1
2
3 T H E C A B I N E T
4 S T A T E O F F L O R I D A
5
Representing:
6
STATE BOARD OF ADMINISTRATION
7 DIVISION OF BOND FINANCE
DEPARTMENT OF REVENUE
8 STATE BOARD OF EDUCATION
ADMINISTRATION COMMISSION
9 FLORIDA LAND AND WATER ADJUDICATORY COMMISSION
BOARD OF TRUSTEES, INTERNAL IMPROVEMENT TRUST FUND
10
11 The above agencies came to be heard before
THE FLORIDA CABINET, Honorable Governor Chiles
12 presiding, in the Cabinet Meeting Room, LL-03,
The Capitol, Tallahassee, Florida, on Tuesday,
13 February 10, 1998, commencing at approximately
9:45 a.m.
14
15
16
17 Reported by:
18 LAURIE L. GILBERT
Registered Professional Reporter
19 Certified Court Reporter
Certified Realtime Reporter
20 Notary Public in and for
the State of Florida at Large
21
22
23
24 ACCURATE STENOTYPE REPORTERS, INC.
100 SALEM COURT
25 TALLAHASSEE, FLORIDA 32301
850/878-2221
2
1 APPEARANCES:
2 Representing the Florida Cabinet:
3 LAWTON CHILES
Governor
4
BOB CRAWFORD
5 Commissioner of Agriculture
6 BOB MILLIGAN
Comptroller
7
SANDRA B. MORTHAM
8 Secretary of State
9 BOB BUTTERWORTH
Attorney General
10
BILL NELSON
11 Treasurer
12 FRANK T. BROGAN
Commissioner of Education
13
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ACCURATE STENOTYPE REPORTERS, INC.
February 10, 1998
3
1 I N D E X
2 ITEM ACTION PAGE
3 STATE BOARD OF ADMINISTRATION:
(Presented by Tom Herndon,
4 Executive Director)
5 1 Approved 5
2 Approved 5
6 3 Approved 6
4 Approved 6
7 5 Approved 9
8 DIVISION OF BOND FINANCE:
(Presented by J. Timothy Tinsley,
9 Manager of Bond Programs)
10 1 Approved 10
2 Approved 10
11 3 Approved 10
12 DEPARTMENT OF REVENUE:
(Presented by L.H. Fuchs,
13 Executive Director)
14 1 Approved 12
2 Approved 12
15 3 Approved 37
16 STATE BOARD OF EDUCATION:
(Presented by Robert L. Bedford, Ph.D.,
17 Deputy Commissioner)
18 1 Approved 38
2 Approved 38
19 3 Approved 39
4 Withdrawn 39
20 5 Approved 39
6 Approved 40
21
22
23
24
25
ACCURATE STENOTYPE REPORTERS, INC.
February 10, 1998
4
1 I N D E X
(Continued)
2
ITEM ACTION PAGE
3
ADMINISTRATION COMMISSION:
4 (Presented by Robert B. Bradley, Ph.D.,
Secretary)
5
1 Approved 44
6 2 Approved 44
3 Approved 45
7
FLORIDA LAND AND WATER
8 ADJUDICATORY COMMISSION:
(Presented by Robert B. Bradley, Ph.D.,
9 Secretary)
10 1 Approved 46
2 Approved 46
11
BOARD OF TRUSTEES OF THE
12 INTERNAL IMPROVEMENT
TRUST FUND:
13 (Presented by Virginia B. Wetherell,
Secretary)
14
1 Approved 47
15 2 Approved 47
Substitute 3 Deferred 47
16 4 Approved 47
Substitute 5 Approved 55
17 6 Approved 57
7 Approved 57
18 8 Approved 58
9 Approved 58
19 10 Approved 58
Substitute 11 Approved 59
20 12 Approved 59
13 Approved 59
21 14 Approved 60
15 Approved 60
22
CERTIFICATE OF REPORTER 61
23
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ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION
February 10, 1998
5
1 P R O C E E D I N G S
2 (The agenda items commenced at 9:45 a.m.)
3 GOVERNOR CHILES: State Board of
4 Administration.
5 MR. HERNDON: First item on the agenda this
6 morning is approval of the minutes of the
7 meeting held on January 21st, 1998.
8 COMPTROLLER MILLIGAN: I move the minutes.
9 TREASURER NELSON: I move it.
10 GOVERNOR CHILES: They've been moved and
11 seconded.
12 Without objection, they're approved.
13 MR. HERNDON: Second item is approval of
14 fiscal sufficiency for a three hundred and
15 seventy-five million dollar State of Florida
16 full faith and credit State Board of Education
17 capital outlay bond.
18 COMPTROLLER MILLIGAN: Move the item.
19 TREASURER NELSON: Second.
20 GOVERNOR CHILES: Moved and seconded.
21 Without objection, it's approved.
22 MR. HERNDON: Third item is the change in
23 our total fund investment plan to reflect the
24 divestiture of tobacco stocks. We're changing
25 the benchmark for our domestic equities class to
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION
February 10, 1998
6
1 reflect the divestiture, proposing that we
2 continue to use the Wilshire 2500, which is our
3 benchmark, but we modify that benchmark to
4 exclude tobacco so we're comparing apples to
5 apples.
6 And we're proposing that that be effective
7 retroactive to June of 1997.
8 COMPTROLLER MILLIGAN: And I move that
9 item.
10 TREASURER NELSON: Second.
11 GOVERNOR CHILES: Moved and seconded.
12 Without objection, it's approved.
13 MR. HERNDON: Item number 4 is the
14 investment, performance, and fund balance
15 analysis for the months of November and
16 December 1997.
17 TREASURER NELSON: Move it.
18 COMPTROLLER MILLIGAN: Move it.
19 GOVERNOR CHILES: Moved and seconded.
20 Without objection, that's approved.
21 MR. HERNDON: That completes the SBA
22 agenda, Governor.
23 If you would like to convene the SBA
24 Trustees as the Inland Protection Financing
25 Corporation, we'll report to you on the bond
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION
February 10, 1998
7
1 sale.
2 GOVERNOR CHILES: The meeting is so
3 convened.
4 MR. HERNDON: And Mr. Keith Carswell, who's
5 Chairman of the Black Business Investment Board,
6 and on the Board of the Inland Protection
7 Financing Corporation, is here this morning.
8 We wanted to report to you that we have
9 been successful in selling the first tranche of
10 Inland Protection Financing Corporation Special
11 Obligation Bonds in the amount of two hundred
12 and fifty-three million dollars.
13 Those bonds were sold to
14 Morgan Stanley & Company at a very good rate of
15 4.0097 percent. They're scheduled to be
16 delivered on February 11th.
17 In our continuing discussions with the
18 Department of Environmental Protection and the
19 Bank of New York, which is our fiscal paying
20 agent, we anticipate that the checks will
21 actually start to flow to the claimants within
22 the next 10 days or so.
23 This particular tranche of bonds is
24 anticipated to probably cover about 70 percent,
25 perhaps a little bit more than that, of the
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION
February 10, 1998
8
1 total obligation. We do anticipate going to
2 market again probably in the early summer is our
3 current forecasted time to sell the remaining
4 bonds.
5 We do expect that the bond proceeds in
6 their entirety will cover all of the backlogged
7 claims. Now, we won't know that for an absolute
8 fact, of course, until we pay all of them. But
9 as is presently projected, it does look like the
10 proceeds will be sufficient to pay all of the
11 claimants that are out there, and the program
12 would effectively, from the bond sale point of
13 view, be completed.
14 I don't know if Mr. Carswell wants to say
15 anything.
16 MR. CARSWELL: No. No comments.
17 MR. HERNDON: Okay. So that completes the
18 report of the Inland Protection Trust Fund
19 regarding the sale of the bonds, and our
20 anticipated sequence of events for the next four
21 or five months.
22 COMPTROLLER MILLIGAN: I move that we
23 adjourn, Governor.
24 GOVERNOR CHILES: Move to accept the
25 report?
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF ADMINISTRATION
February 10, 1998
9
1 TREASURER NELSON: Second.
2 GOVERNOR CHILES: Second.
3 Without objection, report is accepted.
4 MR. HERNDON: Thank you.
5 That completes the business this morning.
6 GOVERNOR CHILES: Thank you.
7 (The State Board of Administration Agenda
8 was concluded.)
9 *
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ACCURATE STENOTYPE REPORTERS, INC.
DIVISION OF BOND FINANCE
February 10, 1998
10
1 GOVERNOR CHILES: Division of
2 Bond Finance.
3 MR. TINSLEY: Item 1 is approval of the
4 minutes of the January 21st meeting.
5 COMMISSIONER BROGAN: Move the minutes.
6 SECRETARY MORTHAM: Second.
7 GOVERNOR CHILES: Moved and seconded.
8 Without objection they're approved.
9 MR. TINSLEY: Item number 2 is adoption of
10 a resolution authorizing the sale of not
11 exceeding three hundred and seventy-five million
12 dollars of capital outlay bonds.
13 COMMISSIONER BROGAN: Move approval.
14 SECRETARY MORTHAM: Second.
15 GOVERNOR CHILES: Moved and seconded.
16 Without objection, that's approved.
17 MR. TINSLEY: And Item number 3 is report
18 of award of the sale of eleven million
19 six hundred and seventy-five thousand dollars of
20 facilities management bonds to First Union.
21 COMMISSIONER BROGAN: Move approval.
22 SECRETARY MORTHAM: Second.
23 GOVERNOR CHILES: Moved and seconded.
24 Without objection, that's approved.
25 MR. TINSLEY: Thank you.
ACCURATE STENOTYPE REPORTERS, INC.
DIVISION OF BOND FINANCE
February 10, 1998
11
1 GOVERNOR CHILES: Thank you, sir.
2 (The Division of Bond Finance Agenda was
3 concluded.)
4 *
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ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
February 10, 1998
12
1 GOVERNOR CHILES: Department of Revenue.
2 MR. FUCHS: Good morning.
3 Item 1 is a request for approval of the
4 minutes of the January 21st, 1998, meeting.
5 COMMISSIONER BROGAN: Move approval.
6 SECRETARY MORTHAM: Move approval.
7 COMMISSIONER BROGAN: Second.
8 MR. FUCHS: Item 2 is --
9 GOVERNOR CHILES: Moved and seconded.
10 Without objection, they're approved.
11 MR. FUCHS: Sorry.
12 Item 2 is a request for permission to
13 notice a proposed amendment to
14 Rule Chapter 12B-8.001.
15 SECRETARY MORTHAM: Move approval.
16 COMMISSIONER BROGAN: Second.
17 GOVERNOR CHILES: Moved and seconded.
18 Without objection, that's approved.
19 MR. FUCHS: Item 3 is request for approval
20 and authority to file with the Secretary of
21 State under Chapter 120, adoption of proposed
22 amendments to Rule Chapter 12B-8.003, and
23 12B-8.016.
24 TREASURER NELSON: Governor, may I be
25 recognized?
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
February 10, 1998
13
1 GOVERNOR CHILES: Yes, sir.
2 TREASURER NELSON: This is an issue that we
3 hashed out for 55 minutes back in November. In
4 that November meeting, we approved the rule
5 proposed by Revenue to enhance the State's
6 position regarding the possible refunds of
7 20 million dollars of previously collected taxes
8 in '95 and '96.
9 And at the same time, we instructed the
10 Department to file a new rule, with a different
11 interpretation of how to calculate the tax,
12 which is the rule that they're coming back to us
13 today with.
14 So we're exactly where we said we would be
15 when we approved the motion in November.
16 Now, in the meantime, they've had a rule
17 workshop, and not one objection was raised.
18 They had a public hearing, and no challenge was
19 filed during the 21-day window period.
20 The Department of Revenue has already sent
21 instructions and forms for paying as of
22 January the 1st, 1998, which has already
23 passed. And those instructions have gone out in
24 conformity with the proposed rule that is before
25 us today.
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
February 10, 1998
14
1 I'm going to move the item.
2 Just to refresh your memory, the motion
3 back in November was a compromise motion. It
4 said that basically legislation that had
5 occurred back several years ago had recognized
6 that you deduct from the computation, the
7 calculation of premium taxes, special
8 assessments. But that in the meantime, in the
9 years '95 and '96, the Department had had a
10 different interpretation.
11 The motion was to don't go back and try to
12 collect that 10 million dollars a year in those
13 two years, '95 and '96, that was collected. But
14 on a going forward basis for 1997, to do it
15 according to what was the common sense
16 interpretation of the statute, which means
17 10 million dollars per year less in taxes.
18 Now, the purpose of this whole thing is a
19 very complicated statute about retaliatory tax.
20 The idea is that you try to get all different
21 states equalized in their amount of insurance
22 premium taxes, so they don't retaliate against
23 each other when one's -- one's insured here is
24 domiciled in another state.
25 So the effect of what we have in front of
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
February 10, 1998
15
1 us is a rule that says it's going to lower the
2 taxes by 10.2 million dollars per year,
3 according to the interpretations that we have.
4 And in the interim, since November, they've gone
5 through all of the legal processes of the
6 workshop and the public hearing.
7 I move the -- the item, Governor.
8 COMMISSIONER BROGAN: Second.
9 GOVERNOR CHILES: I would like some
10 discussion on this --
11 TREASURER NELSON: Sure.
12 GOVERNOR CHILES: -- at this time.
13 And I know that we discussed this at length
14 in an earlier meeting. And I know at that time
15 I said I did not understand the question. I'm
16 not sure that I understand it any better now, I
17 would say that.
18 But I would say that I certainly support,
19 as the Commissioner does, a policy of low cost,
20 as all of us do, and increased availability of
21 workers' compensation.
22 I have a concern that if we say the rule is
23 right, and the inference is that the current
24 rule is wrong, that we could face up to some
25 30 million dollars in refunds if we take that
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
February 10, 1998
16
1 position.
2 I also have a concern that -- and this is a
3 smaller concern of mine actually, that the
4 proposed rule will have a fiscal impact, about
5 15 million dollars this year, and 10 million
6 dollars next year. But that's about a
7 25 million dollar impact on next year's budget.
8 But I think the greatest thing I'm
9 concerned about is that we're not on good legal
10 ground to make this rule.
11 My understanding now is that we've been
12 pretty well set on notice that rules that we
13 make now -- that we must have statutory
14 authority for rules that we make. If we make a
15 rule without statutory authority, we are subject
16 to attorneys' fees, and I'm afraid that there
17 are lawyers perhaps that are out there
18 looking -- or other groups, that might be
19 saying, where is there some area that we could
20 have attorneys' fees.
21 And I guess for that reason, I just am
22 concerned as to whether we have the statutory
23 authority or not, and -- and in a minute, I
24 would ask the Director a question on that.
25 But I guess where I come down is that
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
February 10, 1998
17
1 I think this is something that probably -- or
2 that should be done by the Legislature if we're
3 going to make this correction. The Legislature
4 will be in session shortly. I think I would
5 support the Legislature making this correction,
6 if that's the will that we do it.
7 But I think that would give us a grounds
8 upon which to do it, and would not subject us
9 to -- to some attorneys' fees.
10 And then I would sort of ask the --
11 Director Fuchs --
12 TREASURER NELSON: May I respectfully --
13 GOVERNOR CHILES: -- the --
14 TREASURER NELSON: -- respond to that?
15 GOVERNOR CHILES: Sure.
16 TREASURER NELSON: Governor, I certainly
17 understand what you're saying. But let me tell
18 you why I have a different cut on this.
19 I think the legislative leadership has
20 articulated that they are not going back in and
21 opening up Chapter 440, which is workers' comp.
22 The reforms under your leadership, Governor,
23 when Ms. Mortham was in the Legislature, you all
24 did a tremendous job. And the reforms are
25 working.
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
February 10, 1998
18
1 And as you know, we've stabilized rates.
2 And for 1997, because of the stabilized and the
3 increased competition, I lowered the rates
4 11 percent; and for 1998, I lowered the rates
5 another 3.2 percent.
6 And because of that, I think the
7 Legislature is not going to go back in and open
8 up this area of workers' compensation. And if
9 they do not, if we just deferred this to the
10 Legislature, it has the effect of increasing the
11 tax 10.2 million dollars per year, which may --
12 and I say may, there is a perception in the
13 industry that that will cause workers' comp
14 premium rates to go up. That's my concern. And
15 that is a legitimate concern.
16 GOVERNOR CHILES: I think it is a
17 legitimate concern.
18 I think that we can -- I think this actual
19 section is not in 440; is it not?
20 MS. LETTERA: Six twenty-four. It is
21 not --
22 MR. FUCHS: It is not, Governor.
23 GOVERNOR CHILES: It's in another section.
24 And so we wouldn't be opening up 440. And I
25 would think the way you'd kind of do this is
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
February 10, 1998
19
1 it's in one of the -- sort of the bills that
2 just --
3 What is the section it would be in?
4 MR. FUCHS: I believe 624?
5 MS. LETTERA: That's correct.
6 MR. FUCHS: Six twenty-four, Governor.
7 GOVERNOR CHILES: Six twenty-four. So it
8 would be in 624.
9 TREASURER NELSON: Well, I've got some
10 staff that are shaking their head no. So I'd
11 like to hear --
12 MR. COATES: Richard Coates representing
13 the American Insurance Association, Governor and
14 Cabinet.
15 Even though the -- this section is 624, it
16 would require a cross-reference into
17 Chapter 440, because that is where the
18 assessments are levied. So with the creative
19 Legislature on germanity issues from time to
20 time, it would arguably open 440 because of the
21 cross-reference issue.
22 GOVERNOR CHILES: Well, it sounds like we
23 both have a point.
24 And I -- you know, again, I think this -- I
25 see the Commissioner's concern. When I'm
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
February 10, 1998
20
1 looking at a 10 million dollar item in a
2 3 million -- 3 billion dollar workers' comp pot,
3 I have a hard time seeing that that item,
4 10 million, causes workers' comp rates to go
5 up.
6 You know, I think that we worked pretty
7 hard to get those rates down. We had to take on
8 a lot of folks to -- you know, to do that. And
9 I'm not wanting to skyrocket those rates off any
10 more than you are.
11 The question is whether 10 million of the
12 3 billion dollar thing would do that.
13 And -- but I am concerned personally that
14 if we take an action that later subjects us
15 to -- to the refunds of -- of 30 million
16 dollars, and then later to attorneys' fees for
17 taking an action that we did not have a
18 statutory ground to do it.
19 I would ask the -- the Director, in his
20 professional opinion, whether this rule would be
21 supported by -- whether there is a statute that
22 supports the rule -- would support the rule.
23 MR. FUCHS: Well, Governor,
24 Commissioner Nelson --
25 ATTORNEY GENERAL BUTTERWORTH: It only
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
February 10, 1998
21
1 takes four of us to fire you, so it's -- no
2 matter how you go, you'd probably still have
3 four somewhere.
4 MR. FUCHS: General, you bring that up
5 almost every meeting.
6 Taxes and child support, you ladies and
7 gentlemen have given me an enviable position.
8 I appreciate both of you, Governor and
9 Treasurer Nelson, for separating the issues
10 here. The Department of Revenue clearly does
11 not have a position, nor should we, on the
12 underlying policy. We are supportive of both of
13 your statements, not wanting to complicate or in
14 any way be detrimental to the workers'
15 compensation scheme that is -- has been working
16 in the state.
17 The question at hand is whether or not we
18 have statutory authority for the rule.
19 I pointed out, I think, at the last
20 meeting, that whenever you have attorneys giving
21 opinions, you sometimes have differing opinions,
22 or very often have differing opinions.
23 In this particular case, I can only recite
24 the record, and that is that both the Court in
25 the Zurich decision, and DOAH in interpreting
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
February 10, 1998
22
1 the rule that was passed in November, have said
2 that those -- or that rule is in compliance with
3 the statute.
4 This rule is in contravention to the
5 November rule. Both cannot be legal and proper
6 unless there is sufficient latitude in the --
7 the statute to allow both interpretations.
8 The legal staff of the
9 Department of Revenue carefully, and under my
10 intense questioning, advises me that the
11 November rule, in their opinion, is legal, and
12 that the proposed rule does not have statutory
13 authority.
14 COMMISSIONER BROGAN: Governor, if I --
15 MR. FUCHS: That's the best answer I can
16 give you.
17 COMMISSIONER BROGAN: Well, why is it
18 here?
19 ATTORNEY GENERAL BUTTERWORTH: Governor,
20 originally I was with the Commissioner on this.
21 I think I was part of the 5-2 vote, Bill.
22 My staff has come up with the same
23 conclusion, that we're on kind of thin ice right
24 here, and that the best thing to do is to --
25 I believe, Governor, to -- as you suggested,
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
February 10, 1998
23
1 withdraw the item and send it to the
2 Legislature.
3 And I would make that as a -- that motion
4 as a substitute motion.
5 COMPTROLLER MILLIGAN: Second.
6 GOVERNOR CHILES: There is a --
7 COMMISSIONER BROGAN: Could I ask a
8 question, before --
9 GOVERNOR CHILES: -- motion and a second.
10 COMMISSIONER BROGAN: -- the vote, and it's
11 simply procedural.
12 Why then am I looking at a proposed rule
13 that has no basis in statutory support?
14 MR. FUCHS: Because --
15 COMMISSIONER BROGAN: You've put me as a
16 member in -- in a rather compromising position,
17 to have been placed in front of me a rule that
18 our own Department feels is not supported in
19 statute.
20 So regardless of how I vote this point
21 forward on the issue, I'm offended at the fact
22 that I've been put in this position and told
23 now, just prior to the vote, that I was about to
24 vote on a rule that's not supported in law.
25 MR. FUCHS: The reason it's there,
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
February 10, 1998
24
1 Commissioner, is that this body directed me to
2 bring it.
3 TREASURER NELSON: Then may I respectfully
4 ask why in the rule workshop, or the public
5 hearing on the rule, was there not one challenge
6 filed during the 21-day window period?
7 MR. FUCHS: I can't honestly say,
8 Treasurer Nelson, that anyone will challenge
9 it. I do know that at least one company has
10 indicated that because of the difference between
11 the two rules, that they will seek redress for
12 payments made under the old rule if the new rule
13 is adopted, which indicates that they think they
14 are in contravention to each other.
15 But my assumption would be that those
16 persons -- or those companies that are directly
17 affected are pleased with the proposed rule, and
18 that there isn't any party who is aware of the
19 situation at this time who raised an objection.
20 I can't foretell what the -- the future
21 would -- will bring.
22 TREASURER NELSON: I think the displeasure
23 that my colleague is expressing is why would
24 your legal department raise the objection at the
25 eleventh hour, instead of the course of the last
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
February 10, 1998
25
1 four months as this rule has been promulgated?
2 And I think he's expressing a displeasure
3 that I would like to associate myself with, that
4 you just don't do things like this right at --
5 to mousetrap somebody at the eleventh hour.
6 MR. FUCHS: With all due respect,
7 Treasurer Nelson, these objections have been
8 raised repeatedly and continuously in meetings
9 with staff from before the last meeting, until
10 the present. We have said over and over again
11 that we did not believe that there was
12 sufficient statutory support for this rule.
13 At the same time, we've gone through the
14 exercise of advising the Legislature of 78 other
15 rules that we don't believe we have statutory
16 authority for under the new requirements of the
17 APA.
18 It certainly is not my personal desire to
19 be in this position. I certainly have no
20 intention, and had no intention, of putting the
21 Cabinet and the Governor in the embarrassing
22 position of having to make this
23 Hobson's choice. I recognize that. We have
24 done everything that I thought we could do to
25 try and not get to this point.
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
February 10, 1998
26
1 But at the same time, we have a policy
2 issue that had to be decided. The problem is
3 really that the industry has put us in the
4 position of forum shopping.
5 The industry lost in court; the industry
6 lost in DOAH; and the industry made some very
7 good, logical arguments, and perhaps they are
8 right, on a policy standpoint. But they have
9 brought it before this body instead of the
10 Legislature in previous sessions. Now, I didn't
11 do that, and I couldn't prevent that.
12 And I'm once again saying that I do not
13 have any argument with the policy decision. I
14 don't have any argument with the workers' comp
15 position.
16 But I am put in this -- in this box as far
17 as the Administrative Procedures Act is
18 concerned, and I have no logical way out of it,
19 having brought it to everyone's attention, I
20 thought, over the past several months.
21 SECRETARY MORTHAM: Governor --
22 GOVERNOR CHILES: Yes, ma'am.
23 SECRETARY MORTHAM: -- if I might comment.
24 I -- I think I was the only one that voted
25 against the proposed rule at the -- at the
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
February 10, 1998
27
1 last -- at the November meeting, for an entirely
2 different reason than anything that we've
3 discussed here today.
4 And I still believe that the reduction in
5 the tax of 10 million dollars per year for the
6 following years is a good one.
7 My problem was is if it was good in the
8 years to come, why wasn't it good for the
9 previous two years? And so I -- to add to this
10 mix a little bit, I believe that we should be
11 looking backwards, as well as looking forward,
12 in this particular instance.
13 Now, my understanding is is that -- has
14 there not already been bills going out for the
15 year to come, and on what basis were those sent
16 out?
17 MR. FUCHS: They are not bills,
18 Madam Secretary --
19 SECRETARY MORTHAM: Whatever you call them.
20 MR. FUCHS: We have sent out forms and
21 returns based on the rule that is proposed
22 today.
23 SECRETARY MORTHAM: Okay. So if that is
24 the case, I would assume then that you were
25 assuming that this would pass today.
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
February 10, 1998
28
1 What's going to happen if this gets
2 withdrawn today, what are you going to do then?
3 MR. FUCHS: There are a relatively small
4 number of taxpayers. The whole universe is
5 about 1400, as opposed to the 800,000 or 500,000
6 we normally deal with.
7 We could literally call the 1400, we could
8 provide alternative forms. The payments aren't
9 due until March the 1st. So as far as the
10 payment itself is concerned, I don't -- that's
11 not an issue.
12 SECRETARY MORTHAM: Well, I mean,
13 1400 calls is a fairly large number of calls.
14 I think the other thing is is that -- going back
15 to Commissioner Nelson's statement, is that
16 10 million dollars in a, you know, several
17 billion dollar industry may not be a huge
18 number. But somebody's going to pay that
19 10 million dollars. I don't believe that these
20 1400 companies are going to say for the sake of
21 everyone, we're going to absorb that 10 million
22 dollar cost.
23 So what we're really talking about is a
24 10 million dollar tax that we are putting on the
25 individuals in the state, as a result of this
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
February 10, 1998
29
1 rule going or not going, is that correct, or not
2 correct?
3 MR. FUCHS: It is correct as far as it
4 goes, again, Madam Secretary. Remember -- if I
5 could, briefly, that the November rule was not
6 the result of a statutory change. It was the
7 result of a court interpretation of the previous
8 rule. It was an amendment to a previously
9 existing rule, based on this Court
10 interpretation, and it did, in fact, have the
11 effect that you're describing.
12 So what we have is a statute that was
13 passed in '94, interpreted by the Court -- the
14 District Court of Appeal in the Zurich decision,
15 which resulted in an amended rule, which this
16 Cabinet did approve over objections that have
17 been stated in November. But there has not been
18 an intervening statutory change. There has only
19 been a court decision.
20 SECRETARY MORTHAM: Well, the only concern
21 I have is that if, in fact, we pass the rule as
22 presented from November, that I -- I agree with
23 the Governor that we're going to not only have
24 to pay the back tax, but we are going to have to
25 pay attorneys' fees as well.
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
February 10, 1998
30
1 And that's the reason -- and I'm going to
2 restate it one more time -- that's the reason I
3 voted against the rule at the last meeting.
4 I believe we've got -- you know, we've got
5 a substitute motion on the floor that we're
6 going to have to deal with. But unfortunately
7 I think that we should have looked at the issue
8 going backwards, as well as forwards. But
9 obviously we'll -- we're ready to vote.
10 COMMISSIONER BROGAN: Governor, one other
11 quick question, if I may, regarding statute.
12 With the filed paperwork regarding the
13 promulgation of the rule, there is a specific
14 authority cite, Florida Statute 213.06(1).
15 What does that statute suggest that made
16 people believe it supported the promulgation of
17 the rule?
18 MR. FUCHS: I believe, Commissioner Brogan,
19 that is just our general rulemaking authority.
20 That just says that the Department of Revenue is
21 authorized to promulgate rules.
22 COMMISSIONER BROGAN: Thank you, Governor.
23 GOVERNOR CHILES: All right. There is a
24 motion before us and a second.
25 Is there further discussion on the
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
February 10, 1998
31
1 substitute motion?
2 COMMISSIONER BROGAN: Could we just restate
3 the substitute motion, please?
4 GOVERNOR CHILES: Yes, sir.
5 ATTORNEY GENERAL BUTTERWORTH: I can read a
6 lengthier one.
7 I move the Department of Revenue agenda
8 Item number 3 be withdrawn, and request that the
9 Department work during upcoming legislative
10 session with the Legislature, and other
11 interested parties, in obtaining both direction
12 and the legislative intent necessary to reach a
13 statutory resolution regarding this matter.
14 This will provide us with the needed and
15 fundamental guidance in our capacity as head of
16 Department of Revenue.
17 TREASURER NELSON: And it's -- and it's my
18 contention, Governor --
19 GOVERNOR CHILES: Yes.
20 TREASURER NELSON: -- that the Legislature
21 will not address that, and it will have the
22 result of a 10 million dollar tax per year levy.
23 GOVERNOR CHILES: All right. So many as
24 favor the adoption of the substitute, say aye.
25 COMPTROLLER MILLIGAN: Aye.
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
February 10, 1998
32
1 GOVERNOR CHILES: Opposed, no.
2 SECRETARY MORTHAM: No.
3 COMMISSIONER BROGAN: No.
4 GOVERNOR CHILES: Let's -- let's call the
5 roll.
6 COURT REPORTER GILBERT:
7 Commissioner Brogan.
8 COMMISSIONER BROGAN: No.
9 COURT REPORTER GILBERT:
10 Commissioner Crawford.
11 COMMISSIONER CRAWFORD: No.
12 COURT REPORTER GILBERT:
13 Commissioner Nelson.
14 TREASURER NELSON: No.
15 COURT REPORTER GILBERT:
16 Commissioner Milligan.
17 COMPTROLLER MILLIGAN: Yes.
18 COURT REPORTER GILBERT:
19 General Butterworth.
20 ATTORNEY GENERAL BUTTERWORTH: Yes.
21 COURT REPORTER GILBERT: Secretary Mortham.
22 SECRETARY MORTHAM: No.
23 COURT REPORTER GILBERT: Governor Chiles.
24 GOVERNOR CHILES: I -- yes.
25 So by your vote, the motion fails, the
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
February 10, 1998
33
1 substitute motion fails.
2 ATTORNEY GENERAL BUTTERWORTH: Go back to
3 the main motion.
4 GOVERNOR CHILES: Pardon?
5 ATTORNEY GENERAL BUTTERWORTH: Now we're
6 back on Commissioner Nelson's.
7 GOVERNOR CHILES: Well, that would -- it
8 was -- I think you --
9 TREASURER NELSON: Yes, sir. I had moved
10 that --
11 GOVERNOR CHILES: All right.
12 TREASURER NELSON: -- that we adopt the
13 rule.
14 GOVERNOR CHILES: All right.
15 COMMISSIONER BROGAN: And I'd second.
16 GOVERNOR CHILES: And it's been seconded.
17 So many as favor that --
18 SECRETARY MORTHAM: Governor, before we --
19 I want to at least put this on the table one
20 more time.
21 I'd like to move a substitute motion that
22 would direct the Department of Revenue to go
23 back, to notice rulemaking, to hold workshops,
24 and bring back to us as quickly as possible a
25 rule that includes an exemption for 1995 and
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
February 10, 1998
34
1 1996 in order to alleviate the litigation that
2 is bound to occur, and to avoid paying for
3 attorneys' fees.
4 COMMISSIONER BROGAN: Is it possible to get
5 a legal opinion on that?
6 GOVERNOR CHILES: Is there a second?
7 COMMISSIONER BROGAN: I'd like to hear an
8 opinion before I considered a second. It's not
9 that I'm questioning the Secretary's legal
10 prowess.
11 MR. FUCHS: With your permission, our
12 General Counsel, Linda Lettera.
13 MS. LETTERA: Governor, members of the
14 Cabinet, it would be redundant. Again, I do not
15 believe we have the statutory authority to do
16 initially. And I think what Secretary Mortham
17 is asking is that we just go ahead and do the
18 same kind of add-back of a credit that we do not
19 have today. And I think you're just going back
20 an additional two years.
21 The statute's very specific on what it
22 provides as far as adding back. It allows
23 80 percent of the salary credit. That's in the
24 statute. It allows a creditor an add-back for
25 intangible tax. It does not allow for a credit
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
February 10, 1998
35
1 for the workers' comp assessments.
2 SECRETARY MORTHAM: I've got a question of
3 her. Governor, is that okay?
4 GOVERNOR CHILES: Yes, ma'am.
5 SECRETARY MORTHAM: You're speaking to the
6 rule that's before us, as well as going
7 backwards. So you're -- you're opposed to what
8 we've got before us.
9 But I believe that Commissioner Brogan's
10 question would be, other than going back
11 two years, is this -- what I propose any
12 different than what your -- your opinion is on
13 the current rule before us?
14 MS. LETTERA: Let me make sure I understand
15 what you're proposing.
16 You're proposing to go back -- the rule
17 before you today is to go back for '95 and '96.
18 You want to go back even further.
19 SECRETARY MORTHAM: I'm going '95, '96.
20 The rule before us is for subsequent years.
21 MS. LETTERA: Is -- is from '95, I believe.
22 TREASURER NELSON: No. No. The rule in
23 front of us is '97 forward.
24 MS. LETTERA: Okay. So you want to go back
25 even further.
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
February 10, 1998
36
1 SECRETARY MORTHAM: Well, yeah. I mean,
2 the idea is is that if we're going to be going
3 into court and we're going to be saying, okay,
4 it's okay for '97, '98, but guess what, the
5 statute doesn't allow us to go back to '95,
6 '96. Well, it doesn't make any sense at all.
7 I mean, we're going to lose that. That's my
8 opinion as a nonlawyer.
9 MS. LETTERA: But if we don't have the
10 opinion to go back for '97 and '98, we clearly
11 don't have it for -- for '95 or '96.
12 SECRETARY MORTHAM: And I believe that's
13 Commissioner Brogan's question.
14 MS. LETTERA: I do not believe you have the
15 authority to -- we have the authority to do
16 that.
17 GOVERNOR CHILES: All right. Is there a
18 second to the substitute?
19 There is no second, so the substitute
20 fails.
21 The vote recurs on the -- on the motion.
22 So many as favor the motion, signify by
23 saying aye.
24 SECRETARY MORTHAM: Aye.
25 COMMISSIONER CRAWFORD: Aye.
ACCURATE STENOTYPE REPORTERS, INC.
DEPARTMENT OF REVENUE
February 10, 1998
37
1 TREASURER NELSON: Aye.
2 COMMISSIONER BROGAN: Aye.
3 GOVERNOR CHILES: Opposed, no.
4 ATTORNEY GENERAL BUTTERWORTH: No.
5 COMPTROLLER MILLIGAN: No.
6 GOVERNOR CHILES: No.
7 The -- the ayes appear to have it. The
8 ayes have it. Motion passes.
9 MR. FUCHS: Thank you.
10 (The Department of Revenue Agenda was
11 concluded.)
12 *
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25
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION
February 10, 1998
38
1 GOVERNOR CHILES: State Board of Education.
2 DR. BEDFORD: Governor Chiles,
3 Commissioner Brogan, members of the State Board
4 of Education, good morning.
5 Item 1, minutes of the meetings held on
6 November 4th, November 18th, and December 4th,
7 1997.
8 SECRETARY MORTHAM: Move approval.
9 COMMISSIONER BROGAN: Second.
10 DR. BEDFORD: Item 2 --
11 GOVERNOR CHILES: Moved and seconded.
12 Without objection, they're approved.
13 DR. BEDFORD: Excuse me.
14 Item 2, authorization of three hundred and
15 seventy-five million dollars, capital outlay
16 bonds, 1998, Series A.
17 COMMISSIONER BROGAN: Move approval.
18 SECRETARY MORTHAM: Second.
19 GOVERNOR CHILES: Moved and seconded.
20 Without objection, they're approved.
21 DR. BEDFORD: Item 3, reengineering of
22 Merit Scholarship Program.
23 COMMISSIONER BROGAN: Move approval.
24 SECRETARY MORTHAM: Second.
25 GOVERNOR CHILES: Moved and seconded.
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION
February 10, 1998
39
1 Without objection, it's approved.
2 DR. BEDFORD: Item 4, we would request
3 withdrawal.
4 COMMISSIONER BROGAN: I'll move withdrawal.
5 ATTORNEY GENERAL BUTTERWORTH: Second.
6 COMPTROLLER MILLIGAN: Second.
7 GOVERNOR CHILES: Moved and seconded.
8 Without objection, it's withdrawn.
9 DR. BEDFORD: Items 5 and Item 6 are from
10 the Florida School for the Deaf and the Blind.
11 We have Elmer Dillingham, the President of
12 Florida School for Deaf and the Blind, in the
13 audience if there are any questions.
14 Item 5, Rule 6D-5.003, an amendment to
15 section called Other Personnel.
16 SECRETARY MORTHAM: Move approval.
17 COMMISSIONER BROGAN: Second.
18 GOVERNOR CHILES: Moved and seconded.
19 Without objection, it's approved.
20 DR. BEDFORD: Item 6, Rule 6D-7.006, an
21 amendment to the Pupil Progression Plan and
22 Graduation Requirements.
23 COMMISSIONER BROGAN: Move approval.
24 SECRETARY MORTHAM: Second.
25 GOVERNOR CHILES: Moved and seconded.
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION
February 10, 1998
40
1 Without objection, it's approved.
2 DR. BEDFORD: Thank you.
3 TREASURER NELSON: Governor, may I ask one
4 question, please. Back on the subject matter of
5 Item 3, even though it was a technical matter.
6 There has been quite a bit of comment in
7 the -- in the newspapers over the policy
8 question as raised by the former Chancellor,
9 Dr. Reed, about the Bright Futures.
10 And I would like to have --
11 (Secretary Mortham exited the room.)
12 TREASURER NELSON: -- some presentation at
13 some point for consideration by this body
14 sitting as the State Board of Education over
15 this policy question.
16 What Dr. Reed has said in the newspaper is
17 that, in effect, 98 percent of the students in
18 the State University System are getting the
19 Bright Futures Scholarships. And he has further
20 said, if I'm interpreting his comments in the
21 newspaper correctly, that that is being financed
22 by the Lottery, and, therefore, that people who
23 play the Lottery, often coming from more
24 disadvantaged backgrounds, in effect, are
25 supplying the monies based on merit scholarships
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION
February 10, 1998
41
1 for 98 percent of the students in the State
2 University System.
3 And as I have interpreted Dr. Reed's
4 comments, he has said that his preference would
5 be based on needs based scholarships, instead of
6 the present system.
7 So could I ask you and the Commissioner to
8 agenda that at an appropriate time where we
9 could have a policy discussion on that matter?
10 COMMISSIONER BROGAN: Commissioner, the --
11 the whole issue we've said from the beginning,
12 we want to study very carefully in terms of just
13 how many students are receiving Bright Futures,
14 and how many students are receiving needs based
15 in the state of Florida; where they are; where
16 they're attending; what sort of an impact it's
17 having.
18 I think you're going to see the Bright
19 Future Scholarship program evolve over time
20 based on change, which is based on good
21 demographic data.
22 I think some of the comments that have been
23 made to this point by others, as you've
24 suggested, are by virtue of the fact that we're
25 only through the first semester of the first
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION
February 10, 1998
42
1 year of the program, a bit early to make with
2 any degree of certainty.
3 And that's why we've asked people to give
4 us this first year to collect all that data, and
5 find out exactly what it is that we're talking
6 about.
7 I have some rather strong feelings on the
8 subject of the Bright Future Scholarship
9 program, and I won't bore you with those today,
10 because you've not asked me for that today.
11 You've asked if we would agenda the item, and we
12 would be happy to do that.
13 But I think what's most important is we
14 not --
15 (Secretary Mortham entered the room.)
16 COMMISSIONER BROGAN: -- do that until we
17 have supporting data that I know you'll want,
18 and the members of the House and Senate would
19 want as well, to be able to make not only --
20 (Commissioner Crawford exited the room.)
21 COMMISSIONER BROGAN: -- accurate
22 recommendations for change, but also accurate
23 statements.
24 I think many of the statements that have
25 been made thus far have been based in large
ACCURATE STENOTYPE REPORTERS, INC.
STATE BOARD OF EDUCATION
February 10, 1998
43
1 measure on assumptions and assertions that may
2 or may not have any grounding in statistical
3 analysis.
4 And I think as we've requested from the
5 Legislature, not only second year funding in
6 Bright Future, but also a record amount of money
7 for needs based. I think we've got to be
8 careful as we approach this thing that we're
9 doing it with all good accurate information.
10 And we'll be happy, as soon as we've
11 collected that, to share that with all the
12 members of the State Board.
13 DR. BEDFORD: Thank you.
14 GOVERNOR CHILES: Thank you, sir.
15 (The State Board of Education Agenda was
16 concluded.)
17 *
18
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20
21
22
23
24
25
ACCURATE STENOTYPE REPORTERS, INC.
ADMINISTRATION COMMISSION
February 10, 1998
44
1 GOVERNOR CHILES:
2 Administration Commission.
3 DR. BRADLEY: Item number 1, recommend
4 approval of the minutes for the meeting held
5 January 21st, 1998.
6 COMMISSIONER BROGAN: Move it.
7 SECRETARY MORTHAM: Second.
8 GOVERNOR CHILES: Moved and seconded.
9 Without objection, it's approved.
10 DR. BRADLEY: Item number 2, recommend
11 approval of the transfer of general revenue
12 appropriations for the Department of Children
13 and Families to support emergency efforts
14 associated with the December storms.
15 SECRETARY MORTHAM: Move approval.
16 COMMISSIONER BROGAN: Second.
17 GOVERNOR CHILES: Moved and seconded.
18 Without objection, it's approved.
19 DR. BRADLEY: Item number 3, recommend
20 approval of the transfer of general revenue
21 appropriations for the Justice
22 Administration Commission.
23 COMMISSIONER BROGAN: Move approval.
24 SECRETARY MORTHAM: Second.
25 GOVERNOR CHILES: Moved and seconded.
ACCURATE STENOTYPE REPORTERS, INC.
ADMINISTRATION COMMISSION
February 10, 1998
45
1 Without objection, it's approved.
2 (The Administration Commission Agenda was
3 concluded.)
4 *
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ACCURATE STENOTYPE REPORTERS, INC.
FLORIDA LAND AND WATER ADJUDICATORY COMMISSION
February 10, 1998
46
1 GOVERNOR CHILES: Florida Land and Water
2 Adjudicatory Commission.
3 DR. BRADLEY: Item number 1, request
4 approval of the minutes of the October 21st,
5 1997, Commission meeting.
6 (Attorney General Butterworth exited the
7 room.)
8 COMPTROLLER MILLIGAN: Move approval.
9 COMMISSIONER BROGAN: Second.
10 GOVERNOR CHILES: Moved and seconded.
11 Without objection, it's approved.
12 (Commissioner Crawford entered the room.)
13 DR. BRADLEY: Item number 2, request
14 acceptance of the report on the status of the
15 Save Our Everglades program. And we have
16 Estus Whitfield or -- Rick Smith here to answer
17 any questions you might have.
18 COMMISSIONER BROGAN: I'll move we accept
19 the report, Governor.
20 COMPTROLLER MILLIGAN: And second.
21 GOVERNOR CHILES: It's been moved and
22 seconded.
23 Without objection, it's approved.
24 (The Florida Land and Water Adjudicatory
25 Commission Agenda was concluded.)
ACCURATE STENOTYPE REPORTERS, INC.
BOARD OF TRUSTEES/INTERNAL IMPROVEMENT TRUST FUND
February 10, 1998
47
1 GOVERNOR CHILES: Board of Trustees.
2 MS. WETHERELL: Item 1, minutes.
3 TREASURER NELSON: Move it.
4 COMMISSIONER BROGAN: Second.
5 GOVERNOR CHILES: Moved and seconded.
6 Without objection, the minutes are
7 approved.
8 MS. WETHERELL: Item 2, the Florida Keys
9 Sanctuary Rule Amendment.
10 SECRETARY MORTHAM: Move approval.
11 COMMISSIONER BROGAN: Second.
12 GOVERNOR CHILES: Moved and seconded.
13 Without objection, it's approved.
14 MS. WETHERELL: Substitute Item 3,
15 requesting deferral until March the 10th.
16 COMMISSIONER BROGAN: Move deferral.
17 GOVERNOR CHILES: Moved and seconded to
18 defer.
19 Without objection, it's approved.
20 MS. WETHERELL: Item 4 is a quitclaim deed.
21 COMMISSIONER BROGAN: Move the item.
22 SECRETARY MORTHAM: Second.
23 GOVERNOR CHILES: Moved and seconded.
24 Without objection, it's approved.
25 MS. WETHERELL: Substitute Item 5 is
ACCURATE STENOTYPE REPORTERS, INC.
BOARD OF TRUSTEES/INTERNAL IMPROVEMENT TRUST FUND
February 10, 1998
48
1 conceptual approval of a conveyance to the
2 City of Punta Gorda. And we have a speaker,
3 Mr. Bob Johns, from the City of Punta Gorda, who
4 wishes to address you.
5 GOVERNOR CHILES: All right.
6 MR. JOHNS: Good morning, Governor Chiles,
7 and members of the Cabinet.
8 My name is Bob Johns, and I represent the
9 City of Punta Gorda concerning Item number 5
10 under your Trustees agenda item entitled
11 Wood Street Extension Conveyance.
12 You are being given a handout that I'd like
13 to use to expedite my presentation to you. And
14 let me start by getting to the punch line,
15 and -- and go there, and then give you the
16 information that I'd like to share with you.
17 Your staff has been very helpful, very
18 cooperative. We appreciate them greatly. And
19 they have given you recommendation for
20 conceptual approval.
21 However, we're going to ask you to go
22 beyond the conceptual approval recommended by
23 staff, and to go ahead and authorize the release
24 of this reverter clause, and to do so at no cost
25 to the City of Punta Gorda. And that is, we're
ACCURATE STENOTYPE REPORTERS, INC.
BOARD OF TRUSTEES/INTERNAL IMPROVEMENT TRUST FUND
February 10, 1998
49
1 asking you to give us land for nothing.
2 And I will get on my knees and beg if
3 that'll help, but let me give you a professional
4 presentation, and then see if that's needed at
5 all.
6 COMMISSIONER BROGAN: Couldn't hurt.
7 MR. JOHNS: It couldn't hurt, that's right.
8 First, the background on this particular
9 item.
10 In 1958, which is ironically the year I was
11 born, the Governor and the Trustees -- and
12 that's none of you I'm sure -- actually allowed
13 a permit for the filling of submerged bottom
14 lands in the City of Punta Gorda. It was right
15 down in our waterfront, in our 100 year old
16 downtown.
17 And what we put there was
18 400 mobile homes. We weren't thinking very
19 well, and we put 400 mobile homes there in a
20 hurricane high hazard zone.
21 The years passed, and we, I think, learned
22 some things about those mobile homes being
23 there, and also about downtown redevelopment.
24 And on that site, we went ahead and cleared them
25 in 1986.
ACCURATE STENOTYPE REPORTERS, INC.
BOARD OF TRUSTEES/INTERNAL IMPROVEMENT TRUST FUND
February 10, 1998
50
1 Well, part of the 1958 permit had an actual
2 reverter clause in it for a section of what we
3 call Wood Street. And all that is is a part of
4 our traditional grid downtown street system that
5 evidently got extended out over this as
6 submerged filled bottom lands.
7 And if you'll look at plate number 1,
8 you'll see that. And actually the red marked
9 area called overall Wood Street Reverter, part
10 of it's in the water, part of it's on the land,
11 and none of it connects to the Wood Street that
12 we know of that's further south in our downtown.
13 With that, if you'll turn to plate
14 number 2, the City of Punta Gorda did what so
15 many Florida communities have done with the
16 support of the State Legislature over the last
17 20 years, they began to say, we want to save our
18 downtowns.
19 And what they did is they entered into an
20 actual redevelopment project on this site. And
21 lo and behold, that project had many different
22 uses on it. It has 75,000 square feet of office
23 space; it has a new Justice Center for the --
24 for Charlotte County; it has a new marina; it
25 has retail space; and it has 60 condominium
ACCURATE STENOTYPE REPORTERS, INC.
BOARD OF TRUSTEES/INTERNAL IMPROVEMENT TRUST FUND
February 10, 1998
51
1 units, which those condominium units, when sited
2 back in 1993, rest right on top of the
3 Wood Street Extension Conveyance. It's the only
4 parcel that we have to give fee simple title to
5 a developer for.
6 Now, under redevelopment statute, the City
7 of Punta Gorda's receiving money for this, and
8 we will be using that money to do other
9 redevelopment projects. Our redevelopment
10 effort is only eight years old.
11 So plate number 2, the red marked area,
12 shows you the pickle that we're kind of in. And
13 we also have thought about actually moving the
14 buildings. But when we move the buildings back
15 to get them out of your reverter clause area, we
16 wind up cutting into a public park that we went
17 to great lengths to create and develop, and want
18 to use in our community.
19 So where does that leave us?
20 In 1993 we agreed, and you conceptually
21 approved, for us to buy the reverter interest
22 for fair market value. And we did that because
23 the original reverter said that you shall have
24 public access across this red strip that you see
25 on these plates.
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1 And in 1993, we weren't having any public
2 access of any sort, whether it was cars or
3 people.
4 Well, since then, and I think because of
5 that 1993 conceptual approval by the Trustees,
6 we've gone ahead and redesigned the site plan.
7 And now we have a 25-foot wide public walkway
8 that's part of a 3-mile harbor walk system.
9 So we recaptured public access to the
10 waterfront. And we did that in an effort to
11 meet the original -- what we thought was the
12 legislative intent of the 1958 reverter.
13 We're now here before you today to ask you
14 to finalize this interest, and to release your
15 claim on the reverter. And I'd like to give you
16 four reasons as a bottom line for why you might
17 do that.
18 First, the remaining sliver of land that
19 you'll see on plate number 3, and it's a blowup
20 of it, is a very insignificant sliver of land
21 that I doubt there's any really State use for
22 that property.
23 In addition, it is only usable really for
24 our redevelopment purposes. So that's the first
25 point.
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1 Secondly, the State's interest is in a
2 reverter only, and is not fee simple. And,
3 therefore, it makes it tough for your staff
4 I think to come up with some proposal, like what
5 I'm asking you to do, and we respect that.
6 Third, we've tried to meet the legislative
7 intent of the original 1958 permit by having a
8 public walkway constructed across the green area
9 that you see in plate number 3.
10 (Commissioner Crawford exited the room.)
11 MR. JOHNS: And, finally, this is a real
12 opportunity for local and State government to
13 work together to facilitate downtown
14 redevelopment.
15 We're very proud of our downtown
16 redevelopment efforts. We're a very small
17 community, but we are very aggressive in what
18 we're doing, and we're seeing great blessings
19 upon those efforts.
20 And so with that, we would respectfully ask
21 that you partner with us, and go ahead and make
22 a motion to allow the reverter interest to be
23 removed at no cost to the City of Punta Gorda.
24 Thank you.
25 GOVERNOR CHILES: Thank you, sir.
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1 MR. JOHNS: Are there any questions?
2 GOVERNOR CHILES: Are there questions?
3 COMMISSIONER BROGAN: Could I just ask,
4 Governor, of the Secretary.
5 Is the gentleman's request -- does it meet
6 process and procedure?
7 MS. WETHERELL: Well, actually, what we're
8 trying to do is to follow the process that y'all
9 set in place in '93.
10 And in '93, you basically were asking us to
11 go negotiate, you know, with the City for a
12 consideration for them to pay a fair market
13 value. The deal has changed, as you heard this
14 gentleman say. The configuration of the
15 property is different now.
16 And so what we were suggesting to you
17 today, based on your '93 direction, was that you
18 tell us -- you give us conceptual approval, but
19 you tell us to go back and negotiate with the
20 City.
21 So it would be coming back to you with a
22 proposal, which I think then you could look at
23 the consideration and see what your -- you know,
24 your interest is.
25 The bottom line, I believe, of what he's
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1 asking you to do is just to go ahead and give
2 them the property. And that's -- in terms of
3 being consistent with the way we normally do
4 business, it's not. We normally charge fair
5 market value. But --
6 GOVERNOR CHILES: My understanding is that
7 a motion for conceptual approval, which is the
8 way we routinely handle these things, would give
9 the State then the ability to negotiate with the
10 City, and come back to us for revision and final
11 approval.
12 SECRETARY MORTHAM: I move conceptual
13 approval.
14 GOVERNOR CHILES: It's been moved and --
15 COMMISSIONER BROGAN: Second.
16 GOVERNOR CHILES: -- seconded.
17 So many as favor that, signify by saying
18 aye.
19 THE CABINET: Aye.
20 GOVERNOR CHILES: The --
21 MS. WETHERELL: Thank you.
22 GOVERNOR CHILES: -- conceptual approval is
23 given.
24 COMPTROLLER MILLIGAN: I might comment, if
25 I could, Governor, that one of the things that
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1 is being looked at is the idea that this is a
2 noneconomical remainder, and, therefore, should
3 have some sort of 75 percent factor applied
4 against it as the Department of Transportation
5 apparently does.
6 And I am reminded of some other lands that
7 we have purchased, such as railroad beds, that
8 had rather uneconomical remainder
9 characteristics. And we paid top dollar.
10 I'm not opposed to supporting this -- the
11 City of Punta Gorda in their efforts. But it is
12 kind of interesting that we approach these
13 things from different directions, depending on
14 whether the State's buying or selling.
15 MS. WETHERELL: Yeah. In this case,
16 General, the City had the property appraised,
17 and the appraiser used that 75 percent
18 reduction. We didn't agree with the --
19 COMPTROLLER MILLIGAN: I --
20 MS. WETHERELL: -- application of that.
21 Yeah.
22 COMPTROLLER MILLIGAN: I understand it. I
23 just had to make the comment --
24 MS. WETHERELL: I understand.
25 COMPTROLLER MILLIGAN: -- after the
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1 railroad bed business.
2 MS. WETHERELL: I understand.
3 COMPTROLLER MILLIGAN: Yes.
4 GOVERNOR CHILES: Over the fence.
5 MS. WETHERELL: Okay.
6 COMPTROLLER MILLIGAN: Yes. Over the
7 fence.
8 GOVERNOR CHILES: All right.
9 MS. WETHERELL: Item 6, amendment to
10 covenants and restrictions.
11 COMMISSIONER BROGAN: Move approval.
12 COMPTROLLER MILLIGAN: Second.
13 GOVERNOR CHILES: Moved and seconded.
14 Without objection, it's approved.
15 MS. WETHERELL: Item 7, the 1998 CARL
16 annual priority list.
17 COMPTROLLER MILLIGAN: Move approval.
18 SECRETARY MORTHAM: Second.
19 GOVERNOR CHILES: Moved and seconded.
20 Without objection, it's approved.
21 MS. WETHERELL: Item 8, purchase agreement
22 for Lake Wales Ridge Ecosystem CARL project, a
23 waiver of the marketability of title, and waiver
24 of survey.
25 COMMISSIONER BROGAN: Move approval.
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1 COMPTROLLER MILLIGAN: Second.
2 GOVERNOR CHILES: Moved and seconded.
3 Without objection, it's approved.
4 MS. WETHERELL: Item 9, a purchase
5 agreement for Belle Meade CARL project, and a
6 waiver of survey.
7 SECRETARY MORTHAM: Move approval.
8 COMMISSIONER BROGAN: Second.
9 GOVERNOR CHILES: Moved and seconded.
10 Without objection, it's approved.
11 MS. WETHERELL: Item 10, an option
12 agreement on Coupon Bight Key Deer CARL project.
13 COMMISSIONER BROGAN: That's Fausto's Food
14 Palace --
15 MS. WETHERELL: Yes.
16 COMMISSIONER BROGAN: -- Inc.?
17 Move approval.
18 SECRETARY MORTHAM: Second.
19 GOVERNOR CHILES: Is there a second?
20 SECRETARY MORTHAM: Second.
21 GOVERNOR CHILES: Moved and seconded.
22 Without objection, it's approved.
23 MS. WETHERELL: Substitute Item 11,
24 assignment of an option agreement for
25 Paynes Prairie for Recreation and Parks
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1 Addition.
2 COMMISSIONER BROGAN: Move approval.
3 SECRETARY MORTHAM: Second.
4 GOVERNOR CHILES: Moved and seconded.
5 Without objection, it's approved.
6 MS. WETHERELL: Item 12, an option
7 agreement for Shell Island Recreation and Parks
8 Addition, and a waiver of survey.
9 SECRETARY MORTHAM: Move approval.
10 COMMISSIONER BROGAN: Second.
11 GOVERNOR CHILES: Moved and seconded.
12 Without objection, it's approved.
13 MS. WETHERELL: Item 13 is an option
14 agreement for Chassahowitzka Wildlife Management
15 Area.
16 SECRETARY MORTHAM: Move --
17 COMMISSIONER BROGAN: Move the --
18 SECRETARY MORTHAM: -- approval.
19 COMMISSIONER BROGAN: -- item.
20 Second.
21 GOVERNOR CHILES: Moved and seconded.
22 Without objection, it's approved.
23 MS. WETHERELL: Item 14, a purchase
24 agreement for the Department of Agriculture, and
25 a waiver of survey.
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1 SECRETARY MORTHAM: Move approval.
2 COMMISSIONER BROGAN: Second.
3 GOVERNOR CHILES: Moved and seconded.
4 Without objection, that's approved.
5 MS. WETHERELL: Item 15 is assignment of a
6 purchase agreement on behalf of the -- FSU.
7 SECRETARY MORTHAM: Move approval.
8 GOVERNOR CHILES: Moved and seconded.
9 Without objection, that's approved.
10 MS. WETHERELL: And that's concludes it.
11 Thank you very much.
12 GOVERNOR CHILES: Thank you.
13 (The Board of Trustees of the Internal
14 Improvement Trust Fund Agenda was concluded.)
15 *
16 (The Cabinet meeting was concluded at
17 11:12 a.m.)
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1 CERTIFICATE OF REPORTER
2
3
4 STATE OF FLORIDA:
5 COUNTY OF LEON:
6 I, LAURIE L. GILBERT, do hereby certify that
7 the foregoing proceedings were taken before me at the
8 time and place therein designated; that my shorthand
9 notes were thereafter translated; and the foregoing
10 pages numbered 1 through 60 are a true and correct
11 record of the aforesaid proceedings.
12 I FURTHER CERTIFY that I am not a relative,
13 employee, attorney or counsel of any of the parties,
14 nor relative or employee of such attorney or counsel,
15 or financially interested in the foregoing action.
16 DATED THIS 20TH day of FEBRUARY, 1998.
17
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19 LAURIE L. GILBERT, RPR, CCR, CRR
100 Salem Court
20 Tallahassee, Florida 32301
850/878-2221
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ACCURATE STENOTYPE REPORTERS, INC.
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Affairs