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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 __________________________________ Representing: Division of Bond Finance Financial Services Commission Department of Veterans' Affairs Department of Revenue 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, February 25,
2003 commencing at approximately 9:40 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 2 APPEARANCES: Representing the Florida Cabinet: JEB BUSH Governor CHARLES H. BRONSON Commissioner of Agriculture CHARLIE CRIST Attorney General TOM GALLAGHER Chief Financial Officer * * * 3 I N D E X DIVISION OF BOND FINANCE (Presented by Ben Watkins) ITEM
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14 FINANCIAL SERVICES COMMISSION (Presented by Kevin McCarty) ITEM
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81 DEPARTMENT OF VETERANS' AFFAIRS (Presented by Rocky McPherson) ITEM
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25 DEPARTMENT OF REVENUE (Presented by James Zingale) ITEM
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30 STATE BOARD OF ADMINISTRATION (Presented by Coleman Stipanovich) ITEM
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36 CERTIFICATE OF REPORTER
37
5
1
P R O C E E D I N G S
2
(The agenda items commenced at 9:40 a.m.)
3
GOVERNOR BUSH:
Division of Bond Finance.
4
CFO GALLAGHER: Motion
on the minutes.
5
GENERAL CRIST:
Second. 6 GOVERNOR BUSH: Moved and seconded.
7 Without
objection, the item passes.
8
By the way, the next Cabinet meeting will
9
be Thursday, March 13.
10
Item 2.
11
MR. WATKINS: Item 2 is
a resolution
12
authorizing the issuance and competitive sale
of
13
up to $510 million of Turnpike Revenue
Refunding
14
Bonds.
15
CFO GALLAGHER: Motion
on 2.
16
GENERAL CRIST:
Second. 17 GOVERNOR BUSH: Moved and seconded.
18 Without
objection, the item passes.
19
MR. WATKINS: Item 3 is
a resolution
20
authorizing the issuance and competitive sale
of
21
up to $85 million of Save-Our-Coast Refunding
22
Bonds.
23
CFO GALLAGHER: Motion
on 3.
24
GENERAL CRIST:
Second.
25
GOVERNOR BUSH: Moved
and seconded.
6
1 Without
2
MR. WATKINS: Item 4 is
a resolution
3
authorizing the issuance and competitive sale
of
4
up to $58 million in State University System
5
Refunding Bonds.
6
GENERAL CRIST:
Motion.
7 CFO
GALLAGHER:
Second. 8 GOVERNOR BUSH: Moved and seconded.
9 Without
objection, the item passes.
10
MR. WATKINS: Item 5
and 6 are companion
11
items dealing with the selection of service
12
providers for the Everglades Restoration
Bonding
13
Program. And if I may
very briefly describe for
14
you the process behind the recommendation
being
15
made this morning.
16
GOVERNOR BUSH:
Sure.
17
MR. WATKINS: The
process involves an RFP
18
process. This is for
selection of underwriters
19
and bond counsel.
20
We designed an RFP with substantive
21
questions that had scores associated with
those
22
designed to elicit the qualifications of the
23
individual firms.
24
We then established a selection committee
25
of individual members to grade the responses
to
7
1
the RFPs based on their responses to those
2
scores. Each of the
individual members then
3
independently grades the responses to the
RFPs;
4
based on that score they rank the firms.
5
The individual
rankings of the firms are
6
then aggregated to come up with an overall
7
recommendation of the top ranked firms. So
8
that's the process that we utilize in making
9
the recommendations to you this morning.
10
I would like to publicly acknowledge the
11
work of Kevin Stanfield and Ingrid King;
Kevin
12
with Treasurer Gallagher's office, and Ingrid 13
King is with the Division of State Lands
and
14
Department of Environmental Protection.
15
They were the outside members of our
16
selection committee, and it's a very
important
17
process and requires a lot of time, effort
and
18
energy and painful review of responses to
RFPs.
19
So I want to thank them for their
contribution
20
in helping us with this process.
21
CFO GALLAGHER: Glad to
have them back to
22
work after all this.
23
MR. WATKINS: Thanks
for letting us borrow
24
them, Treasurer Gallagher.
We appreciate that.
25
COMMISSIONER BRONSON:
Motion on 5.
8
1
GOVERNOR BUSH: There
is a motion.
General?
2
GENERAL
CRIST:
Second.
3
Just a quick question.
You were
4
mentioning the process, and I imagine one of
5
the questions is the cost?
6
MR. WATKINS: One of
the things, especially
7
with bond counsel, we prescribe a limit on
the
8
level of compensation.
So within the cap we
9
provide them the latitude to propose
something
10
under our
cap. So an element of the
scoring is
11
cost, absolutely, both for bond counsel and
for
12
underwriters.
13
GOVERNOR BUSH: There
is a motion and second.
14
Any other discussion?
15
The item passes without objection; both
16
items, I guess.
17
MR. WATKINS: The
underwriting firms, for
18
your-all information, the top ranked
underwriting
19
firms are Solomon, Smith, Barney and Goldman
Sax.
20
Those are two top ranked firms out of 24
firms
21
responding to the RFP.
22
And in item 6, for bond counsel we
23
received 12 responses and Squire, Sanders and
24
Dempsey is the top-ranked law firm being
25
recommend.
9
1
GOVERNOR BUSH: There
is a motion on item 6
2
and a second. Any
other discussion?
3
Without objection the item passes.
4
MR. WATKINS: Item 7 is
a resolution
5
authorizing the purchase of a surety bond to
be
6
substituted in lieu of a cash reserve for the
7
Preservation 2000 in Florida Forever Bonding
8
Program. In effect,
this resolution does three
9
things.
10
It authorizes the purchase of a surety to
11
be substituted for a cash reserve; it amends
12
the bond resolution for the Preservation 2000
13
and the Florida Forever programs, requiring
14
that the excess proceeds, the cash generated
15
from substituting a financial product for the
16
reserve fund, that that money is transferred
17
into the Preservation 2000 Trust Fund and the
18
Florida Forever Trust Fund, which is where
the
19
proceeds of the bonds would have gone had we
20
not used the portion of the proceeds of each 21
prior bond issue to fund a reserve fund for
the
22
two bond programs.
23
And thirdly, it incorporates a statement
24
of intent that the proceeds of these bond
25
issues are to be used for a purpose
consistent
10
1
with the constitutional authorization for
each
2
of the bonding programs.
3
COMMISSIONER BRONSON:
Motion on 7.
4
CFO GALLAGHER: What we
are doing here is we
5
are preserving this money from other
6
appropriations by
putting it in the trust fund?
7
MR. WATKINS: It moves
them back to the trust
8
fund. It's still up to
the legislature to decide
9
how to appropriate those monies.
10
There is no budget authority for those
11
monies, so the legislature still has to
address
12
the question of how the monies are going to
be
13
used.
14
What it
does is put them in the trust fund
15
where they would have gone anyway had we not
16
funded a reserve with this.
So it's sort of
17
half of the equation.
18
GOVERNOR BUSH: The second -- in our
budget,
19
in our recommendation to the legislature, we
are
20
proposing transferring the monies that we are
--
21
that are being proposed to be transferred
back
22
into these accounts to the Everglades Trust
Fund,
23
so as to have a source of money to continue
the
24
state's commitment for funding the
Everglades.
25
And that, I think it has symmetry. We are
11
1
taking environmental funds to go to the
highest
2
priority.
3
Secondly, in a bazaar twist of fate,
4
environmental groups are suing the state
based
5
on a law that passed that makes it impossible
6
to use bonds for the Everglades funding: Irony
7
of all ironies.
8
So this is the strategy to fund the
9
Everglades for this year.
And I would hope
10
that people would work to -- would support
this
11
and work with the legislature to encourage
them
12
not to take these monies, which they can
still
13
take. They can take it
out of the escrow
14
accounts and put a surety bond in, just as we
15
are proposing be done
here, and they can take
16
it out of the accounts as was attempted last
17
year where I vetoed the transfer.
18
So this is only a one-step process towards
19
the ultimate goal which is to have
20
$300 million, I guess, of these -- this is
what
21
this money totals up to -- to be put in
22
Everglades Trust Fund where we have a stable 23
source of money for the next two or three
24
years.
25
CFO GALLAGHER: What we
are doing here is we
12 1
are putting -- issuing a bond, with the money
that
2
we are releasing by that bond we are putting
into
3
what trust fund?
4
MR. WATKINS:
Preservation 2000 Trust Fund
5
and Florida
Forever Trust Fund, depending on what
6
the source of the monies is.
7
We got 307 million; 260 million would go
8
to Preservation 2000 Trust Fund because those
9
relate to the Preservation 2000 bonds, and
the
10
remainder 37 million, 47 million, goes to
11
Florida Forever Trust Fund because that was
12
funded, that's related to the bond issues for
13
Florida Forever.
14
GOVERNOR BUSH:
Treasurer, our hope -- my
15
plan, which was foiled by the lawyers, was to
16
transfer this directly to the Everglades
Trust 17
Fund. Apparently you
can't.
18
CFO GALLAGHER: Here's
your other problem.
19
The legislature needs to change these trust
fund
20
rules in order to allow it to go to the other
21
trust fund.
22
In other words, the law needs to be
23
changed on this trust fund, these two trust
24
funds, in order to allow the money in these
25
trust funds to
be transferred to the Everglades
13
1
Trust Fund.
2
MR. WATKINS: That's
correct.
3
GOVERNOR BUSH: That's
our plan.
4
CFO GALLAGHER: So you
have a bill or
5
somebody has a bill to change the trust fund
law
6
of those two trust funds to allow it to flow
into
7
the Everglades.
8
MR. WATKINS: Yes, sir,
that's got to work
9
itself through the legislative process,
that's
10
correct.
11
GOVERNOR BUSH: So we
are in peril.
Any
12
other discussion?
There has been a motion, I
13
believe on --
14
CFO GALLAGHER: I make
a motion.
15
COMMISSIONER BRONSON:
I already made the
16 motion.
17
CFO GALLAGHER: I will
second it.
18
GOVERNOR BUSH: Item 7
has been moved and
19
seconded. Without
objection, the item passes.
20
MR. WATKINS: Item is a
report on award on
21
the competitive sale of $282 million in PECO
22
refunding bonds.
23
The bonds were awarded to the low bidder
24
at a true interest cost of 4.31 percent,
25
generating gross debt service savings of
14
1
approximately of $17.6 million or $13.9
million
2
on a present value basis.
3
CFO GALLAGHER: Motion
on 8.
4
COMMISSIONER BRONSON:
Second. 5 GOVERNOR BUSH: Moved and seconded.
6 Without
objection, the item passes.
7
MR. WATKINS: Thank
you, sir.
8
GOVERNOR BUSH: Thank
you, Ben.
9
10
11
12
13
14
15
16 17
18
19
20
21
22
23
24
25
15
1
GOVERNOR BUSH:
Financial Services
2
Commission.
3
CFO GALLAGHER: Motion
on the minutes.
4
COMMISSIONER BRONSON:
Second. 5 GOVERNOR BUSH: Moved and seconded. 6 Without
objection, the item passes.
7
MR. McCARTY: Agenda
item number 2 is a
8
proposed delegation of authority to the Office
of
9
Insurance Regulation and the Office of
Financial
10
Institutions and Securities
Regulation.
11
CFO GALLAGHER: Motion
on 2.
12
GENERAL CRIST:
Second.
13
GOVERNOR BUSH: Moved
and seconded.
Any
14
discussion?
15
Without objection, the item passes.
16
MR. McCARTY: Next
agenda item is
17
authorization to initiate rule making on
proposed
18
rules related to additional organizational
19
structure of the Office of Insurance
Regulation
20
and the Office of Financial Institutions and
21
Securities Regulations, as contemplated by
22 Section 20.121,
Florida Statutes, for the final
23
proposal rule making authority before the
24
Commission before final adoption.
25
CFO GALLAGHER: Motion
on 3.
16
1
GENERAL CRIST:
Second. 2 GOVERNOR BUSH: Moved and seconded.
3 Without
objection, the item passes.
4
MR. McCARTY: Finally,
for your consideration
5
is a request for authorization to move
forward
6
with all steps necessary to transfer the
existing
7
rules of the former Department of Insurance
and
8
the former Department of Banking to the Office
of
9
Insurance Regulation and the Office of
Financial
10
Institutions and Security Regulations as
11
appropriate and to make technical changes to
the
12
transferred rules.
13
COMMISSIONER BRONSON:
Motion.
14
CFO GALLAGHER:
Second. 15 GOVERNOR BUSH: Moved and seconded.
16 Without
17
CFO GALLAGHER:
Governor, I have a motion
18
here, and that is the Governor and Cabinet,
19
sitting as the Financial Services Commission,
20
hereby authorize the director of the Office
of
21
Insurance Regulation and the director of the
22
Office of Financial Institutions and
Securities
23
Regulation to reassign, reorganize, reclassify
and
24
otherwise transfer positions to appropriate
25
administrative units within their offices to
17
1
efficiently and effectively fulfill the
regulatory
2
mandates under Florida law and regulations.
3
I make that motion in order to give both
4
of those directors the opportunity to
organize
5
in any way different than was originally done
6
by the committees because we did it before we
7
had basically agency heads here.
8
GENERAL CRIST:
Second. 9
GOVERNOR BUSH: Moved
and seconded.
10
Could I ask a question, Kevin? What is
11
the status of the glitch bill in the
12
legislature? Is there
a glitch bill?
13
CFO GALLAGHER: It's
about 2500 pages, is the
14
status.
15
GOVERNOR BUSH: We'll
call it a gigantic
16
glitch bill. 2500
pages?
17
CFO GALLAGHER:
Everywhere it says Treasurer,
18
Comptroller, Department of Insurance --
19
GOVERNOR BUSH: It
still is a glitch bill.
20
CFO GALLAGHER: -- all
that has to be
21
changed. That's the
majority of what the bill is
22
about.
23
MR. McCARTY: In
response to your question,
24
Governor, we are working with -- and Don
Saxon,
25
the director, Leo Fisher -- are working with
18
1
Legislature Affairs on that bill, and I know
there
2
is a draft, and I don't have anything further
to 3
report.
4
GOVERNOR BUSH:
Okay.
5
CFO GALLAGHER: I think
the Senate and House
6
had a similar project to come up with a basic
7
plan. There is
probably two or three, maybe five
8
at the most issues that are -- have any
9
controversy or any really -- most of it is
10
changing names and cleaning up the law. That's
11
the
majority. There is a few
issues.
12
MR. McCARTY: There are
a few substantive
13
areas for consideration.
14
CFO GALLAGHER: There
may be 10, but there is
15
more like five.
16
GOVERNOR BUSH: Thank
you. There is a
motion
17
and second. Without
objection, the items passes.
18
19
20
21
22
23
24
25
19
1
GOVERNOR BUSH:
Veterans Affairs.
2
CFO GALLAGHER: Motion
on the minutes.
3 GENERAL
CRIST:
Second. 4 GOVERNOR BUSH: Moved and seconded.
5 Without
objection, the item passes.
6
MR. McPHERSON: Good
morning. Thank
you.
7
Item 2 is our quarterly report for the
8
department for this fiscal year, attachment
2.
9
It's recommended for acceptance.
10
CFO GALLAGHER: Motion
on 2.
11
COMMISSIONER BRONSON:
Second. 12 GOVERNOR BUSH: Moved and seconded.
13 Without
objection, the item passes.
14
Item 3.
15
MR. McPHERSON: Item 2,
sir, is the Florida
16
Department of Energy Annual Performance
Contract
17
for the executive director for this year
18
2003-2004. It's in
attachment 3 and it is 19 recommended for acceptance, pending any
20 discussion or
anything you would like to add, sir.
21
CFO GALLAGHER:
Governor, I would like to 22 move an amendment to that performance contract
23 and
24 to
87 percent, I would like that moved to 90
percent
25
in regards to bids; the statute requires
20
1
90 percent.
2
It would not make much sense for us to
3
have a performance contract that has a goal
--
4
I know it would be nice for you -- but have a
5 goal
below the statutory goals. If
you want to
6
change and have the legislature change their
7
goal, I would be willing to change ours, but
I
8
don't think we should have one -- 9
GOVERNOR BUSH: How
about if we do it this
10
way: How about if we
say that the performance
11
criteria is at the statutory requirement, so
if
12
the statute does change, then it's
automatically
13
adjusted?
14
CFO GALLAGHER: No
problem with that.
15
MR. McPHERSON: There
is, in our long-range
16
plan there is a plan to move this to the
industry
17
standard of 87 percent.
But you are correct, sir,
18
it has not been approved by the legislature
yet.
19
GOVERNOR BUSH: We
ought to have at least
20
90 percent of our nursing homes occupied just
for
21
sound fiscal management.
It actually enhances
22
quality of care because you keep employees. There
23
is -- it's more than just an efficiency or
24
financial issue; I think it does help quality
of
25
care as well.
21
1
CFO GALLAGHER: Where
are veterans homes 2
right now?
3
MR. McPHERSON: Two of
the nursing homes
4
are -- Daytona was the first one built.
5
CFO GALLAGHER: Not
where they are, where are
6
they in regards to --
7
MR. McPHERSON: Current
percentages?
8
Approximately 85 percent, sir. And that's due
to
9
some of the distinct things that have gone on
in
10
the health care industry.
We have had some
11
staffing issues, and therefore, when you have
12
staffing issues, you have to sometime
restrain
13
your occupancy.
14
We are making improvements in that we have
15
come from a low of 83 to 85 and getting back
to
16
90 is an attainable goal, but it's going to
be
17
challenging and we are glad to accept it.
18
CFO GALLAGHER: You
know and I know that
19
there is more than enough need to fill every
20
single one of those nursing homes to the max. In 21
fact, you got waiting lists, I know.
22
MR. McPHERSON: We do
have some, yes, sir,
23
but there are turnover factors that do -- you
have
24
requirements to keep beds when someone goes to
a
25
hospital. There are
things there, you can never
22
1
get to a hundred percent.
2
CFO GALLAGHER: I
understand, but the idea is
3
that -- I think 90 percent probably is a good
4
number, we ought to keep our eye on. Maybe it's
5
hard to reach.
6
Actually year to date we are running about
7
83 percent is what this says.
But I know it's
8
challenging, but at the same time, I look at
9
the other side, and I know there is plenty of
10
veterans that would love to have the
11
opportunity, their
families, to have them in
12
one of these really well-run homes.
13
So anything we can do to get -- have the
14
personnel, whatever it takes to get the
15 utilization up,
it's good for our state
16
veterans.
17
GOVERNOR BUSH: I think
one of the ways that
18
you can accomplish the 90 percent, we are
pretty
19
close to 90 percent on the stable and the
mature
20
homes, the homes that have been opened for a
21
longer period of time.
22
It's the Sandy -- facility in Pembroke
23
Pines that has been slow to reach full
24
capacity. And so the
challenge I think is that
25
we have got two new homes coming on stream
this
23
1
year, right?
2
MR. McPHERSON: Yes,
sir, we do.
3
GOVERNOR BUSH: You
need to develop
4
strategies to really accelerate the filling
of
5
those, because the Broward County one is taking
a
6
really long time to do so.
7
MR. McPHERSON: We are
working on that now.
8
COMMISSIONER BRONSON:
Governor, I had a
9
question, too, and that is with some of the
10
changes, both at the federal level on people
11
keeping their family members at home with
extra
12
reductions in taxes, and so forth, to help pay
for 13
those, it could be that we are actually
seeing
14
people who are using those tax deductions to
keep
15
their loved ones at home rather than put them
into
16
a facility that is creating maybe some of the
17
reasons why we can't get to 90 percent.
18
GOVERNOR BUSH: I think
the universe is so
19
enormous.
20
CFO GALLAGHER: There's
plenty of people.
21
It's the ability --
22
GOVERNOR BUSH: We do
need to do both.
23
CFO GALLAGHER: It's
not a shortage of
24
veterans.
25
GOVERNOR BUSH: Because
you do have waiting
24
1
lists, don't you?
2
MR. McPHERSON: We do,
with the exception of
3
the Pembroke Pines facility and we are
working
4
that regularly.
5
GOVERNOR BUSH: You
don't have a waiting list
6
for Pembroke Pines?
7
MR. McPHERSON: No, we
are working that one
8
literally daily.
9
CFO GALLAGHER: Some
people may not know it's
10
there.
11
MR. McPHERSON: And
that is part of our
12
issue, is the public getting the word out?
13
GOVERNOR BUSH: Broward
County, you would
14
think --
15
CFO GALLAGHER: They
like to be where there
16
is a military facility close by; so we don't
have
17
a military facility.
In fact, Homestead use to
18
have a tremendous amount of Vets around it,
and
19
when the facility closed, they started moving
20
north.
21
GOVERNOR BUSH:
Okay. So the motion is
to --
22
CFO GALLAGHER: -- set
the goals at the
23
legislative-set goals.
24
GOVERNOR BUSH: If you
could just keep us
25
advised on a regular basis how you are doing
on
25
1
this, because this is an important issue.
2
MR. McPHERSON: Yes,
sir, we will.
3
CFO GALLAGHER: Thank
you very much for the
4
performance contract.
5
GOVERNOR BUSH: Motion
and a second.
Without 6
objection, the item passes.
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
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1
GOVERNOR BUSH:
Department of Revenue.
2
CFO GALLAGHER: Motion
on the minutes.
3
COMMISSIONER BRONSON:
Second. 4 GOVERNOR BUSH: Moved and seconded.
5 Without
objection, the item passes.
6
Dr. Z, how the heck are you?
7
MR. ZINGALE: I am
doing great.
8
Revenues are coming in okay, on forecast
9
so far, so we are doing great.
10
If you really want to know, this is the Go
11
Live on all kinds of our systems that have
come
12
up since sales tax has been rolled on the
13
system. I thought it
went on live Monday.
14
This week collection integration takes place.
15
By next Monday --
16
CFO GALLAGHER: Is that
the system, the
17
electronic system, or are you talking about
SEP?
18
MR. ZINGALE: The
complete Integrated Tax 19 Administration System, between now and Monday, 20 the old system will be gone; the brand new system
21 will
22
CFO GALLAGHER: With no
glitches whatsoever?
23
MR. ZINGALE: Well, you
know, a lot of lost
24
data in the middle of the night. Yeah, there
were
25
glitches, but nothing that can't -- hasn't
been
27
1
fixed to this point.
2
Item number 2, amends the sales and use
3
tax chapter, provide guidelines on the
4
application of sales tax to vacation
packages;
5
updates refunds for these features, removes
6
definition of trade fixtures as provided by
7
2002 law changes, and provides comprehensive
8
update to all that E-filing and
E-registration
9
so that the rules reflect what is actually
10
going on.
11
Recommend approval.
12
CFO GALLAGHER: Motion
on 2. 13
COMMISSIONER BRONSON:
Second. 14 GOVERNOR BUSH: Moved and seconded.
15 Without objection
the item passes.
16
MR. ZINGALE: Item
number 3 relates to
17
communication services tax.
18
Amendments in this section provide
19
guidance on registration, tax rates, filing
20
requirements and incorporates 2002 law
changes
21
related to
exemptions for religious and
22
educational institutions.
23
Recommend approval.
24
CFO GALLAGHER: Motion
on 3.
25
COMMISSIONER BRONSON:
Second.
28 1 GOVERNOR BUSH: Moved and seconded.
2 Without
objection, the item passes.
3
MR. ZINGALE: Item 4
provides amendments to
4
various miscellaneous tax provisions,
provides
5
guidelines for registration, clarifies when
tax 6 returns and payments are due. The amendments
7 also
8
remittance of certain fees directly to the
9
department.
10
Recommend approval.
11
CFO GALLAGHER: Motion
on 4.
12
COMMISSIONER BRONSON:
Second. 13 GOVERNOR BUSH: Moved and seconded.
14
Without objection, the item passes.
15
MR. ZINGALE: Thank
you.
16
17
18
19
20
21
22
23
24
25
29
1
GOVERNOR BUSH: Board
of Trustees. 2 MR. STRUHS: Item 1, we recommend acceptance
3
of the year 2003 Florida Forever Five-year
Plan
4
and to approve the February 2003 Florida
Forever
5
Priority List which is in your materials.
6
CFO GALLAGHER: Motion
on 1.
7
COMMISSIONER BRONSON:
Second. 8 GOVERNOR BUSH: Moved and seconded.
9
Without o
10
MR. STRUHS: Item 2, we
request your approval
11
for consideration of an option agreement to
12
acquire 32.61 acres within Charlotte Harbor
13
Estuary, Florida Forever Project, Swarcomm
14
Investments, LTD/Steincomm Investments, LTD.
15
GOVERNOR BUSH: Is
there a motion?
16
CFO GALLAGHER: Motion
on 2.
17
COMMISSIONER BRONSON:
Second. 18 GOVERNOR BUSH: Moved and seconded.
19
Without
20
MR. STRUHS: Item 3, we
would ask that item
21
be withdrawn, please.
22
GOVERNOR BUSH: There
is a motion; is there a
23
motion to withdraw?
24
CFO GALLAGHER: Motion
to withdraw 3.
25
COMMISSIONER BRONSON:
Second.
30
1
GOVERNOR BUSH: The
item has a motion to
2
withdraw and the second.
3
Without objection the item is withdrawn.
4
MR. STRUHS: Item 4,
our final item,
5
consideration of an option agreement to
acquire
6
105 acres within the Tiger Island Florida
Forever
7
Project.
8
CFO GALLAGHER: Motion
on 4.
9
MR. STRUHS: This
acquires the St. Martin's
10
Island.
11
CFO GALLAGHER: Motion
on 4.
12
COMMISSIONER BRONSON:
Second. 13 GOVERNOR BUSH: Moved and seconded.
14 Without
objection, the item passes.
15
MR. STRUHS: Thank you
very much.
16
(At this point, General Crist and
17
Commissioner Bronson depart.)
18
19
20
21
22
23
24
25
31
1
GOVERNOR BUSH:
Coleman, where are you?
2
CFO GALLAGHER: Motion
on the minutes.
And
3
Governor, I recognize you.
4
GOVERNOR BUSH:
Second.
5
CFO GALLAGHER: Without
objection, the
6
minutes passes.
7
GOVERNOR BUSH: Item 2,
shall I start this?
8
CFO GALLAGHER: Back to
you.
9
GOVERNOR BUSH: Item
2.
10
MR. STAPANOVICH: Good
morning, Governor,
11
Treasurer, item 2, approval of fiscal
sufficiency
12
of an amount not exceeding $510 million, State
of
13
Florida, Department of Transportation
Turnpike
14
Revenue Refunding Bonds.
15
It is recommended that the board approve
16
the fiscal sufficiency.
17
CFO GALLAGHER: Motion
on 2. I recognize
the
18
Governor.
19
GOVERNOR BUSH:
Second.
20
CFO GALLAGHER: Without
objection, 2 passes.
21
GOVERNOR BUSH: Item
3.
22 MR.
STAPANOVICH: Approval of
fiscal
23
sufficiency of an amount not exceeding 85
million,
24
State of Florida, Department of Environmental
25
Protection, Save our Coast Refunding Revenue
32
1
Bonds. It's
recommended the Board approve the
2
fiscal sufficiency.
3
CFO GALLAGHER: Motion
on 3. Recognize
the
4
Governor's second.
5
GOVERNOR BUSH:
Second.
6
CFO GALLAGHER: Passes
without objection.
7
GOVERNOR BUSH: Go
ahead.
8
MR. STAPANOVICH: Item
4, approval of fiscal
9
sufficiency of an amount exceeding 58
million,
10
State of Florida, Florida Education System,
11
University System Improvement Revenue
Refunding 12
Bonds. It is
recommended the board the approve
13
fiscal sufficiency.
14
CFO GALLAGHER: Motion
on 4. Recognize
the
15
Governor.
16
GOVERNOR BUSH:
Second.
17
CFO GALLAGHER: Item 4
passes without
18
objection.
19
MR. STAPANOVICH: Item
5, approval of fiscal
20
determination of an amount not exceeding $9 21
million 500,000, Florida Housing Finance
22
Corporation Multifamily Mortgage Revenue
Bonds,
23
Andrews Place Apartments.
It is recommended the
24
Board approve the fiscal sufficiency.
25
CFO GALLAGHER: Motion
on 5. Recognize
the
33
1
Governor.
2
GOVERNOR BUSH:
Second.
3
CFO
GALLAGHER: Without objection,
5 passes.
4
MR. STAPANOVICH: Item
6, approval of fiscal
5
determination of amount not exceeding 9
million
6
tax exempt Florida Housing Finance
Corporation
7
Multifamily Mortgage Revenue Bonds, Hunters
Run
8
Phase II Apartments.
It is recommended the board
9
approve the determination.
10
CFO GALLAGHER: Motion
on 6. Recognize
the
11
Governor.
12
GOVERNOR BUSH:
Second.
13
CFO GALLAGHER: Without
objection, item 6
14
passes.
15
MR. STAPANOVICH: Item
7, approval of fiscal
16
determination of an amount not exceeding
17
$7,560,000 tax exempt Florida Housing Finance
18
Corporation, Multifamily Mortgage Revenue
Bonds,
19
Heather Glenn Apartments.
It's recommended the
20
board approve the fiscal
determination.
21
CFO GALLAGHER: Motion
on 7.
22
GOVERNOR BUSH:
Second.
23
CFO GALLAGHER: Without
objection, 7 passes.
24
GOVERNOR BUSH: You
have done well.
25
MR. STAPANOVICH: The
final item on the
34
1 agenda is the
Lawton Chiles Endowment Fund,
2
proposed changes to the total fund investment
3
policy.
4
In your agenda you have some backup
5
materials; specifically you have a memorandum
6
from me dated 2-13-03; you have slide
7
presentations illustrating the Lawton Chiles
8
Endowment Developments to date and key points
9
from Dr. Milevsky, the principal consultant
on
10
this project, and authority and annuity
11
structures and investments; his vitae is
12
enclosed as well.
13
You also have the consulting report from
14
Dr. Milevsky, and the final document you have
15
is the proposed revisions to the Lawton
Chiles
16
Endowment Fund which will require some action
17
today.
18
Briefly, the process has been a
19
three-month process that began in October and
20
Dr. Milevsky's work on this study was
augmented
21
by staff. Also it was
reviewed by our general
22
consultant, Ennis-Knupp and Associates. It was
23
reviewed by our investment consultant, Callen
24
and Associates, and the study recommendations 25
were presented to the IEC during a
one-day
35
1
workshop in December.
2
Staff's recommendation to change the
3
investment plan in order to preserve capital
4
through revised payout structure was
5
unanimously supported by the Investment
6
Advisory Council.
7
I have recently met with staff directors
8
of Appropriations in both the Senate and the
9
House to keep them informed on proposed
10
changes.
11
Therefore, I am pleased with the expected
12 lower
payouts in this proposal but certainly
13
understand the significance of the capital
14
preservation if this is to continue to be a
15
viable fund over the very long-term.
16
Some background on the fund is, briefly,
17
it was created in 1999.
The statute specified
18
that the fund was to receive $1.7 billion in
19
contributions.
20
If you look
at my memo, table 1, page 2,
21
you will see a contribution schedule that
22
1.1 billion was received in 99-01, 200
million
23
in 00-01, and 200 million thereafter, and we 24
just received the last tranche in January.
25
Unfortunately, equity markets peaked a
36
1
little over six months after the fund was
2
established.
3
And if you look at table 3 on page 4 of
4
the memorandum -- and I won't go through it
5
line-by-line, but I will give you some idea
of 6
the investment returns over that period. Had
7
the fund maintained his investment objective
8
over that period of time, it would be worth
9
1.8 billion today, and it's worth 1.4
billion.
10
CFO GALLAGHER: Motion
on 8.
11
GOVERNOR BUSH: -- to
put it in cash. 12 MR. STAPANOVICH: Then you wouldn't have
13 much in the way of payouts, and I think the 14 legislature would certainly have a problem with that
15 one
and a half percent yield.
16
GOVERNOR BUSH: I
understand, I am joking.
17
CFO GALLAGHER: Motion
on 8. Recognize
the
18
Governor.
19
GOVERNOR BUSH:
Second.
20
CFO GALLAGHER: Without
objection, 8 passes.
21
Thank you, Coleman.
22
GOVERNOR
BUSH: Thank you,
Coleman.
23
(The proceedings concluded at 10:04 a.m.)
24
25
37
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 4th
19 day of March,
2003.
20
21
22
______________________________
23
SANDRA L. NARGIZ, RMR, CRR
100 SALEM COURT
24
TALLAHASSEE, FL
32301
850-878-2221
25
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