from 10 and a half to 3.9 --
22 GOVERNOR BUSH: That's not very optimistic.
23 MR. STAPANOVICH: That's not realistic. We
24 all -- that's not what we are talking about here
25 today, but obviously with lower equity exposures,
272
1 we then really would put the fund at risk because
2 in terms of trying to meet future liability.
3 GOVERNOR BUSH: The peer issues you don't --
4 just out of curiosity, has there been a consistent
5 rachetting down of expectation of return?
6 That's on the next page, I think. It
7 doesn't have the -- it just has the asset
8 allocations more than --
9 JIM: Right. In terms of what our peers do,
10 they are largely governed by the thinking of these
11 major consulting firms.
12 GOVERNOR BUSH: They sell the same service
13 over and over again.
14 JIM: There is certainly an element of it.
15 TREASURER GALLAGHER: Let's face it, we got a
16 pretty tough stock market; everybody wants to look
17 better. What's the best way to do that? Lower
18 the goals.
19 GOVERNOR BUSH: You are still compared to
20 your peers, though, aren't you? Isn't that the
21 way you brag, that's the ultimate way to brag, is
22 that we did poorly because the market did poorly,
23 but we did better than --
24 TREASURER GALLAGHER: Better than what -- we
25 met our goals; you see, it depends on where the
273
1 goal is to whether or not we met it.
2 GOVERNOR BUSH: I think you are absolutely
3 right. As we measure how we do with state of
4 California, New York, Texas, Ohio, whatever,
5 lowering our potential -- our projected returns
6 doesn't matter, doesn't it? It's the actual
7 return.
8 TREASURER GALLAGHER: I don't
think that 9 really tells -- it's like money managers.
I never 10 met one yet that wasn't
in the top quartile. 11 Every one
of them. Have you ever met one not
in 12 the top quartile when they give
you a 13 presentation? 14 MR. STAPANOVICH: No. 15 TREASURER
GALLAGHER: I haven't either. I 16 have been
doing this for a long time and I've 17
never met anybody -- 18 GOVERNOR BUSH: Who is below
peers in our 19 little world? If we are
always above peers, 20 first, for a one-year average, three-year average, 21
10-year average; we are always above our peers. 22
So who is
below? 23 MR. STAPANOVICH: In our particular
universe, 24 we
use
the Trust Universe Comparative Service, 25 TUCS, which is
the biggest universe of this kind, 274 1 California,
New York, all the large ones, and 2 there is
about 21 funds that are in it. But
I 3 can -- 4 GOVERNOR BUSH: I
would just be curious. 5 TREASURER GALLAGHER:
Do they tell everybody 6 the same thing or are
they all
in the top 7 quartile? 8
MR. STAPANOVICH: No, there is no 9 manipulating
that. Your numbers are what they 10 are. 11
GOVERNOR BUSH: You can give it later. 12 That's not essential today,
but -- 13 TREASURER GALLAGHER: I would like, if
you 14 all wouldn't mind, because we
are late here, and I 15 would like to take this
item, just put it off if 16 we could to
the next meeting. Does anybody mind
17 that? 18 GOVERNOR BUSH: No, I don't mind at
all. I 19 just had a question. 20 If
we are raising the allocation for real 21 estate and
equities overall, at a time when the 22
real estate market is at the peak
-- in other 23 words, it's a
very interest rate, low interest 24 rate driven
analysis, I would think, to suggest 25 that
we
lower bonds -- are we lowering bonds?
275 1 MR. STAPANOVICH: Bonds would go from 2
26 percent, which includes a 1 percent cash 3 target
-- let me lump into a fixed income --
would 4 go from 26 to 21. 5 GOVERNOR
BUSH: Lower bonds, and then raising 6 real estate,
I guess lowering the bonds right now. 7 TREASURER GALLAGHER:
That's one of the
8 reasons I would like some time to just absorb
all 9 this and feel more comfortable with it.
Give 10 Coleman a chance to get
around, do better selling 11 on it.
12 MR. STAPANOVICH: Governor, we could do this,
13 we'll certainly get around and
visit with you 14 individually. But we can hold
a workshop with the 15 trustees. 16 TREASURER GALLAGHER: We are
not in a 17 workshop mood right now. 18 MR. STAPANOVICH: If
our objective is going 19 to be something
different than 4.0, we would 20 certainly need to revisit what
the allocations 21 would be across asset classes, because
I can
tell 22 you the 4 percent fits with the
recommended asset. 23 GOVERNOR BUSH: This is important
enough to 24 catch us when we are
in the morning. 25 MR. STAPANOVICH: I know it's
been
a long 276 1 day, Governor. 2 TREASURER GALLAGHER:
I move we take item 9 3 and
postpone it until the next meeting. 4 GENERAL
CRIST: Second. 5 GOVERNOR BUSH: Motion to defer
until the 6 next meeting and a second,
item 9. Without 7 objection, the item is deferred.
8 Appreciate your good advice on that, 9 Treasurer/Commissioner.
10 TREASURER GALLAGHER: Let me mention one 11 other thing.
Included in 9 is your adoption for 12 the total fund
investment plan, right? 13 MR. STAPANOVICH: Yes. 14
TREASURER GALLAGHER: On page 2, under 15 item 4, the
executive director,
this is probably a 16 nic-picking thing, but
I know it does speak to it 17
later on in objectives, but where it says
the 18
executive director is charged with developing 19 specific
asset classification investment
portfolio 20 objectives, second paragraph -- and
policy 21 guidelines, comma, for approval by the board. I
22 think that
needs to be added there. 23 MR. STAPANOVICH: Okay. 24
TREASURER GALLAGHER: Because that's what you 25 are doing
now; it needs to be there as
opposed 277 1 to -- 2 GOVERNOR BUSH: That's what we
were
trying to 3 do but we didn't do it. 4
Item 10. 5 TREASURER GALLAGHER: One of the
other things 6 that, just for whatever it's worth, on
page 4, 7 what we are doing here on our one
year is we are 8 looking at a -- percentiles
have gone from 11 9 positive to 11 minus on
expectations on the risk 10 returns. When you get a
chance, I would like 11 someone to sit
down and go over that with me, too. 12 GOVERNOR BUSH:
Item 10. 13 MR.
STAPANOVICH: Item 10, Dr. Nicholson of 14 the Florida
Hurricane Catastrophe Fund
has a 15 legislative proposal concept he would like
to 16 share with you. 17 GOVERNOR BUSH: That's
a lot of stuff in 18 front of
you that you are not going to go through,
19 right? 20 DR. NICHOLSON: We have discussed some 21 legislative
ideas with our advisory council, and 22 basically there
are seven concepts; three are 23 substantive concepts; the other four
are 24 technical. 25
The substantive concepts, the first has to
278 1
do with increasing the capacity of the
CAT 2 Fund. Currently the capacity of the
CAT Fund 3 is $11 billion and it's limited by law.
4
There is a way it starts to grow,
once we 5 have enough subsequent season capacity to
match 6 the initial season capacity. 7 But what we are proposing
here would be to 8 increase the initial and subsequent season
9 capacity with growth in
exposure in the state. 10 Currently the underlying
retention, or if you 11 will, the aggregate industry deductible
12 increases in that same fashion. 13 GOVERNOR BUSH: So we
are not going to be 14 changing our exposure proportionally or over
the 15 proportion that we currently have? 16 DR. NICHOLSON:
Right. 17 GOVERNOR BUSH: Is this the version of what 18
you just said? 19 DR. NICHOLSON: Right. That
would be funded 20 by an additional
assessment authority. We have 21 currently four percent assessment
authority we can 22 use in any one year, six percent
in the aggregate 23 for all potential storms in the future.
24 Currently,
however, if we had to bond, we 25 would
only use about 2 percent of that 279 1 assessment authority.
So we are talking here 2 going from four
to six, or going from five to 3 eight
instead of four to six. That's how it
4 would be funded. 5 GENERAL CRIST: Assess who?
6 DR.
NICHOLSON: The assessment is required by 7 law. If
our
cash is not sufficient to pay for 8 hurricanes, then
we would assess all property 9 casualty insurance companies, with
the exclusion 10 of workers workers' compensation writers, up to
11 4 percent of their gross direct written premiums 12 from
the prior year. 13 GOVERNOR BUSH: You yourself? 14 GENERAL
CRIST: Insurance companies. 15 DR.
NICHOLSON: Right. 16 GOVERNOR BUSH: They pass it
along, so we all 17 pay it. 18
TREASURER GALLAGHER: Other property and 19 casualty writers.
20 GENERAL CRIST: We
are not voting on this 21 today,
are we? 22 TREASURER GALLAGHER: Yes, we are. 23 GENERAL
CRIST: I
thought it was for 24 discussion. 25 TREASURER GALLAGHER: No,
this is for them to 280 1 take
to the legislature. 2 GOVERNOR BUSH: It says discussion only.
You 3 don't want to do anything? 4 DR.
NICHOLSON: If we are going to take this 5 to the
legislature, if we are going to get
this 6 thing in bill form -- 7
GOVERNOR BUSH: So you need -- 8 DR.
NICHOLSON: Right. 9 The second concept is including
surplus 10 lines policyholders in the CAT Fund assessment
11 base. 12 Surplus lines are those lines of business
13 that are written by insurance companies that 14 are
not
considered authorized insurers; they do 15 not have
a certificate of authority in
the 16 State of Florida. 17 However, they
operate in the
market to 18 facilitate high-risk business and other sorts
19 of situations. Included in the
assessment base 20 would bring the assessment base from
19 billion 21 to 20 billion.
22 GOVERNOR BUSH: There is a billion dollars 23 worth
of surplus lines? 24 DR. NICHOLSON: Approximately. 25
GOVERNOR BUSH: How do they think about this? 281
1 DR. NICHOLSON: They don't like it. 2 TREASURER
GALLAGHER: Here's the issue.
3 Large numbers that can't get coverage
from State 4 Farm, for a 3 million-dollar house on the beach,
5 they can't --
they are not going to sell it to 6
them. So when you have a big storm, they don't
7 pay their fair share because they got their policy 8 with surplus
lines. And we did add them to the 9 assessment base of
citizens. 10 GOVERNOR BUSH: Right. But the
flip side, 11 wouldn't it be --
I think I am a surplus line 12
insured because I can't get insurance from any 13 other
source. And I paid for it through my nose. 14 TREASURER
GALLAGHER:
You may be with 15 Citizens. 16 GOVERNOR BUSH: I am
on my way probably. I
am 17 a little condo. 18 TREASURER GALLAGHER: Then
you are not a 19 surplus lines. 20
GOVERNOR BUSH: That's what I have, I paid
my 21 insurance, I thought it was -- 22 TREASURER
GALLAGHER: You are probably with 23 Citizens. 24 GOVERNOR BUSH:
It happened this year. Maybe 25 it happened
this year. Last year I know I was 282 1 with
Surplus Lines. I couldn't get insurance. 2 TREASURER GALLAGHER: Then you
were with JUA. 3 GOVERNOR BUSH: The JUA has to be
priced even 4 higher, right? 5 TREASURER GALLAGHER: Supposedly
right now 6 it's priced too low. 7 DR. NICHOLSON: Assessments
would be only 8 levied -- 9 GOVERNOR BUSH: They are
not here to argue 10 their case, Surplus Line
Carriers Association of 11 America. 12 DR. NICHOLSON: They argued
in front of our 13 advisory council, and I argued
with them before, 14 but they are not here. 15
TREASURER GALLAGHER: They get to fight in 16 the legislature. 17
GOVERNOR BUSH: Okay. 18 DR. NICHOLSON: The third substantive issue 19 has
to do with
-- I guess we can either go way
20 with this particular issue, and I had discussions 21 with
Treasurer Gallagher the other day about this. 22
One is
--
what it deals with is
an 23 accounting issue that requires the booking of 24
assessment liabilities on insurance company's 25 financial statements; so
what we would have to 283 1
do is accrue a total
liability, which is a very 2 onerous type requirement. 3 That
requirement comes about through the 4 National Association of Insurance
5 Commissioners, what is called a statement of 6 statutory accounting principal
number 35. 7 We are currently working with the NAIC to
8 get them to change their interpretation of that
9 particular
principal. If we can do that, 10 statutory
change will not be necessary and 11 that's
-- 12 TREASURER GALLAGHER: The issue here is the 13
NAIC accounting rules have stated that an 14 insurance
company must carry on their books, on 15 their financial
statement, a liability for any 16 potential assessments by any
assessing entity like 17 guarantee funds, things like that, which can
18 assess them mostly 1 to 2 percent. So
they are 19 going to carry that as a
liability. 20 Well this is a huge number for anybody 21
that visits in Florida. The same issue
exists 22
for the Hawaii Catastrophe Fund and the 23 California Earthquake
Fund, so what we are 24 appealing to is, look, leave
these
funds out of 25 that. This is a
highly unusual -- the other 284 1 ones
happen all the time. They can be ongoing 2 any
time you have an
insolvency, et cetera. 3 This is hopefully a way we
build up cash 4 once
every 50-year deal or something like that,
5 so it shouldn't be required to be carried on 6 the
books as a liability. 7 That's
the issue here. We are going to 8 try to
get the NAIC to
back off on this so we 9 don't need
to make a legislative change, and I 10 am
not real sure that a legislative change 11 works, but maybe
Jack has got an idea on how it 12
might. 13 GOVERNOR BUSH: All right, Jack. Move on. 14
DR. NICHOLSON: There are four technical 15 changes dealing with
clarifying the prior fiscal 16 year as far
as -- 17
GOVERNOR BUSH: Is there a motion? 18 TREASURER GALLAGHER: I move them
all. 19 GOVERNOR BUSH: Take all of this and present
20 it to the legislature as the State Board
21 Administration's proposed
legislative agenda for 22 the CAT fund. 23
TREASURER GALLAGHER: Motion. 24 GENERAL CRIST: I have
a
question. It was 25 presented to me that this was
for discussion only 285 1 today and I
don't know why we are voting on it,
2 frankly. 3 But be that as
it may, you're recommending 4 that we increase the size
of the CAT Fund, is 5 that the proposal?
We increase the assessment 6 indirectly to the people
through the companies? 7 DR. NICHOLSON: It would only
be in a certain 8 situation. But the CAT
Fund capacity would grow 9 relative to the total exposure
in the state. It 10 would adjust with exposure growth
in the state. 11 Exposure growth is 4 percent.
The CAT Fund 12 capacity would grow 4 percent.
13 TREASURER GALLAGHER: Let me give it to you
a 14 different way, so you understand this. 15 What
this change on this assessment does 16 is allow the
CAT Fund to ensure for insurers a 17 higher number
than the 3.8 billion -- that's 18
where it starts, I
think it's where we are 19 today
-- 4
billion -- starts when insurance 20 companies
pay the first 4 billion. Then we pay 21
up to 11 billion. 22 What we are trying to do
is increase the 23 11 billion so it goes higher. 24
Now
that's reinsurance that is a huge 25 amount cheaper that
the companies would pay for 286 1 than if they went
out in the reinsurance 2 market. That's why the reinsurers don't like
3 this. 4 This is a huge savings on a
yearly basis 5 for the homeowner. In order to
do that, we 6 have
to have a higher assessment base, which 7
might never happen, might happen in 50 years, 8
but the year-to-year savings that's passed 9 through to the
homeowner based on the 10 reinsurance costs is
sizeable. So there is a 11 major plus to the
homeowner in having this -- 12 GOVERNOR BUSH: You are
shifting the mix of 13 the insurance layers? 14
TREASURER GALLAGHER: Uh-huh, and you are 15 getting the
homeowners advantage of the cheaper 16 one, a larger,
cheaper one. 17 GENERAL CRIST: Okay. 18 TREASURER GALLAGHER: The
only way you can do
19 that is you have to have an assessment
base higher 20 that would allow -- 21
GOVERNOR BUSH: I think that would be on a 22
net basis a savings, but we are expanding our --
23 TREASURER GALLAGHER: Right, if you have a 24 storm this
summer, nobody wins. If it goes five 25 years,
everybody wins. 287 1 GENERAL CRIST:
You also said the assessment 2 may not be
automatic,
it may never happen. 3 TREASURER GALLAGHER: That's
correct. What 4 happens
is when the storm hits, it triggers by 5 they run out
of cash, they have to issue bonds. 6 Right now
they have about four, almost $5 million 7 in cash. 8 GOVERNOR
BUSH: This is a good time to be 9 doing that because
the reinsurance
market is 10 creating really high pricing. 11
TREASURER GALLAGHER: They won't tell you 12 that in
reinsurance. They
will tell you they can 13 handle it all,
but it's very expensive. 14 GENERAL CRIST: Second. 15
GOVERNOR BUSH: There is a motion and a 16
second. Without objection, the item passes. And 17 God
Bless America. 18 (The proceedings concluded at 2:40 p.m..) 19 20
21 22 23 24 25 288 1 2 CERTIFICATE OF
REPORTER 3 4 5 6 STATE OF FLORIDA ) 7
COUNTY OF LEON ) 8 9 I,
SANDRA L. NARGIZ, RMR, CRR, certify that I 10
was authorized to and did stenographically report the 11 proceedings
herein, and that the transcript is a true 12 and complete record of
my stenographic notes. 13 I further certify that I am not
a relative, 14 employee, attorney or counsel of any of the
parties, 15 nor am I a relative or employee of any of
the parties' 16 attorney or counsel connected with the action, nor am
I
17 financially interested in the action. 18 WITNESS my
hand and official seal this 5th 19 day of February, 2003. 20 21
22 ______________________________ 23
SANDRA L. NARGIZ, RMR, CRR 100 SALEM COURT 24 TALLAHASSEE, FL
32301 850-878-2221 25
|
Cabinet
Affairs
